Turf Terminators burst on the local scene nearly two years ago with a simple strategy: promising property owners they’d handle all the hard work of removing water-guzzling lawns and leaving them with permanently lowered water bills. Customers paid nothing, but the Santa Monica company would apply for – and pocket – rapidly burgeoning turf-removal rebates from local governments.
For 18 months, the strategy worked beautifully, as the company at times raked in well over $1 million a month in rebates.
Then, Turf Terminators imploded, the victim of a business model that appears to have been too reliant on generous rebates. Once big rebates evaporated, so did Turf Terminators’ business – evidence that, without hefty public subsidies, there was little demand for its water-saving services.
On July 8, giant regional water wholesaler Metropolitan Water District of Southern California announced it was ending its lawn-removal rebate program as overwhelming public demand swamped the $350 million it had set aside for the rebates. The district’s rebate of $2 a square foot of lawn removed was by far the largest among local water agencies and formed the base of the regional lawn removal rebate program.
“With Met’s announcement that no new applications would be accepted to its program, nearly 90 percent of employer’s sales pipeline instantly and unexpectedly evaporated,” Turf Terminators said in a letter to the state Employment Development Department that’s required for mass layoffs.
Most of the other 200 employees eventually returned to work – at least temporarily – as smaller rebate programs in Los Angeles and several other communities have remained active.
But over the longer term, the company said in its letter that it is “actively seeking capital and restructuring its business model so that it may continue operations.”
Turf Terminators is run by Chief Executive Ryan Nivakoff, and appears to be owned by one of the firms he’s been affiliated with: Palo Alto investment firm Carbon Venture Partners, which owns the Turf Terminators trademark, or New York private equity Parvus Rex Capital. Several current or former Turf Terminators employees also list positions at Parvus.
Turf Terminator executives, including Nivakoff, did not return repeated calls and emails seeking more details on the company’s plans.
It’s been a swift fall for the company, which was the only firm to actively market its lawn-removal services to drought-conscious Southern California residents and businesses. Customers paid nothing for Turf Terminators’ services, and the company covered all its costs with lawn-removal rebates. With that pitch, it quickly dominated the market, taking in more than 90 percent of all rebate applications done through contractors, and even got an attaboy from Los Angeles Mayor Eric Garcetti, who singled them out in his State of the City speech in April as a creator of green jobs.
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