With banks spurning borrowers and consumers clutching their wallets, it might seem like the wrong time for a small business to expand.
Don't tell that to Gene Crozat of G&C Auto Body in Santa Rosa, who's made a career out of defying conventional wisdom.
He's spending $7 million to double the size of his flagship store in Santa Rosa. Later this year, he'll open a fourth location in Windsor.
"There were people who made fortunes during the Depression," he said. "Smart businesses are going to invest in times like this. It's not all doom and gloom."
With interest rates down and builders hungry for work, the Santa Rosa project is costing about a third less than it would have cost in 2005, Crozat said.
"We've been waiting for a time like this to jump in," he said.
The economy's downturn provides opportunities for businesses to grow, said Robert Eyler, an economics professor at Sonoma State University.
"If your business is recession-proof or if you have a strong feeling it's going to turn around, this is a good time to think about the strategic endpoint," Eyler said.
Some businesses can take advantage of low interest rates and sliding costs for commercial space. "They're thinking about expanding while the getting is good," Eyler said.
Small, specialized businesses are best suited to profit, Eyler said. A family-owned body shop is an example, he said.
"People are always going to need body work," Eyler said. "They're going to get into accidents."
Still, companies must be financially healthy before they seek cash to expand, said Ben Stone, director of Sonoma County's Economic Development Board. Interest rates are low, but lenders' credit requirements are stricter, he said.
"You need to have money to make money," Stone said.
It's not the first time Crozat has made the most of an economic slump. He moved the business to Bellevue Avenue in the early 1990s, when the United States was mired in recession.
He built a two-story, Spanish-style headquarters with stone walls, a fountain and oak-and-tile interior. Competitors scoffed at Crozat's showplace.
"They said 'customers will never come to you there,' " Crozat said.
But G&C did so well that Crozat opened two more locations in San Rafael and Petaluma. Today, G&C claims to be the county's largest collision repair business, fixing 400 to 500 cars every month. The company does about $20 million a year in sales.
Last week, earth movers were grading a 3.5-acre site next to G&C's Santa Rosa headquarters for the expansion. It will include almost 23,000 square feet of covered space, mostly for auto body work.
G&C, which has about 75 workers, will add 25 workers and offer 24-hours-a-day service, so that customers get their cars back sooner, Crozat said.
Later this year, the company will open another location on Old Redwood Highway at Arata Lane in Windsor.
Crozat, 64, opened his first body shop in Santa Rosa in 1972.
"I came to Santa Rosa with $1.40 and a pack of cigarettes," he said.
Over the years, he's drawn public attention for feuds with city officials, state authorities and the insurance industry.
For years, Crozat has hired teens to feed expired parking meters during the Christmas shopping season in downtown Santa Rosa.
The campaign delighted shoppers but angered city parking officials, who said the practice was illegal. The city has since dropped its objections.
In 2003, the state Bureau of Automotive Repair accused G&C of fraud following complaints that consumers paid for parts that were never installed. G&C denied the charges but agreed to a $15,000 fine, restitution and three years' probation.
Crozat also clashed with state tax authorities over his use of independent contractors to perform most of the body work and painting at G&C. About 60 percent of the company's workers are independent contractors, who pay for work space and equipment. The state has since accepted the arrangement.
As head of the Collision Repair Association of California, Crozat is pushing for state legislation that would make it harder for insurance companies to "steer" policyholders to preferred body shops.
Insurers deny they are violating the state's anti-steering law, saying they have a right to tell customers about shops that guarantee their work.
Crozat said he'll continue to challenge the status quo.
"You've got to make your own luck," he said.
You can reach Staff Writer Steve Hart at 521-5205 or steve.hart@pressdemocrat.com.
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