How Gonyea Homes Beat the Building Bust

The following SPECIAL REPORT was published in the Minneapolis/St. Paul Business Journal September 6, 2013

Nancy Kuehn | Minneapolis/St. Paul Business Journal
Elizabeth Millard, Contributing Writer

The recent recession wasn’t kind to homebuilders nationwide. Confidence within the industry is only now hitting pre-recession levels, according to the National Association of Home Builders. However, some builders stood out amidst all the gloom. Golden Valley-based Gonyea Homes Inc. and Remodeling was definitely one of those bright lights.

Tony Sonnen, co-owner of Gonyea Homes, said the company took advantage of the economic downturn to hire experienced staff.

Despite a difficult housing market, Gonyea’s sales grew by 112 percent last year. In another significant boost, the Builders Association of the Twin Cities (BATC) named Gonyea its 2012 Builder of the Year.

“We are a talented group of people who care about our clients and the homes we build,” said the company’s Managing Partner Tony Sonnen. “We offer one of the best values out there, with our purchasing power and our staff, and our homes show as a great value.”

Strong foundation

Started in 1987 by Dave Gonyea, the company began as a way to build homes on foreclosed lots. In the early 1990s, Tim Carlson and Tony Sonnen joined the company, eventually becoming co-owners when Gonyea decided to work on other businesses.

Although the builder focuses mostly on large, expensive homes — the average single-family home that Gonyea built in 2012 was $620,000 and one project was $1.8 million; square footage ranges from 4,500 to 7,400 — Sonnen noted that the company has always had a wide range of building values, from starter homes to luxury custom homes.

“When the economic downturn hit, we were able to offer better values to the marketplace than other custom home builders,” he said. “We had been very conservative coming up to the downturn, because we expected it.”

Everything runs in a cycle, he added. He and Carlson sensed that a downturn already was overdue. As a result, they streamlined operations and remained frugal, putting them in a good position when the market changed.

In recent years, Gonyea began building more higher-priced custom homes and started advertising heavily toward those customers. The ensuing boom in demand for that niche has expanded the builder’s presence in the luxury-homes market.

In addition to preparing for a rainy-day downturn with a conservative financial approach, Gonyea benefited from the recession when other builders laid off talented employees, Sonnen said.

“Because of the downturn, we were able to hire amazing staff,” he said. “I believe we have some of the best in the industry working in our company — from architectural design to interior design to project management.”

Looking ahead

The nod from the BATC was announced last October. Gonyea was chosen by members of the association, who evaluated builders based on a variety of criteria, including trust, communication, loyalty and ethics.

“Earning high esteem from the people you deal with on a day-to-day basis is a very real source of pride and satisfaction for any business owner,” said 2012 BATC President Curt Christensen, owner of Lee Lyn Construction. “Gonyea Homes can be very proud. They know they have received the most significant honor a member of the BATC can receive.”

Gonyea intends to keep that momentum going strong — with a continued focus on its luxury homes, and with limited growth. Even with overall confidence increasing among builders, Sonnen believes that the conservative approach is still beneficial for strategic operations and long-term sustainability.

But one area that looks likely to grow is the remodeling division, which is seeing increasing interest from customers. The company hired a new president, Bob Mock, who runs the division out of a new office in St. Paul’s Groveland neighborhood.

“At this point, we’re focusing on doing what we do best,” Sonnen said.

Gonyea Homes Inc.
Rank on the Top 25 Home Builders List: 6
Co-owners: Tony Sonnen and Tim Carlson
Headquarters: Golden Valley
Revenue: $41.2 million in new-construction sales
Employees: 26
Founded: 1987
Business: Homebuilding and remodeling company