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By Duane Craig
March 13, 2017
It’s only a matter of time before you find yourself staring at an old building that’s just waiting for you to repurpose it. And you won’t be the only one.
The world is on its way to urbanization. A United Nations World Urbanization Trends report predicted that 66% of the world’s population would live in cities by 2050. In the U.S., 82% will be city dwellers by the same year. The UN isn’t the only one predicting the move to cities. There are plenty of people giving warnings of the potential problems of rapid urbanization.
Developed countries have neglected their urban infrastructures, and developing countries are struggling to keep up with new infrastructure demands from rapidly growing populations.
However, this tension goes far beyond infrastructure. Cities across the globe struggle with housing affordability, causing some to raise minimum wages so that workers can afford to live nearby their workplaces. Increasingly, city workers are finding housing in repurposed factories and warehouses. These structures with ‘good bones’ are getting tapped for all types of uses, including mixed use, housing, dining, shopping, and office space conveniently placed together. The trend of repurposing old buildings is accelerating.
Owners, developers, and municipalities want to avoid new construction in congested areas because it costs too much to demolish and rebuild. Old factory buildings and industrial buildings usually have large open spaces that work well for new industry, such as tech startups. Other companies that find old buildings attractive include:
Many types of businesses want flexible, well-lit atmospheres, and high ceilings to help reduce noise. Wireless technology––today’s communications workhorse––works even better in wide open spaces. Old warehouse spaces are becoming showrooms, company offices, and lofts for living.
The investment opportunities are enticing since many of these buildings are in excellent locations and offered at reasonable prices. And with the interest that cities have in rejuvenating distressed areas within their borders, there are often significant tax incentives for purchasing and renovating old buildings. That’s because there’s a shortage of land to build on and cities want to avoid the problems that come with neglected properties.
When old buildings are brought back to life and begin to serve useful purposes once again, communities bounce back, businesses return, and the tax base improves. Many times it's possible to purchase and renovate a structure for less than it costs to demolish it and haul away. Avoiding demolition also means avoiding the waste of some of the embodied energy that exists in the building. Much of the energy it took to create the components, get them to the jobsite, and assemble them, is reclaimed. Plus, some of the energy previously invested by the workforce that did the original building is also recouped.
However, with all of the positives there are certainly some negatives. These projects offer particular risks for all stakeholders. It is, therefore, crucial to have a thorough discovery process before embarking on one of these projects.
Experts Bill Robson and Steven Arthur recommend having a specialized team prepare a comprehensive study on the property. You should include experts like real estate professionals, legal practitioners, structural practitioners, and scientific experts that are familiar with the construction practices from the time of the building’s construction. In some cases, you will also need to consider the historical aspects of the structure. For example, if the building is in a historical district, then you will need to keep the renovations historically accurate.
It's also important to include someone who is very familiar with environmental regulation, both from a national perspective and from a local perspective. The older the building, the more likely it is that it will have environmental concerns like asbestos, improperly disposed chemicals, and polluting compounds.
Contractors and subcontractors have more risks under traditional design-bid-build projects when dealing with older buildings. It’s risky business to assume that the design phase accounted for all the variables. More than likely, the design was taken from the building’s original documents and then updated. While this allows the owner to get bid drawings done quickly and inexpensively, it does little to account for the dangers lurking in old structures.
Newer project delivery methods like integrated project delivery and design-build provide more favorable situations for contractors and subcontractors when taking on projects with old buildings. In those cases, design is collaborative, providing more emphasis on discovery as design unfolds.
Whether the project is a traditional design-bid-build or one of the more collaborative delivery methods, an efficient and thorough way to approach discovery is doing it as a project. Construction is a project-based process. Create a work breakdown structure that addresses all the major components of the building. You might have to allow time for exploratory demolition so you can see hidden aspects.
If you can’t do discovery while design is underway, then be sure to build cross checks with the existing plans into your discovery schedule. That will allow you to see all the places where earlier design documents don’t reflect the reality of the building’s condition. Set up your work breakdown structure with days allotted for comparing what you find existing in the structure, to what is proposed in the plans.
Once discovery is complete, you will have accounted for many variables that old buildings can throw at you. But, you probably won’t catch all of them. Build a contingency into the budget, and make sure you have insurance coverage for environmental issues. If an owner is requiring a tight schedule and is in a rush, think carefully about participating. It took time for old buildings to become dated, and you will need ample time to make them new again.
The Anatomy of a Request for Information (RFI)
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