News

Sioux Falls Business Journal Article on Carhart Lumber's Newest Location

(February 18, 2008)

By Randy Hascall
Sioux Falls Business Journal
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TEA – A family-owned chain of Nebraska lumberyards is expanding to a local industrial park to take advantage of continuing growth in the Sioux Falls region.
Carhart Lumber Co., founded 87 years ago in Wayne, Neb., has selected the Hagedorn Industrial Park for its 10th lumberyard. The company acquired two adjacent lots with existing buildings and opened for business in the last week of January, only days after gaining approval from the Lincoln County Planning Commission.
Kim Carhart, vice president, said a steady housing market and the likelihood that Hyperion Oil will build a refinery near Elk Point fueled the company’s desire to open a South Dakota lumberyard.
“With a downturn in the (lumberyard) business the last two or three years, a lot of people are closing locations,” Carhart said. “We’re doing the opposite. We’re trying to take advantage of what I believe is long-term growth along the I-29 corridor as far south as North Sioux City.”
Carhart said the company also is interested in opening a lumberyard at Vermillion. Its nine existing yards are all in Nebraska: at Wayne, Hartington, Norfolk, Neligh, O’Neill, Bloomfield, Pierce, Tilden and North Platte.
Carhart said her cousins, Scott and John Carhart, who are company president and treasurer, identified Sioux Falls as a potential location five years ago.
A housing market meltdown that has affected much of the nation has spared the Sioux Falls region.
“I think Sioux Falls is kind of an anomaly nationally,” said Kim Carhart, who lives at Spink. “Huntsville, Alabama, is the only city like it that’s been kind of insulated.”
The company’s new location is within five miles of home-improvement giants Menards, Home Depot and Lowe’s, but Carhart said traditional lumberyards have different strategies than the big-box stores.
The smaller companies realize their hardware sales will be minimal but believe they can do a better job of serving home builders and construction companies. Carhart said 75 percent of her company’s business is in sales to professional builders.
She said the big companies’ lowest-priced lumber is of a lower quality than lumber that Carhart Lumber Co. stocks. Customers have to pay more for higher-quality lumber but can avoid future problems, she said.
Kyle Eberts, president of the Home Builders Association of the Sioux Empire, said it’s always challenging for a company to break into a new market, but he believes Carhart Lumber will do well and the area will benefit.
“I think competition in our business is always good,” Eberts said. “There’s a lot of new money coming to our area. There are a lot of new people and a lot of new homes.”
Eberts’ company, Eberts Properties, owns one of the buildings that Carhart is leasing, and he said the company is good to work with.
The lumberyard’s retail center is in a 6,000-square-foot building, and lumber will be stored in a building twice that size. A truckload of wood arrived Jan. 31.
Drafting, delivery, DeWalts
The new lumberyard’s manager, Scott Gerdes, said the business will have a draftsman on site.
“You can bring in an idea for a house, scratched on a piece of paper, and we’ll draw it up for you,” Gerdes said.
The business will excel in customer service, assisting contractors, framers, home owners and others, he said. The center will carry a full line of cabinets and flooring. Its tool selection will include DeWalt and Paslode brands. It also will provide delivery service.
Gerdes said the early response has been positive.
“People seem to be really receptive and friendly,” he said. “It’s nice to come to an area where they’re receptive.”
Carhart said she started looking for prospective locations last spring.
“Trying to find available commercial real estate in the area was quite a challenge,” she said. “We had to get quite creative.”
The company typically builds its own facilities and probably would have started with a larger building if it would have had that opportunity, Carhart said. Instead, the company’s officers decided to take over two vacant, side-by-side buildings in the industrial park west of the Lincoln County Marv Skie Airport.
Carhart Lumber will take a nontraditional approach with this lumberyard. Because most of the company’s wholesale suppliers are in nearby Sioux Falls, the business will maintain a low inventory at its center with the realization it can get more items quickly. Its Nebraska lumberyards are farther from suppliers, so they stock larger inventories.
The lumberyard has three employees and will add two in the next weeks, with plans to reach a staff of seven.
Vermillion may be next
Carhart said the company will continue to look for a site at Vermillion. Most existing buildings that could accommodate a lumberyard in that city are owned by Polaris, she said.
Although the lumberyard is east of Tea’s city limits, it’s a welcome addition to the area, said Kevin Nissen, Tea’s planning and zoning administrator.
“We’re kind of excited to have them close,” he said.
The Hagedorn Industrial Park could be annexed into the city within three to five years, Nissen said.
Tea recently has expanded eastward, and developer Ted Thoms is planning a mostly residential development that would butt against the industrial/commercial park. That would open up a better opportunity to extend city services to the area.
Annexation of the park also would boost the city’s tax base.