Rick Holliday hoping ‘third time’s a charm’ with Modular Build of Twice Burned Intersection Project
After the second blaze at the 3800 San Pablo development in less than a year, famed East Bay developer Rick Holliday waited for the shock to dissipate, rolled up his sleeves, and got back to work.
The arson of the project was one of a string of similar incidents across the East Bay dating back several years. 45-year-old Oakland resident Dustin Bellinger AKA “Faheem Bey” was arrested last November in connection with at least one of the incidents and authorities are hopeful they got their man.
Holliday is as determined as ever to see the 105-unit market-rate apartment complex he started in 2013 through to completion. This time, he’s going to try a different approach to building it using modular units built at his Factory_OS modular housing facility and assembled on site.
Tour of Factory_OS’s Mare Island Facility
The Factory_OS plant is a state-of-the-art facility on Mare Island in Vallejo (OS being an acronym for “off site”). The Mare Island Naval Shipyard (MINSY) historically served as a Navy base but has transitioned to various industrial uses and housing developments since it was decommissioned in 1996.
The iconic ‘Building 680’ where Holliday operates once served as a machine shop that helped rebuild the Pacific Fleet after the attack on Pearl Harbor. Holliday likens the importance of its modern use of helping solve a contemporary social problem that is our housing crisis. A problem that is rapidly displacing residents and contributing to our homeless crisis. Holliday acquired the space from a high-end modular builder called Blu Homes.
Rick didn’t invent Modular Housing, but is looking to become the ‘Henry Ford’ of them by streamlining the process. “You wouldn’t build a car at your home, you’d build it a factory,” is an analogy he references often.
The 265K square foot factory is arranged in an assembly line format with massive overhead “bridge” cranes that allow workers easy access to all sides of the units and allow them to move them from station to station. They also use air casters that enable workers to easily ‘glide’ units over the warehouse floor. “Like air hockey,” Holliday pointed out on a private tour of his facility.
There are as many as twenty of these stations where various skilled craftsman apply their trade in carpentry, plumbing, electrical, etc.. “Right down to the toilet paper roll,” Holliday added. It also considered safer as workers can do their jobs from stationary walkways instead of scaffolding.
When the factory is operating at its peak, Holliday anticipates it might employ as many as 200 workers. Since the plant has access to a port, the units can be shipped to other ports along the West Coast.
The completed units are then transported on site and assembled with a crane ‘like legos’. Residents of neighborhoods where the final construction is taking place are less inconvenienced as the on-site construction process is shortened and fewer on-site workers are required.
Holliday hopes to dispel the misperception that ‘pre-fab’ homes are inferior quality. “We’re using the same materials and they won’t be exposed to the elements,” Holliday noted adding that wet weather won’t slow down these projects. Holliday also noted that fire-sprinklers are pre-built into the modular units thus dramatically shortening the window where developments are vulnerable to fires.
Hoping to Make Dent in Housing Crisis, Affordability and Homelessness
With spiking construction and labor costs, impact fees, insurance costs, etc., developers have to get creative to get their projects to pencil out. Holliday is embracing off-site modular construction to cut costs by 20 percent and build projects 40 percent faster. “Construction costs have exploded to the point where many projects just aren’t feasible,” Holliday added.
Holliday is also hopeful that modular construction can revolutionize the building of homeless and supportive housing projects where costs are critical. Construction costs typically represent about 70% of the cost of a housing unit. Construction costs per square foot in the Bay Area is at about $700 and increasing about 1% per month. “Tough sheds are a nice intermediary step to helping people transition off the streets, but permanent, supportive housing is the longterm solution.”
Google has even bought into the idea by committing to 300 units for a development for their employees. Google’s “smart home” technology can be incorporated directly into the build and truly revolutionize the efficiency of the way we live. “Smaller, smarter, and more adaptive … we’re really excited about having technology partners in this venture.”
Finding a Compromise with Trade Unions
In order to gain traction with this type of building, modular builders have had to try to squash the fear by trade and labor unions that modular building is a threat. If a majority of building can be done in cheaper parts of the state or country, a geographic or even non-unionized shift in jobs could be realized. All of the building in Factory_OS’s plant is done with union labor.
The region’s housing crisis appears to be stuck in a spiral and perpetuating itself. When the cost of housing is so expensive that construction workers — electricians, carpenters, plumbers —can’t afford to live nearby, they either command higher labor rates, which increases construction costs, or drive from further distances which contributes to the gridlock we’re experiencing in our highways.
Productivity is also impacted when workers are slowed by commutes or have to wait around for materials from other areas. Productivity or “wrench time” as Holliday refers to it, can be as low as 30% for laborers. Factory_OS claims “50% increased productivity” with their process.
“Homelessness and housing are complex issues, and we cannot be confined to brick-and-mortar answers,” noted former SF Mayor Ed Lee when he advocated in favor of the use of modular construction for a supportive housing project in his city in 2017. “We need to think out of the box.”
In addition to The Intersection project, Holliday is using modular construction for all of the projects in his Oakland portfolio including:
- 110-unit Union project under construction near the West Oakland BART station
- 235 units approved at 2121 Wood Street
- “The Phoenix” 101 units for the homeless and 200 market-rate units at West Oakland’s Phoenix Iron Works
The Intersection 3.0
“The ironic thing is that I initially wanted to build the Emeryville Intersection project as modular,” Holliday noted adding that the city was supportive of it. “Our business partner had some apprehensions so we went with a conventional build.”
Holliday noted the change of contractors from Davis Reed to Cannon noting Cannon has more experience with modular building. Cannon’s principal is Larry Pace who is also a partner of Factory_OS.
Holliday is in the process of securing new building permits through the city and expects construction to begin this summer and be completed by next spring.