Yerba Buena Engineering & Construction, Inc., is ranked 49 on the 2011 list of the fastest-growing inner-city companies in the United States.
The 2011 Inner City 100 list was compiled by the Initiative for a Competitive Inner City and Fortune Magazine. The program recognizes successful inner-city companies and their CEOs as role models for entrepreneurship, innovative business practices, and job creation in America’s urban communities.
“We are delighted to celebrate businesses like Yerba Buena Engineering & Construction, Inc., that are playing a critical role in revitalizing America’s urban communities,” said Mary Kay Leonard, ICIC president and CEO.
To qualify for the Inner City 100 list, companies had to have at least 51 percent of their operations located in an economically distressed urban area, have at least 10 full-time employees, and have a five-year operating sales history that included at least $200,000 in revenues in the first year of consideration, an increase in year five sales over year four sales, and fifth-year sales of at least $1 million. For the 2011 list, ICIC looked at total revenue growth from 2005 to 2009.
Miguel Galarza founded Yerba Buena Engineering and Construction to take advantage of federal contracting preferences for companies that create jobs in areas with high unemployment. The San Francisco company does heavy civil construction projects like highways, levies, and pipelines for local and federal agencies. Galarza, a 48-year-old San Francisco native, "drifted around" after high school before getting a job as a carpenter and, eventually, a manager working on federal empowerment zone projects with Mendelian Construction, one of the first HUBZone certified contractors in the Bay Area, which has since closed. He started Yerba Buena in 2002 in a HUBZone, his own Bayview neighborhood, and says his goal is to "create opportunities in the community where I came up."
For the second year in a row, Yerba Buena Engineering & Construction, Inc., has ranked first among Hispanic-owned businesses in San Francisco.
The 2011 HispanicBusiness 500 Directory, published by HispanicBusiness Magazine, also showed Yerba Buena moving up 46 places on the national list, from 269 to 223.
The HB500 is an annual directory of the 500 largest US Hispanic-owned companies. Rankings are based on the previous year's revenues,
Some companies -- and the people who run them -- might shy away from work that involves dangling from 600-foot cliffs.
Not Miguel Galarza. His Yerba Buena Engineering and Construction is doing emergency work to stabilize the landslide-prone cliffs at Devil's Slide on Highway 1.
These types of projects have helped the company grow from $500,000 in revenue in 2002 to $5 million in 2005. Galarza said the company will bring in $12 million this year.
Yerba Buena focuses on civil construction: mostly roads, pipelines and other infrastructure. The company has a diverse client base, from the San Francisco Department of Public Works to the Army Corps of Engineers to the Maritime Museum. Yerba Buena is also working on a water main on Alcatraz and on joint venture with Alamo-based Gordon N. Ball on the 500-acre Hunters Point redevelopment project.
Galarza grew up in San Francisco's Mission District. "My Dad had six of us to raise," he said. From age 14, Galarza was digging ditches for as little as $1 an hour. He later joined a program that helped minority youngsters get construction jobs, and then worked for contractors.
By the 1990s, Galarza was employed by another local minority contractor -- which he described as a "nine-year apprenticeship." He took on so much responsibility there, he said, that people referred to him as the owner. But Galarza was dissatisfied with the quality of the company's service. He knew he could do better.
He left to start Yerba Buena in 2002, and immediately began tapping the relationships he had built with city and federal officials, as well as with other contractors. The owners of Power Engineering of Alameda and Gordon N. Ball were his mentors, Galarza said.
Galarza had always been a good salesman, said Ken Lindberg, owner of Power Engineering, but when he went out on his own, he needed to learn other aspects of the business. Lindberg helped Galarza set up his accounting system and learn the tricky process of estimating.
"He is an honorable guy," Lindberg said, "and that's not always the case in the construction business."
Galarza looks for that same reliability in his employees, seeking "guys who've never had the opportunity to shine." And Yerba Buena provides much-needed jobs to the San Francisco neighborhood where its operations are based: Hunters Point. Galarza received a 504 loan from the Small Business Administration to buy real estate in the area. In exchange, the company gets federal credit for hiring in an "empowerment zone," which helps it secure government contracts.
So what's next for Yerba Buena? Galarza said he'd like to rein in the company's growth to keep it at a steady $7 million in annual revenue so that he can develop the talent and systems he has in place. "If you can't manage what you have, you're not going to make any money on anything," he said.