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Business Observer Friday, Jun. 18, 2004 18 years ago

One Man's Trash ...

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Sarasota's Meyer & Gabbert Excavating finds its profit at the bottom of dumpsters - converting lawn and construction waste into materials to sell to others.

One Man's Trash ...

Sarasota's Meyer & Gabbert Excavating finds its profit at the bottom of dumpsters - converting lawn and construction waste into materials to sell to others.

By Sean Roth

Real Estate Editor

Recycling has the unfair reputation of being the purview of long-haired hippies. Jim Gabbert and his business associate Leonard Meyer certainly don't fit the mold. The truth is both partners are supportive of environmental sustainability, but when it comes to Sarasota-based Meyer & Gabbert Excavating Inc. they see recycling in dollars and cents.

From a business perspective, recycling can be an exciting proposition. Imagine a business model where the supplier actually pays you to take the raw materials off their hands. Meyer & Gabbert Excavating takes huge chunks of concrete and crushes it into small pebbles for use in driveways and road base. In much the same way, tree branches and other land waste is cleaned and shredded into a natural mulch, which is sold to landscape maintenance companies.

"This is a very economics driven business," Gabbert says. "If we didn't think we could make money we wouldn't be doing it."

The local economics of recycling construction and yard waste, although subject to diverse market conditions, have proven good for the partners. The company's annual gross revenue more than doubled from about $3 million in 1999 to $6.5 million last year. Belied in those numbers is the company's significant expenditures on expansion since early 1997. Gabbert and Meyer now own and operate four recycling facilities in the local market: two in Sarasota County and two in Manatee County. Recycling sites are located near Fruitville Road and Sarasota International Trade Center, next to the Central Sarasota County landfill on Knights Trail Road in Nokomis, on 63rd Street East in Bradenton, and on State Road 70, east of I-75. The company has grown from four employees in 1997 to about 70.

What's perhaps the most intriguing about the company's quick growth is that it reached those large numbers after only nine years in the recycling industry.

Gabbert and Meyer, both life-long Sarasotans, started their business careers as self-employed contractors in the mid-'70s. "Leonard's father was a general contractor," Gabbert says. "My father worked with homebuilders. My brother was a general contractor. Both of us grew up in the industry so it was only natural that when we were 19 we became contractors ourselves. It was mostly on the job training. At the time, there was plenty of work to go around. Most contractors were open; they would let you do a small job to start with."

The two contactors gravitated toward excavation, site development and demolition work.

In the spring of 1987, the two future partners met while excavating a lake site. They got along so well, they merged their two small companies into Meyer & Gabbert Excavating later that year.

Gabbert and Meyer operated the merged company as a typical general contracting firm through the early-'90s with fairly regular growth. But in 1994, the partners saw a legal notice from Sarasota County that changed the development path of the company.

"We always saw the need to recycle construction materials on the job site," Gabbert says. "It just felt like we were throwing away money. But we could never find a facility nearby."

The county's notice was a request for proposal for a company to take over the recycling of all of Sarasota County's construction debris. The county had a fairly tight schedule to find a new contractor. Its former recycling contractor had not renewed its contract, and the Florida Legislature had passed a law requiring that all counties, with a population larger than 50,000, meet a 30% adjusted recycling rate for all solid waste by 1998.

While the two partners had a firm grasp on what materials would be left on a job site, what to do with those materials in order to recover them was far outside their scope of knowledge. In addition, recycling is a highly legislated industry, so all of the company's recycling techniques had to meet the state code.

"There was a steep learning curve," Gabbert says. "We went to trade shows and visited other recycling sites. We also wrote letters asking other people how they had done it."

From that feedback, the partners drafted a proposal to partner with the county to take over recycling. In 1995, Meyer & Gabbert Excavating was awarded the contract.

The contract gave Meyer & Gabbert a use agreement for a 5-acre site on the now-closed Bee Ridge Road landfill. It was the partner's responsibility to build the facilities and assemble the necessary equipment. That same year, the partners opened a $4 million recycling facility for the county materials. By 1997, with an additional investment of about $6 million of the principals' own savings, the company opened its first separate private recycling facility. Unlike most of its contemporaries, the facility recycled multiple products, including steel, cardboard, concrete, cooper, stainless steel and lawn materials.

Then the partners had to address the really tough part; they had to find clients for their recycled products. Some products could be sold locally, namely the mulch, artificial dirt and stone products. But some clients, such as those for stainless steel, were out of state and took years of searching to find.

"This takes a lot of state-of-the-art processes and creativity," Gabbert says. "We discovered that crushed up concrete rubble could be recycled into artificial dirt, which can be used by the county to cover its landfill. We are constantly evolving to keep up with the technology. We got a lot of cooperation from the county."

After nine years, the partners are happy to say that the business has been a win-win for most involved. The company is profitable. The costs to the contractors for hauling a load of construction materials is comparable to other companies, which recycle only part of the material or even dump it all. Meyer & Gabbert Excavating charges about $47 per ton of materials compared to about $63 for a delivery of a ton of material to the landfill.

"We can show we can provide an economical alternative to everyone," Gabbert says. In 2003, the company's contract with the county was extended five years.

Now 90% of the company's work involves recycling while 10% involves traditional contracting services. The company was chosen as the environmental business of the year in 2002 by Sarasota County, and the company has achieved a cumulative recycling rate of 74%.

Going forward, the principals for Meyer & Gabbert Excavating see the biggest potentially, new growth sector coming from increased green building.

A number of new homebuilders and commercial contractors are jumping on the green built bandwagon. WCI Communities of Bonita Springs is building all green homes in its Venice Golf & River Club development. Bruce Williams Homes, Homes By Towne, Kimball Hill Homes, Lee Wetherington Homes Inc. and Morrison Homes are all committed to building in The Villages of Greenbrook, the first green-built community in Lakewood Ranch. One of the ways to increase the likelihood of obtaining a high green-built certification is by proving that a certain percentage of the waste construction materials are recycled. Meyer & Gabbert Excavating is trying to attract both the Lakewood Ranch builders and the homebuilders in the Founders Club.

"That has been a great market for us," Gabbert says. "We can prove that we recover at least 50% of what's in a construction dumpster. We also know how to the fill out the paper work, which is an important part of the process."

Bottom-line: the owners know that Meyer & Gabbert is a service business and they have to continue to focus on the company's delivery and employee presentation.

"We are producing superior products," Gabbert says. "Our Florida native mulch is a premium product that is half the cost (of the more accepted) cypress mulch. But our business comes down to top quality service and competitive pricing. It is more important to have good employees that are courteous on the work site. Service is still the driving force."

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