Despite essential status, CA construction firms scored billions in PPP loans

Thousands of Golden State builders received federal loans even as work kept on

TRD LOS ANGELES /
Jul.July 10, 2020 03:37 PM
Builders throughout the state get millions in loans even as work continued amid covid
Builders throughout the state get millions in loans even as work continued amid covid

As other businesses shut down due to the coronavirus pandemic, California construction companies kept building.

But that didn’t stop 2,784 such companies from nabbing Paycheck Protection Program loans, including prolific builders Bernards Bros. and A.C. Enterprises, who each got at least $5 million toward employee retention.

The data is culled from the Small Business Administration’s release Monday of what organizations grabbed loans in an emergency payroll relief program that has so far totaled $659 billion.

The publicly available information provides loan ranges, not exact figures. Recipients can apply to have the loan forgiven if they meet criteria including that at least 75 percent of the money goes to payroll.

Thousands of California real estate companies directly affected by the pandemic received loans to avert layoffs.

For instance, The Agency, a Beverly Hills-based residential brokerage, took a loan of between $2 million and $5 million after open houses and home showings were banned by local stay-at-home orders.

But construction wasn’t banned at any point.

Literally hours after Gov. Gavin Newsom announced on March 19 a sweeping shut down of much of California’s economy and civic life, Newsom amended his emergency order to allow construction work to keep going.

Subsequent to Newsom’s order, top construction outfits in Los Angeles County and throughout the state said projects were proceeding, though with additional safety precautions due to Covid.

“Most of my members didn’t apply for the PPP loans,” said Peter Tateishi, CEO of the Association of General Contractors, California’s main construction lobbying group and an advocate for persuading Newsom that construction was an “essential” activity.

The ones who did were likely “managing and anticipating the future state of the unknown,” Tateishi said.

One wrinkle, the construction trade group leader pointed out, is that six Bay Area counties banned construction in March, a ban that stayed in place for four weeks.

The stoppage affected Bernards, a San Francisco-headquartered company that ranks as one of L.A. County’s most prolific builders, and the company used the loan to preserve 272 jobs.

Other construction companies that received at least $5 million loans include Calabasas-based West Coast Redevelopment Inc., which applied to use the money to retain 356 jobs; and A.C. Enterprises, a Hayward-headquartered company that used the money to keep on 272 workers, though the firm’s focus is residential construction.

A curious entrant in the PPP sweepstakes was Oceanwide Plaza LLC, a Los Angeles subsidiary of a China-based company that is best known locally for a stalled downtown high rise. The company netted a loan of between $350,000 and $1 million loan to keep 17 employees.

Messages left with individual companies were not returned.


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