Talk about innovation. SG Blocks takes large steel shipping containers and turns them into apartments, hotels, restaurants, houses and stores — at a fraction of the costs it takes to build such structures.
By Lee Barnathan, California Business Journal
Go to any of California’s 11 ports and see a familiar site: those large steel shipping containers are off-loaded from boats and then just sit there empty. Paul Galvin has seen that, too, but he’s doing something about it: creating livable, workable and shoppable environments.
Galvin, CEO of Brooklyn, N.Y.-based SG Blocks, takes these containers and, with the help of architects, engineers, developers and builders, turns them into commercial and dwelling units at a fraction of the costs it takes to build such structures, using traditional methods of construction.
SG Blocks has developed a strong portfolio of brands, having done work for household names like Starbucks, Taco Bell, Mini Cooper, Puma, Schneider’s, private residences and offices. And helping nonprofits, especially those that deal with homelessness, is of special interest to Galvin. Before he invested in SG Blocks, he founded and ran a non-profit that helps the homeless-with-AIDS population in New York. His experience with traditional construction, led him to explore alternatives and he met SG Blocks founder David Cross, who used these shipping containers to build a house in Charleston, S.C.
A current project is 46 containers that will be Heart of Los Angeles’ 25,000-square-foot arts and recreation center in the city’s Lafayette Park section. This will be the nonprofit’s flagship building and the majority of a 38,000-square-foot complex. It is scheduled to open in August.
“Look at the demand for housing. I’m frequently in L.A., and I’m disheartened by the number of homeless individuals and the encampments that are growing by themselves,” Galvin says. “I’m aware of the inefficiencies of traditional construction and we offer a scalable, fast-to-market solution.”
Building a house isn’t cheap. The website homeadvisor.com says the national average to build a house is $286,277; The Lenders Network puts it at $289,415. According to the San Francisco-based nonprofit public media outlet KQED, the median home price in Los Angeles exceeds half a million dollars (the real estate database company Zillow puts it at $537,315). In San Francisco, it’s $1.61 million, according to Paragon Real Estate economist Patrick Carlisle. In San Diego, it’s $625,759 by Zillow’s estimate.
Galvin says he can build at 25 percent below site-bid construction costs. The entry-level GreenSteel™ product begins at less than 50 percent of the national average of $150 per square foot for one story, according to homeadvisor.com.
“It’s a better product at a lower price in half the time, and it’s installed in weeks, not years,” Galvin says, adding that once others build the foundations and do the necessary work for water and power, SG Blocks can deliver the containers in as fast as one every 20 minutes. “There’s no scaffolding and dirt and razing and double-parking. Storefronts aren’t covered for years.”
What’s more, SG Blocks are built in compliance with building codes, and work with any façade, including stucco, limestone, brick and aluminum. These don’t look anything like the rectangular steel containers that have just come off a ship.
“They are built to withstand a dynamic, moving conditions aboard ships, and then we take them and put them in a stable environment on a foundation,” Galvin says.
SG Blocks works with various insulation technologies to keep the unit hot or cold as needed, just like traditional wood-based structures. The 8×40-feet units are made of recyclable Cor-Ten steel that weigh 8,000 pounds and can hold 50,000 pounds. Since these containers are stackable, as many as nine can be stacked in one structure (which allows designers to get creative), and can hold approximately half a million pounds.
With HOLA’s future center, the containers will comprise three stories and make up the music and activity rooms, community rooms and labs. This will increase HOLA’s ability to serve its constituents by 74 percent.
HOLA originally became involved with SG Blocks because CEO Tony Brown was looking for a temporary solution to serve his wait list of 250-300 children and families. He looked at the rectangular trailers schools often use but found them, well, too temporary. Then he heard about a Waldorf School in Costa Mesa and a complex in Oak Park that was using them.
After visiting Oak Park, Brown was sold.
“The containers can blend in,” he says. “When you go to the Westside, you feel a certain way. We want the kids in this neighborhood to have a sense of dignity and pride when they come into our building.”
Then he met Galvin and found a kindred spirit.
“Paul’s leadership is wonderful,” Brown says. “He has great vision, he has a heart for the community, and he has a heart for wanting to make sure the containers are seen as part of a solution. We want kids to have an equal chance to be successful. Paul has been committed to that.”