Blu Homes is counting on green demand for homes

Blu Homes, a Massachusetts-based builder of energy-efficient, prefabricated homes, is opening a factory at the former Mare Island shipyard in a move that will add home-building jobs in the Bay Area while giving the fast-growing company a bigger California presence.

The 250,000-square-foot manufacturing facility will start operations in November, and will have a ribbon-cutting ceremony on Oct. 20. The company expects to hire about 80 people in the first year.

Blu Homes considered a site in Nevada but decided to go with the Mare Island location after getting a pep talk about what the Bay Area could offer from Tom Steyer, founder of San Francisco-based Farallon Capital Management and co-chairman of Californians for Clean Energy and Jobs.

“We were about to sign a lease in Nevada and he made a very strong case for the Bay Area for companies like ours. The Bay Area has the Silicon Valley talent and information technology and the East Bay has the deep labor pool of factory craftsmen. That’s a very compelling combination,” said Bill Haney, president and founder of Blu Homes. “The first people have already been hired. The major hiring will take place in the next 30 days.”

Blu Homes uses computer technology to help buyers design their homes, which are then manufactured in a factory using structural steel instead of wood to frame the house, along with green and energy-efficient building techniques, before they are shipped out to the buyer’s land in a flatbed truck and assembled.

Since its founding in 2007, the privately held company has raised $25 million in funding from private investors. A year ago, the company had about 20 workers.

Today, it has about 90 workers at its first factory in Massachusetts, and offices in Boston, Ann Arbor, Mich., and San Francisco.

Blu Homes has signed a 10-year lease with Lennar Mare Island for the factory. It is intended to meet demand for the company’s homes in California and other western states and western Canada. In the first year, the company expects to build about 70 homes, but is projecting that number could rise to 500 to 1,000 homes annually after five years.

“Over the first five years, if our projections of demand are correct, we expect to have up to 500” Bay Area employees, Haney said.

The city of Vallejo worked with Blu Homes and Lennar Mare Island to help get the site ready in time to meet Blu Homes’ timeline for opening the factory next month.

“It’s a pretty significant investment. We’re really happy to be landing those kinds of jobs in Vallejo,” said Ursula Luna-Reynosa, economic development director for Vallejo.

The homes will range in size from about 500-square-foot studios or one-bedrooms (priced at about $125,000) to 2,500-square-foot four-bedrooms (priced at $500,000). Of course on top of that, buyers have to buy the land for the home to sit on, which in the Bay Area can be hard to come by and expensive.

Haney expects that some of the demand for Blu Homes will come from people who are downsizing into areas outside the Bay Area or who are looking for vacation homes in places like Lake Tahoe.

Blu Homes makes it possible for buyers to lock in a set price for a home as opposed to hiring a general contractor to build a custom home and risk having cost overruns and time delays, Haney said.

Blu Homes pricing is on the high side for prefabricated homes, according to Dean Wehrli, senior manager for Irvine-based John Burns Real Estate Consulting. But, he noted, Blu Homes is aiming to reach consumers who value green-building techniques.

“That kind of thing can certainly have some legs in a place like the Bay Area,” he said. “I think it will be a growing (niche market) but very, very slow growing.” And while Blu Homes touts its eco-friendly homes, Wehrli notes that custom builders can also build green homes.

Contact Eve Mitchell at 925-952-2690.