... make a bet and build a plant,” he says. Now, however, finance vehicles are becoming available for multifamily developments like Walnut Square, opening up possibilities for modular manufacturers.
Even if New Orleans develops an appetite for Stratford’s product, transportation remains a huge challenge. Yet Endy says building a plant in New Orleans is not a viable option. “It’s a tough time to expand plant capacity, and I still have two factories in the Midwest that I am currently not fully utilizing,” he says.
Walton and Stratford are considering barging the modules on the Mississippi River from a port at LaCrosse, Wis., 160 miles from the plant. They also are pricing trucking firms, which may appreciate the steady stream of work for the eight-month to 14-month project.
Freight rates of $10 to $12 per sq ft will hurt Midwest companies in the long run, says David Lohrey, CEO of Housing International Inc., a Sausalito, Calif.-based manufacturer of steel-frame panels for homes. The firm purchased and converted a pipe plant in Reserve, La., between New Orleans and Baton Rouge, a year ago and began home production in July. The plant is near the Mississippi River, the Port of South Louisiana, Interstates 10 and 12 and several rail lines.
Roof system is installed and protected from the elements in Wisconsin manufacturing plant.
“I see us being able to deliver fairly inexpensively within 125 miles,” says Lohrey, who claims a sales backlog of 12 to 18 months for several hundred million dollars of work in Alabama, Mississippi and Louisiana. He admits “all that work isn’t contracted yet” because of difficulties owners have working with the federal and state aid programs.
Since Lohrey started his company in 1998, he has been involved in international housing, including “container housing,” which consists of a shipping container and its contents in an all-inclusive house package. Housing International subcontracts to plants in Southern California and Hawaii for export to Korea, Africa, Mexico and Latin America. It was attracted to southern Louisiana not only by the local demand but also by its strategic positioning to Latin America.
“I like it because we are not just dependent on the local market,” Lohrey says. “We can export to anywhere. That will also be a boost to the local economy if we can manufacture something that will be distributed worldwide.”
That vision has attracted the AFL-CIO Housing Investment Trust, which provided seed money and introduced Housing International to “friends and family,” investors, financiers and builders. The union’s housing and building investment trusts can’t invest in operating businesses but have been “closely involved in assisting the owners and arranging opportunities,” says Tom O’Malley, AFL-CIO HIT’s director of community investment initiatives.
In June 2006, AFL-CIO President John Sweeney announced a $1-billion Gulf Coast Revitalization Program that would include workforce training as well as projects to put graduates to work. “We want to support affordable housing, but we also want to put the people to work that are coming out of our ...