Contracting vets deliberate on downturn

Norm Dianda's first job after he founded Q&D Construction in 1964 with partner Lawrence Quadrio was a $650 kitchen remodel. The company's latest projects include the $75 million Mathewson-IGT Knowledge Center at the University of Nevada, Reno.

But Dianda says the current recession is the most difficult for the construction industry business in northern Nevada during the 44 years Q&D has been in business.

Bob Jones, who led the Builders Association of Northern Nevada for 26 years after he began his construction career with Reno Millworks and Shea Homes, agrees that Reno never has been hit so hard.

Dianda, Jones and the late E.W. Hardesty last week were inducted into the Builders Association of Northern Nevada's Housing Hall of Fame. Hardesty, who became the association's first president in 1956, died in 1985.

The biggest factor separating this recession from others, Dianda says, is that Reno wasn't hit as hard as

other metropolitan areas during previous downturns.

"Reno always seemed to continue to grow. We suffered, and it was tough, but we didn't have a flooded market of developed subdivision lots, overbuilding of housing, overbuilding of industrial warehousing, commercial space and office as we do today," he says.

Jones says dramatic changes in Reno and Sparks in the past 30 years contribute to the severity of the downturn.

"In previous recessions the fall wasn't as far," he says. "In the '80s, we didn't have the number of units being built, so that the downturn didn't feel as severe. The actual market itself was as severe, but it wasn't affecting as many people because we were a smaller community, and there were a smaller number of houses being built."

Traditionally, too, the Reno-area economy remained relatively unaffected by national economy cycles, he says.

Jones took the reins as executive director BANN in 1981, near the bottom of a severe recession.

He says today's tough economic climate mirrors troubled times of the late 1970s and 1980s, but this recession is caused by different factors.

"That was probably the most difficult market period I have seen since today," he says. "The interest rate at one point was up to 19 percent on housing, and you can imagine trying to buy a house. Now it is being driven by international and other monetary problems, but at that time it was driven by inflation."

Jones says one of the main reasons why northern Nevada is getting pounded economically is because the basic economics of the industry changed for homebuilders. Rather than the previous model in which local builders borrowed money from local banks to construct new housing units, large national Wall Street-

backed builders began saturating the market.

"The industry itself changed," he says. "The bigger builders had funding to run out in front of inventory."

Q&D has managed to weather economic storms including the current downturn through diversification, says the 69-year-old Dianda, who began his construction career as a carpenter and cabinetmaker after he graduated from Reno High School.

Its general engineering group installs underground utilities such as gas, water, storm drain, sewer, telephone, fiber optics, and performs site grading. It builds concrete and asphalt highway projects, using its own products from a subsidiary, All-Lite Aggregate.

On building projects, Q&D handles work ranging from preparation of a site to finished product, including carpentry, concrete, and finish work. It also furnishes millwork and interior packages from a subsidiary company, Artefice by Dianda.

The company has tightened its belt substantially.

Lacking its normal large load of site engineering work, Q&D has trimmed employment to 520 workers from its 2006 peak of 1,252. Q&D also sold off about 10 percent of its older equipment at a Ritchie Bros. auction in Patrick in October.

"We have a lot of our big equipment parked but the good thing is that we can afford to have it parked because it's all paid for," Dianda says.

The current economy, he says, points up the need for the community to continue to seek economic development.

"If you don't have sustainable growth, you have a dying community," Dianda says. "We are in a tough recessionary time, and it is going to get tougher. I don't want to pave everything black, but we need good sustainable growth."