How to Bring New Projects Online Fast

illions of dollars of sales can be earned by timely delivery of an e-business facility–or lost if the effort gets mired in delay. Herein lies the importance finance and operations management place on accelerating the start date for billing of services. Although lowest facility delivery cost may feel increasing pressure in 2001, management’s overriding priority will continue to be the revenue ready date.

       
Proven timesaving advantages to site acquisition can be realized through the use of a multi-tracked process that allows for timely facility delivery for clients. The primary focus of these clients has been revenue ready dates–how soon can they generate income? This process is built around six critical efforts pursued simultaneously to the maximum extent that conditions will permit. They are:

• Simultaneous, multi-disciplinary team-tasking that eliminates sequential delays
  
• Selection criteria that is identified, prioritized and ranked as deal makers or breakers, eliminating wasted efforts
  
• Use of computer-aided design and communication (CADC), which speeds analysis
  
• Early jurisdictional contact, which disarms controversy and builds consensus and partnership solutions
  
• Acquisition of approved infrastructure capacity for eliminating surprises
  
• Simultaneous land closing & construction start, which preserves capital
  
• Simultaneous team-tasking
  

       

The single greatest time-saving decision is to avoid a traditional linear, sequential process. Typically, a client or consultant team will approach project delivery tasks in a one-at-a-time, linear process with each task pursued individually and separately by consultants in sequence, such as this scenario:

1. A site is identified and put under contract through a broker.
   
2. Lawyers pursue entitlements through a bureaucracy of jurisdictional authorities.
   
3. Engineers seek to resolve inherent physical site problems, utility constraints and development and design criteria.
   
4. Architects and engineers fit a building to the site in compliance with entitlements and jurisdictional development controls.
   
5. Contractors’ bids challenge critical construction schedules and budgets.
   
6. Then one may start over or delay the project upon evaluation of costs & benefits.
   
7. Or the site purchase contract closing may already have occurred, which limits the flexibility of all remaining actions and decisions. Options are no longer available.
   

Compliance with regulations dealing with the protection of the public health, safety and welfare is the most critical issue facing the development community today.

       
This process can easily consume eight months to a year — two to three months by the broker, three to four months for entitlements, one to two months for utility and site resolutions, one to two months to design and site plan a building preliminarily, and one to two months for the traditional contractor bid and revisions to schedules and budgets. Total time consumed for site delivery ranges from eight to thirteen months. Still to be completed is a three-to-five-month building design and permitting process and a one month construction bid and contract resolution period prior to construction start. Additional negative impacts can include increased financial carry, lost revenue from delayed billing and significant program modifications required to adapt the single site solution to conform with unresolved issues.

       
Consider instead a simultaneously executed, multi-disciplinary team effort managed by a single individual as the point of control. With all actions occurring simultaneously and coordinated by a single manager who comprehends the interrelations of all site criteria and conditions, many months can be eliminated from the process. In addition, the probability is great that the ultimate site solution will be superior to that resulting from the typical linear process. For illustration purposes, the following team members are critical to this multi-tracked site acquisition process:

• A broker is selected to collect data on a number of available sites, to confirm costs and deliverability and to preliminarily screen and rank options. The broker is provided a list of site selection criteria which all sites must meet or risk immediate elimination. The broker assists in evaluation of all conditions and interacts with local jurisdictional authorities as appropriate to achieve entitlements.
  
• A civil engineer is on board to identify and evaluate for each option: utility availability and capacity, slope and drainage conditions, floodplain and wetlands issues, geotechnical conditions, site ingress and egress, platting issues and site configuration and site plan fit.
  
• A planner is part of the team that will meet with city political and economic leadership and staff on entitlements, identify and evaluate development restrictions and timetables, analyze site data and prepare preliminary site plans for comparative evaluation of each option. It is often critical that the team include legal representation to assist in the pursuit of necessary entitlements.
  
• An architect is on board to confirm design program compatibility, to review design implications of each site, to deal with development criteria and to review site plans.
  
• An MEP coordinator (mechanical, electrical and plumbing) is available to confirm utility availability and capacity of wet utilities and the increasingly critical availability of electrical power and related environmental controls.
  
• A contractor or pre-construction project manager is on board for cost evaluation of alternatives, to deal with scheduling and procurement issues and to deal with unique, local construction circumstances.
  

Computer-aided design and documentation and Internet communication technologies offer an exceptional time-saving opportunity to team-oriented project-delivery processes.

       
As the broker provides screened available sites for comparative analysis, the remaining team members utilize computerized and Internet-linked design and communication techniques to share critical site information, collaborate on comparative analyses and design solutions, and reach consensus as to the superior site option. Depending upon project complexity, this effort can often be accomplished within two to four weeks, resulting in a realistic and practical site identification and a workable site plan.

       
At this stage in the process, a workable site has been identified and purchase contract issues, such as boundary survey and title commitment, can be finalized. The actual due diligence period is used to conduct detailed surveys, finalize environmental and geotechnical analyses, and deal with any other identified issues. Preliminary yet detailed site design can proceed as soon as boundary, topographic and wetland surveys are complete. Utility availability is confirmed at this time. Three to five weeks is often adequate to deal with these issues while other tasks are progressing.

       
After site plan consensus is reached during the first stage, and a good working relationship is established with city staff and leaders, entitlements can be pursued and often expedited to the maximum extent allowed by law. Frequently, preliminary submittals can be refined during the review process in order to reduce submittal delay. It is imperative to identify a singular point-of-contact within the city and to establish a high level of communication and understanding of expectations. Scheduling of submittals and reviews, handling during interdepartmental reviews, responsiveness of the team to questions, and emphasis on the importance of fast-tracking the process are all critical issues to raise with city staff. Minimum time for entitlement processing is generally 30 to 45 days.

       
Depending on the risk tolerance of the client/user, architectural and engineering design and documentation can proceed simultaneously with entitlement processing to the point of submitting for and obtaining a site development permit and a building permit after entitlement approval and just prior to site closing. Documentation and approval time can generally range from two to four months, with greater time requirements depending upon project complexity.

       
Coordination with city leadership and staff, coordination of all efforts of the design team including the construction contractor, and communication with the client for critical decision-making are all vital to the success of this multi-tracked process. It is reasonable to expect site delivery, ready for construction start, to be completed within three to five months of initiation of the project site search.

Selection Criteria as Deal Maker/Breaker

Critical to expedited site selection is the identification of criteria, which will be deal breakers–those characteristics that will prohibit the client from full and unencumbered use of the property. Obviously, the desired site criteria must also be identified and will become the target for the broker’s selection activity. These criteria should be identified and prioritized for comparative ranking of alternative sites:

1. Site location, size and configuration;
   
2. Municipal jurisdictions, entitlements, platting requirements, approval submittals and timetables;
   
3. Utility requirements, availability, capacities, off-site improvements and impact fees;
   
4. Land use and zoning adjacency issues, valuation and exit strategy;
   
5. Site configuration in compliance with a reasonable building footprint and site plan;
   
6. Adequacy of available parking area, site ingress and egress, required road improvements, fees;
   
7. Floodplains, topography, wetlands, vegetation and related regulatory impacts on site utilization and approvals timing; and
   
8. Covenants, conditions and restrictions of the seller with approvals timetable.
   

       

Deal breakers might include the following:

1. Lack of adequate electric power and no potential for future relief;
   
2. Proximity to underground high-pressure gas transmission lines;
   
3. Six- to 12-month entitlements approval timetable;
   
4. A no-growth municipal attitude reflected in difficult and lengthy approvals;
   
5. Significant impact fees;
   
6. Extreme development requirements resulting in project economic infeasibility; and
   
7. Stringent Environmental Impact Review criteria and timetable.
   

       
Computer-aided design and documentation and Internet communication technologies offer an exceptional timesaving opportunity to team-oriented project-delivery processes. Use of CADC systems facilitates all aspects of comparative site feasibility analysis, site plan design concept execution, design refinement, presentation, and documentation for permitting and construction and construction management.

       
Site data in a CADD format is provided by property sellers, collected by the broker and communicated to all team members via the Internet. Within hours, comparative overlays for each site can be constructed from boundary and topographical surveys, vegetation survey, floodplain and wetland survey, preliminary site plan with building footprint developed as a prototype design concept, parking and loading areas, ingress and egress, utilities, setbacks, height restrictions and other appropriate information.

       
Analysis of the overlays may reveal zoning entitlement issues, design concerns, construction cost and schedule implications, purchase or title issues, environmental approval issues or many other circumstances. Through Internet communications, the entire team is involved simultaneously in analysis and decision making, which leads to the most appropriate solution. Significant time savings and a superior solution is a practical expectation.

Approval Sand Traps Abound

One of the greatest perils in the development process today is obtaining approvals from local, state and national jurisdictions. Sensitivity resulting from environmental concerns and growth/urban sprawl issues have led many municipalities to implement extensive development requirements and time-consuming staff reviews and approval procedures. Examples include basic zoning and building permits as well as detailed landscaping plans and tree replacement required to improve municipal imagery, increased open space and sand filter beds required to improve quality of storm water runoff, on-site storm water detention ponds to reduce municipal downstream flood-improvement costs, air quality standards limiting on-site emergency power back-up diesel generators–the list goes on and on.

       
In certain jurisdictions across the nation, entitlement and environmental approvals are expected to take 18 to 36 months. Compliance with regulations dealing with the protection of the public health, safety and welfare is the most critical issue facing the development community today. It is critical to the site acquisition process and to a comparative analysis of alternative sites to determine the probability of approvals’ success and to make decisions accordingly.

       
Early and straight-forward communication with jurisdictional and economic development agency authorities is critical to approvals. Clear understanding of expectations of both sides will help to disarm political controversy and can build consensus solutions. Technical understanding is required. Exhibiting a willingness to seek a win-win solution, ability to work with staff in an open, professional manner, and sensitivity to political, scientific and regulatory issues are examples of characteristics one must convey in working within the regulatory bureaucracy.

       
Critical to expediting jurisdictional approvals and their comparative site impacts are the following steps:

1. Determine required submittals, approvals, process, timelines and detailed development criteria.
   
2. Determine the attitude and expectations of staff, departmental workloads and staff availability.
   
3. Identify an expediter or project manager to assist in dealing with staff communication.
   
4. Understand the development objectives of political and economic development decision-makers.
   

Acquisition of Approved Infrastructure Capacity

Acquisition of approved infrastructure capacity is critical to timely occupancy. Utility capacity is one of the most important site selection criteria. It can quickly become a deal breaker if capacity is not available. For a number of years, we have seen development moratoriums in effect in certain jurisdictions across the nation, placing restrictions on development subject to completion of sanitary sewer treatment plant or pipeline improvements.
       
During the initial phase of site selection, contact with local utility officials must identify service constraints and potential solutions. Often, evaluation of broad project economic benefits can lead to creative solutions to water and sewer capacity problems. Critical to this evaluation is good communication with city staff and political leaders.

       
More recently, the availability of adequate electric power has become critical as Internet businesses consume greater quantities of power to operate concentrations of highly space-efficient equipment such as switches, servers and routers of Internet traffic. Most likely, the availability of power will override other utility issues.

       
During the initial phase of site identification and evaluation, contact must be made with the local power provider to identify and evaluate real demand and supply issues. Contact should be established with both the engineering and economic development offices. Input from the team’s MEP coordinator is critical to convey accurate and realistic demand data to power engineers and planners. The economic value of the project should be communicated clearly to appropriate power officials. Comparative analysis of responses to each site should result in a priority ranking of sites according to utility availability.

       
As with other areas of contact and analysis, it is wise to establish a single point-of-contact and an expediter or project manager to provide ongoing sponsoring leadership within local organizations.

Tips for Preserving Capital

While the above analyses and evaluations are occurring, legal representation should be under way. The focus at this stage is on comparative evaluations of boundary survey and title documents, deed restrictions or other covenants, easements and encumbrances, assurance of ownership deliverability, purchase contract negotiation, obligations for the payment of impact fees, and other similar preparations for closing on the selected site.

       
As the broker provides purchase contract and site description information on alternative sites, copies of all documents should go to the attorney and to the team coordinator for distribution to appropriate parties. Boundary survey and title commitments with exception documents need legal, planning and engineering review. Covenants, along with conditions and restrictions need careful design review to identify critical development regulations and the seller’s project approval process and timetable. Preliminary environmental site assessment and geotechnical reviews should be done simultaneously with site planning and engineering analyses to identify any hidden site characteristics.

       
Typically, the greatest time and cost benefits related to closing result from coordination of the closing with the actual construction start date. The most desirable situation is to close one day prior to construction start, which generally means the start of clearing and grubbing and the moving of dirt at the site. This action will tend to reduce interim construction cost financing, to shorten interim land carry and to accelerate debt repayment.

       
In order to achieve this objective, coordination of many critical team member activities must occur, including: approval of entitlements, confirmation of utility capacity, determination of fast-track design and permitting issues, completion of project design and construction documents either in fast-track phases or in total, application for site development permit and building permit, completion of contractor agreements and construction scheduling. Ongoing and timely communication between all team members is crucial to ensure that critical dates are met, materials and information are provided, questions are answered and decisions are made.
Since it can be beneficial to change start dates to take advantage of design team efficiency, it is wise to provide flexibility by incorporating language in the purchase contract that will facilitate an accelerated closing.

       
Simultaneous pursuit of these six efforts related to site acquisition has proven to be a significant time-saving advantage on numerous fast-track projects. From very large office campuses to site-specific office developments to multi-location data centers nationwide, this process has yielded significant advantages to corporate clients whose bottom line has been significantly and positively impacted by timely site delivery and meeting fastest available revenue ready dates.