Team work is the key in historic projects.
Great projects are the result of great teamwork. Do not reinvent the wheel and do not try to go it alone. A team of well-trained people, working to achieve a common set of objectives over time, is the most effective and efficient way of successfully implementing complex historic rehabilitation projects. Good teamwork requires that the qualities, styles and specialties of each team member be recognized in order to overcome shortfalls and draw on the group's collective strengths. Good teamwork also relies upon patience, perseverance and a shared sense of mission.
One of the development team's greatest strengths is the diversity and inclusiveness of the team's membership. Early in the process, try to include key project staff and development partners in the design and planning stages to leverage expertise, minimize miscommunication and build consensus. In some cases, a historic property may not be ripe for rehabilitation and it's better to find this out sooner rather than later. For example, a building may possess certain structural defects or there may be environmental hazards lurking beneath the ground, that may preclude a project from moving forward.
The development process rarely runs smoothly. Unforeseen surprises can delay, or even terminate, the proposed rehabilitation of a historic building. That's why up-front due diligence is often a critical first step for any developer who wishes to renovate a historic property. Whether or not a historic rehabilitation project succeeds often depends on the architects, engineers and consultants who provide input to a developer during the feasibility stage. Their views can help determine whether to proceed with the actual renovation of a property.
A successful redevelopment project starts and ends with the developer. Metaphorically, developers are the maestros who put all the players in tune. They coordinate and inspire, while at other times, they may rant and rave. Developers risk the cash on the front end of a deal. They also go hat in hand for money from partners and banks, and then become proud parents boasting that their new building can save the world. Developers are the major players in the high-risk, high-reward game of real estate development.
To finance the redevelopment project, a developer must win over the
hearts and minds of prospective investors and lenders. The developer is typically judged on his track record in the business, experience with the proposed project type, financial strength and liquidity and willingness to choose other team members to balance out one's weaknesses.
As such, a key factor in the success of a historic rehabilitation project is the ability of the developer to assemble a strong team of professionals to carry out the project. The development team provides the developer with the essential skills, expertise and possibly relationships that may not be available through the in-house staff. In addition, experienced professionals may add another level of credibility with the financing sources or other parties whose support is necessary for the success of the project.
Depending upon the complexity of the planned redevelopment, the developer determines what types of professionals are required to round out the development team and the order and timing in which these professionals are hired. As with any real estate project, the core development team typically includes the developer plus an architect, legal counsel and a general contractor. Of course, other experts become involved at certain stages throughout the process, including an appraiser, structural engineer, environmental consultant, market study firm, property manager and accountant.
For the developer, the critical decisions are the selection of an experienced architect, contractor and engineer specializing in historic preservation work. Furthermore, if the project is utilizing federal historic rehabilitation tax credits as a financing source, it is highly recommended that the developer engages highly experienced historic rehabilitation tax credit legal and accounting professionals, as well as an experienced historic preservation consultant, who has a relationship with the local State Historic Preservation Office.
To facilitate the selection process of the development team, it is wise to seek referrals from business colleagues, lending institutions, trade associations and even the local State Historic Preservation Office. However, regardless of how these professionals are identified, the developer should thoroughly review their credentials, including resumes, references, licenses and evidence of insurance, as appropriate to their specialty.
In conclusion, developers involved in rehabilitating historic buildings should promote teamwork, include experienced professionals and expect the unexpected. A critical success factor is the developer's willingness and ability to assemble a strong team of experienced professionals to carry out the project. With a strong development team, the project may not only run more smoothly, but also be perceived more favorably by investors and lenders while obtaining better terms in the process.
CITYSCAPE CAPITAL GROUP, LLC
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|Title Annotation:||Insiders Outlook|
|Publication:||Real Estate Weekly|
|Date:||Nov 3, 2004|
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