FEATURE ARTICLE, JUNE 2004

DELIVERING YOUR PROJECT ON SCHEDULE AND ON BUDGET
How to avoid the “ready, fire, aim” real estate phenomenon.
Chuck Winstead

Winstead

Miami International Airport is the Number 1 airport in the United States for international freight. The airport has more scheduled non-stop cargo flights to Latin America and the Caribbean than the airports in Orlando and Tampa, Florida; Houston; New Orleans; Atlanta; and New York City (John F. Kennedy International) combined. But despite its reputation as a cargo hub, historically contractors at the airport have struggled to build critical new facilities on time and on budget.

In 1999, a private company made plans to develop a $110 million, 564,000-square-foot cargo complex for Lan Chile Cargo Airlines and Fine Air Services near the Miami International Airport. When complete, the facility would handle nearly one-third of the total air-freight shipped between North and South America. With Federal Aviation Administration security requirements, 110,000 square feet of refrigerated warehouse space and an attached 50,000-square-foot Class A office being used as a corporate headquarters by one of the tenants, the project had every opportunity to fail. But a unique approach to construction and development helped the facility get built on time and under budget.

In order to avoid the work stoppages and budget overruns that had plagued previous projects, several steps were taken that can offer guidelines for complex development projects in cities throughout the Southeast.

Previous projects had been started before construction planning was complete and before the right team of contractors, architects and engineers had been assembled. They were examples of the “ready, fire, aim” phenomenon that often occurs on major urban construction projects. The phenomenon is typically the result of excitement generated by large projects, where the rush to build overwhelms the prudence that must be associated with developing multi-million dollar structures.

For the 564,000-square-foot cargo complex for Lan Chile Cargo Airlines and Fine Air Services in Miami, the contractor, owners, architects and engineers spent 7 months planning, assessing challenges and assembling the right team of subcontractors before beginning the project, allowing it to be completed under budget and in record time.

“Ready, fire, aim” most often troubles those who move outside of their comfort zones to build unique projects in challenging locations: a non-profit organization proposing a landmark building; a philanthropist considering a legacy landmark; a suburban office developer working on an intown parcel; a municipality building a huge public facility; or an investor with a massive stake in a complex, mixed-use high-rise.

Those proposing unique buildings in infill locations often forget to ask critical questions:

• What is the right team? Every market is different, and it is critical to assemble a team of lead contractors and partners that understand the vagaries of the industry in the specific submarket. Look for team members that have succeeded in the market before and have existing relationships with key civic leaders.

• Do I need a third party to get me on the right track? When building beyond their experience, owners and developers should seek expertise that is not trying to sell architecture or contracting services. Having an independent voice involved early in the project will involve minimal cost, while also providing a realistic picture of what to expect and how to plan. An independent expert can also mediate when mid-stream challenges arise that pit professionals against one another.

• How much time should be dedicated to planning? For the Lan Chile Cargo Airlines and Fine Air Services in Miami, the contractor, owners, architects and engineers spent 7 months planning, assessing challenges and assembling the right team of subcontractors before beginning the project, allowing it to be completed under budget and in record time.

• Who are the key audiences? When a large project is announced, various groups often come calling with “wish lists.” This can include anything from air-conditioning for a local school to jobs for local residents. Pre-selling and engaging in meaningful dialogues with these groups is often a must. Neighborhood groups, unions, city officials, regional officials and environmentalists often expect to be heard and can cause problems if they are not considered early on.

In order to comply with Federal Aviation Administration security requirements, a specific set of steps were taken to ensure that projects near the Miami International Airport were successful.

• What can derail this project? It behooves all parties involved to consider scenarios that could stop or delay the project. Brainstorm these scenarios and develop a crisis plan in case they occur. Be sure to consider worker safety issues, environmental policies, site-specific challenges, political sensitivities and other non-design issues. Remember that in urban areas, private deals will have “public” elements: even a privately financed, privately developed office tower impacts surrounding public spaces, utilities and the crowded urban street grid.

For investors, developers, municipalities and owners that are considering complex projects in urban areas, there is only one cure for “ready, fire, aim” — thoughtful planning before hiring the first professional. Consulting an outside expert — and one without a vested interest in “selling up” for other services — is the wisest initial investment owners, developers and investors can make.

Chuck Winstead is a principal with Gellerstedt Consulting, an Atlanta-based real estate consulting company.

©2004 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.