New company to build modular homes for energy boom areas

2012-05-14T17:15:00Z 2012-05-14T21:46:04Z New company to build modular homes for energy boom areasBy JAN FALSTAD jfalstad@billingsgazette.com The Billings Gazette

Jobs are plentiful, but housing is hard to find and super expensive in energy boom states and provinces.

A newly formed Colorado company has chosen Billings as its headquarters to build modular homes to help address the critical housing shortage in 10 Western states and three Canadian provinces.

Canadian-American Structured Solutions Inc. has leased the sprawling Sutton's Sportswear Co. warehouse at 1400 S. 24th St. W., and intends to hire 100 workers by year's end to build 150 to 250 single-family homes per year.

"The volume we have on the books now is equal to our third year in our business plan, so the first two years of start-up work were thrown out the window," said Larry Nelson, CASS Homes investor and chief financial officer.

The first order of five homes will be shipped by July. The single-family homes will make up 50 percent of the business and the other half will be constructing modular multifamily buildings, even hotels. The energy-efficient homes will be trucked to permanent sites in housing-hungry towns and cities across the Great Plains and Rocky Mountain region.

Nelson said developers are talking with the company about building 100 homes in Williston, N.D., where workers are living in cramped and sometimes unsafe man camps and monthly rent for a single bedroom can be $1,200.

The Rocky Mountain and Great Plains region is seeing the largest influx of workers in decades. 

"We don't even have a sales department or a marketing department. We're just getting all the phone calls," Nelson said.

The Sutton's building, which sat vacant for three years after the clothing manufacturer closed, has 68,600 square feet, including 8,600 square feet of office space. Jon Ussin of U Bar S Real Estate handled the lease/buy negotiations.

"Ten pages in our business plan list why Billings makes sense. It couldn't make more sense if we'd created a town," Nelson said.

The privately-owned company plans on exercising an option to buy the Sutton's warehouse on nine acres at the end of a seven-year lease.

If this company is successful, the ripple effects of the business will be substantial.

"If we do 500 units a year and we have 10 windows per home, that's 5,000 windows per year," Nelson said. "I don't know if (the local) Pella store has ever sold 5,000 windows, much less in one year."

Three entrepreneurs with a combined 100 years experience in home building, including modular homes, formed CASS Homes.

Nelson, of Denver, built homes in the Southwest and works as a CPA specializing in fraud and forensic accounting. Engineer Ronald Sparkman received the "Green Builders" award from the National Association of Home Builders. And president and chief executive Lorne Wallace, of Toronto, is a manufacturing efficiency expert.

The three own 80 percent of the company, which incorporated in Colorado in January with the balance of the cash put up by Moriarty Group, a California-based investment company.

Many other companies are building modular homes and trucking them to the site, said Greg McCall of McCall Development in Billings. The idea isn't new, but it makes sense, especially in areas where building materials and labor are unavailable or expensive.

"Williston can barely stock the shelves in Walmart, how can people build houses in an affordable manner and compete with oil field wages?" McCall said.

CASS will spend up to $500,000 to remodel the Sutton's building.

Half of the homes and all of the widest ones — up to 24 feet wide — will be shipped to Canada so CASS can qualify for tax incentives to hire workers, Nelson said.

"The state of Montana actually requires us to export over 50 percent of our production," he said.

Big Sky Economic Development officials are working with CASS on their Billings plans.

Despite all the opportunity, Nelson said the company's business plan is broad based.

"We did not build our business on the assumption of doing a majority of sales due to the oil boom, but the offshoot will be beneficial to us," he said.

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