Market Trends June 2004

LANDSCAPE TRENDS

• Water Gardens Gain Popularity

GREENVILLE, Va. – Just in case you haven’t figured it out yet, water features can enrich clients’ home in a variety of ways, including providing a spot for relaxation as well as a haven for birds and butterflies.

“Few landscape features are so versatile,” says Keith Folsom, president of Springdale Water Gardens, Greenville, Va. “That can mean reflecting pools or fountains and waterfalls. You can put in formal (water) gardens or use designs mimicking and miniaturizing nature.”

Residential water gardens began growing in popularity about a decade ago. Fountains, overflowing barrels, statuaries and flower-fringed ponds have become commonplace in condominium courtyards, on suburban decks or around ranches and farmyards.
An estimated 16 million American households, or 15 percent, have incorporated water gardens into their landscapes, reports the National Gardening Association. Total water gardening retail sales for 2003 approached $1.56 billion. “The water gardening category continues to be one of the fastest growing lawn and garden categories seen over the past five years,” says Bruce Butterfield, the association’s research director.
Aside from their artistic value, water features offer homeowners a hefty payback. Landscaping properly done – especially a theme garden – adds anywhere from 7 to 15 percent or more to the value of a home, realtors say.

Many landscape contractors are even expanding clients’ water gardens to include sculptural fountains, Folsom says. “People are going from a relatively small pond to 1,000 gallons or larger,” he says. “That compares with just a couple hundred gallons a few years ago.”

Some landscape contractors also may be reworking their clients’ ponds because they are in the wrong location, such as too near some trees causing a lot of leaf debris in the pond or too far from where the homeowners spend the bulk of their outdoor time.
Self-sustaining gardens are in, meaning bigger is definitely better, Folsom adds.

“Bigger requires less per-square-foot maintenance,” he notes. “You can grow bigger and better kinds of beneficial bacteria. That helps make the pond fully self-sustaining. More water means a more constant water temperature. That helps it stay cool and clear and that’s what people are after.”

Additionally, water gardens make more than a visual impact. The sound of running water is soothing and attracts a variety of wildlife. “Moving water is background music in a sense,” Folsom says. “It gives people a chance to hide something they don’t want to hear, like road noise.”

MERGERS & ACQUISITONS

• Home Depot to Buy White Cap Construction

ATLANTA – The Home Depot has entered into an agreement to acquire White Cap Construction Supply, a distributor of specialty hardware, tools and materials targeting large- and medium-sized contractors. The acquisition is part of Home Depot’s strategy to expand its professional customer market base.

Headquartered in Costa Mesa, Calif., White Cap will become part of The Home Depot Supply division. The agreement is anticipated to close by mid-June, and terms were not disclosed.

“We remain committed to finding new business opportunities for The Home Depot, and this acquisition adds new customer channels and product selling opportunities,” says Frank Blake, executive vice president of business development, The Home Depot. “We were attracted to White Cap because of its position in the industry, and because its customers and product lines complement our existing business. White Cap represents another step in offering professional customers products and services for the entire construction process.”

Founded in 1976, White Cap Construction Supply, operates 70 branch locations throughout the United States and employs 1,720 people. White Cap’s estimated annual sales are approximately $500 million.
Approximately 60 percent of White Cap’s sales are delivered to the job site, while the remaining 40 percent are purchased at the branch locations. The company offers a wide array of more than 65,000 in-stock products including brand-name construction materials, hand tools, fasteners, safety equipment, power tools and equipment, work wear and landscape lighting.

“White Cap is a leader in this highly fragmented market, and we’re pleased that its leadership team will continue to play an integral role in the organization,” says Jim Stoddart, president, The Home Depot Supply. “We believe this acquisition will be accretive to earnings, and we are most excited about the opportunity it provides for future growth. White Cap’s expertise will help The Home Depot Supply more fully satisfy its customers’ needs.”

REGULATION EDUCATION

• EPA Cracks Down on Diesel

WASHINGTON, D.C. – The U.S. Environmental Protection Agency (EPA) issued a new Clean Air Nonroad Diesel Rule, designed to cut and clean up emissions from the kinds of “off-road” diesel equipment commonly used in landscape management, such as tractors and loaders.

According to the agency, the new provisions will cut emission levels from construction, agricultural and industrial diesel-powered equipment by more than 90 percent. The new rule will also remove 99 percent of the sulfur in diesel fuel by 2010, resultin gin dramatic reductions in soot from all diesel engines.

The EPA estimates, however, that the required changes to diesel-powered equipment and diesel fuel will increase the cost of both items. According to an EPA statement, “The anticipated costs vary with the size and complexity of the equipment but are in the range of 1 to 3 percent of the total purchase price for most equipment categories. While the estimated added cost for low-sulfur fuel is about seven cents per gallon, the net cost is projected to average about four cents per gallon because the use of ultra-low sulfur fuel could significantly reduce engine maintenance expenses.”

“We are going to make that burst of black smoke that erupts from diesels a thing of the past,” EPA Administrator Mike Leavitt added.

This new rule complements the Clean Diesel Truck and Bus Rule (announced December 21, 2000), which was designed to cut emissions from heavy-duty trucks and buses. On-highway compliance requirements take effect with the 2007 model year.

According to EPA, “The Clean Air Nonroad Diesel Rule will result in the widespread introduction of emission control systems, a move comparable to the advent of catalytic converters for cars in the 1970s.”

The new standards will be phased in over the next several years. Standards for new engines will be phased in starting with the smallest engines in 2008 until all but the very largest diesel engines meet both NOx and PM standards in 2014. Some of the largest engines, 750+ horsepower, will have one additional year to meet the emissions standards.

Diesel fuel currently contains about 3,000 parts per million (ppm) sulfur. The new rule will cut that to 500 ppm in 2007 and 15 ppm by 2010.

REGIONAL NEWS

• Ash Tree Destruction May Be Only Way to Contain Borer

COLUMBUS, Ohio - Government officials are considering cutting down ash trees in a miles-wide swath across three states in an attempt to contain the infestation of a tree-killing beetle.

The goal is to create a natural barrier against the emerald ash borer that could extend in a semicircle south from Michigan into northwestern Ohio and northeastern Indiana, according to state and federal officials.

The pesticide-resistant beetle has wiped out millions of ash trees in southeast Michigan and has been found in all three states.

In theory, the barrier would stop the beetle from spreading from its core infestation in Detroit by denying it food. No route has been determined.

The barrier would be three to six miles wide because it’s believed the ash borer does not travel farther than half a mile on its own. U.S. Forest Service maps will be used to determine the number of ash trees in the zone, officials say.

There were no estimates on the cost of creating the barrier. The U.S. Department of Agriculture plans to spend up to $43.4 million on ash borer eradication efforts this year.

The zone could take up to eight years to plan and complete, says Bob Waltz, state entomologist for the Indiana Department of Natural Resources.

“The ultimate goal of all of this is to protect the ash (tree) resources of North America,” Waltz explains. “When the emerald ash borer gets in the trees, it kills them. This insect takes no prisoners.”

A native of Asia, the ash borer was discovered in the United States two years ago in Michigan. Officials believe it traveled to this country inside wood packing crates.