Our guest Ken Calligar, CEO of RSG 3-D, is a career investment banker won over by the stellar performance of RSG’s panel system. He loved the design so much he bought the company a few years ago. Now RSG is on a mission to spread the good word of panelized construction across the country and the world. Their multi-layer panels are resistant to hurricanes, tornados, fire, water, mold, insects, and earthquakes and form a monolithic building envelope to stand the test of time.

Visit rsg3d.com to learn more about RSG’s unique panelized construction and their vision for the future of construction.

Episodes are sponsored and produced by Isaiah industries, a manufacturer of specialty metal roofing systems and other building materials. Learn more at isaiahindustries.com

Ken Calligar:

There's two thousand one hundred and thirty-twocounties in the U.S., all two thousand one hundred thirty-twoshare only one thing, that they don't have enough affordable housing. There is no unanimity in this country. This is a vast, different, dispersed country with all kinds of different needs. And that's the one thing we all need.

Todd Miller:

Welcome to the Construction Disruption podcast, where we uncover the future of building and remodeling. I'm Todd Miller of Isaiah Industries, manufacturer of specialty residential metal roofing and other building materials. And with me today is our co-host, our sales manager, Seth Heckaman. Our goal here at Construction Disruption is to provide timely and forward-lookinginformation that is helpful to those who are serious about this industry for their careers, both now and into the future. As part of that, we look at new innovations as well as trends in construction, building materials, the labor market, and even leadership. If it's something that we believe will impact the future of building and remodeling, then we go out and find a leading expert on that topic and invite them to the show as our spotlighted guest. Today, that guest is Ken Calligar. Ken is the CEO of RSG 3-D 3D. RSG 3-D makes a panelized building system that is known for its resistance to fire, earthquake, hurricanes, and even wood-destroyinginsects. Basically, if there's a harsh environment seeking a great building solution, RSG 3-D is there offering a resilient and affordable option. And let's face it, what area today doesn't seem to be prone to vulnerable weather or vulnerable to extreme weather? Ken, welcome to Construction Disruption. Thank you so much for your time today.

Ken Calligar:

Thank you, Todd. Thank you, Seth. Appreciate being here.

Todd Miller:

So I read something recently where you said that they figure that about 77 percent of our housing stock in the United States is in areas at risk for extreme weather. And sounds like you guys are doing a great job of trying to meet that need. The information on your website rsg3d.com is certainly very thorough and very enticing. Got some great projects and things out there, but can we kind of start, maybe you give us an overview of the 3-D system and how it works?

Ken Calligar:

Sure. Absolutely. So it's a mouthful, but the RSG 3-D panel is a proprietary, lightweight, structural, concrete insulated panel. So we sit somewhere, you know, in the intellectual realm between SIPs and SCIPs. Back in late 2016, there was an article published that used a lead lifecycle assessment to analyze every building material out there. And their point was it is about the lifecycle of the building and how do your building products best serve that building for its lifecycle. We have to have a very extended lifecycle, as you understand from our description. But, that lead lifecycle assessment analysis came to the fact that SIP was great for insulation, SCIP was great for durability. But they said RSG "is the new frontier of green, sustainable building materials because it combines the insulation properties of a SIP with the durability of a SCIP and brings it into an affordable package." So that was a pretty nice thing for them to say, and that was actually a year and a half before I bought the company when I was just working on it. So that was all terrific. So the panel itself is it is essentially a sheet good. Every panel is four feet wide and we manufacture them bespoke to the exact length that you're going to need. If you have a 12-footplate, you're going to get a 12-footpanel. If you have some twenty-four-footor thirty-six-footspans that you need, you'll get that. We've manufactured up to 40 feet where balloon framing was done on a multi-family building. The panel consists of really just two elements, it's expanded polystyrene for insulation and steel. Now, the steel is configured as a two-inchby two-inchwelded wire fabric that goes on the outside of every panel and on the inside is your expanded polystyrene. The typical set right now would be a five-inchEPS panel for exterior walls and roofs in the U.S. and two and a half or three-inchfor interior bearing walls, that's what we're selling most of. But welded wire fabric on the outside is really, really important. It's this is high tensile pre-galvanized steel at a very high grade and gauge, and it's extremely strong and rigid. That is connected by a proprietary truss system that goes from welded wire fabric to welded wire fabric across it. So if you turn the panel, you know it's a truss that would hold up a bridge or a roof at the Costco or something like that. That's the lightest way to build or, you know, hold up a project structurally is a truss system. So we've created this repeatable high-gradetruss system that you can then suspend EPS within, and therefore it's used for its exterior walls, roofs, intermediate floors, party walls, corridor walls, it's used for every element of the building. And if you think about it from the builder's perspective, you know, in a residence, let's just, you know, we talk about residences a lot. We also do commercial and industrial, obviously, and municipal in every form of building. We have prisons built with the stuff and as well as Jimmy Carter using it for Habitat for Humanity. But if you look at the residential assembly, that wall is probably 10 or 12 layers, right? That's a lot of work and a lot of products, especially in 2021-22, when the logistics are starting to kill people and the individual costs. So having a panel that can be used in all these realms, walls, intermediate floors, roofs, and for infrastructure, in fact, is very, very helpful to the builders. It's one medium. It's one very simple medium. The system is a composite system where you apply concrete to the outside or the top and the bottom of a roof panel. And so that's typically done through shotcrete method, but it can be done basically through any method. But so there you have a composite system where you know, again, just kind of recapuslating that if you saw it finished, you'd have an inch and a half of concrete on the exterior portion, inch and a half of concrete on the interior portion. Then you'd have the steel encapsulated within the concrete, the truss system connecting both sides. Then you'd have expanded polystyrene in the center. If you think of ICF, this is a reverse ICF. One architect told me that the ICF is mass backwards, so I thought that was really a brilliant description of it because it is, you know, that, you know, we have this so it's a structural system. It just is indestructible. I mean, I can't say that legally, so pull that out of the podcast. But we did three and a half years of testing at the University of California, Irvine. It's a structural engineering test hall and in addition, we have 28 years of 10,000 constructions around the world during which not one single building or element of a building has ever been damaged by any natural disaster. Now, the UCI testing was pretty instructive. They tested up to an 11.0 Richter event. Officially, the university let them test to a 9.0 and they couldn't track it. But it got to be kind of a game with the engineers, engineers are pretty smart fellas. And they got after it trying to figure out how to crack the panel. They eventually got the actuators on that machinery up to an 11.0 Richter and the university shut them down because they were afraid they were going to break the million-dollarequipment. But they got out the jackhammers, took the concrete off, tried to find if any of the welds were broken. Not a single one. So in terms of seismic, we don't know how strong that is, but we know it's way strong. You know, I would shear off from the East Coast, you know, before a panel would be broken by seismic. We do have a two-hourflame rating on it. That's courtesy primarily of the concrete. But again, there's nothing combustible within the system here. The concrete is noncombustible, the steel is noncombustible. The EPS that we use is in fact, auto-extinguishable. So if you've got a spark on it, it would, you know, it would cease. So, so that's hurricane. Excuse me, that's seismic and fire, hurricanes. You know, it comes down to really what is the design of the building, but we're somewhere around 300 to 312 miles per hour wind ratings on that building, which is double the Miami-Dade hurricane code. Miami-Dade, I believe, tests for two-secondgusts last time I looked. That's not the way a hurricane works. You know, give us 300 miles per hour as a steady diet, and we're perfectly comfortable with that. We've been through a couple of floods and had no damage. We also have NATO ballistic ratings on the panel. We supplied to the army in Iraq and Afghanistan back in the day. And so there are NATO ballistic ratings on it. So it's strong.

Todd Miller:

That's an incredibly compelling story. And again, your website, rsg3d.com is great as well. I know that one of the things that we always run into is every once in a while, we'll run into where we've got a set of plans for a structure and it's a concrete structure. And I can always depend on that being overseas because that just isn't a method of construction that we historically have used here in the States. And yet it makes so much sense. So you kind of alluded to it earlier, you mentioned when I bought the company. So I'm starting to pick up on a thing that, you know, I fell in love with this product, loved it so much I bought the company. Is that kind of your story? I know you kind of came out of the financial and capital markets world. So how did this all come to be?

Ken Calligar:

Well, it's kind of that, it was both love and duty. So I bumped into the panel when a client came to me and said, Hey, we've seen this technology being used in Africa for social housing. We think, you know, we've got a great business plan here with the United Nations to go build a bazillion houses in Africa, in frontier economies, and really do good work on the social housing level. So they kind of induced me to look at that. I did. I thought it was pretty cool, but I didn't know anything about construction, nothing about architecture, zero about engineering. So I did learn an awful lot. And now I worked with those guys for a couple of years as an advisor in the business, but I didn't eventually really go anywhere. It was a tough business to really do a lot of business in Africa, as you can imagine. But I spent quite a while touring the world, if you will, and looking at every building system out there and meeting a European manufacturer of the system and eventually meeting a gentleman named Juan Martinez, who ran a company in Mexicali, Mexico. And to my mind then and still today, Juan's the best panel expert in the world bar none. I tell people that I'm fifty-seventh, but I was fifty-ninthlast year, so I'm coming. So anyway, so I found the system. And you know, look, when I was in college, I wanted to work for the World Bank and do infrastructure in the Third World and things like that and kind of benefit the world and I got onto this financial path. And it was great, it was an interesting career. I got to meet a lot of interesting people and really learned a lot of interesting companies and gave me the skill to understand what I had here. And so the panel is really special. It's really affordable. It really de-risks projects. And as I compared it to every building system in the world, I became very acutely aware that wood-framebuildings were a disservice to anyone who lives within them. They're not energy efficient, they're not cost-effective. They're not healthy, for goodness sakes. And we spend 85 percent of our life in a building. And ultimately, they're not long-termaffordable. So I looked at every advanced building system, whether it was ICF or SIPs or all kinds of little niche products along the way. And I pulled out a piece of paper and did the pluses and minuses and this system had every plus and there are other systems with some nice benefits, but nothing was matching this. So I had this knowledge and I had walked away from that company because it was just not a viable company and was doing other things in my investment banking world. But I kept being nagged by this knowledge. I had this knowledge. I love the product, but more than that, honestly, it was a duty. I had this knowledge and so many people could benefit from it. And if I didn't do it, what would happen, you know, we would go on and continue to do things kind of the wrong way. So I honestly do see this as a mission and we will make plenty of money. Our shareholders will be very happy with that. But there's also a lot of do good here. You know, every constituency that touches this panel in a building is benefiting, whether it's a family, a community, a multifamily builder, a developer, or just a builder. And that's really something special about this, that we can make better communities. We used to, it's worth talking about the future-proofcommunity because you started out with the conversation about, you know, resilience in natural disasters. But so if you want to talk about that, that's a great topic, I think.

Todd Miller:

I'm kind of curious, too. How about the speed of building erection compared to stick-built?

Ken Calligar:

I would tell you that look, a stick-built assembly has 10 or 12 different products in it. It's a significant undertaking to get all those things correct, but a panel is panel plus concrete. And what I can frame up wall panel, you know, in hours versus you're doing wood in days, it's a big cost savings and a big time savings. We projected there's with a seasoned builder that's done this a couple of times, they should be 40 to 50 percent faster than wood framing.

Todd Miller:

And that's certainly enticing to anybody who's dealing with labor shortages and all that right now as well.

Ken Calligar:

You're also using smaller crews because the panels are very, very light. So imagine a 10-foot by 4-footpanel that's used for a wall plate that's going to weigh about 76 pounds. So you and I are going to pick that up and we're going to jam it down onto the rebar that's sitting there waiting for it, coming out of the concrete. And then Seth and someone else are going to grab the next piece and they're going to jam it down right adjacent. We'll hit that with the hog ring gun, and boom. We've just framed up two panels. But you're going to circle around that building. We have on one of our websites, we have a little time-lapseof one of our ADUs. We have an ADU division called Resilience ADU, which is a, just a homerun great little idea and company. But we have a time-lapseon there of our smallest ADU 320 square feet. It's great for an office or a gym or, you know, a one-bedroomin the backyard. And we have our plant workers framing that up in an hour and 57 minutes. We just had some architects, architects and engineers down to the plant yesterday, never seen the panel before and never worked with it, and they were sending me videos of it on my phone yesterday. Those guys framed that thing up in maybe two and a half hours while they were being instructed. So, you know, easy, great job. You can't mess it up.

Todd Miller:

So you mentioned the plant. I'm kind of curious about the nuts and bolts of what you're doing. Where are the panels currently produced? Looking at freight costs and things, would you see regional production at some point or how might that play out?

Ken Calligar:

Right. So we currently manufacture in Mexicali, Mexico, which is about five miles over the Southern California border, two hours east of San Diego, two hours south of Palm Springs, two hours west of Yuma. So you have to get to it from one of those points. It's a great manufacturing area. Mexicali is a huge manufacturing hub for US products. All the avionics companies are down there. There's a lot of metalworking companies and whatnot. If you ever break your iPhone, it's going to go down there to be repaired. But big, big companies are there. So it's a great little manufacturing hub and it's where the plant was when I bought it in 2018. They've been operating there since 1996 and there was no reason to move it. Now, in terms of expansion, yes, we're going to the Southeast with our second plant and then we're going to the Midwest with our third. Along the way, we need to establish, we want to establish some builder training centers where we can have people in for a day and train them on the panel. It basically creates plants for us and it creates a new path of green, sustainable building for the builders, and it creates benefits for the communities that they're now starting to get better, more energy-efficient, more healthful, more durable buildings in their community. So, you know, we have a very high-yield manufacturing system. So it's a terrific system that is very expensive. But we will have additional plants, not necessarily because we can't meet demand at this point, we can. But to be closer to these clients, you know, we just came from the IBS down in Orlando two weeks ago and met a whole new cohort of builders in Florida. And boy, were they excited to see the system. So we need to be close to those people

Todd Miller:

Makes a lot of sense. So I know that you're currently doing a lot of work in the North Bay Area. You know, from the fire rebuilding and things. What does that process look like in terms of, you know, our clients bringing you building designs, home designs? I know you said you do commercial as well and basically saying, you know, can you adapt your system to this or can you is that kind of how that works or what does that look usually look like?

Ken Calligar:

Yeah. So I think you've basically asked two questions in there, kind of what's the demand and what's the adoption, but also what's the process? So the process is very simple. We will take any building plan and turn it into a panel modulation. One of the things that we started doing in 2018 was instead of working through distributors who had certain knowledge about the panel, we said, We're going to bring all the knowledge internal. Train our own architects and engineers, and we're going to speak from the company direct to the buyer, right? So there was no middleman who was. This is a technical sale and there are technical benefits. So there's no middleman essentially in there to pat you on the back and take you out for a beer and try to sell you some panel. There is a trained architect and a trained engineer and even myself to really discuss the benefits of the system with you and its usage. So our architects, all they do all day and they do it mostly these days, seven days a week is take someone else's building plan, whether it's wood or concrete block, whether it's single family, a garage or multifamily building, assisted living, whatever you've got. And we will turn it through CAD into a panelized plan. Now, that does a lot of things. We typically will send about six to eight sheets of design with that, and they will be floor plans for every individual floor. So you'll see what panel goes on the exterior wall, what panel may be the bearing wall, what panel may be you know, the non-bearing walls. We don't, we don't use panel form because it's not necessary. But if you're holding up the panel roof, you need some bearing walls at certain spreads, spans,and whatnot, so you will get designs for your floor plans. Each floor, the roof plan, the exterior plan, and you'll ultimately from there get a bill of materials. And that bill of materials may say you're 13,000 foot, 11 unit condo here is using 30,000 square feet of panel, but it doesn't just say 30,000 square feet of panel like you would buy five hundred gallons of paint, it says 30,000 panels made up of these ninety-sixindividual panel designs. Eight-footlengths, 12-footlengths, 13, 14-footeight-inchlengths, that kind of stuff. So it's a very, very bespoke system. It's essentially a kit house for a building envelope.

Todd Miller:

Very interesting. I'm kind of curious because we live in the world of the exterior envelope, so are most folks usually leaving the concrete as the exposure on the walls or what does that usually look like? And similarly, I'm curious on the roof covering as well.

Ken Calligar:

Sure. So it's really a regional and a taste thing. Now we have a LEED silver building that's on the cover of our website that was designed by a really noted and wonderful architect named Narendra Patel in Rancho Mirage, absolute genius. And he had done his offices with the system, and then he did this thing. It's called the Henderson Center in Palm Desert, and it's an absolutely brilliant municipal building. There's not a wall in there that has a right angle, all the walls radius and most of them are off-plumb and it's just brilliant geometry. Anyway, that building is completely natural concrete inside and out, but it's in a dry environment, it's in an arid environment. And you know, you get up to Northern California, where we're doing a lot of wildfire rebuilds, as you mentioned up there. And typically, people will stucco the exterior because that's the look that they like. The interior walls, now remember on the interior walls, and this is really an important kinda little nuance. You have an inch and a half of concrete on the inside. So that's this thermal mass like you would go for in a passive house, right? And so you don't want to drywall that, you would be blocking some of your energy benefit to do that. So people are finishing the concrete any way they want to. We have prisons where they just do an elastomeric paint, we have schools where they do an elastomeric paint. In northern California a lot of people are using exposed concrete because they like that, or they may be troweling with some natural finish or a plaster, but you can get to a level, flat finish very easily. You're dealing with extremely stable, perfectly-done concrete, and because of that, you can mechanically or chemically attach anything. Go down to Cabo, we have houses like that look like they're they should be in Italy, covered in stone and terracotta tile on the roof. In terms of the roof, you're gonna pour two inches of concrete or create two inches of concrete on the pitch roof there, and then you can finish it any way you want. Northern California, we get a lot of standing seam. Down in the US Southeast, we get a lot of standing seam. That's a very easy attachment. Remember, we've been doing this twenty-eightyears, so we have essentially architectural and engineering details for every attachment of everything you could figure out. So really, concrete is a great medium to create any look that you want.

Todd Miller:

What would that attachment be? Would it be a special screw?

Ken Calligar:

Well, you know, it's normally, you'd flash it and there would be some kind of a Tapcon that you would put into the concrete. But it's just the normal hook that would go with the standing seam. I'd be happy to send it to you. Remember, I'm not the engineer or architect.

Todd Miller:

No, it's good stuff. Very interesting. And you know, I know that we will be hearing about this. We as a building products manufacturer, will be hearing about this more and more. So trying to learn whatever we can. Kind of curious, so structurally, how high have you gone on these buildings? I saw some things that appear to be two and three-story.

Ken Calligar:

Our tallest building is called La Residencia. It's an 80 foot high, five-storycondo smack on the beach down in Cabo San Lucas. It's been there 15 years. That building's been hit by six Cat. 5 storms in its history, never even lost a roof tile. It's a beautiful building and as you can find it on YouTube and whatnot, but 80 feet high, five stories. And that building was done as 100 percent RSG panel. So you've got exterior walls going 80 feet up. You've got intermediate floors, five of them. You got party walls between the units, and they used a pretty thick panel there to get to soundproof. Corridor walls, elevator shafts, terraces, the faces on the terraces, and the roof. There's nothing in that building that's another company's building material other than the columns, stone columns, that are on the terraces. It's a magnificent building done by, we have some great builders down in the Cabo area and really terrific guys and just absolutely great builders. You know, people would think that Mexican building is not to U.S. standards. Our builders down there are really formerly real high-endbuilders in the US who just wanted to move. And so we're, you know, we're doing some high-endfinishes. Right now, we're working for the Four Seasons Resort in Costa Palmas, Mexico. Costa Palmas is a magnificent resort on the water, golf course, et cetera. And the residences down there, we're supplying to those and we've got a company down there named Prestige Homes, Phil Orr who's a magnificent builder, and he's doing a series of residences there. They're four or five thousand square foot homes. And they go for a lot of money and very, very high-endfinishes. We had one of them flooded in September 9th this past year with the hurricane, and they washed it out. They power washed it out, lost a little millwork in the kitchen, I think that was wood, but they washed it out and back in operation in a number of days. And conversely, the concrete block buildings up there smelled like mold and mildew. So, you know, better system, better technology.

Todd Miller:

So building codes, have you found building codes fairly receptive? Or is there work to be done there with changing some of the codes?

Ken Calligar:

There's a lot of work to be done with building codes, but that's a separate rant that I'll go on some other day. But in terms of our reception, building codes really like what we have and we've also made it easy for them. I reference the University of California Irvine testing. That resulted in an International Code Council, an ICC evaluation, and certification so we can either send it to them online ESR-2435 or send it PDF. And it gives them the results of the testing and essentially the calculations. ICC is basically the gold standard of building products, certainly in structural building products. And, you know, it's easy enough at some point that you can just kind of drop this on the desk and they're like, Wow, OK, let's go, understood. And, you know, but other times we'll get some questions, and most of the questions are really coming from not a challenge standpoint, but Wow, I've never seen this standpoint. Explain it to me. This is so cool. We do webinars pretty consistently, Zoom webinars with fire departments, building code officials all around California, and we'll start expanding that and most of the time it's requested. So we just did one with the city of Ukiah a couple of weeks ago, and that came about because we had done a Zoom call with the fire department in Sonoma County. And they'd heard about it. So there's a lot of curiosity out there, I mean, there's a lot of really good people. They want a better-builtenvironment. You know, and honestly, they don't know that we exist. And when they find out it's kind of that aha moment, which is always fun to watch. Holy cow, and it does this and it does that. It's fun. But yeah, we don't get we've never had pushback. We exceed every building code structurally in the world. We just updated our Miami-Dade NOA recently. We picked up some City of Houston and L.A. approvals whatnot. But our portfolio of code approvals is global.

Todd Miller:

So what are some of the comments that you hear from builders after they get their first exposure to your system? I mean, I have to think that they become stark raving fans and you'll want to do more of it. So what are some of the comments you hear?

Ken Calligar:

It's uniformly excitement. We had a gentleman just pass recently who built with the panel for many, many years, guy named Rod Murphy, an absolute great guy. And he coined the phrase panelhead and he said, You know that we become panelheads. You know, it's a riff on the idea of being a crackhead or something, which is not great. And I don't recommend, but be a panelhead. It means you get you start getting a little crazy about the panel and you and you see its usages. So what we get, you know, consistently, and I'll tell you this as an anecdote, we went to see a builder up in Carmel Valley. Brian Jager, Jager Construction. Awesome guy, really super guy. He works with his son, Chris, and they are just terrific. Their first homes, well, I don't really want to disclose a lot, but it's bordering on about twenty thousand square feet. That's their first project with RSG. And we went up to see them and I was talking to Brian. I had not met him before. And he was saying how happy he was with the system. And at the same time, one of our engineers was talking to the project manager separately, and he was saying how much he loved the system. And, you know, because it made his life easier and de-risked it. And then Juan Martinez, our general manager and architect, was talking with the crew, which was mostly Spanish, and I don't speak Spanish. And those guys loved it even more than the GC or their project manager because they were, the panels are easy to work with. They're not exhausted and beat up at the end of the week. They're seeing their progress daily. They're not fixing things. They're not shimming and planning some studs that come in the shape of studs these days, which are not really square, and so everybody within kinda the whole value chain there, the whole process seems to really get into it. You know, we have presently six architects who are doing their own homes with us, none of whom have ever done it for a client. And that's a, now that's a different constituency. But that's another group that gets it, right? So they saw the panel and six architects. I mean, that's incredible. It's such an honor, you know, in my view, it's such an affirmation of what we're doing here that we have these six great architects building some really dramatic homes. And they'll, of course, become clients, you know, down the road working with us. But yeah, it's a fun business in that sense, because you get that panel, that enthusiasm and look, to be honest, once we have a builder in our system or an architect or, you know, so let's say with the builders, they're not going back to wood frame. They're not going back again because their clients want it, it gives them a quieter home, a healthier home, a more energy-efficienthome, a higher value home. And their clients want it. We have a great, real quick anecdote, I know I'm giving you long answers, I apologize. But Gateway Builders up in Santa Rosa, California. Santa Rosa burned down October 9th of 2017, and they lost about six and a half thousand houses up there. And I approached Gateway Builders shortly after I bought the company, and they kind of said, Well, you know, it's very interesting, but we're so busy. But then their clients started asking for it and they built one house and then they built two, and they're on the third right now. And they were just interviewed in Time magazine in an article about rebuilding wildfire zones, and Matt Lawson, the president there, who's a brilliant great builder. He said that 19 of 21 clients had chosen RSG. That's not market adoption, in my view. You know, that is market-changing.

Todd Miller:

That's permeation.

Ken Calligar:

Sure, and you know, my view on this is very simple. Everybody knows their issues and their challenges and their problems, they don't know the solution. When presented with a logical solution, there's very few people who will not really try to dig in and understand it and try it. Fortunately, our stuff is pretty easy to understand. I figured it out, right? And because of that, you get this aha moment, you get this quick adoption. So that's terrific. You know, it's we've had tremendous reception up there, but also, you know, going back to the panelhead notion, if I may, our clients become our best salespeople, it's amazing. So up in Santa Rosa, Gateway built for Nancy Watson and Frank Tansey, these people are like angels sent from heaven. They have hosted tours of their home during its construction eight or ten or twelve times for us. At the drop of a hat. You know, we'll call them up and say, Hey, Nancy, Frank, you know, would you mind if so-and-so dropped by? Or would you mind if we brought in, you know, three architects who want to see the system? They're always there, and they will tell people their story, how their house burned down, how they decided they were not leaving, but they were going to do it right and how their knowledge was going to help their community. I mean, it's really inspiring when you meet folks like this.

Todd Miller:

Yeah, I have to imagine it really is. And I know you talked some to about energy efficiency and net-zerohomes. What are some of the stories you're hearing in terms of the operating costs of a panelized building like this?

Ken Calligar:

Well, I'll give you just straight-updata. We're going to cut the energy consumption versus a wood frame, code-compliantnew home by 45 percent plus or minusjust by substituting the panel. OK, so we do so. California Title 24 is the strictest energy code in the country, and wood builders are having fits trying to meet it. When we model our buildings, they are typically exceeding California Title 24 by 22-26 percent. That's with just a normal amount of glazing and whatnot, and no changes to the building other than substituting five-inchpanels for the walls and the roof versus whatever else they have specced in there before we modulated it, right. Now in terms of cost savings, I have a little side gig called Joshua Tree Sustainable Development. I'm building a couple of homes in Joshua Tree, which is the desert. It can be very cold and it obviously can be very, very hot. And we're doing that basically to have a couple of models that we can take architects and engineers and builders and consumers to go see as much as we like visiting Frank and Nancy and Gateway and whatnot. You know, it's their house, and we wanted to be able to do something slow and show a lot of people the framing, then the concrete work, et cetera. Anyway, we just had that building modeled. Now that house is, huge amount of glazing it faces due west into the sunset, the back wall of the building is 65 feet long, and it's got 42 feet of glass, so it's mostly glass. So we're taking on a lot of radiant heat gain, but we're exceeding Title 24 as a wood-framebuilding that would have been $310 a month in energy costs. By substituting the panel, we got to $180. OK, so we've got about a forty-fivepercent savings. But then we got to zero with a 4.2 kilowatt solar system for a net cost of about twelve thousand dollars. The building will save $165,000 on the portion, on the RSG portion, the 180 to zero, $165,000 savings on 20 years, another 45 percent, it would have saved over $300,000 from the starting with wood frame package, and that's on a $700,000 build. So that's a significant chunk of change, right? We have a builder down in Houston, terrific guy, Everlasting Homes Group. They're just finishing their first project, it's a four-storytownhome, about 4000 square feet, and he's got seven houses signed. He just did an analysis of one of these things. It would have taken eight tons of HVAC in Houston, which is hot and humid. With the RSG system, it was 2.4 tons. So huge energy savings here, right? And you know, to my mind, that goes back to that, that notion of a futureproofcommunity and benefiting communities and families. If you can free up cash flow for most people and look, the average American has not a lot of money in their checking account and their house is their biggest asset. If you can save a few hundred dollars a month every month, that is very, very important cash, right. It's very important during inflationary times. It's very important when you have a health crisis, it's very important in a lot of ways. So and it's available at no extra cost because the RSG panel system builds at the same price as wood. So it's essentially getting, I'm essentially giving you half a free solar system if you look at it that way, right? Because we're saving you half of your energy. So, so these benefits really trickle through to communities and intergenerational wealth. I mean, you know, or look at it this way, if you can free up $300 a month in cash flow on just your energy, add on to that your durability savings, right because these are 500 to 1000 year buildings with, you know, no maintenance, maybe some insurance savings, maybe you're saving 400, 500, 600 dollars a month. That's real, real money at the end of the year. You put that, you put that money into prepaying your mortgage. We've done these studies and it basically pays the mortgage off in 15 to 17 years. You put that money into a savings account at any reasonable interest rate you've got college paid for when you know, sixteen years out, when you need it, when your kid is ready to go or health care.

Todd Miller:

And that all goes back to future-proofing, right?

Ken Calligar:

Yeah. I mean, look, it all goes back to benefiting your client and this is, it's great path to benefiting your client. There's value added along every single day. And by the way, nobody knows the cost. We don't talk enough in this country about the healthfulness of our buildings. We're starting to get it, you know, twenty-fiveyears ago, we started to understand the energy efficiency thanks to guys like Sam Rashkin and other people. And then maybe, you know, when Hurricane Katrina came around, the word resilience came into the zeitgeist and we're now starting to get the healthy aspect of the building. Builders in the Southeast will tell you that 25 to 30 percent of their clients have asthma or allergies. If you can get into a building that's clean, that can't rot, mold, host vermin, that's not laden with chemicals like certain woods are that has no VOCs and has clean, clean, clean air. The health benefits just jump. They just jump. And what's the cost of being sick? What's the cost of the misery of your child having a cold or having asthma? These are incalculable benefits, but they're there.

Todd Miller:

So I believe that RSG and your name stands for Restructure Group. Is that correct? That's correct. And so what you're doing really is very disruptive technology, restructuring how things are built. What do you see as the overall market potential for this type of panelized construction?

Ken Calligar:

Well, you know, I don't want to sound crazy here, but it's every wall, every floor and every roof in North America, which is a lot. I mean, there's 30 billion square feet of drywall is sold in the U.S. annually. So, you know, if we got that market that would take like a thousand plants, then of course, there's the flooring and the roofs that would take another thousand plants before, you know it would have, you know, 10 plants in every state. But our total addressable market is virtually every structural surface in North America. There's not a building that we haven't done or can't do. You know, I'd say we're limited to about 70 or 80 feet, so we're not going to do a skyscraper in New York City unless you want to use it as an infill product. But anything up to that absolutely works. In addition, you know, we just do infrastructure. So we've done freeway sound barrier walls. And we did firewalls for the city of Santa Rosa for their rebuilds. You know, they were rebuilding fast after their fires in 2017, and we built 3,100 linear feet of sound wall and firewall for them in the community of Coffey Park. That little project won the I think it was called the North Bay Infrastructure Project of the Year. It was one of the top ones or something like that. But it was this great little project and we're happy to do those kind of things to help communities. But it's this is a giant market and the other thing that we have and worth mentioning here is we have a division called Resilience ADU and we market it as the only disaster-resilient, energy-efficientADUs in North America. That division won the NAHB's Global Innovation Award in 2020, presented in January 2020 as the leading product in the world. You had, I think, you know Robert August.

Todd Miller:

Sure.

Ken Calligar:

Robert's on our board of directors. And the way we met Robert was he was the lead judge of the NAHB's Global Innovation Awards the year that we won.

Todd Miller:

OK.

Ken Calligar:

Talk about a panelhead. When we were, the first day I met Robert was the day we were being presented with the award at the IBS show in Vegas in January 2020, and this gentleman was going off about the benefits of RSG like no one in the world. More than me. And I said, Wow, this guy is a treasure. Great, great background in the industry, knows a bazillion people, and his enthusiasm was just, you know, exciting. So we got to talking and we just, you know, a certain point. We just said, Listen, we've become friends, we're colleagues. We all want the same thing, why not just come on the board of the company and help us out. And so that's how we got Robert, you know, just a guy who figured it out and got enthused.

Todd Miller:

Very good. Yeah. Well, and you know, I mean, you've sold me all of the benefits of what you're doing are so apparent. And you know, that market share does build pretty quickly. I mean, we've seen it in our own metal roofing industry. We've seen pretty dramatic market share growth over the last 15 to 20 years. So it does happen and sounds like you guys are well on your way already. Well, we're really close to the end of our time. This has really been informative and I know that we're going to be seeing a lot more of RSG 3-D in the future. And I look forward to that. Before we close out, something we always ask folks if they're willing to do is participate in our rapid-firequestion round. These are seven questions that some of them may be a little silly. Some are more serious. All you have to do is give your immediate response to them, and our audience needs to understand that if Ken agrees to this, he doesn't know what we're going to ask him. So before we close out here, are you up to the challenge of rapid-fire?

Ken Calligar:

Go ahead Todd. I'll do eight if you want.

Todd Miller:

Hey, we may come up with another one. You want to alternate questions.

Seth Heckaman:

Sure.

Todd Miller:

OK. I'll let Seth ask the first one and we'll alternate back and forth.

Seth Heckaman:

If you could invent anything, what would it be?

Ken Calligar:

If I could invent anything, it would be pride. It would be some way to give people pride in what they're doing. There's no better feeling than being proud of your children or being proud of what you do. And that's what I would give people.

Todd Miller:

That is awesome. Oh, I love that. Where's your favorite place to visit? You mentioned Joshua Tree, by the way. Next time you're at Joshua Tree. We have a cool roof on the BlackRock Visitor Center there.

Ken Calligar:

Really?

Todd Miller:

That we did a roofing project a few years ago. But yeah, I love that area anyway. What's your favorite place to visit?

Ken Calligar:

Our favorite place to visit is probably anything with a mountain. Banff, Canada, Yosemite, Rome. That absolutely magical day in 2015 with my girlfriend there, and I just want to go back and feel that again

Todd Miller:

Wow, neat. Good stuff.

Seth Heckaman:

Third question top or bottom half of the bagel, which do you prefer?

Ken Calligar:

Oh, there's no question, it's the top.

Todd Miller:

See that's where I am too. He's a bottom-halfguy.

Ken Calligar:

Really?

Todd Miller:

I don't know.

Ken Calligar:

Wow.

Todd Miller:

Yeah. I don't understand that. It makes no sense to me.

Ken Calligar:

Must be like a middle child. I don't know.

Todd Miller:

When do you feel that you're the most productive, early in the day or late in the day?

Ken Calligar:

Is there a time that we're not working? Late in the day. Because early in the day I'm addressing the things that have happened that other people need immediately so I can move my business better late in the day. You know, I live in New York, my manufacturing is Pacific Coast Time, so you know, I work on East Coast Time and West Coast Time, but. And I'll tell you that the best, most productive place for me is it is an airplane because nobody can get to me and I can.

Todd Miller:

I hear you.

Seth Heckaman:

Favorite hobby?

Ken Calligar:

I hate and love golf. I absolutely love hiking and cycling, and I've gotten into rowing in the last number of years. If you could row with someone, it would be the perfect sport. It's hard. It's you need to be present. It makes you concentrate and eventually, it exhausts you enough that you're feeling happy.

Seth Heckaman:

Yeah, full-bodyworkout. Have you read Boys in the Boat?

Ken Calligar:

Yeah, awesome book.

Seth Heckaman:

Incredible.

Ken Calligar:

Terrible movie, awesome book. They were going to do a movie about that, and they never got it off the ground.

Seth Heckaman:

Oh, really?

Ken Calligar:

But an awesome book. Yeah. And one of the great books of all time is The Amateurs by David Halberstam. It's about rowers at Yale and Harvard. I guess it was maybe 1972 or so when they were true amateurs in sports. It's absolutely inspiring, and I probably read it five or six times, and there's just life lessons in there.

Seth Heckaman:

Oh, fantastic. I'll be checking that out, too. Thank you.

Todd Miller:

Sixth question coffee or tea?

Ken Calligar:

Coffee.

Todd Miller:

Very good.

Seth Heckaman:

Seventh and final question if you could be any animal, what would it be?

Ken Calligar:

I think I'd like to be an eagle. I'd like to be able to see more of and see a bigger picture. On the other hand, you know, being my daughter's dog is not a bad life, either, if you go that way.

Todd Miller:

I hear you. This has been great. I've really enjoyed this. Been a real pleasure and privilege to spend some time with you. Is there anything that we haven't covered about RSG 3-D today that you'd like to cover and share with our audience?

Ken Calligar:

I think we've done a fair assessment of this. I want to just maybe amplify just a little bit on the Resilience ADU side of this. I think this is very socially beneficial. I think the entire ADU growth in this country is really an incredible benefit for the country. There's two thousand one hundred and thirty-twocounties in the U.S. all two thousand one hundred thirty-twoshare only one thing, that they don't have enough affordable housing. There is no unanimity in this country. This is a vast, different, dispersed country with all kinds of different needs. And that's the one thing we all need. Resilience ADU takes a lot of the friction out of building ADUs, and it gives you a much better, healthier, longer life building that will service people to a much greater extent. I have some friends at Casita Coalition in California, and they're really the leading thinkers on ADUS and been helping the legislation for years. And, you know, kudos to these people who give all their time to making life better for others. And we're speaking with them pretty consistently. They're a very inspiring group, and we look forward to working with them and really getting the benefits. You know, the beauty of this is, I can say to people, and this is a true thing. The same panel that's in La Residencia million-dollarcondos or in the Four Seasons is in an ADU. This is not trickle-downtechnology, it's the same exact thing. So if you're making, you know, if you're at an average median income and you need a home, this is what you need, right? You know, if it costs you an extra thousand dollars to build it, who cares? This is what you need if it costs you a thousand dollars less, even better. But this is the type of thing that you need for your family and you really need to. I don't mean to sound too harsh. You need to wake up and address your needs. Because Sam Rashkin, has a nice photo and one of his books about a house framed in 1888, and a house framed in 2040. Says these things, nothing's changed. And to your point, Todd, right? You know, construction has been slow to change. I talked to Sam, I said, Actually, that's, you know, they're not the same buildings. That building in 1888 was better because it was natural grown wood versus softwood we have today. So this is the only industry that's gone backwards in time. You know, final thought, if you're building a house to code, you are building the worst house that you're legally allowed to build. Think of the logic, right? In what other place in your life do you choose the worst car that you're legally allowed to build? But do you choose the worst spouse? Do you choose the worst doctor? No, you've got to build way above code. Codes are just trailing along technology. The technologies are leaps and bounds, whether it's SIPs or SCIPs or any of our competitors, they're all better. It's time to get off the wood platform and do the healthy, affordable, resilient dance. And it pays dividends for centuries.

Todd Miller:

It's a great point, and that point's come up before here on Construction Disruption. That building code is, you know, just the entry-level. That's the bare minimum, right? And you know, where can we go from there? And you make such great points about everything else that we buy. We don't typically buy the bare minimum, so it makes a lot of good sense. Well, this has been great. Really enjoyed it. If someone wanted to connect with you, how could they do that? And in particular, is there a specific website for Resilience ADU?

Ken Calligar:

Sure, we have. We have a website for Resilience ADU, it's just resilienceadu.com, but also probably best just to go straight to the parent company of RSG 3-D. RSG 3D, you can go to the website, there's a little link in there. We get plenty of inquiries every week. You just put in your project and tell us where to contact you and we'll send you some great information. We're a knowledge company at this point. The manufacturing takes care of itself. We have to teach people how to build better and how to create a better path for themselves and their families and their community. So that's all we do.

Ken Calligar:

Todd Miller: Very good. Well, this has been great. Thank you so much to our audience for tuning into this episode of Construction Disruption with our special guest, Ken Calligar of RSG 3-D. A fantastic panelist building system designed to weather even the most extreme conditions. Please watch for future episodes of our podcast. We have more great guests on tap. And don't forget to leave a review on Apple Podcasts or YouTube. Until then, change the world for someone. Make them smile, encourage them, two very powerful things that we can do to change the world. God bless, take care. This is Isaiah Industries signing off until the next episode of Construction Disruption.