Lessons Learned: Lesson #5 – Timeouts aren’t just for kids!

The beautiful plans for First Place–Phoenix were approved in the summer of 2016 with complete sets of drawings and the oh-so-critical financing and permits in place. Final bids from subcontractors during the robust real estate market came in high—really high—at over $18 million. Recognizing that we would be too highly leveraged, the board required us to take a timeout to undertake an extensive value-engineering exercise and proceed with two public zoning variances. Sidelining the process and returning our city-approved plans to the drawing board was painful but necessary.

The single largest expense item of the property was an underground-parking garage costing $2 million to accommodate the number spaces required under the approved zoning. We had already been planning how to use a large portion of the garage for something other than parking, because we knew many of our residents would not drive. A major consideration for selecting our location was its urban orientation, within walking distance of public transit, including light rail. To eliminate the underground parking, we needed to allocate more surface-area space, reduce the size of the first floor of the four-story property and do our best to preserve the significant investment in completed plans.

While the value-engineering timeout undertaken by our board—and involving RSP Architects and contractor hardison-downey construction—was painful, it was also incredibly productive, resulting in a cost reduction of $3 million. This unexpected but crucial timeout also allowed us to get closer to our neighbors, giving them a chance to more actively weigh in on our design and area improvements, as well as to show up at our hearings in support of the new plans. We found ourselves collaborating and enjoying the first of many celebrations together.

Please join us for the fall First Place Global Leadership Institute Symposium, October 24-26. There’s much we will continue learning from each other—and so much more we can do and build by working together!

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