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Wrecking firms: what goes up ...

By Rees, David
Publication: Los Angeles Business Journal
Date: Monday, August 22 1988

Wrecking firms: What goes up...

His bookends are made out of railway steel. William M. Fenning keeps them in his office at Cleveland Wrecking Co. in Vernon as a reminder that his company lost more than $600,000 demolishing the Boston Elevated Railway. Scrap steel prices fell unexpectedly.

The industry that made "headache" balls famous, of course, hits a bonanza now and again. Aluminum scrap prices doubled while Cleveland was tearing down a Kaiser Aluminum plant in Louisiana. Scrap, though, is only half the game.

Demolition work is the big enchilada for the nearly 200 licensed demolition contractors who compete here, says Chuck L. Clark, who owns a Baldwin Park demo outfit called Three-D Service Co. He says the industry is worth about $100 million annually in Los Angeles County. Cleveland, the nation's largest demolition company, will probably take in 60 percent of that total, says Fenning, its president and CEO.

Razing highrises, houses, churches and pools is full of surprises. If your father's in the dirty, dangerous business, odds are better than average you'll join him. The yen for this line of work runs in families.

This week Cleveland operators are crashing a headache ball -- two-and-half tons of steel -- from a crane through walls of the Church of the Open Door in downtown Los Angeles. The venerable church that had the "Jesus Saves" sign is becoming rubble.

A few blocks to the east, near Union Station, a crew is demolishing the Brew 102 brewery. These are but two of the 35 demolition jobs Cleveland currently has under way in the county, 550 worldwide.

Meanwhile, Glendale-based Viking Equipment Co. is demolishing two brick buildings at Arrowhead & Puritas Water Co. in South Central L.A., according to Secretary-Treasurer Mike Tredick. "Business has been pretty good for two years, and we still have a substantial backlog."

Clark's company just finished clearing a 20-acre shopping center in West Covina to make way for two high-rise office buildings and a Marriott hotel.

Cleveland Wrecking, with 450 employees in L.A. County and 3,500 altogether working around the globe, curiously has never done a job in Cleveland, Ohio, says Fenning. The wrecking company was founded 80 years ago by six brothers of the Rose family in Minneapolis to generate used building materials as an adjunct to their Rose Bros. new building supplies business.

The distinguish between their new and used materials, the brothers named the latter business Cleveland Wrecking after their birthplace, Fenning says.

To expand, several of the brothers moved to other cities to open branches there. The concern still has salvage yards in Minneapolis and St. Paul, Minn.

A key move was in the 1930s, when one Rose brother came to California to raze buildings to make way for San Francisco Bay-area bridges and to clean up after the Long Beach earthquake in 1933, which caused property loss of $50 million in Depression dollars.

Cleveland once became technical adviser for a Hollwood movie. "The Wrecker," starring Richard Arlen and George Bancroft, Fenning recalls, concerned a wrecker who saved the life of a young student trapped in a Long Beach school damaged by the quake.

Fenning married the daughter of a founding Rose brother, bought out two of the partners and established Cleveland's head-quarters in Vernon, five miles southeast of downtown L.A. Fenning's son, Donald L., is Cleveland's California operations vice president, a third-generation manager.

The industry claims close to 2,900 companies. It is populated by second- and third-generation managers or by people who learned the business by working for firms such as Cleveland and then started their own companies, says William L. Baker, executive director of the National Association of Demolition Contractors. He says the industry is very closely tied to construction, for to build something new in a metropolitan area, something old first must usually be razed.

Clark, for example, worked for his father's wrecking company before starting Three-D in 1968. Before founding Viking in 1965, Tredick first gained experience by going to work in 1961 for a demolition firm run by a friend's step-father.

In the old days, says Fenning, the company paid for the right to raze a building and wind up with the salvage. But as labor grew dearer, both to demolish a building and to straighten salvaged pipe, wreckers in the early 1950s began asking to be paid cash to demolish a building in addition to getting all salvage rights, he says.

The average price today ranges between $4,000 and $5,000 to raze a standard, single-family, one-story, three-bedroom home here, Viking's Tredick says. The price varies, he says, according to how many truck loads will be required, how far away the nearest dump site is and how much used brick and other reusable materials may be salvaged.

New environmental restrictions are making wrecking jobs more complex and costly. Cleveland has developed special expertise just to do jobs requiring the handling of asbestos, but Three-D prefers to farm out asbestos work to specialized sub-contractors to avoid potential litigation.

With the county's few remaining dumps filling up fast, dump operators have hiked their fees. It now costs $300 to dump a load, up from only $75 five years ago.

"And they're talking about $400 a load," adds Cleveland's Donald Fenning. Moreover, he says, it now costs $60 an hour to truck solid waste to a dump site, and it takes longer and longer to get there because nearby dumps have closed.

These are among the reasons why, he says, Cleveland now is grinding up the Brew 102 brewery's concrete into aggregate that can be sold as salvaged materials to builders instead of trucking the concrete to a dump.

Bidding on big commercial and industrial jobs is a very tricky business. Fenning says there are several reasons:

. Frequently lacking adequate plans of the building, a wrecker does not know what sorts of problems will be encountered in the demolition process. Fenning recalls one wrecker went broke trying to raze the heavily reinforced walls of downtown L.A.'s old Paramount Theater on Sixth Street between Broadway and Pershing Square.

(L.A., like many major cities in the United State today, bars wreckers from using explosives because of the damage they may do to underground wiring, sewers, gas lines and so forth.

. In bidding, a wrecker has to predict what salvaged materials and equipment will fetch months into the future. Fenning's railway bookends remind him of the Boston Elevated Railway debacle.

Sometimes Cleveland chooses to hang onto salvaged equipment while awaiting a particular industry's turnaround, he says, such as today's renewed demand for polyethylene equipment that Cleveland salvaged years ago from wrecking jobs.

Carrying such inventories requires a considerable line of bank credit (from -- of all places -- First National Bank of Cincinnati), he allows. "If you're going to be in the business, you have to be in the business."

While relatively few wreckers go to such inventory lengths, Viking and Three-D are among the firms with local salvage yards that sell reclaimed building supplies, such as used brick. Strolling through Cleveland's yard at 3170 E. Washington Blvd., a surprisingly small 1.5 acres, you can buy at least 100 toilets, retailing for $28 to $30 each, with seat; 100 steel bathtubs, each retailing for $40 to $50; 2,500 doors; laminated construction beams; chain-link gates; and stained glass windows.

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