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Category ArchiveDesign + Construction

Spring’s in the Air: How Palm Springs Went From Desert Getaway to Hipster Playground

Los Angeles is the second-least affordable city in the U.S., for both home renters and buyers, according to the 14th Annual Demographia International Housing Affordability Survey: 2018, a fact that has many heading east—more specifically to Palm Springs.

A desert town located at the base of the San Jacinto Mountains, synonymous with midcentury modern architecture, Palm Springs may have been the playground of the Hollywood elite and retirees, but of late it has become a hotspot for hipsters, telecommuters and members of the LGBTQI community, all looking to reside full-time in a more reasonably priced and slower-paced locale.

Moreover, serious real estate investors see the area’s potential: earlier this year The Desert Sun reported that BlackRock had picked up 167 acres of land with a potential to build some 1,100 homes in the Palm Desert. The price wasn’t immediately available and attempts to reach BlackRock were unsuccessful.

The city of Palm Springs, 106 miles from L.A., was first developed in the 1930s as a weekend getaway L.A. dwellers, but it wasn’t until the 1950s that it gained a broad appeal when Alexander Construction built more than 2,000 contemporary, stylish and affordable tract homes. Today the Alexander homes go for around $500,000, and are a cherished investment.

gettyimages 514975170 Springs in the Air: How Palm Springs Went From Desert Getaway to Hipster Playground
In 1908, Palm Springs was practically empty but became a popular winter resort. Getty Images.

Flinn Fagg, the director of planning services for the City of Palm Springs, said in the three years since he’s lived in Palm Springs, his office has seen a marked increase in entitlement requests, primarily for building small-lot single-family homes—one of the greatest indicators in assessing the need for to the city.

“People are looking for detached homes with yards and pools,” Fagg said. “We’ve been busy in terms of applications. If you compare between 2010 until now, we’ve easily increased the applications from 1,200 to 1,700 per year.”

As of January 2018, the average price for a single-family home in Palm Springs was about $495,000, and a condominium unit about $220,000, according to Zillow.

The median sale price for a single-family home in Los Angeles is $704,500 with a 2.9 percent projected increase by 2019 and the median monthly rent is $3,500, Zillow indicates.

Palm Springs is building largely to keep up with those who’re flooding to the desert for an easier and more reasonably priced lifestyle with all the amenities of a vacation destination.

Brad Shuckhart, the division president for the California region of Freehold Communities—a group of developers focusing on lots in Texas, Tennessee, North Carolina, Florida and California—and the project director for Miralon, a Palm Springs-based master-planned community in the works, explained that communities such as Miralon are anomalous in Palm Springs primarily because it is an older community. But developers are confident they must build it, because people are already coming.

“We expect to have a fairly broad draw from millennials to retirees,” Shuckhart said. “The desert does skew older, but it’s unique in the Coachella Valley, which contains the resort cities of Palm Springs and Palm Desert, as well as Indio, La Quinta, Indian Wells and Cathedral City, as there’s a vibrancy that you don’t find in similar communities—meaning there’s more activity across the age spectrum and the lifestyle spectrum.”

gettyimages 503213652 Springs in the Air: How Palm Springs Went From Desert Getaway to Hipster Playground
Cate Blanchett at the 27th Annual Palm Springs International Film Festival Awards Gala. Photo by Jason Merritt/Getty Images for PSIFF

He added: “We’ve seen interest in this community from people up and down the West Coast, as well as the Midwest and even parts of Canada. If you are a telecommuter or are retired or going to retire, and you’re looking at cost of living, the desert offers a more affordable way to continue with a lifestyle you’ve become accustomed to, but no longer want to pay for—at least to the extent you’d pay for it in L.A.”

With its year-round population of almost 48,000, historically Palm Springs’ youngest residents tend to leave after finishing high school, but today the city is finding its millennials returning to start their own businesses; three of the desert’s hippest bars and restaurants are owned by four members of Palm Springs High School’s class of 2002.

Between the annual Palm Springs International Film Festival,and the 77,500 people who descended on the town for Modernism Week 2016, it’s clear this little desert resort town has become a cool 21st-century destination.

Taking a unique approach to target a new buyer, Miralon has spent the last several months working with the city to convert the greens (the property was originally built as a golf resort), to what its executives believe is a more diverse and inclusive use of space.

“We’ve changed it to a system of plantings, which are largely olive trees, the fruit of which will be harvested by the [home owners association] through a contract, and pressed into olive oil and made available to future residents and members of the community,” Shuckhart said. “We believe that there is a better way to use the open space that’s more inclusive that would appeal to a broader range of people. Whereas golf may appeal to a subset of those, we believe everyone will enjoy this active open recreational space.”

Miralon will also leverage the existing golf space into hiking trials, offering what it calls “social spaces,” seating areas, Wi-Fi hotspots, community gardens, fireplaces and a club house—an 11,000-square-foot facility with seven or eight buildings all connected by a large shade structure—offering pools, spa, exercise rooms, and even a bar that will operate to the benefit of the HOA, according to Shuckhart.

When Miralon is finished this fall, it will offer 1,150 units, 400 of which will be affordable townhouses priced between $300,000 and $400,000. The balance will be traditional and larger single-family homes with prices in the mid-$700,000s, all built in a modern aesthetic.

In addition to planned communities and new homes, the activity in downtown Palm Springs isn’t just hot hotels like the luxe Arrive hotel, which opened in 2016, or a new Kimpton, which bowed at the end of 2017, but a number of new restaurants, and the tony Uptown Design District (Ezra Callahan, Facebook’s sixth employee, is one investor)—a two-mile stretch chock-filled with over 50 unique interior design boutiques, galleries, shops and galleries located inside stunningly-restored midcentury modern buildings.

“What created the resurgence of Palm Springs is it became accessible,” Tara Lazar told The New York Times in March of 2017. She is a lifelong resident who bought and renovated the Alcazar Palm Springs hotel in 2009 and now owns and operates three local restaurants and a bar called Seymour’s. “It was always for the elite and the wealthy,” Lazar said, “and then all of a sudden, other people could afford to come and stay. There is now a middle market. We have young people in Palm Springs, and that hasn’t happened in more than 20 years.”

The annual Coachella Valley Music and Arts Festival have also raised the profile of the area. Palm Springs has always had the marquis name, but now the city of Coachella has been put onto the map.

Thriving with diversity, all one needs do is take a stroll down the rainbow-flag strewn Palm Canyon Drive, to see that Palm Springs has one of the largest LGBTQI communities in SoCal. Once a conservative outpost, it has become an internationally known place of residence for gays and lesbians.

The city is ranked first in California and third in the U.S. among cities with the most same-sex couples (per 1,000 households), according to analysis of U.S. census data by the Williams Institute at the UCLA School of Law.

The community has a thriving year-round LGBTQI culture for residents and the Palm Springs Pride Festival is hugely popular, honoring the history of the gay rights movement. In November 2017, the city elected an all-LGBTQI city council.

“Palm Springs has become a very inclusive community to LGBTQ folks,” said Gretchen Gutierrez, the CEO of the Desert Valleys Builders Association. “It’s more affordable and it’s a community that has wholly embraced LGBT people.”

She said that although building in the desert isn’t easy, she can’t deny that there is absolutely a demand for housing. And although things can take a couple of years to build after filing for entitlements and permits, it does appear that the building market is growing.

Fagg said he hopes the city doesn’t become too crowded with L.A. folks, as what people like about Palm Springs is that it isn’t L.A. or Orange County.

“It’s a low-rise city,” Fagg added. “It prides itself on having open space and a relaxed style of life. The roads aren’t crowded. It’s walkable and bikeable. If you want to get coffee, you just jump on your bike and go. You don’t have to sit in traffic for 20 minutes, and additionally it’s more affordable than L.A.”

It should be said that Palm Springs is still California, so on-average the cost of living is higher than it would be in the Midwest or a small town, but definitely less than cities such as New York or Boston, and about 8 percent less than the California average.

With additional reporting provided by Max Gross and Lauren Elkies Schram.

Source: commercial

The Plan: Inside World Economic Forum’s New Energy Efficient Offices

The World Economic Forum is trying to lead by example.

The organization, which was founded in 1971 and is tasked with resolving international conflicts and improving the world through meetings with political and business leaders (like its annual summit in Davos), supports sustainable development practices.  

So when designing its new offices at RFR Realty’s 350 Madison Avenue between East 44th and East 45th Streets, it worked with CodeGreen Solutions—a sustainable building consultant—to make its location platinum-level Leadership in Energy and Environmental Design, or LEED, certified, the highest level awarded by the U.S. Green Building Council.

“Our new New York City office design by Montroy Andersen DeMarco will support our mission and provide a comfortable work environment for our employees,” Stephan Ruiz, the forum’s head of finance and operations, said in a prepared statement. “It also reflects our organization’s strong commitment to sustainable development and operations.”

The office has energy efficient LED lights throughout, it uses less water in washrooms than typical offices and about 90 percent of the appliances are Energy Star certified, meaning they were built specifically to consume less power. Also, more than 80 percent of the waste from demolition of the space was recycled.

Architecture firm Montroy Andersen designed the 39,000-square-foot office on the entire 10th and 11th floors to fit the Swiss organization’s 150 New York-based employees, as well as their guests, for meetings and events.

The 10th floor has executive suites and 109 workstations, all with adjustable-height desks. And there is a 425-square-foot foyer with four seating pods and a pantry with seating for 30 people. Montroy Andersen redesigned an existing internal staircase and added stainless-steel handrails.

And the 11th floor features 29 workstations, offices for the finance and human resources departments and a studio where the organization can make promotional videos.

On this floor there are seven conference rooms, all with high-level audio and video-conferencing equipment. Also, a pantry and a 950-square-foot event space, which can sit up to 160 people, was designed for when the office needs to host large meetings.

Guests to the office will be greeted by a 1,300-square-foot reception area on the 11th floor. The welcome space features a residential aesthetic with wood flooring and walls and a custom receptionist’s desk with a glass front. A nearby seating area has high-end European furniture, LED lights and carpeting.

“The overall look and feel for the entire space is light, warm and contemporary, with an understated European aesthetic that is a nod to the visual language of the Geneva headquarters,” said Mariana Panova, a designer at Montroy Andersen. “The team wanted to create a high-end, more sophisticated reception area on the 11th floor, where guests, speakers and leaders will be greeted.”

Source: commercial

Does 270 Park Avenue Deserve to Be Saved?

When J.P. Morgan Chase announced last month that it would demolish its 52-story headquarters at 270 Park Avenue in Midtown, preservationists and architecture fans were up in arms. The bank said it would tear down the 1961 modernist skyscraper to build a new 70-story headquarters that would house 15,000 employees and 2.3 million square feet of office space.

Architecture writers were quick to point out that 270 Park Avenue—also known as the Union Carbide Building—was an important example of mid-century corporate architecture. More importantly, it was perhaps the first high-rise designed by a woman, according to Curbed architecture critic Alexandra Lange. Natalie de Blois helped lead the team of architects at Skidmore, Owings & Merrill (SOM) that designed Union Carbide, under the supervision of Gordon Bunshaft, partner at SOM. De Bois, one of a handful of high-profile female architects at the time, also played a pivotal role in designing two other corporate icons of the 1950s and ‘60s: the Pepsi-Cola Building and Lever House (both of which are now landmarked).

Since de Blois and Bunshaft’s other well-known Midtown East works have landmark protection, critics argue that 270 Park should be designated a landmark, too.

“The point is not that she did it solo, but she was part of the team that designed this building and was instrumental in the design,” Lange said. “And she wasn’t talked about enough in her lifetime.” She added that the building was unique because in its early years, Union Carbide left the lobby open to the public and organized exhibits on art and finance there.

On Curbed, Lange explained that the building’s gridded exterior was “coated in one of Union Carbide’s latest products and thus, like Lever House’s window-washing apparatus, became a showcase for the company’s chemistry.” (Union Carbide has produced a slew of chemicals and household products since its founding in 1917, including antifreeze, Glad bags and plastic wraps, Energizer batteries, rocket fuel and asbestos. It occupied 270 Park until 1983, when it moved its operations to Danbury, Conn.)  

In his write-up on the demise of 270 Park, New York magazine’s Justin Davidson argued, “The Union Carbide Building deserves to continue existing, not because it was in the vanguard of a movement with a dubious urban legacy, but because it’s among the finest of its kind. The clear glass membrane, stainless steel fins, and slender bones combine to give it a texture and personality that so many imitators lack.”

And 270 Park is one of several architecturally significant structures in the neighborhood that deserve historic protection, preservationists argue. As the city was gearing up to rezone Midtown East in 2016, the Landmarks Preservation Commission (LPC) assembled a collection of properties that could merit designation. Although a dozen buildings were ultimately landmarked, advocates said there are several more properties that should have been seriously considered. Union Carbide topped the list, as well as the Universal Pictures Building at 445 Park Avenue (Kahn & Jacobs, 1946-47), the former Girl Scouts of America headquarters at 830 Third Avenue (SOM, 1957), the MetLife Building at 200 Park Avenue (Emery Roth & Sons, 1963), the National Distillers Building at 99 Park Avenue (Emery Roth & Sons, 1953) and the Lipstick Building at 885 Third Avenue (Philip Johnson, 1986). The landmark commission put another Johnson-designed office tower at 550 Madison Avenue on its calendar last fall after its owners threatened to dramatically renovate the building, but it hasn’t been officially voted on yet.  

“Further consideration of [270 Park] as a landmark is not among the commission’s priorities at this time,” an LPC spokeswoman said in a statement. “As part of the interagency East Midtown rezoning initiative, the commission evaluated buildings in the area, including this one. As a result, we prioritized and designated 12 iconic buildings that represented the key periods of development in the area as individual landmarks, but the J.P. Morgan Chase building at 270 Park Avenue was not among them.”

Not everyone believes that 270 Park is worthy of being saved. Matt Shaw of Architects Newspaper contended that the tower “represents the worst of midcentury American corporate architecture, something that at the time was totalizing, banal, repetitive and dogmatic.” Shaw added that Union Carbide should be remembered as the company responsible for the worst industrial accident in history, the Bhopal disaster in India, a toxic gas leak that killed 16,000 and exposed hundreds of thousands to a lethal gas in 1984. He asked in his publication: “Why not just let 270 Park die a natural death at the hands of the 21st century equivalent of Union Carbide: a multi-national bank? It’s really a beautiful story if you think about it correctly.”  

The disassembly of buildings like Union Carbide is exactly what the city intended when it dramatically upzoned Midtown East in August 2017. Mayor Bill de Blasio’s administration hoped that the new zoning would encourage the redevelopment of the area’s century-old office stock, which has been eclipsed by newer buildings in hipper parts of Manhattan. When J.P. Morgan Chase made its announcement about a new headquarters, the mayor crowed in a press release: “This is our plan for East Midtown in action. Good jobs, modern buildings and concrete investments that will make East Midtown stronger for the hundreds of thousands of New Yorkers who work here.” The development is expected to generate $40 million in improvements for streets and subway stations, which was one of the primary aims of the rezoning.

Still, preservationists were shocked to hear that 270 Park would meet the wrecking ball. “270 Park was not even identified as a development site” because the building already took up much of the site’s potential floor area, said Simeon Bankoff, the president of the Historic Districts Council. “Honestly it took everyone I know by surprise. The rezoning really changed the rules for development in East Midtown.”

When Union Carbide bites the dust early next year, the 1.3-million-square-foot structure—which occupies a full block between Park and Madison Avenues and East 47th and 48th Streets—will be the world’s largest voluntary demolition. It will take that title from the Singer Building, the 47-story, 612-foot tall skyscraper at 149 Broadway that was constructed in 1908 and torn down in 1967 to make room for One Liberty Plaza.

Chase will have to invest considerable time and money in knocking down 270 Park. And the decision to redevelop it comes only six years after America’s largest bank pumped tens of millions into renovating the building, adding eco-friendly features and bringing it up to LEED platinum status. Critics charge that the development will be a big waste of cash, especially since the financial institution already spent untold millions on the renovation in 2012.

“Above and beyond the landmark preservation process being kind of bent for this to happen, this strikes me as a deeply conspicuous consumption and something I find shocking on that level,” Bankoff said.

However, Robert Knakal, the chairman of New York investment sales at Cushman & Wakefield, pointed out that once the bank considered the cost of land in Midtown, it was cheaper to demolish and rebuild at 270 Park than to buy another site and try to develop it.  

“If that was a vacant lot today, the land value would be arguably approaching $1,000 a square foot,” he said. “So by the time they demolish the building, their land basis is going to be less than that. And that’s a heck of a lot less than it would be today.” (Land basis equals what you paid for the property, plus the cost of capital improvements and construction.)

The proposed demolition of Union Carbide also ignited a wave of fear, among preservationists and architecture enthusiasts, that the rezoning would inspire other landlords to knock down large, unique office properties in Midtown East. Knakal argued that probably wouldn’t happen for decades, given how challenging it can be to vacate big commercial buildings and cobble together development sites in Manhattan.

“A number of people have called me and asked, ‘Bob, is this a wave of this happening?’ Of the 16 sites the city projected to take advantage of the Midtown East rezoning, many have seven and eight owners, so it will take a decade to assemble those sites. And then you have to deal with the tenants. There might be 30, 40, 60 tenants. You can’t just say I want to knock the building down, please leave. Unless owners have a very particular set of circumstances with their tenants, it likely isn’t going to happen.”

J.P. Morgan Chase hasn’t released any details on the architects, contractors or developers involved in either the demolition of its old headquarters or construction of the new building, which is expected to be complete in 2025.

Construction experts predict that it will take at least a year to demolish the 700-foot-tall property, which will have to be torn apart mostly by hand.

First, in order to prevent dust and debris from affecting neighboring buildings or people walking by, the project’s contractor will shroud the building in scaffolding or netting. Then workers will have to remove any harmful materials, like asbestos and lead paint, and use hand tools to remove windows, fixtures and doors. The deconstructing of the building comes next. Metal facade panels would be carefully removed by hand. Excavators—like BobCats—and smaller tools would likely be used to break apart the concrete slabs of each floor, although some projects have deployed demolition robots to accomplish the task. In the final steps of the demolition, workers would take acetylene torches to the steel beams and superstructure, cutting the steel into smaller pieces floor by floor.

Ken Colao, of CNY Construction, explained the demolition of such a large building offers an opportunity to think about more efficient ways to take apart skyscrapers. “New regulations need to be developed with the building department to address the demolition of large-scale developments,” he said. “The current method—to enclose it with scaffolding and dismantle it by hand with small equipment—would be too time consuming.”

The contractors on 270 Park could use cranes to remove large pieces of the building. And disassembling the steel frame could be faster if workers cut through pieces of steel, and then a crane lifted the steel onto a truck, he said.

Developers in other countries have used even more unconventional methods: In 2013, a Japanese construction firm demolished a building by jacking up the steel columns with a hydraulic lift, cutting each column with a torch simultaneously, roughly two feet at a time, and then chopping up each floor of a 35-story tower.

Besides the usual worries about dust and noise, construction firms working on 270 Park will have to avoid cutting off the building’s standpipes. If a fire breaks out, firefighters connect hoses to the pipes, which link each floor of a building to the city water system. During the demolition of the 41-story Deutsche Bank Building at 130 Liberty Street—the second-largest building to ever be taken apart in New York—two firefighters died battling a 2007 blaze because they couldn’t reach a working standpipe. The building was heavily contaminated and damaged by the Sept. 11 attacks. Then the fire, sparked by a worker’s dropped cigarette, halted its decade-long, $160 million demolition. The incident forced the Department of Buildings to institute several rule changes, including prohibitions against smoking on worksites and regular inspections to make sure standpipes are maintained.

“When the fireman tried to hook up their hose to the standpipe, there was no water because the standpipe had been cut,” explained Richard Lambeck, chair of the construction management program at New York University’s Schack Institute of Real Estate. “The building department was supposed to inspect the building but they didn’t do it in the periodic way they were supposed to.”

There are also concerns about tearing out the building’s foundation, because it sits atop the Metro North tracks along Park Avenue and could contain asbestos, like many buildings from the 1960s. Colao suggested that the old foundation could be kept, at least partially, and then decked over with a new foundation to support the weight of the new, larger building.

Even with the issues surrounding the demolition of the Park Avenue tower, its replacement will have much more energy-efficient facade panels, windows and building systems.

“These curtain walls have a useful life, they don’t last forever,” said Richard Wood, the head of Plaza Construction, which handled the building’s renovation. “And no one would go back to the 60s era of single-pane glass [windows].”

And protecting buildings like 270 Park may simply be holding the neighborhood back, preventing it from competing with more modern office developments Downtown and on the West Side.

“There’s nothing beautiful about these 1960s buildings,” Wood continued. “[Preservation efforts] are just a way to stop growth and development. I would argue that maybe you would save the facade if it’s an old stone building with hand carving that’s hard to recreate, but I’m sure what they put there will be a lot more beautiful than what’s there now.”

Source: commercial

Williamsburg’s Dime Savings Bank Gets Landmarked

The Dime Savings Bank of Williamsburgh—which will soon be redeveloped as part of a 22-story residential and commercial complex—is now a landmark.

The city’s Landmarks Preservation Commission voted today to designate the Neo-Classical bank at 209 Havemeyer Street a landmark, according to a press release from the agency. The building was constructed as the bank’s headquarters between 1906 and 1908, during a period of growth in Williamsburg that followed the completion of the Williamsburg Bridge. Helmle & Huberty designed the 16,700-square-foot structure, which was constructed out of Indiana limestone and features Corinthian columns, modillions (elaborate brackets that support the cornice) and a clock.

In a statement, LPC Chair Meenakshi Srinivasan called the property “a testament to the elegance and grandeur of the City Beautiful Movement.”

Charney Construction and Tavros Capital Partners purchased the building from Dime Community Bancshares for $12.3 million last November, after paying $80 million for the adjacent site and air rights in March 2016. Late last year, the bank relocated across the street to recently completed rental building at 282 South 5th Street.

Charney and Tavros plan to transform the two sites into a 340,000-square-foot mixed-use project called “The Dime.” With the help of architecture firm Fogarty Finger, the developers plan to build 100,000 square feet of office space, 50,000 square feet of retail and 177 rental apartments. Sam Charney, the principal at Charney Construction, told Commercial Observer that construction recently began on the new building, and workers just put in foundations. The former bank building will be renovated into either office or retail, depending on what kind of commercial tenant signs on for the space.

“This is a fitting tribute to the building’s architecture and its long history as a pillar of the historic financial center that was South Williamsburg,” Charney said in a statement. “The Dime Savings Bank of Williamsburgh has served as a local source of pride and community centerpiece for the past century, and is a true reflection of the socioeconomic diversity that has historically made this neighborhood and Brooklyn so special.”

Source: commercial

Hudson Yards Stakeholders Dive into NYC’s ‘Newest Neighborhood’ at CO Event

What kind of work goes into rebuilding and renewing a massive chunk of Manhattan, spanning from the High Line up to Hell’s Kitchen and Eighth Avenue over to the Hudson River?

That was the question posed to a select group of developers, architects, engineers and officials helming the transformation of Manhattan’s Far West Side, who gathered at Commercial Observer’s “The Hudson Yards District: New York’s Newest Neighborhood” conference earlier this month to discuss the various commercial and infrastructure developments that are recreating an entire swath of the island.

The event, held on March 8 at law firm Herrick Feinstein’s offices at 2 Park Avenue near Murray Hill, was kicked off with remarks from Patrick O’Sullivan, a partner in the firm’s real estate department. O’Sullivan, a former executive at the New York City Economic Development Corporation, recalled how the development of Hudson Yards was preceded by the proposed West Side Stadium, which was part of the city’s unsuccessful bid to host the 2012 Summer Olympics. After the Olympic bid (which was awarded to London) failed, O’Sullivan said, New York “went to plan B—and it was definitely a good one.”

That “plan B”—most significantly the Hudson Yards mixed-use mega-development helmed by Related Companies and Oxford Properties Group—was the subject of the morning’s first panel, which featured Andrew Cantor, a senior vice president at Related; Andrew Werner, a senior associate principal at architecture firm and Hudson Yards master planner Kohn Pedersen Fox Associates; Colin Brown, a principal at engineering firm Thornton Tomasetti; and Mitchell Moinian, a principal at The Moinian Group, which is developing its own Hudson Yards office tower at 3 Hudson Boulevard.

With Phase 1 of Related and Oxford’s 28-acre Hudson Yards project roughly one year away from opening, Cantor recalled the process that has facilitated the evolution of a neighborhood that historically was “always seen as too far away” from the rest of Manhattan into one that has “changed the way many people view” the possibilities for development in New York City.

Werner noted the “mixed-use” aspect of the project, which seeks to bring residential, commercial and retail uses all within close proximity of each other with the goal of building a “24-hour neighborhood.” From an architectural perspective, Werner said the multi-tower development sought a design with “texture” that would “drive people to want to be there”—a daunting task, considering the site was a “tabula rasa,” or blank slate, that forced KPF to draw on its experiences building “large-scale cities from scratch” in Asia.

Brown, whose firm handled engineering for much of the Related and Oxford project, cited the “great challenge” of building on a site that was an operational railyard—constraints that made it “hard not to be innovative [in order] to make something work,” and called for out-of-the-box solutions like suspending the development’s retail podium above the railyards and building from there.

Moinian was quick to point out that while the Related and Oxford project occupies several square blocks south of West 34th Street, half of the Hudson Yards district at large is located above the thoroughfare, stretching up to West 41st Street. The district at large, he said, will provide newfound “connectivity from Midtown [down] to the Meatpacking District.”

While acknowledging that The Moinian Group’s 2-million-square-foot 3 Hudson Boulevard, which sits on the north side of West 34th Street, won’t be able to take advantage of the “mini-city infrastructure in place for [Related and Oxford’s] mini-city,” the tower will benefit from the development of Hudson Boulevard Park, which will run from West 34th to West 37th Streets, Moinian said. The developer has commenced work on the foundation of the FXCollaborative-designed office building “on spec,” with no advance agreements with office tenants in place—something that shows the extent to which The Moinian Group “obviously believe[s] in the neighborhood,” he added.

hudson yards panels 90 Hudson Yards Stakeholders Dive into NYC’s Newest Neighborhood at CO Event
From left: Robin Stout, Michael Evans and Henry Caso at CO’s “The Hudson Yards District: New York’s Newest Neighborhood” conference on March 8. Photo: Aaron Adler/for Commercial Observer

The second and final panel of the morning focused on the area’s infrastructure, and the developments and improvements taking place to bolster the Hudson Yards district’s transportation offerings and connectivity. Those include the ambitious redevelopment of the James A. Farley Post Office Building into the new Moynihan Train Hall—a project decades in the making that seeks to build “the Grand Central Terminal of the West Side” while relieving the notorious congestion that affects the neighboring Pennsylvania Station, according to Michael Evans, the president of the Moynihan Station Development Corporation.

Work on Moynihan Train Hall is scheduled for completion in early 2021, and Evans cited the logistical obstacles involved when “working within the busiest train station in the Western Hemisphere.” But the project is expected to increase concourse capacity at Penn Station “by 50 percent overnight,” Evans said, and build momentum for further, “critical” infrastructure improvements at the transit hub deridingly referred to by New York Governor Andrew Cuomo as “the catacombs.”

Further west, the Jacob K. Javits Convention Center is in the midst of its own major overhaul, as detailed by Robin Stout, the president of the New York Convention Center Development Corporation. The four-year, $1.2 billion project seeks to expand the convention center’s roughly 400,000 square feet of exhibition space to 500,000 square feet in order “to attract the largest shows,” Stout said.

The expansion will also add 50,000 square feet of new meeting room and breakout room space, as well as a new 6,000-person capacity ballroom that will be “the largest ballroom in the northeast,” according to Stout. There will also be upgrades to the Javits Center’s infrastructure, including a new three-story electrical transformer building and a new truck-marshalling facility that will be built on West 40th Street.

“We don’t want people to think of Javits as low-rise protection for Hudson Yards’ river views,” Stout said. He added the convention center, and the commerce it will bring to the Far West Side, will spur further hotel and retail development and help Hudson Yards achieve its goal of becoming “a vibrant 24-hour neighborhood.”

Source: commercial

Breaking Down LA’s Jordan Downs

Jordan Downs in South Los Angeles looms large in the national consciousness as an example of urban woe—the public housing project in the neighborhood of Watts served as the flashpoint of violence during both the 1965 Watts riots and the 1992 Rodney King riots, as well as was an epicenter of gang violence. But, if the long-harbored hopes of city leaders, including Mayor Eric Garcetti, and developers come to fruition, the redevelopment of Jordan Downs may be a key component in revitalizing the typically underserved community.

The redevelopment of the property at 9800 Grape Street is a cornerstone of L.A.’s $5 billion housing plan that was launched in 2008. The Housing Authority of the City of Los Angeles (HACLA), in conjunction with residents and a broad spectrum of community stakeholders, initiated a plan to rebuild the community into a mixed-use, mixed-income development with new homes, jobs, parks and community facilities. The plan also includes a comprehensive “human capital plan” to provide family support, job training and community programs for residents to move toward self- sufficiency.

HACLA’s vision involved turning Jordan Downs into an urban village replete with green space and retail amenities that could serve as a national model for how public housing could be reimagined. HACLA named The Michaels Organization and the nonprofit BRIDGE Housing as the master developers in 2012, with Primestor Development, a L.A. company with a history of work in underserved areas, charged with the development of the more than 120,000 square feet of new retail space.

jordandowns rendering retail Breaking Down LAs Jordan Downs
The retail component of Jordan Downs Courtesy of Bridge Housing.

According to current plans, the World War II-era complex is one of four public housing projects in Watts to be turned into a modern, 119-acre mixed-income, mixed-use urban village. Fully built, it will be comprised of at least 710 new apartments and townhomes (though the plan is to double the amount of available units), nine acres of green space and a 50,000 square-foot community center. A grocery store, shops and restaurants on Alameda Street and Century Boulevard, which will be extended by a half-mile to connect Jordan Downs to the rest of the neighborhood, are also part of the master plan. Rumor has it that a Nike store is among the retail offerings being considered. (Primestor would not confirm any tenant details as of press time.)

The revitalization of Jordan Downs has been in the works for a decade and its journey has been fraught even by the typical difficulty of affordable housing redevelopment standards, Jenny Scanlin, the director of development of the Housing Authority of Los Angeles, told Commercial Observer. First, there’s the understandable ongoing public distrust of public housing redevelopment given the way that the Housing and Urban Development (HUD) department under Hope IV operated, “where you basically came in and you relocated all your tenants and then you demolished everything and started from scratch.” (HOPE IV program combines rental assistance with case management and supportive services to help very low-income, frail, elderly persons remain in an independent living environment and to prevent their premature placement in nursing homes, according to the HUD website.)

To prevent such wholesale displacement, HACLA purchased a 21-acre industrial site for $31 million adjacent to the site, according to The Los Angeles Times. Originally estimated to cost $5 million to clean up contaminants from the former steel mill site, the effort ended up costing around $31 million and involved filing suit against the property’s previous owners, which included PCC Technical Industries and GK Technologies. (The details of the settlement, reached in 2017, were not disclosed.)

Then there is the “jigsaw puzzle” of patching together funding sources of the 10-year, multi-stage project.

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An aerial shot of the complex. Courtesy of Bridge Housing.

“It would be fantastic to see this happen dramatically, but the hard reality is developing in Watts versus developing in downtown [Los Angeles], you’re not going to have five cranes out doing 70-story buildings,” Scanlin said. “So, it has its own timeline, but it’s a timeline that ultimately serves us well because it will be well-integrated into the community. If we could do it faster, we’d do it faster, but you have to sort of inch along with the funding sources and since we are building in affordable housing into all the phases, we are reliant on tax credit financing, which is our primary tool.”

A ceremonial groundbreaking held last June, which drew Garcetti and other officials and community stakeholders, ushered in the first phase of new residential construction at Jordan Downs developed by BRIDGE Housing, which will consist of 115 affordable rental apartments in 12 buildings on 3.15 acres. The first 115 units will be reserved for tenants who earn 50 percent or less than Los Angeles County’s median income, which is $64,30 this year, according to Curbed LA. Of those units, 72 will be reserved for current residents, and their rents will not increase, according to Scanlin.

Phase 1B, shepherded by the Michaels Organization, will break ground this June. That portion of the project was recently awarded $13 million in grant funding, according to an official company statement. The grant, part of $35 million in funds received by HACLA from California’s Cap-and-Trade program, will provide funding for 81 new apartment homes, affordable to families earning up to 50 percent of the Area Median Income.  Michaels announced it will receive $50,000 in additional grant funds to support neighborhood bicycle safety programs and $1.3 million for a new neighborhood park that is being created on the site in the important and historic neighborhood of Watts.

The commercial component will begin in the second quarter of 2018 with tenants announced over the summer, according to Arturo Sneider, the CEO and co-founder of Primestor. He partnered with Nadel Architects for the design, Davies Associates for graphic design, signage and branding and David Schneider of Fong Hart Schneider + Partners on landscape and hardscape work for the project, which is expected to cost in the $40 million range.

While he could not directly name retailers, Sneider said his company was able to get everything on the Watts community’s “wish list.” These include a full-service supermarket, financial institutions, sit-down restaurants, café s and nationally branded apparel—amenities Watts and other underserved communities his firm has focused on, have typically lacked.

“Basically, the other thing our projects have found over the years is that there is really no interaction for the communities in terms of being sort of a town center that is a well-designed place to be and not just feel rushed or unsafe in any way,” Sneider said.

In Watts, he said, poor urban design by either intention or accident has hindered the development of such an urban center.

“If you look in the grid, we’re putting Century Boulevard in,” he noted. This is a street that should have connected east and eest decades ago and the reality is that it’s just being done now.”

The redevelopment and creation of new commercial projects in Watts is long overdue. The area has the largest amount of public housing west of the Mississippi, and Jordan Downs—one of the largest—housing 2,100 people, according to KCET television station—has typically netted more in the way of empty promises than actual private development dollars. Some of that has started to change, with folks like Roy Choi, the chef behind Kogi BBQ food truck fame, opening an affordable branch of health-oriented fast food restaurant LocoL on 1950 East 103rd Street in 2016, but it’s been slow- and small-going.

Scanlin described it as a “chicken and egg quandary.”

While banks and private investors don’t officially redline, they are averse to invest in new development where there isn’t a track record of development.

“These communities are the ones that really need investments, but people don’t want to invest if they don’t see anyone else investing so then nobody invests. It’s a really vicious cycle that’s a zero-net gain for the community,” she said.

The higher cost of development and construction in areas with higher crime stats like Watts and lower rates of return given the average asking rents have also been deterrents to private investment.

Those spearheading the effort at Jordan Downs hope that its revitalization becomes a major impetus at turning the tide.

“To really strike gold in any of these underserved communities or even just to push the needle in terms of bringing true amenities to the community, you have to have a catalytic project,” Scanlin said. “You have to have a big bang. You have to have somebody coming in to make a sizable investment. That’s one thing we have been able to do with Jordan is really provide hopefully that catalytic moment where we’ve put enough public dollars in, we’ve made a strong enough investment to say we’re going to see this through all the way. The tide hasn’t turned yet, but the private dollars have started to come in in a much more reasonable manner than we’ve seen before.”

Source: commercial

Court Sides With City of Santa Monica in Short-Term Rental Law Challenge

A U.S. District judge has ruled in favor  of the city of Santa Monica, finding that short-term rental sites Airbnb and HomeAway did not show they are “likely to prevail on claims Santa Monica’s short-term rental ordinance violates the Coastal Act, the Communications Decency Act or First Amendment,” the Santa Monica Daily Press reported.

In the March 9 ruling, the judge denied a preliminary injunction to stop the enforcement of the ordinance.

“In the midst of a statewide housing crisis, [the] decision affirms that the City of Santa Monica can take reasonable steps to protect residential units from conversion into de facto hotels, while also allowing individuals to share their homes with guests for compensation in authorized circumstances,” City Attorney Lane Dilg said in an official statement. “We applaud this important ruling.”

Airbnb, for one, shows no signs of backing down. An Airbnb spokesman told the Santa Monica Daily Press that the company “strongly believe[s the] ruling is wrong and inconsistent with the law, and we will be exploring all options moving forward.” (Representatives for both Airbnb and HomeAway did not respond to Commercial Observer’s requests for comment.)

     This battle between the city and the short-term rental sites started two years ago.  The Santa Monica City Council adopted a Home-Sharing Ordinance on May 12, 2015, adding guidelines to the city’s municipal code that clarified prohibitions against short-term vacation rentals and imposed regulations and taxes on home-sharing, according to the City of Santa Monica’s Planning and Community Development Department. The ordinance allows home-sharing for 30 or less consecutive days but only when at least one of the listed residents is present and requires hosts to obtain a license and register with the city—at no cost—as well as both the host and visitor pay an occupancy tax. The annual tax is $75 on the first $60,0000 of gross receipts. For every $1,000 above $60,000, a tax of 0.3 percent is assessed. An individual who makes $40,000 or less annually in gross receipts may apply for a Small Business Exemption. Moreover, the City of Santa Monica levies a 14 percent tax on the total amount paid for the rental of a home share in the city, which is to be paid by the guest. Federal, state or city of Santa Monica employees in town on official business, however, are exempt from this tax.

AirBnB and HomeAway filed suit seeking to invalidate the City’s Home-Sharing Ordinance in September 2016. Subsequently, the City of Los Angeles filed an amicus brief with the Court to support Santa Monica’s Home-Sharing Ordinance. The City has filed a motion asking the Court to dismiss the entire lawsuit. The Court is scheduled to hear oral argument for the City’s motion to dismiss on March 26, 2018.

Source: commercial

Under Construction: 315 Park Avenue South Has a New Lobby

When Columbia Property Trust purchased 315 Park Avenue South from Spear Street Capital for $353.9 million in 2015, the new owner wanted to change the lobby even though it wasn’t in disrepair.

“It wasn’t bad,” Nelson Mills, the CEO and president of Columbia Property Trust, told Commercial Observer. “The previous owners had done a nice job. But we just didn’t think it had the quality that we were looking for; the crispness and clean look.”

The old lobby featured concrete floors and gray walls with wooden furniture and subdued lighting, as well as multicolored artwork. And Columbia Property Trust was hoping for something a little simpler and cleaner.

So the landlord, which hired L&L Holding Company to lease and manage the property at the time, tapped Gensler to reimagine the lobby, as well as revitalize the facade and the storefronts in a project that cost just over $10 million.

In addition, since there were multiple elevator banks with nine cabs altogether and two building entrances, Columbia Property Trust saw the opportunity to separate the lobby and make a main entrance to the building on East 24th Street and a smaller private entrance on Park Avenue South. The private one has two elevators for the tenant that took the top floor, London-based investment firm Winton Capital, as CO previously reported.

The renovation has been completed and now features a clean design with white walls, exposed steel beams covered in white intumescent paint, white ceilings and bright lights. The 3,000-square-foot space also has a marble security desk and upgraded elevator cabs and turnstiles.

The a white box lobby will allow artwork in the lobby to “shine and give it some character,” said Joseph Lauro, a Gensler principal and co-managing director of the company’s New York office.  

Columbia Property Trust expects to select paintings to hang on the lobby walls later this year. The revitalization of the facade and storefronts will be finished by the fall.

Much like the lobby, the facade wasn’t in dire need of repair, but Columbia Property Trust felt it should spruce it up a bit. So there will be moderate but not drastic changes to the classic, Beaux-Arts-style exterior.

Spanning 20 stories, the facade is being cleaned, and Gensler added some lighting to brighten it up. The storefronts will be flanked with more efficient glass. Finally, a new canopy had been added to the main entrance on East 24th Street.

“The building’s facade is beautiful in its current form,” Mills said, “but we wanted to sharpen it up.”

Source: commercial

LA Mayor Appoints City’s First Chief Design Officer

Los Angeles Mayor Eric Garcetti has appointed Christopher Hawthorne as the city’s first chief design officer, according to an official release. The post was created to “improve the quality of civic architecture and urban design across Los Angeles” and foster a “broad civic conversation about architecture and urban design across the city.”

Hawthorne will be leaving the Los Angeles Times, where he has served as the architecture critic since 2004, to join City Hall next month. As he explained in a column penned for The Los Angeles Times last week, “the main and animating subject of my work has been Los Angeles itself and the major civic transformation that’s underway here.

“It’s precisely the scale of that transformation—how much hangs in the balance as L.A. tries to establish a coherent post-suburban identity and deal with a severe housing and homelessness crisis and the specter of climate change, among other challenges—that explains why I’ve decided to leave after nearly 14 years.” Hawthorne is a native of Berkeley, Calif., and a graduate of Yale University, where he studied political science and architectural history. In addition to his post at the L.A. Times, Hawthorne was professor of practice at Occidental College, where he led an annual L.A. series, exploring the city’s past, present and future and issues that “will dominate the civic conversation.” It was during one of those conversations with Eric Garcetti following his reelection in 2017 that the mayor first spoke about the role in a broad way, Hawthorne told Curbed LA.

It’s a novel role, but not one that hasn’t been adopted by other cities looking to have a more cohesive planning and design process in other ways, as Hawthorne pointed out to Curbed LA following his appointment.

He cited New York’s efforts under former New York City mayors Michael Bloomberg and John Lindsay as examples. The former, he said, empowered some of his commissioners, including Janette Sadik-Khan in transportation to “think boldly about the intersection of their departments with urban design.”

Hawthorne said that the mayor is interested in how a “smart approach to design can not only improve the architecture and public realm but also be a unifying force in leveraging investments in new housing and new transit,” as well as “boosting a larger civic conversation about architecture and design.”

A big part of his role, Hawthorne said, would be communicating across various departments and agencies on the one hand and City Hall and the public on the other.

Hawthorne’s departure comes at an interesting juncture for the L.A. Times, which underwent an ownership change in early February when L.A. biotech billionaire Patrick Soon-Shiong purchased the paper, along with other properties from parent company, Tronc.

Hawthorne wasn’t available to talk to Commercial Observer.

Source: commercial

How Do You Build a NoMad Hotel in LA? R.D. Olson’s Bill Wilhelm Has the Answer

Bill Wilhelm has been a part of R.D. Olson Construction, a leading California general contracting firm, since 1994. Perhaps that’s why he considers his colleagues his second family.

Currently president of the business founded by Robert Olson in 1979, the Southern California native lives in Orange County with his high school sweetheart whom he married 31 years ago and his two children. “I can truly say that the R.D. Olson family means as much to me as my family,” Wilhelm, 54, told Commercial Observer. “The kind of projects that we associate with, 70 percent of our work is through existing relationships, repeat customers. When you have those kind of stats, you love what you’re doing.”

The firm, the construction arm of developer R.D. Olson, specializes in hotel and hospitality—which accounts for 60 percent of the firm’s volume—while also pursuing multifamily housing, country club and retail construction projects. Since 2000, the Olson companies have developed over $1 billion in hotel assets and hospitality projects with a client list that includes Marriott, Kimpton Hotel & Restaurant Group, UDR and Affirmed Housing Group. Based in Irvine, Calif., recent projects Wilhelm has worked on include the H Hotel, a 12-story 260,000-square-foot project located adjacent to the Los Angeles International Airport (LAX), the NoMad Los Angeles downtown, which opened earlier this year, and the redesigned Marriott Irvine Spectrum, the only full-service hotel in the Irvine Spectrum Center area. Annual revenues for R.D. Olson Construction have ranged from $225 million to $245 million over the last three years.

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The H Hotel Los Angeles, Curio Collection by Hilton. Photo: R.D. Olson

Wilhelm’s lengthy tenure has not been without conflict. During the city planning and review process for the redevelopment of a Jack in the Box the company has owned since 2014 into a 21-story hotel called Ivar Gardens in Hollywood in 2017, Wilhelm’s membership in Legatus, an anti-gay, anti-abortion Catholic business leader networking group, brought unwelcome attention. Wilhelm became the target of Unite Here Local 11, a powerful union that represents 23,000 hotel, airport and food service workers in California, which objected to the executive’s ties to the organization. Wilhelm announced in a letter following the union’s protest that he was resigning from Legatus, saying that “some of Legatus’ beliefs regarding sexual orientation and women’s rights do not represent my own,” LA Weekly reported. He told CO through a company spokeswoman that he left his role with Legatus because he didn’t have time to be an active member. (The R.D. Olson-helmed project was ultimately approved by the Los Angeles City Council in August 2017, with one council member saying the discrimination allegations against the contractor were not credible.)

Despite the controversy, R.D. Olson Construction was recognized among the top 20 medium-sized firms as one of the region’s, “Best Places to Work,” by the Orange County Business Journal, which Wilhelm attributes to the company’s entrepreneurial spirit, mixed-generation workforce and community and team engagement. Team events have centered around pro-bono work building homes for Habitat for Humanity, Cal Poly Pomona, Rady’s Children’s Hospital and the Ronald McDonald Corporation.

Olson spoke to CO about the evolution of the hospitality industry, including the rise in Airbnb and changing client expectations.

Commercial Observer: In terms of markets, your company works primarily in Los Angeles and Orange County, correct?

Bill Wilhelm: We’re licensed in 22 states. Today our focus is really the West Coast. Most of our work is in California and Hawaii, with work in California taking us from San Diego to Northern California. Our West Coast presence remains strong. It’s probably 95 percent of our work. However, we are geared up in preparation to start to go to back across the country in anticipation that the market is going to see some adjustments in the next year and a half.

What’s behind those adjustments?

We are seeing enough indications to tell us that in the next 18 months or so we’re going to see a change. We’re already seeing the change. We’re seeing stabilization. What’s driving that is the supply and the demand, world economics and the financial industry. We’re starting to see a little bit of a cap on the demand side even though you have more growth at the airport, you have the Olympics in 2028 and you have the football stadium. We’re going to see more of a controlled growth, versus a dead stop. It will slow the process down for the next couple of years.

Is that related to the Trump tax plan?

In the multi-unit world, yeah. We’re going to see single-family homes for sale potentially slow down because of [changes to] the mortgage write-off deduction. From my chair, that’s going to drive up or enhance the multi-unit industry, which has been on fire and maybe allow that multi-unit to go a bit longer because the single-family homes—which everyone says we still don’t have enough supply—you’re going to see a slowdown in the buying, you’re probably going to see housing prices a year or so out start to cap out or go down a tad.

You mentioned that the NoMad concept is the talk of the hospitality industry today. What is it about the model that is generating buzz?

Number one, it’s an adaptive reuse, which is a whole new market itself. It’s been there for a long time, but in the last five years adaptive reuse has come [more] into play. We have seen a lot of our work go from new construction ground-up to adaptive reuse for all the right reasons. With the NoMad property, here is a chance to go into a building that was built in the early 1900s. There is a storyline. There’s history there. There’s an architectural element that you’re going to capture, reinvent, revitalize, but [we will] also bring a whole new flair. The NoMad, which is part of a group out of New York, [Sydell Group]—they are the hottest thing since sliced butter in the hospitality circuit. They are pushing the envelope on the overall guest experience.

22 How Do You Build a NoMad Hotel in LA? R.D. Olsons Bill Wilhelm Has the Answer
NoMad Los Angeles Courtesy R.D. Olson

What asset class does your company focus on?

If you look at our hospitality, we’re not chasing the secondary-type market. We’re engaged in the market that is a higher-end project for a higher-end end-user in mainly a primary type market.  

How many employees do you have at the construction arm of the Olson company?

We have 125 employees. Of those 125 we have close to 35 who are field superintendents. We have operations staff and support staff within our building, which is anything from our accounting group to risk management. It’s a nimble-sized company.

What is the biggest challenge you face?

The biggest challenge in any industry is resources—quantity of resources, quality of resources, material availability. Resources are not only what we deal with here at R.D. Olson, but also our contractors, our designers, even city planners. When you look at the city agencies, they are all stretched pretty thin. A lot of people are going to retire in the next five to 10 years. You have aging industries across the board, which is a challenge with the issues we’re dealing with today. The largest percentage of our workforce is going to be the millennials.

Millennials tend to get a bad rap. Are there certain strengths that you see in this generation?

Oh yeah, I’m not one to give them a bad rap because we were all millennials ourselves within our own generational description. They are just a lot smarter than we ever were at that stage of our lives. They have a lot of great things to offer, just like the Gen Xers and the baby boomers have. Our baby boomers and Gen Xers here within R.D. Olson are really welcoming the millennials with open arms and vice versa. They have come together because each generation has been able to bring a unique offering to the table. My superintendents who are 70 years old, are some of the most tech-savvy superintendents you are going to find in the industry and that’s because millennials are investing their knowledge, their experience in them. My millennials are some of the best because my seasoned veterans are sharing with them their experiences on how to deal with certain situations.

What do millennials bring to your company specifically?

Tech, but it’s also the way they look at life. Their expectations. They want it now. Do I agree with all their expectations? No. But if you really step back and listen to what their expectations are and you have a conversation, they’re smart enough to listen to some reason today.

What are you doing to stay ahead of tech and construction trends?

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Bill Wilhelm Courtesy R.D. Olson

We are updating every platform across company lines. We are updating our construction operations software, our accounting software. We are bringing in new technology that allows us to look at buildings three-dimensionally, to understand the building makeup, how these buildings function, how they operate.  All our superintendents work off iPads. Some of them still have blueprints on the job sites, but those are usually building permits that are required by city officials. We’re just now finishing an $80 million 15-story project here in Orange County and we don’t have blueprints aside from the permits. The entire team built this project off our ability to work online and communicate in a concentrated effort with all our consultants, all our contractors and within our own project team.

You are in the process of updating your operations systems.

A year-and-a-half ago I thought we were cutting edge. We were, but nowhere near where we could or needed to be. We made the commitment to literally go across company lines from accounting to business development, to field operations and are enhancing and updating every platform across the board.

What are the latest trends in hotel development? What are clients asking for?

We have seen a [demand for a] lifestyle experience for the last seven or eight years. When people stay in a hotel, they want a nice room, but they also want a public forum, an open area where they can be part of a community gathering. We’re seeing more and more of that. The social, community area is continuing to step up another notch. That can be anything from the quality of the material to the amenities that are provided. Social connection and interaction is probably the top runner right now in the hospitality industry, which also includes your restaurant facilities and what have you. That’s a market that’s on fire right now.

Is Airbnb having a major impact on the hotel and hospitality industry? (Cities across California have put limits on Airbnb, though, as Curbed LA reported on Feb. 8, in Los Angeles, where there are approximately 23,000 listings for short-term rentals, the L.A. City Council delayed a vote on rules on such arrangements.)

I think like everything else, it has taken a bite out of the hospitality industry because it’s another resource, another option for consumers to consider. It takes a percentage away, but when you look at the sheer numbers [in] the hospitality industry—the number of users that are traveling—we’ve seen a significant increase. So, if anything it’s keeping the hospitality industry a little more honest, a little more focused on the goal line, to not take things for granted, as much as we might have in the past. We must focus on the experience because if we don’t three, four, five years from now there might be a greater impact from Airbnb.

Have there been any injuries or deaths on your sites this year?

We did have one death on the job site, but it was non-job related. A gentleman was up on the roof deck in a safe area and he just happened to have a heart attack, which was a hereditary issue, based on what we found out.

Do you only use union labor?

We are nonsignatory to the union so we use the most qualified and competitive subcontractors that are out there.

Is your company facing a labor shortage?

There is a labor-resource issue in the construction industry and building in general. We have a shortage of qualified craftsmen, designers, even as I said earlier, a shortage of city [inspection] officials.

How have you dealt with rising costs on the large-scale multi-year projects you work on?

It’s been difficult. It’s delayed some projects. It has required us to think outside the box in terms of means and methods to offset some of those costs. It has driven the bottom-line cost of development and construction up. And that is only one part of it. If you look at overall development costs, land costs have gone up substantially, design costs have gone up substantially. For a developer that was going to build, say a Renaissance Inn today, to build that same property in the same city is probably 30 to 40 percent more than what he was going to pay seven years ago. But, on the flip side, look at what he is going to get for a nightly rate today compared to what he made back then.

What about construction costs?

Within the construction industry we have seen an increase over the past few years of close to 30 percent increase, most of which is in labor and some in subcontractor margin.

Today construction costs have plateaued. We’re going to see a couple of small increases, but I’m hoping to see a couple of small decreases or at least for it to stabilize itself, versus the last four years.

Where do you think the biggest opportunities in the contracting business are moving forward?

Every project, every state is different. If I just look at the state of California, Title 24 [The California Building Standards Code, also known as Title 24, serves as the basis for the design and construction of buildings in California. Composed of 12 parts, the regulations cover everything from electrical, plumbing and green building standards code], those are things that continue to throw challenges at us. How do you manage the ongoing code enhancements, the ongoing building requirements to meet the end user’s needs? That is one of the challenges of the industry. Construction, in general, outside of resources being a big issue, are the design parameters that are being driven by a lot of factors from code to owner to end-user expectation.

Source: commercial