Concrete Option

0
Concrete Option
Rubbersidewalks founder Lindsay Smith with a section of product at the Hammer Museum in Westwood.

Becoming an entrepreneur was the furthest thing from screenwriter Lindsay Smith’s mind nine years ago when she drove down a street near her Gardena home and saw a row of beautiful ficus trees marked with big red X’s.

That was until the next morning, when she found county work crews cutting down the trees.

“I hit the roof,” Smith recalled. “I asked the foreman what they were doing. He said the ficus tree roots were breaking up the sidewalk and the trees had to come out.”

Determined to stop the cutting, Smith called the local newspaper, which ran an article. That roused residents and the project was halted, saving more than a dozen trees.

But the episode rankled Smith. “I told the county officials that there has to be an alternative,” she said.

It was that impulse that launched Smith on her career as an entrepreneur in the sidewalk construction business. While there are plenty of companies that make rubberized playground surfaces, Smith’s Rubbersidewalks Inc. is using recycled tires to make sidewalks that are more flexible than concrete.

The sidewalks have been installed in Thousand Oaks and Los Angeles to name just a few cities, but the company has struggled to gain traction as a combination of premium pricing and tight municipal budgets has made public works officials reluctant to embrace the material.

In response, the company cut pricing last year and grossed more than $1 million. It’s also sold the material to commercial and non-profit facilities, such as the Los Angeles County Music Center.

That’s not a bad strategy, given that even boosters concede that city sidewalks are likely to remain a niche market, with perhaps just 10 percent to 20 percent of sidewalks appropriate for the material.

“This only makes financial sense where there are trees with extensive root systems that consistently damage sidewalks,” said Richard Valeriano, a Santa Monica sidewalk inspector. “It makes no sense to use this on streets lined with palm trees or with no trees at all.”

Uneven path

Smith didn’t necessarily expect to start her own company. But when she called other cities to see how they were handling the problem of tree roots cracking through sidewalks, it turned out that Valeriano was experimenting in Santa Monica with health club flooring made from recycled tires; it could bend yet remain intact as tree roots pushed from below.

The product was still experimental, so Smith took time off from screenwriting and worked with Valeriano to come up with a durable and marketable material. But the tire recycling company that Valeriano was partnering with didn’t want to go further, saying the venture was too expensive. So, in late 2001, Smith went off on her own and formed Rubbersidewalks.

She then got a $250,000 grant from the state Integrated Waste Management Board, which each year doles out millions of dollars generated from a $1.75-per-tire recycling fee for projects that find uses for old tires. She used the grant to hire some contractors to turn little crumbs of recycled tire rubber into a mold that could serve as a sidewalk material more durable than indoor flooring.

“It was hard, because there was nothing like this on the market and nobody knew enough to say, ‘This is how you do it,’” Smith said.

Rubbersidewalks came up with an acceptable material but more importantly had a key innovation – a five-square-foot modular design that allowed portions of a sidewalk to be removed, and then put back into place after the tree roots underneath are pruned. But the challenge was convincing bureaucrats to take a chance on an unproven material that costs up to 30 percent more per square foot than concrete, which goes for about $7 per square foot.

Cities also can seek grants from the state waste board, but those subsidies can’t cover the entire additional up-front cost of switching to the rubber sidewalk material. However, Smith would argue that cities would save money in the long run by not having to replace long segments of cracked sidewalks every three to five years.

In 2003, Smith landed her first trial project on a residential street in Long Beach. After a few months, the project was deemed a success and soon Smith convinced Thousand Oaks, Santa Monica and Los Angeles to use the rubber sidewalk material on a trial basis.

Orders from local cities picked up in 2004 after local television personality Huell Howser featured Rubbersidewalks on one of his shows. That exposure also brought in a former dot-com executive who invested $100,000, allowing the company to ramp up marketing.

Durability question

Smith by this time had set aside a screenwriting career. (Her credits include the 1993 thriller “Back in the U.S.S.R.,” which starred director Roman Polanski in a lead role.) The next big challenge was to make the material even more durable.

The company tried mixing it with polyurethane resin, but abandoned that idea when prices for the oil-based resin skyrocketed during the oil bubble of 2006 and 2007. Instead, Smith and her team injected liquid recycled-waste plastic into the rubber mold. Not only did the new blend hold up longer, it also looked lighter and more like concrete.

But this new blend, dubbed Terrewalks, cost more than $10 per square foot, nearly 50 percent more than concrete. At this price, it takes about five or six years to break even on the up-front investment. Last year, sales slumped, so Rubbersidewalks lowered the price on Terrewalks to nearly that of concrete, while maintaining pricing on its original product.

Since then, Smith said, orders have picked up, prompting Rubbersidewalks to look for outside capital to contract with an additional rubber recycling plant. Currently, Rubbersidewalks contracts with several companies that collect the recycled rubber and process it into the sidewalk molds.

Smith has a big challenge.

Eventually, the state’s tire recycling grants are going to wind down, which would make it tougher for cities to bear the up-front cost of using Rubbersidewalks products. No one knows when that will be, but the company will need to reduce the cost of the material to stay competitive.

“These grants aren’t going to last forever,” said Terry Leveille, publisher and editor of California Tire Report. “The tire fee program was designed as a temporary subsidy to get the market for recycled tire products going.”

One thing Smith has done is to highlight how the material is easier on pedestrians and porous, allowing rainwater to be absorbed rather than run off into storm sewers. She is also aggressively marketing her material to developers, non-profits and any other entities that install sidewalks.

Andrew Werner, operations director for the Hammer Museum in Westwood, said administrators were looking for a more pedestrian-friendly material than concrete for the foyer outside a Wolfgang Puck-operated café.

The museum’s architect suggested Rubbersidewalks. Werner said the biggest challenge was the material’s thickness, but it has performed well.

“It cleans more easily and because it’s made out of recycled tires, it helps us with our green cred,” he said.

Rubbersidewalks Inc.

Founded: 2001

Headquarters: Gardena

Core Business: Manufactures flexible

sidewalks using recycled rubber tires

Employees: 3 full time; 12 others, including sales reps and independent contractors

Goals: Opening a manufacturing facility. Broadening sales to courtyards and other pedestrian spaces for commercial and non-profit clients.

The Numbers: Slightly more than $1 million in revenue in 2009; goal of $5 million by 2011

Previous article Deliberations Underway in Karatz Trial
Next article Kennedy-Wilson Makes Acquisition
Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.

No posts to display