Boise modular hotel, apartment maker once had yearly sales of $80M. Then this happened
Guerdon Modular Buildings billed itself as “the leading manufacturer of large-scale, commercial modular construction projects in the Western U.S. and Canada.”
The Boise company’s website said Guerdon completed over 70% of the hotels built with modular technology between 2015 and 2019. By 2018, it had built more than 1,500 hotel and apartment units at its Southeast Boise factory for installation in the Bay Area alone. Guerdon was also a major supplier of modular housing for the natural-gas industry in North Dakota and Canada.
But the company could not keep up with its financial obligations. In late January, Guerdon was sold for an undisclosed price at a foreclosure auction forced by its senior lender, Main Street Capital Corp.
An investor group led by Guerdon founders Laurence “Lad” Dawson and Mike Bowers bought the company, now called Guerdon LLC, in partnership with Innovatus Capital Partners, a New York City investment firm.
It’s unclear what caused Guerdon’s financial problems. The company did not file for bankruptcy, and a search of state court records in Idaho and federal courts throughout the United States revealed only one lawsuit, a California case filed last fall by a construction company that claims Guerdon supplied substandard modular units for a six-story, 118-unit apartment complex in Sacramento.
Guerdon has not returned phone calls and emails from the Idaho Statesman over the past two weeks. Emails to Dawson and Bowers bounced back with messages saying a Statesman reporter’s emails had been “blocked.”
Guerdon loan payments past due
In a quarterly filing last June, Main Street Capital, which provided $11.2 million in loans and $2.4 million in an equity investment in 2014, reported Guerdon’s loan payments were more than 90 days past due.
In its latest annual report, published Feb. 28, the Texas debt and private equity company said Guerdon owed it $13.6 million in debt and interest. Of that, $12.6 million was at 16% interest, with the remaining $1 million at 10.6%.
At the time of Main Street Capital’s 2014 investment, Guerdon reported annual sales of $80 million. Its workforce numbered 300 people. It has not publicly provided sales or workforce numbers since.
Dawson, former CEO of American Homestar Corp., and a group of partners bought American Homestar’s Guerdon division in 2001. At the time, Guerdon built manufactured homes at its factory at 5556 Federal Way.
The company saw sales evaporate when the housing bust began in 2007, the Statesman wrote in 2012. Dawson saw a way out of the financial crunch by turning to modular living quarters for workers in the expanding oil fields of North Dakota and Canada.
Built in Boise, shipped to sites
The units were built in Boise and shipped to the sites, where they were assembled.
Later, Guerdon turned to modular hotels and apartment buildings.
In a lawsuit filed in U.S. District Court in Sacramento, Tricorp Construction Inc. of Sacramento accused Guerdon of breach of contract, negligence and intentional misrepresentation. The lawsuit says many of the modular units delivered for the Eviva Midtown apartment complex had cracked drywall and ridges in flooring.
A video from Tricorp Construction Inc. shows how modular housing units supplied by Guerdon Modular Buildings were fitted into place at the Eviva Midtown apartment complex.
In addition, exhaust vents were placed too close to windows to meet building codes, and the dimensions of some of the modular units were different than plan specifications.
Tricorp said it had to repair and replace damaged bathroom vanities, fans, lights and ceiling fan wiring. Tricorp is seeking a minimum of $949,000.
Guerdon denies the allegations and has filed a countersuit. It claims it was not liable for any damage caused after the housing units were delivered to the site in Sacramento.
A trial date has not been set.
This story was originally published March 5, 2020 at 4:00 AM.
