Making the case for design-build

By RaeAnn Slaybaugh

When architecture and construction experts describe the design-build process, the word “collaborative” comes up a lot. That’s for a reason.

When architecture and construction experts describe the design-build delivery process, the word “collaborative” comes up a lot. That’s for a reason.

Essentially, a design-build project begins with identifying the owner’s budget. Next, architects and engineers work with the owner to develop a design that meets its overall needs, but with an eye on the construction budget.

Richard Harrison, chairman & CEO at Rhino Construction Group (Milan, TN) — a member of National Association of Design Builders (NACDB) — says his company has only built one non-design-build church project in the past 10 years. “Although the church considers it a success, there are serious deficiencies in flow, materials and AVL (audio, video & lighting) systems,” he explains. “Our expertise wasn’t utilized during design, and those changes were too expensive to make after the fact.”

Ernest Pullen, marketing manager at CDH Partners in Marietta, GA, says his firm uses an incentive-based “integrated project delivery” approach to design-build. All team members (owner, constructor and design professional) are vested in the project at its earliest inception.

“This approach creates a sense of ownership and pride,” Pullen says. “IPD provides cost predictability, risk management and technical integration. In the end, we believe that IPD leads to a natural evolution toward a better design project initiative.”

Live-Design-GroupDesign-build’s unique benefits
Church construction and design experts are quick to spotlight some of the major selling points of design-build.

It avoids delays. “With design-build, the contractor and architect are responsible for the construction drawings,” explains Brad Lechtenberger, principal at Daman-Lechtenberger, PC and an architect for Churches by Daniels. Both companies are based in Tulsa, OK. “So, when mistakes or omissions are discovered in the drawings, the team is responsible to work together to solve the problem, without causing delays.”

David Fink, Churches by Daniels’ preconstruction manager, echoes the value of being able to identify costs early — and adjust accordingly. “Design-build’s open-book policy fosters a team mentality for design and construction throughout the project,” he says. “Evaluation of alternative designs, materials and methods are made, and constructability and value engineering are continuous.”

Robby Hayes, operations manager at Birmingham, AL-based Brasfield & Gorrie, cautions against what he says is an inherent mind-set in the design-bid-build process — one which dictates the contractor who submits the lowest bid on the completed set of documents produced by the design team is the “best choice” for the project. “Rarely does the lowest bid submitted at the beginning of the project remain as the same price at the completion of the project,” he says. “Having a competitive price is important, but the other qualities that a contractor must have to work successfully in a design-assist role — preconstruction expertise, ability to work collaboratively, and the ability to identify and resolve constructability issues as the design is developed — far outweigh the ability to have the absolute lowest price.”

Once a guaranteed maximum price, or GMP, is determined in the design-build approach, the builder will develop periodic cost estimates reflecting the anticipated project cost throughout the construction document preparation process. “This allows modifications to be made to the design, if necessary, to maintain the desired project budget,” explains David Strickland, principal at CDH Partners. “It also helps avoid ‘surprises’ when the final GMP (guaranteed maximum price) is submitted.”

It offers single-source responsibility. Churches by Daniels’ David Fink says his church clients appreciate the singular-responsibility aspect. “It establishes risk-averse, turn-key source responsibility,” he explains. “Plus, the owner isn’t required — during design and construction — to coordinate or arbitrate between separate contracts or resolve budget and schedule conflicts.

Designing for ministry
Design-build is also flexible enough to deliver on a church’s vision of a space designed with ministry in mind. To this end, experts say certain types of church facilities have been particularly popular in recent years.

Multipurpose. Rhino Construction Group’s Richard Harrison says his firm has designed foyers that transform into banquet halls for meals, showers or other events, as well as gymnasiums that transform into classrooms in minutes — or even into worship spaces. “Even dedicated worship auditoriums are increasingly being designed as transformational for multiple uses — something that was considered taboo just a few years ago,” he adds.

Churches-by-DanielsFellowship. Churches by Daniels’ Brad Lechtenberger has seen increased interest in Monday-through-Sunday fellowship spaces. “More and more churches are requesting coffee shops and cafés,” he says. “Members want a place to meet, in a casual manner, before and after service, but also during the week.”

Children and youth. Lechtenberger has also added plenty of indoor and outdoor playgrounds in churches lately. “Churches need to give the children a destination during church services, as well as throughout the week.”

For youth and young adults, many churches are building separate spaces, tucked away from the main facility. “That way, youth have a place to call their own, where they can develop their own identity,” he explains.

Education. According to Brasfield & Gorrie’s Robby Hayes, education facilities have been a priority for churches over the past three to five years. Related to this, he says security has been “the single biggest and most consistently discussed design issue” in churches. “With good reasons, they’re focused on imploring smart security measures to ensure that their members — particularly the children — are safe in their church home.”

Expansion/upgrade. In tough economic times, church leaders look to make the most of what they have — including their facilities. “Design-build can be employed to find solutions to challenging sites, or unusual building circumstances and requirements,” says Chad Charon, vice president of project development for PBS Church Visioning Group, another NACDB member.

Brasfield-&-GorrieCDH Partners’ David Strickland has some advice for churches considering design-build for an adaptive reuse project. “A thorough assessment of the space and the utility needs required should be made by the design-builder first — power, HVAC, water and sewer,” he says. “Project leaders need to ask, ‘Will special lighting or equipment be needed by the ministry? And, will that require a power source greater than what’s available?”

Worship. For the first time since the recent recession, Brasfield & Gorrie will be building two new sanctuaries/worship center projects in 2014. “One will be a more traditional facility with 1,200 seats,” Hayes says.

“The other will be a more contemporary facility and will have close to 2,200 seats.”

The firm is also working with two more churches which plan to build sanctuaries in 2015.

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Beyond new-build

By Jac La Tour

Financing implications might dictate whether an existing facility is your best expansion option.

Weekend attendance is nearly three times the seating capacity of your church’s auditorium, and new people keep coming. Someone in the congregation suggests a solution: Buy and reconfigure the newly built automobile dealership down the road, which is for sale because the business went bankrupt.

Is this a crazy idea or God’s provision?

Presented with this exact opportunity, a Texas church discovered one good reason why it might make more sense to buy an existing facility: When it’s time to begin raising funds, you don’t have to rely solely on an architect’s drawings to help people catch the vision. Instead, they can walk through the beautiful new building, which can be purchased for a fraction of what it would cost to buy vacant property and build new.

Photos-courtesy-of-Churches-by-Daniels-ConstructionThere are plenty of other reasons why a vacant restaurant, office building or other commercial facility might be the best expansion option. Pastor Brian Kluth, founder of Maximum Generosity, offers these:

Availability. The downturn in commercial real estate has left countless buildings sitting empty, many of them appropriate for churches — and with ample parking.

Affordability. While new construction costs have escalated, the price of many existing facilities has dropped. One church paid $500,000 for a racquetball club listed at $2.2 million.

Quicker occupancy. It can take up to seven years to go from purchasing land to having your first worship service in a new facility. Existing facilities can often be renovated in 12 months or less.

Less neighborhood opposition. Eager for a community controversy? Just buy a piece of property and tell neighbors you plan to build a church that will attract hundreds of people. Purchase an existing facility, and it’s already part of the local landscape.
Visibility. Attendance at one church that purchased a highly visible sporting goods store grew from 1,200 to 3,000 the first year.

Brasfield-&-Gorrie2Financing implications
OK, let’s assume you’re convinced that an existing facility is a legitimate option. Is it that simple? Just find the right one and start renovating? Not quite.

Your evaluation also needs to account for financing implications. You need to understand a commercial lender’s perspective on this kind
of project.

The good news is that financing is available for repurposed commercial facilities. From a lender’s perspective, there are some important considerations.

Engage your lender early. You’ll want to know any of the lender’s requirements for the new facility. You’ll also want to know the loan size for which your church qualifies. The final loan will be determined as a percentage of the value of the completed property. It’s important to manage project costs so you don’t “over build” beyond what the lender will advance.

Will the church become a landlord? One upside of buying commercial property with tenants is that the rent they pay can help your church qualify for a larger loan. However, that rental income might also require your church to pay additional taxes. Consider engaging an experienced attorney and/or CPA to walk you through the implications of rental income.

Do you have detailed plans? Most lenders will want your plans to describe how the property will be converted for church use. If these modifications require cash, you’ll need to have those funds available before the loan is funded. This might mean doing the project in phases, which could limit the number of interested lenders. And, lenders will also want you to engage a design/build team or architect experienced with similar projects.

CDH-PartnersIdentify municipal zoning and compliance costs. Your team must know the cost and timing implications of municipality requirements before approaching potential lenders.

What if the municipality requires surety bonds? These bonds provide back-up funding to cover additional costs, but churches typically don’t have the credit history required to obtain surety bonds. Consequently, your church would need some sort of security, such as cash or a letter of credit from your lender.

When you approach a project like this, your lender will be an integral partner in the process, so you’ll want to engage them early and often.

How to choose the ideal property
Here are Pastor Kluth’s top four characteristics of the ideal property:

  1. Highly visible, accessible location
  2. Ceilings 18 feet or higher for sanctuary and or gymnasium space
  3. Hundreds of existing, potential or surrounding parking spaces
  4. Sale price between 25 percent and 90 percent below what it would cost to build today

This list should get you started. But, before you go too far into the process, connect with potential lenders. Identify the one that can help you end up with a facility that enables your church to more effectively live out its mission in the community.

Jac La Tour is part of the Strategic Services Team at Evangelical Christian Credit Union (ECCU) in Brea, CA.

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What is design-build?

By David Batten

The traditional approach to building — design-bid-build — can leave you to make important decisions on your own. You’re responsible for finding an architect to draw your project, and a contractor to build it. Then, you must ensure that they communicate and work together within your budget and vision.

Design-build is different; it’s a one-stop-shop for all your design and construction needs. You have one contract that adheres to your budget. In a guaranteed lump sum contract, the design-builder guarantees to deliver the project at the specified price. They will look over drawings and plans throughout the entire process to make sure there are no mistakes in the building, and that everything falls within your budget.

Examining the differences
When evaluating building options, it’s important to understand the nuances between design-bid-build and design-build. Let’s start with the pros of design-bid-build.

First, design-bid-build is well understood by owners, architects and contractors. It allows for competitive bidding among both subcontractors and general contractors and provides the lowest price for a given set of documents.

The cons begin with the fact that design-bid-build allows no input from contractors during the design phase, and it might not represent the best value for the owner. Often, bids come in over budget due to change orders, and it takes more time for a thorough bidding phase. Additionally, it can be difficult to identify long lead items, causing scheduling delays and making “fast-track” construction difficult (if not impossible). Finally, a design-bid-build approach can lead to an adversarial relationship between the design team and the contractor.

CDH-Partners2Design-build pros include having the design-builder as the single source of responsibility. The owner will determine the design and cost at an early stage, after which the design team — working together with the builder — can provide a creative solution to any problem. Design-build takes less time from inception to completion because the bidding phase is reduced and major design revisions are made early. The designer and builder are on same team, eliminating adversarial relationships and facilitating fast-track construction. Further, design-build allows for early and frequent input by the contractor regarding budget, and it can identify long lead items early to avoid scheduling delays.

The drawbacks of design-build are that it doesn’t guarantee lowest cost based upon a given set of documents. And, an owner might perceive there are no checks and balances in place.

What design-build looks like
There are three main phases of a design-build project: 1) preliminary design/build services (three to four months); construction documents (three to eight months); and construction (seven to 10 months).

After you hire a design-builder, you will begin making crucial decisions about your facility. Money is saved in the preliminary design/build services (planning) phase, not in the construction phase. Items addressed in this phase are: needs assessment, master planning, preliminary design, and then budget estimate.  CE

David Batten is president of  National Association of Church Design Builders (NACDB) in  Arlington, TX.

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