Posted by: Fred Soelter | December 2, 2010

Soelter+Associates: Marina Clean Up Campaign Published

This is the actual press release about just one of the programs that came out of the Business Plan + Market Analysis that we that we prepared for S&K Dive. It was picked up, verbatim in some cases,  by 3 local papers and the L.A. Times.

We are in the final process of creating a partnership between S&K Dive and The Santa Monica Bay Restoration Foundation with Heal The Bay to sponsor an annual Diver’s Cleanup of the Venice Pier, in conjunction with the yearly Coastal Cleanup.   This has never been done before and it should bring up some very interesting items. Please stay tuned for an update of that event next year.


S &K Dive Cleans the Marina, Top and Bottom

 It’s that time of year again, with the winter storms and Santa Ana winds approaching, bringing with them all the storm drain debris that gets washed into Marina del Rey from Ballona Creek. Last year, S&K Dive Service provided a free cleanup of F and G basin throughout the winter on a biweekly basis. This year, in order to be more effective, S&K will have an emergency response team of divers in dinghy’s removing the trash after every storm event.

Anyone who has walked around the marina after a storm or after the Santa Ana winds has noticed the abundance of garbage that accumulates on the leeward side of the marina, closest to Lincoln Blvd. This is the storm runoff coming from Ballona Creek. For years this garbage has simply washed back out to sea as the tides change, presumably to join the other trash in the “Great Pacific Garbage Patch.” In an effort to stem the amount of garbage that ends up floating out of the marina and to help keep the oceans blue, S & K Dive Service will continue to provide this annual pro bono public service to clean the marina waters.

The Coastal Cleanups and Kayak Cleanups are great traditions that make an enormous impact on the amount of garbage on our beaches and in our oceans. But with the amount of trash that comes down Ballona Creek from across the Los Angeles basin, these yearly efforts only make a dent in the problem. There still continues to be floating garbage that accumulates in the marina throughout the year, and particularly when there is a storm. S & K Dive has been servicing boats since 1974, with divers continually in the water, and has seen the problem grow. The winter is particularly bad, when the rains and winds make the amount of garbage ending up in the water the greatest. According to S & K Dive’s Paul Skipper, “We want to help keep the water clean, because we’re diving in it every day.”

Starting in November and continuing into the New Year, S & K will be sending crews to remove the surface garbage that is floating in the marina. This will be in addition to the current efforts by the County and will be done as a free service to enhance the public’s enjoyment of the marina. Look for the crews after a storm when the cleanup is in progress and give the divers a big “Thank You!” And you can always stop by S & K Dive for your free water bottle to reduce plastic waste. So when you drop your keys in the water, or need a diver in a hurry, call S & K Dive.

 For more information, please contact Paul Skipper at (310) 822-8349

Posted by: Fred Soelter | November 6, 2010

Estimating a construction project

A good estimator, or a good scheduler, are that elusive godsend that can make or break your proforma. Like the accountant joke, “What’s 2+2=?… What do you want it to be?”
Personally, I think you need to get hard bids on the major trades, If your plans arem’t far enough along to get at least a budget number (low on the contractors side, high on your proforma), then you don’t have enough to go to the bank.
Start with the major trades and actually bid it out and ask for their construction schedules and CPM points with other trades. They will give you schedules and budgets that you can weave into a complete picture.
Start with Grading and utilities (unless they are finished pads, offsites are critical, always overbudget), Concrete foundations (if podium, garage is turnkey), Framing (with window installation), Drywall (surprisingly one of the big numbers), MEP (design/build if possible), Roof and Exterior (stucco or concrete siding). The interior specs can make or break you in the wrong market, this is truly an owner spec that is just a plug number, unless you come up with interior specs (Flooring!), kitchen and bath plan cabinet plans and appliance package.
Well, that’s the standard practice for a number that I would go to the Board with, there really is no way to pull a magic number out of the air, or a schedule, without directly involving your potential trade partners, and spending some time negotiating those numbers. If you have a wide a range of projects, this isn’t a part-time job, if you want a good number. You want to do your homework correctly and it takes time.

Posted by: Fred Soelter | July 28, 2010

Multi-family Housing Poised for a Comebackl?

Luxury Multi-family Housing Segment Positioned for Above Average Growth in the Next Two Years

Executive Summary: Permits and construction starts for multifamily projects have risen dramatically over the past month. These projects have a long entitlement process, which suggests confidence in the medium to long term outlook for this sector. The luxury condominium market is currently undervalued and builders need to start now for deliveries in 2012.

Market Analysis: The U.S. Census recently released data that suggests that while single family construction is lagging far behind its historical levels, multifamily construction has not been hit as hard as other segments of the construction industry. In fact, multifamily seems poised to lead the recovery.

Table 1. New Privately-Owned Housing Units Authorized in Permit-Issuing Places
                                       Total     1 unit   2 to 4      5 +
May 2010 from April 2010  -5.9%   -9.9%   11.8%   9.3%
May 2010 from May 2009    4.4%   3.18   -13.6%  13.6%

Table 3. New Privately-Owned Housing Units Started (2)
                                        Total     1 unit   2 to 4    5+
May 2010 from April 2010  -10.0%   -17.2%  (S)      38.3%
May 2010 from May 2009     7.8%   15.3        (S)     -17.0%

Permits have increased by 13.6% in the last year and actual starts are up an amazing 38.3% in the latest month reported. This means that not only are permits on the rise, the pent up demand created by previously issued permits has reached the point where construction starts have dramatically increased.

The recession has brought a new sense of frugality to many households and multifamily housing provides the affordable, yet luxurious, residences they have been accustomed to. Most condominium communities also have amenities that exceed those available in a masterplanned subdivision, i.e.; pools, spas, TV lounges, business centers, meeting rooms and coffee bars. Data also shows that buyer profile for luxury condos is a two person household earning far above the U.S. median.

Land prices, which historically take longer to drop than home prices, have finally come down to levels that will support high density housing. Projects like Playa Vista and the downtown condo market, combined with the current level of quality in construction and acoustics, have created an acceptance of attached living. And the need for more housing has risen, not dropped. Given the fact that most high density projects require zone changes or General Plan Amendments, as well as site specific architectural designs, now is the time to start the process.

Posted by: Fred Soelter | March 17, 2010

Trade Partners

One of the most overlooked components of the project team is often the subcontractor base. The theory is that all subcontractors can perform the scope of work, so low bid gets you the best price with no impact on performance. Obviously, this is not the case.
It’s like the old joke…you can have two out of three, fast, cheap or good. So it makes sense to develop partnerships with your most important subcontractors. This would be the 5 to 8 largest contracts that you will write for a project.
Surprisingly, drywall is one of the largest contracts, sometimes a larger dollar value than the structure, MEP’s, or site development. So it is important to pay attention to the previous buyouts and establish a historical database of costs. This will identify your most important partners. And remember to foster those relationships, your project is only as good as the people working on it.
Cultivate these, involve them in your projects, and eventually you will have a team that you can depend on. Remember, most major construction operations do not have their own trades, so your success is tied to your partners.

Posted by: Fred Soelter | February 3, 2010

Employee Motivation

Motivating employees, in this and normal economic times, is always a challenging effort. Most people do not work for money. That’s right, most people do not work for money. Their primary motivation is personal recognition and fulfillment.
How many times have you been at a retail outlet and the cashier was happy, understanding and helpful? Seriously, all kidding aside, most of them are very helpful, and their motivation is obviously not money…
So how do you achieve this state of nirvana with your direct reports? Sometimes you can’t! My experience with hiring has taught me to hire for attitude, not experience. If you have the right attitude, I can teach you anything. If you don’t, nothing is going to do the trick. But you must also lead by example by being enthusiastic and accessible. You are the role model.
So my advice is: Hire the right people, give them the right training and atmosphere to thrive, and they will, as long as they feel they are part of the team!
Good luck!
(The ones who don’t want to contribute and succeed can be a real cancer in the organization. They must be removed before their malaise spreads to other employees.)

Posted by: Fred Soelter | December 15, 2009

Project Steps to Success

Most projects can be broken down into discrete stages. These stages are then able to be accomplished by either a specialist trained in that area, such as purchasing or construction, or it will at least allow you to retain some control over the project if you are performing all the steps yourself.

I won’t be discussing scheduling at this point, as that is a whole science in itself. I have broken down a project life cycle into seven separate parts, but I will talk about the first one last. Trust me, there’s a reason behind this…

2) Once a project has become a reality, the first steps are crucial, since they will determine the scope and detail of your project. The initial designs and plans will set the stage for the life of the project. Bad plans, bad project… good plans, good project! It only makes sense, but you would be surprised at the number of people who are not willing to take the time, effort and expense of having a good coordinated set of documents to start.

3) While designing and permitting your project, you should be estimating the costs by finalizing  your bids and contracting for the individual scopes of work. (We will discuss Scopes of Work in a future blog) This will allow you to get good hard numbers and also control your risk of future cost increases by contracting the work right now. It also doesn’t allow you to capture any savings if prices should go down, but I don’t think we will be seeing that again in the future.

4) During the purchasing process, it is critical to let each separate contractor have input into the schedule and also to have the schedule as a part of the contract itself. This gives the contractor some ownership of the project process and eliminates any disagreements over time for each task in the schedule.

5) By now you should have your project planned, approved, scheduled and purchased. Now you can start the actual project itself! This is where budget and schedule control are critical, and if you have proper documents and scopes of work, there shouldn’t be too many items that were left out of the original contracting. If each contractor performs according in the timeframe that they requested in the schedule and for the cost that they are contracted for, everything should come out perfect. But we all know that is never the case and there is always an unforeseen circumstance, or several, with weather being a prime culprit.

After the initial mobilization, intelligent and hands on oversight of the process is the key. There must be weekly meetings, submittals, approvals, permits, etc. and every step of the process requires someone to make sure that everything goes according to plan. A single point of responsibility is the best approach, because design by committee gets you an Edsel!

6) As the project approaches completion, there is a separate complicated process for project closeout. This is when all the various final approvals by State, Federal, County and City agencies need to be obtained. This part of the process should be an ongoing part of the actual project implementation, so that there are no surprises at the end of the project. All warranties, replacement parts, manuals, documentation and as-built final plans must be obtained while the contractors and design team are still engaged in the project.

7) Now the project actually starts to operate. All the little bugs and items that were ignored now come to light and a “punch list” of corrections needs to be made and the contractors held accountable for repairing these items, within reason. The end users, owner or lessee, now takes control and needs to be made happy if you ever want to do another project again. Anything that you think you will ever need to document this project, now is the time to get it, while everything is still fresh on everyone’s mind

1) And now back to the beginning… project concept and acquisition, or better yet, “Who pencils the deal?” It is a constant balancing act to reduce the costs and time so that the project pro forma shows a profit. But sometimes the person making the deal doesn’t have enough background in the nuts and bolts of actually completing the project to make accurate assumptions. And then the deal goes south.

To eliminate this, it is essential to have informed input during the initial concept stage. And as the project progresses to actually getting financing, there has to be accurate information in the proposal. The bank will know if it is actually feasible, or you may have to convince them a little… But if there is real world input into the costs and schedules, backed up by written documentation from the contractors, there shouldn’t be a problem on the operations end of the deal. But forecasting final sales prices over a year in the future, now that is an art!

Hope you enjoyed my random ramblings, Fred