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September 20, 2014

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Martin-Harris stung by tabled time-share project

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The economy is taking a toll on the construction industry, and Martin-Harris Construction is no exception.

The Las Vegas company was building the 19-story Wyndham time-share project when work was halted in November. The Desert Blue resort near the Rio was supposed to be 40 percent of the construction company’s revenue in 2009.

“You can imagine the shock that went throughout the company,” President Frank Martin said. “It meant we had to look at business in a different way when 40 percent of your ability to pay overhead goes away.”

With the construction slowdown Martin-Harris has laid off about 500 workers in the past nine months and now has a workforce of about 400.

Wyndham has been a great company to work for, and Martin said he understands its decision to shut down the project when it was 10 percent to 15 percent complete. Wyndham had other projects that were further along, and it made sense to finish those first, he said.

“If I was in its position, I would have done the same thing,” Martin said.

Martin, who said he hopes his company gets the opportunity to finish the project, said the shutdown went smoothly. Construction companies can restart a project without any major hitches unless it is delayed two years or longer. In those cases, buildings may need to be retrofitted because codes change or degraded material needs to be replaced.

It’s the first time Martin-Harris had a project stop in midstream.

“It taught us that we could face adversity, and inside the company we still look at this as the glass is half full and not half empty,” Martin said. “The first couple of days there were a lot of long faces. We have been here 30-some years and it brought the team closer together.”

Martin-Harris continues to be in a better position than other companies because it has undertaken joint ventures in Texas, Arizona and New Mexico and has focused on government work over the years, Martin said.

In addition to building schools, Martin-Harris is doing work for the Defense and Energy departments, he said.

“The model going forward is public works,” Martin said. “We are highly involved in federal government projects at this point, and (we have) been laying the groundwork for seven years. That groundwork is now paying off.”

Other companies are trying to get that work right now, Martin said.

The industry will continue to face challenges because the casinos drive construction, Martin said. Only the strong companies are going to survive because business owners that took out cash during the good years are going to have to put it back in, he said.

Commercial foreclosures will make construction even more challenging, Martin said.

“That is going to change the face of the construction industry,” Martin said. “We have just barely started to see foreclosures start. We are not going to see the bottom of that until the end of the first quarter or second quarter of 2010. What it is going to do with all the products coming out and the banks needing to get rid of it is shut down new construction projects completely. Why build a building when you can go buy one for 65 cents on the dollar?”

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