Building an Energy-Efficient Business
When he’s not prowling a field for pheasants or casting a line for walleye, Pat Mulroy is at his Minneapolis body shop, in pursuit of the next great idea.
Seven years ago, it was switching to waterborne paint and installing a state-of-the-art air filtration system. More recently, it was adding 174 solar panels and partnering with a company that makes hybrid vehicles more efficient. Next up is a plan to invest in geothermal power.
Mulroy is a hunter on an endless quest to boost his bottom line, improve efficiency and create a better environment for his employees, customers and the neighborhood that surrounds his 15,000-square-foot family-run business. When he finds a strategy that makes sense, he takes a shot. So far, after a roughly $550,000 investment spread out over seven years, it’s paid off.
“If the stuff is there and the technology is there and it’s affordable, why not do it?” he says.
From conservationist to collision repairer
Mulroy, 52, developed a love of all things outdoors when he was a boy. He says he thought about becoming a conservation officer, but changed his mind after looking into school requirements, pay, and the prospect of having to work during fishing and hunting openers.
So he kept the conservationist mentality, but decided to go into the family business at Mulroy’s Body Shop, where his father, grandfather and two uncles worked. Mulroy started helping out when he was 14.
“One morning my dad kicked my bed and said, ‘C’mon, you’re going to work,’” he says. “I started in 1975 riding to work with my dad during the summer.”
Roughly two decades later, after gaining experience in every part of the business, Mulroy and his wife, Donna, purchased the shop and moved it to the current, larger space, which had been a bus garage. It had a total of three light bulbs and was caked with soot from diesel engines. That’s when the conservationist in Mulroy kicked in.
“We wanted to create a healthy environment in our building for our employees and our customers,” he says.
One of the first decisions Mulroy had to make was whether to move the old paint booth and equipment or start over. After weighing the costs, he chose to start fresh, but he wasn’t content with using traditional, eco-unfriendly solvents. He had heard about the use of waterborne paint in Europe and, long before it caught on in the U.S., he signed on.
His shop became the second in Minnesota to spray waterborne, behind Latuff Brothers Auto Body in St. Paul, which started using it about a month earlier. Today his employees are waterborne veterans.
Mulroy’s also streamlined its painting process after making the jump to waterborne. Rather than painting parts individually as was done previously, employees started filling the booth with multiple parts from different vehicles and spraying them at the same time. Mulroy said the larger, more advanced paint booth and reduced drift from the new paint made that possible. The new methods cut the shop’s cycle time in half, dramatically reduced energy consumption and shrank the amount of waste thinner shipped each year from 275 gallons to 110 gallons.
Around the same time as the shop made the paint switch, Mulroy installed an air filtration system that exchanged air throughout the building 10 times per hour. He said the new paint, along with the constant supply of fresh air, all but eliminated the fumy, dirty smell associated with many shops. The air is so fresh that Mulroy has used his shop as a community gathering space.
“We’ve had several community meetings in the shop where we literally sat 15 feet from that paint booth, talked for hours and someone will say ‘I don’t smell anything,’” Mulroy says. “That’s worth every penny. I hear that twice a week.”
The upgrades weren’t cheap, but scouting out a $10,000 Occupational Safety and Health Administration (OSHA) grant, and a $20,000 rebate from the local power company helped. Mulroy said those early changes have paid for themselves at this point, allowing him to focus on new initiatives.
A bright idea
Shortly after moving into his current space, Mulroy leased a small section of the building to a local software company. The relationship paid off unexpectedly last year after one of the employees from that business, Gerardo Ruiz, branched out to start his own company leasing solar arrays.
Mulroy had toyed with the idea of solar power for years, but was waiting for costs to come down. Ruiz, president of Minneapolis-based Solarflow Energy, offered a different approach and tapped Mulroy as one of his first customers.
They struck up an agreement that allows the shop to lease a 40-kilowatt, 174-panel array for three years at a rate equal to the cost of electricity saved while using the system. So if the system saves the shop $500 in electricity costs on a given bill, for example, the lease for that time period would be $500. That means the shop breaks even for now, but in 2013 the solar savings will be evaluated to set a 15-year locked rate, resulting in savings as electricity prices rise, Ruiz said.
At the time of its installation last spring, the array was the largest in Minneapolis. Mulroy’s grandson flipped it on during an Earth Day event at the shop, which drew Sen. Al Franken (D-Minn.), local city council members, neighborhood leaders and a heap of press.
Not only do the panels save money on the shop’s electric bill, but they did marketing wonders for the shop. Though it wasn’t his intent, Mulroy was building an eco-friendly reputation. His next move would solidify it—and attract a new niche of customers.
The Prius partnership
Mulroy’s relationship with Ruiz led to a new opportunity soon after the solar installation.
Ruiz introduced the shop owner to the founders of ReGo Electric Conversions, a company that converts hybrid vehicles, primarily the Toyota Prius, into plug-in electric hybrids with greater electric range and gas mileage.
The fledgling company needed a space to do its work and Mulroy happened to have about 2,000 square feet he could spare in the back of his shop. A lease was signed and the Prius drivers started lining up. Even Minneapolis Mayor R.T. Rybak had his Prius converted at ReGo.
The press again converged and Mulroy’s shop enjoyed another moment in the spotlight. He says his relationship with ReGo works as a partnership, with both companies gaining exposure to prospective customers. There’s no doubt, he says, that his shop has been fixing more Prii since ReGo launched last fall.
“We overlap in some of our thinking and we overlap in some of our customers,” Mulroy says.
The partnership might have never happened if Mulroy wasn’t already invested in green practices.
“It’s one of the main reasons we wanted to be here,” says Alex Danovitch, co-owner of ReGo. “Pat has been doing all of these really amazing things.”
With all the Prii around, Mulroy couldn’t help but be influenced by the car. He bought two to use as loaners for Prius owners getting collision repairs. After entering the psyche of a Prius owner, he says, it’s clear that they’d rather not drive anything else.
“We look at our customer base. We recognize what they’re driving,” Mulroy says. “I thought it would be pretty good for customer satisfaction to at least give them the car that they’re driving.”
He also installed solar-powered outlets for plug-in vehicles outside his building, so customers can leave fully charged.
Recognizing and relating to the customer base has been a crucial part of Mulroy’s business from the start, he says. His customers, most of them neighborhood residents from the houses packed around his shop, have also helped influence his environmental practices.
Knowing your neighborhood
“Being in this neighborhood, it just starts to grow on you and at some point you say ‘This is what we’re going to do,’” Mulroy says of his eco-minded decisions.
His neighborhood, Kingfield, is the home of a large contingent of environmentally conscious residents. The Kingfield Neighborhood Association (KFNA), which has been involved in numerous environmental initiatives, recently started offering a program to help other businesses and residents put up their own solar panels.
Sarah Linnes-Robinson, KFNA’s executive director, said Mulroy’s shop has served as a model for what other people in the community can do.
“He’s very quiet about what his vision is, but he’s been quietly doing it,” she says. “I’ve found other businesses to be inspired by him.”
Mulroy’s relationship with the neighborhood extends beyond his green initiatives. Several years ago, he demolished three run-down and abandoned houses on adjacent property he owned. He sold the land to a daycare center, which built a new bilingual school and childcare facility.
It’s hard to measure how the shop’s strong neighborhood ties have influenced business, but Mulroy suspects it all contributes to the 100 cars a month his shop repairs and the $2 million in revenue it earns annually.
A little bit at a time
Mulroy’s goal is to make his shop as efficient and sustainable as possible before he retires to a life of full-time hunting and fishing. Three of his 10 employees are family—his wife and two children—and he hopes to keep the shop family-run after he moves on.
So far, he says every change he’s made has contributed, or will, to reduced overhead and a stronger business. Next on his agenda is the installation of geothermal units, which he has already done at his home and lake house. He found a 30 percent tax credit for the job and wants to start next year.
He said spacing out his initiatives has made them easier to accomplish. He’s humble about his success, but is confident he’s moving in the right direction.
“The technology is changing this industry and you definitely need to change with it,” Mulroy says. “A little bit at a time.”