So, I’m fresh back from inspecting a project in Miami on Friday for an out of state Commercial Lender that was worried about a project. They should of been.
We met with the owner at the time of the site walk.
The project was a major addition to an existing operating retail operation that has been in business for seventy-two years. It is now finally complete and occupied a year and a half later than originally scheduled. The General Conditions line item alone is over budget by over $500,000 on a $3.5 million dollar contract. That is absurd.
The retail shop section was open and unspectacular and the new warehouse portion of the building is mostly vacant which was just one of the tip offs there may be a problem going forward.
Observations:
Problem One: The architect did not properly coordinate his design with the various engineering disciplines, what so ever. The architectural design never took into account the structural, mechanical, plumbing or electrical designs. Therefore, you literally have ductwork planned to go through the roof and roof hatches that would need a 45’ tall ship ladder to reach the roof. That is why there are now two roof hatches and one will never be used.
Problem Two: The contractor was clearly complicit by not raising flags when he noted issues as they bid the project.
Problem Three: The owner went into contract with a cost plus agreement. The general conditions should always be tied to the percentage complete and that will bring a brain dead project to a halt right away.
Problem Five: Weak supervision on site with experience in dealing with the Miami/Dade Building and Fire Departments. They are very difficult to predict.
Problem Six: The owner was making changes that affected the design, too late in the game.
Current Disputes:
There is a lien issue with the first site contractor because of importing “unsuitable materials”.
The owner also indicated when interviewed he is holding the payment of monies on the tile contractor for “workmanship issues”.
The owner wants to sue the architect but has not found a litigator to engage yet. He wasn’t sure the architect has E&O.
Sam Trotter, my son, found a RE listing that the property is now listed for sale with a lease back provision to keep the current owner as a tenant on one side.
How sad is that…72 years in business and now has to do a leaseback!
Another classic case of why owners do not make great developers. This project needed an owner’s representative but instead we have an owner now needing serious therapy and may have financial distress from another project gone wrong syndrome.
So, please keep us in mind early in the design and building part of the process and not at the final laying of the wreath.
Life is too short for this type of pain.
Thanks,
Greg Trotter President
Commercial Building Consultants, LLC 590 N. Semoran Blvd • Orlando, FL 32807 Phone: 407•447•5881• Fax: 407•843•0006
www.commercialbuildingconsultants.com
Great article. Well said and it is too bad this happened to such a good guy.