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Remodeling Business Rebounds By Refocusing on Commercial Contracts

BY JESSICA LONG

Like a good high-stakes poker game, business owners in a down market have to ask themselves whether they want to hold ’em or fold ’em.

Mark Miller, president of Osso Miller Pacific or OMP, a longtime residential remodeling company, did neither.

Instead, he shuffled the deck and gained $2 million a year in added revenue.

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“Everyone knows that the residential real estate market has taken it pretty hard on the chin in the last couple of years,” Miller said.

Miller bought the company in 2005 from its original family ownership. Based in Coronado, the builder had a strong 15-year reputation and enough backlog of business to last Miller a long time, or so he thought.

“What was attractive about OMP was that all of the infrastructure was in place,” said Miller, a former Navy intelligence officer. “Initially, the residential remodeling work was supposed to provide $3 million to $4 million for a couple of years at least.”

In reality, Miller struggled to generate $2 million in sales his first year, prompting him to make a drastic change.

“It was hard to compete with the guy with the pickup truck who would just show up and get the work done for less,” Miller said.

Miller moved the business to Santee, cut its employees from about 26 to nine and changed its focus from residential remodeling to commercial and affordable/low-income housing.

The employees that Miller laid off were laborers who have been replaced by subcontractors.

“Self-performed labor has always been an issue,” Miller said. “If they screw up, they have to fix it on your dollar, no matter what, it has to be done. But if you use a subcontractor and they mess up, they have to fix it on their dollar, no matter what.”

Immediately, OMP began to log a $3,000 to $4,000 a month savings in lower rent, plus added savings in mileage reimbursements and other expenses, said Chief Financial Officer Stephanie McDonald.

“Obviously, the rent’s cheaper,” McDonald said.

From $2 million in sales in 2005, OMP rose to $4 million in 2006 and $6 million this year. By 2008, the company hopes to reach the $10 million mark in revenue, McDonald said.

Choosing to leave Coronado was a no-brainer for Miller.

“Unless you’re doing business on the island, you don’t need to be on the island,” Miller said. “We had to look like the contractor we wanted to be. A Coronado address didn’t do that for us anymore.”


Latest Projects

One of the latest projects that Miller has attached the new OMP name to is the El Cajon Harley-Davidson dealership. About $4 million is being spent on expanding the space to 21,000 square feet from 6,000 square feet.

The new dealership will include twice as much retail space, an improved service department, showroom and expanded parking.

Construction Supervisor Bob Rohrbach, who works for the dealership, said it’s a project more than five years in the making, but it wasn’t until Miller entered the picture more than a year ago that things started to come together.

Rohrbach said Miller’s military background with complex projects overseas helped him transit into the complicated world of conditional use permits and other City Hall demands.

“I think what’s impressed me so far is Mark’s attention to detail and ability to meet many deadlines,” Rohrbach said. “It’s a trait that is hard to find in the construction industry, but one that’s really important as a client.”

In addition to being detail-oriented and deadline-driven, Miller is challenged by the process of public work.

Another El Cajon client of Miller’s is the El Cajon Community Development Corp., which is building seven affordable houses dubbed the Wisconsin Lane Cottages Project.

About $2 million is being spent on that project.

“It’s a very politically charged project and that to me is pretty exciting,” Miller said.

Other clients include Scripps Memorial Hospital Encinitas, city of Coronado, Paladin Real Estate Group, Spectrum Property Management, San Diego Harbor Excursion and Gate Gourmet, a San Diego company that prepares airline food.


Jessica Long is a freelance writer based in Escondido.


Editor’s Note: A previous version of this story refered to OMP by its historical name. This version has been corrected.

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