Managing Tenant Improvement:

Design/Build Provides Communication that is Key

by Jessica Harris

Renovation of existing space or tenant improvement (TI) work makes a lot of sense to business owners due to the ample amount of leasable space available in the Metro. The key to any project, whether it is new construction or TI work, is communication. Communication with the owner and landlord, the project manager's communication with his/her subcontractors and suppliers, and the contractor's communication with the owner and architect will make or break a fast-track TI project.

TI work traditionally uses a design/bid/build delivery system. In our experience, we have found that a design/build delivery system saves time and allows the owner a single-source of responsibility; streamlining communication. The design/build approach allows the contractor and architect to pursue the project as a team with a direct line of communication, provides the owner with one contract instead of two or more, and allows construction to begin with as little as 30 percent drawings if allowed; expediting the schedule.

The design/build provider can be a "value added" service to the owner of a business seeking to move into leasable space. This is accomplished by providing estimating services during the various phases of design and construction of tenant improvements. This assis-tance can be in several forms. The most important is providing alternative budget comparisons to the business owner so that several levels of design options can be compared to determine which combination meets the owner's needs, and also meets the budget. Doug Walker, Facilities Manager with Pearson Government Solutions, hired Harris Construction on several projects; most recently, a TI project in Phoenix, Arizona. Doug states, "In the purest sense, design/build gives you the best representation of what the customer needs and wants. Design/build allows the customer input in the design decisions and review of the costs so that the team can best serve my needs." Decisions such as HVAC and electrical, type of carpet, and lighting fixtures are just a few of the items that can vary greatly in cost. The business owner will need to make sound financial decisions based on length of lease and overall quality needed in the tenant improvements.

If the owner is working within the parameters of a tenant finish allowance provided by the landlord, the design/builder can make sure that the improvements are within the budget, prior to the expense of drawings, and also functional for the needs of the owner. The design/build team can also advise the business owner regarding environmental friendly materials that will not add appreciably to the overall cost of the tenant improvements. They can even help at the lease negotiation stage by advising the business owner what is reasonable for a negotiated tenant finish allowance. "If the business owner is paying for the tenant improvements separate of the annual lease payments, the design/builder can provide additional assistance. This assistance can be in the form of providing verifiable cost information to the owner's lender to help determine loan amounts, and by working with the owner's tax consultant in determining annual depreciation deductions for the various categories of improvements, some of which may be depreciated over shorter time periods than the length of the lease," states Bo Harris of Harris Construction.

Every project has its challenges, but these challenges can be easily overcome through the project manager's communication with his/her team. Our organization completed a tenant improvement project of 16,000-square-feet in a 30,000-square-foot, 130 year old historic building for Callahan Creek in Lawrence. The importance of daily communication could not be stressed enough in a design/build project of this type. The project's success depended on timely information being available and shared among the owner and the design/build team. The project manager served as the pivotal role in disseminating this information. Cindy Maude of Callahan Creek states, "Several creative solutions were provided by Harris throughout this project. Our intent was to keep the building open and natural with exposed beams, ductwork and electrical, and to keep all the natural stone exposed. Harris worked with us throughout the project to help us find the best solutions to meet our vision. The result is an extremely creative environment for our advertising agency."

Managing tenant improvement work can be successful for everyone when the priority is communication. Design/build makes it that much easier, with the team set up early and a single-source of responsibility in place to protect, serve and meet the needs of the owner.

Jessica Harris, is the Director of Marketing with Harris Construction Company, Inc. She can be reached at 816.472.0900 or by e-mail at harrisje@harrisconst.com