Real Estate News

Prefab home manufacturer closes shop in McClellan Park

Zeta Communities, which manufactured modular home units in a plant in McClellan Park, has permanently ceased operations there and laid off all 122 employees.

The closure details were outlined in a standard “WARN Act letter” sent to the state Employment Development Department, dated March 22, 2016. The Worker Adjustment and Retraining Notification Act requires large businesses to give early warning of layoffs and closures.

The letter said the closure was effective immediately and that final employee checks had been issued.

The listed jobs titles of employees laid off ranged from top executives, including the CEO, to hourly production workers.

To what extent Zeta’s home office in San Francisco is still in business is unclear. Phone calls to the Zeta Design + Build were forwarded to a voicemail message left by Howard Koenig, Zeta’s CEO. At one point late Thursday morning, Koenig called The Sacramento Bee and said he would explain the company’s status later in the day.

However, there was no return call, and further attempts to reach Koenig were unsuccessful.

Koenig’s signature is on the WARN Act letter sent to EDD. In the letter, he notes that the firm was “actively seeking capital” right up until the time of the McClellan Park facility’s closure. The letter added: “We believed that there was a high degree of probability that we would receive additional financing and additional new business during this time period. If our new financing and/or new business had come through, we would have postponed the shutdown indefinitely.”

Zeta leased nearly 100,000 square feet of space at McClellan, constructing prefabricated housing units on-site. The individual units included completed bathrooms, kitchens and flooring. Units could be bolted together and hooked up to utilities.

The green tech company opened the new factory in McClellan Park in 2009. In 2010, it announced that it had secured $5 million in private equity financing from Boston-based Black Coral Capital.

Zeta’s homes were hailed by some as part of a bright, local future for zero-energy buildings – residential or commercial buildings that produce as much energy as they use. Zeta considered the Sacramento area an epicenter for a zero-energy push.

A year ago, Zeta Communities was replaced by Idaho-based Guerdon Enterprises as the main subcontractor for the Eviva Midtown apartments at 16th and N streets, which the project’s lead developer characterized at the time as “all about scheduling.”

Quoted in The Bee, Koenig agreed, saying, “I think they changed the schedule a bit, and it didn’t fit our production schedule, so from our standpoint it was appropriate.”

Mark Glover: 916-321-1184, @markhglover