No matter how many building projects you undertake, early in the process you face myriad decisions that significantly impact capital, operational cost, and time. Now more than ever, the pressure is on to eke out any advantages, from the initial programming phase forward.
To get a perspective on your decision making, imagine a scale. On one side of the scale are information gathering, research, and intelligence. On the other side are calculated risk and a bold-faced clock that ticks away potential revenue that is lost until you become operational or open for business. Keep in mind that striking the right balance is not all up to you. Professional input is there for
the asking on all these decisions.
Decision #1: Selecting the best site for a specific building project.
The challenge is to get critical information in hand to intelligently compare several sites in a reasonable amount of time. There are three issues you can’t afford to neglect as you go through the evaluation process: What will it take in terms of time and money to develop them, to build on them and, possibly the most challenging, what kinds of entitlements will be involved?
Unless you have adequate in-house staff that can dedicate time to gathering this information, you will want to engage an outside resource to help you. Commercial realtors are one option, however, they may have their own agendas that will prejudice their input. And most are not trained to do extensive site analysis. Then too, if you are considering sites in different areas, you will deal with several realtors—and expend a lot of valuable time. A better strategy is to work with a national, multi-disciplined architecture/engineering firm that can coordinate the site evaluation process nationwide. It should have the expertise to understand your business, its unique facility requirements, and related site challenges. Its staff should include specialists in due diligence and entitlements. Even at an early decision point, it can determine the major fees and approvals and the time needed to obtain them, for each site under consideration.
Note: the same type of comparison can help you prioritize your capital spending to achieve your strategic goals. If your goal is to open three new locations in the next two years, an expert can help you choose the best sites to develop.
Decision #2: Should I delay agreeing to the terms of a lease or purchase until I’ve fully researched the site?
Let’s imagine you’ve found a “perfect” location for your building.
It’s tempting to tie down the real estate quickly—before you lose the opportunity. You may think a quick decision will put you ahead of schedule for generating revenue. On the other hand, horror stories abound about discovering site issues that delayed the project and exceeded budget. It’s better to find out about the fees and assessments; any plans for the area around the site that may affect access, traffic patterns, or property values; access to utilities, and more. These answers will influence how you might structure the lease or purchase agreement. Whether you do your homework yourself or engage an outside professional resource with experience in due diligence, don’t short-change this part of the process.
Decision #3: I need to compress the project schedule. Can I reduce the project development phase without risking the success of the project?
While we recommend spending ample time for thorough due diligence, there are ways to save time in the entitlements phase. Having a knowledgeable advocate to manage the permitting process is the key. He or she will know how to sequence the application for various permits and run activities concurrently to reduce the time of critical path activities. He or she can also determine when to risk the minimal permit cost in order to move other tasks forward.
Decision #4: Choosing the optimal site layout for my business.
This decision relies on the capability of the professionals creating the site layout. Make certain they understand how your business functions—down to the detail. For example, if you routinely receive deliveries by truck, they need to know what types of trucks, how many, and the frequency and process of handling deliveries and shipments in order to properly lay out the site. Optimal site planning leads to operational efficiencies and your civil engineers should be able to maximize them in a well-devised layout.
The Overarching Decision:
Selecting a resource to help you.
As this article has suggested, unless you have the in-house capabilities to handle site evaluation and selection, due diligence, entitlements, and site layouts, you should rely on a qualified outside resource. There are small firms that specialize in site services, but they may be too geographically limited for your current and future needs. A better strategy is to find a national, full-service A/E firm with broad civil engineering capabilities.
It will have site, building, and process experts to provide comprehensive, well-developed site services. Consider using the same firm for your entire building project, since it will already be keenly aware of your business objectives and specific site issues.
If you’d like to talk over your site planning decisions with SSOE, please contact Scott Hathaway (jhathaway@ssoe.com).
