The joint venture between Westmoreland Community Action (WCA), Greensburg, PA, and The ReUse People (TRP), Oakland, CA, completes a circle begun over a decade ago when HHS engaged ILSR to explore the feasibility of building deconstruction as a community development tool. The ILSR technical assistance work that followed led to the start up and expansion of numerous deconstruction companies and projects. As advisor to TRP, ILSR suggested that WCA would be a suitable partner as TRP expanded from its base in CA to nine additional sites throughout the US. WCA and TRP have been working together for the past two years.
Background
Westmoreland Community Action, a 501(c)(3) non-profit organization in Greensburg, PA, has been serving disadvantaged residents in Westmoreland County and surrounding counties in southwestern Pennsylvania since 1980. WCA’s mission is to “strengthen communities and families to eliminate poverty,” and the organization currently runs 22 programs to achieve its organizational goals. WCA provides housing services including the construction of 10-20 homes per year. The organization also offers emergency assistance in addition to employment, mental health, and child development programs.
Shop Demo Depot (SDD)
In 2010, WCA began developing the Shop Demo Depot concept as a social enterprise business and an outgrowth of WCA’s multi-faceted housing program. One initiative, the Neighborhood Revitalization Program, provides affordable housing by acquiring, demolishing, and re-constructing homes in disadvantaged communities. Another initiative, the Neighborhood Stabilization Program, purchases and redevelops abandoned and foreclosed homes and residential units.
SDD supports these housing efforts through its two major functions:
- Recovery of salvaged materials through its building deconstruction services;
- Establishment of the retail store with salvaged and donated building products.
SDD’s objectives are:
- To annually divert about 100 tons of building materials from the waste stream.
- To sustain itself by generating revenue from the sale of recovered and donated surplus building materials.
- To maintain a business that provides at least 12 new green jobs for residents with significant needs.
- To establish the enterprise by reusing a vacant site on a highly visible corridor. This supports the local economy with tax revenues and other positive economic benefits.
Location: Westmoreland Community Action selected a location that is easily accessible, is well known in the community, and that provides sufficient space for existing requirements as well as for growth opportunities.
SDD opened for business in April 2012 in Mt. Pleasant, PA, at the location of a former lumberyard on Route 31. SDD’s 14,000 square foot showroom is located on a six-acre site that is highly visible along the well-traveled route that averages 26,000 cars passing each day. In addition SDD, has access to 29,000 square feet of space that can be used for storage, processing, or to expand its retail operation. Third-party leasing of space is also an option.
Products: SDD sells products that are recovered from deconstruction projects and include a wide range of architectural features — doors, windows, flooring, woodwork. In addition, SDD sells appliances, furnaces, plumbing, and furniture.
SDD also receives donated surplus building materials from manufacturers, distributors, and retailers who receive tax deductions for their contributions.
To round out its product mix, SDD sells Amazon Paint, a product that is 100 percent latex paint. For its first year of operation, SDD expects to purchase $20,000 of inventory in order to assure a full range of products for its customers.
Target Markets: WCA projects that customers within 20 miles of SDD will provide most of the retail revenue for the store. WCA’s marketing research revealed, “Within a 20 mile radius we estimate a significant amount of consumer spending on home improvement–$214.3M.” At the same time, SDD also appeals to residents in a five county region – Westmoreland, Washington, Greene, Fayette, and Allegheny Counties.
According to SDD staff, landlords are frequent customers as they find kitchen cabinets and other products for their rental units. Local artists are intrigued by the interesting variety of materials and purchase items that they can use in their creations. Other target markets include:
- Builders, contractors, remodelers
- Architects and designers
- Do-It-Yourself homeowners looking for a “good deal.”
- Social Service Agencies and non-profit organizations that are seeking cost-effective materials for their construction and home improvement projects.
Training and Deconstruction: Ted Reiff of The ReUse Institute (TRI) provided a three-week course for eight SDD staff people and trained them in deconstruction and certified them as retail workers. TRI, the consulting and training division of TRP, “is the first and only organization in the US to certify its graduates as industry-ready.”
SDD will be sending out two full-time deconstruction crews to recover materials from both residential and commercial structures. The Westmoreland County Redevelopment Authority has given SDD the right to salvage materials in county buildings prior to demolition.
Financing: WCA projects that SDD will be financially self-sustaining within 3-8 year of start-up, and estimates that staffing will grow from 12 workers in year one to 21 employees by the end of year three of operation. The business plan projects a growth of annual revenue in from $246,000 (Year One) to $602,000 (Year Three).
SDD raised more than $600,000 for start-up financing including funds from the American Recovery and Reinvestment Act (ARRA) in 2010.
SDD’s business plan presents additional capitalization requirements of $1.4 million and the expectation of financing the venture through foundations, government agencies, and private donations. WCA’s business plan for SDD states, “As the market research indicates, we are operating in a growth industry and we have a niche position to help differentiate ourselves from larger chain stores.”
