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Municipal Capital Projects: Newfound Alternative Procurement

Municipal Capital Projects: Newfound Alternative Procurement 789 444 DMR Architects

(This article originally appeared in NJ Municipalities magazine.) Charles H. Sarlo, Esq. provides a briefing on newfound alternative procurement approaches for design, development, and construction of community impact projects. 

“Change is the law of life. And those who look only to the past or present are certain to miss the future.” -John F. Kennedy

In 1976, Major League Baseball (MLB) accepted change via the introduction of free agency, some 75 years after the formation of the MLB organization, albeit being forced by a court ruling. Although the MLB teams were reluctant at first to embrace this change, today, the free agency period offers the opportunity for a team to put itself in the best possible position for success after consideration of all alternatives.

In a similar vein, some 50 years after the adoption of the Local Public Contracts Law (LPCL) in 1971, the New Jersey Legislature has, within the last few years, enacted new statutes to offer municipalities and other public entities alternate paths for design and construction procurement related to capital projects.

Each alternate public procurement method is unique and each offers certain benefits and drawbacks. No longer is a municipality restricted to the status quo of using the LPCL for the retention of contractors, but rather should consider the LPCL along with the alternative procurement methods to ascertain the best chance for the successful outcome of a capital project.

Local Public Contracts Law (LPCL)

The use of the LPCL will continue to be the standard bearer. The general familiarity of this procurement method, and given it has been “time tested,” currently makes this procurement approach the “go to” by default.

The LPCL is based on the submission of sealed bids by contractors, based on a complete design, and the award to the lowest responsible bidder.

There is a significant body of case law, which evidences that this “time tested” procurement method is not immune from litigation by unsuccessful bidders or improper project specifications or other legal issues.

Nevertheless, in certain situations, such as smaller, non-complex capital projects like facility upgrades or additions, the LPCL will continue to be the standard bearer.

Design-Build Law

Most recently, in 2021, the Design-Build Construction Services Procurement Act (P.L . 2021, c.71 (A-1285)) was signed into law. This design-build procurement allows a public entity to place an emphasis on design and quality, along with cost, the latter being only one factor in the selection process, which must comprise of at least 50% of the scoring criteria.

This procurement process allows the public entity to deal with a single source throughout the duration of the project, rather than coordinating between various parties. The approach is intended to provide cost savings and a streamlined public project delivery to the contracting unit.

For municipalities, capital projects must exceed $5 million for this procurement process. Increasingly, this procurement method is being used for new buildings in the range of 20,000 sq. ft. and greater.

Public-Private-Partnership Law (P3)

The pinnacle of public procurement is the use of the Public-Private-Partnership (P3) Law, P.L. 2018, c.90 (S-865), which came into the public procurement mix in 2018. Although the statute and its enabling regulations are somewhat complex, the P3 Law allows public entities to enter into an agreement with a private entity, whom assumes the financial and administrative responsibility for the design, development, and construction (which alternatively may be reconstruction, repair, alteration, or improvement in whole or in-part) and, over a 30-year period, the maintenance of the public facility.

By way of limited example, over the course of the 30-year period, if an elevator or HVAC system requires maintenance or replacement, the responsibility remains with the P3 developer and not the public entity. The P3 project can be financed in whole, or in part, by the private entity. Financing considerations include a “hand back plan” of the facility to the public entity after 30 years. The P3 agreement establishes the public entity’s expectation of the condition of the facility upon turnover by the P3 developer after 30 years (i.e., at year 30, does the public entity want brand new HVAC equipment or equipment with a certain percentage of life expectancy?).

Redevelopment Law (LRHL)

Lastly, somewhat fitting in between the Design-Build and P3 approaches, is the use of the Local Redevelopment and Housing Law (N.J.S.A. 40A:12A-1, et seq.) (LRHL). This was adopted in 1992, but only in the last several y ears has been increasingly used for the procurement of design, development and/or construction of public capital projects.

Recent court opinions may have injected some uncertainty into the use of the Redevelopment Law for public project procurement, however, depending on the structure of the transaction, the use of the Redevelopment Law remains a viable consideration for municipal entities, e.g., Dobco, Inc. v. Bergen County lmprovement Authority (2022).

The use of the Redevelopment Law by the BCIA was challenged on the basis that contractor election had to be via the LPCL.

The NJ Supreme Court stated that compliance with the Local Public Contract Law was required “in the setting of this appeal.” The Appellate Division had concluded that under these particular facts: “The prudent usage of taxpayer dollars remains paramount in undertaking capital public projects, which creates a compelling argument for municipal officials and their administration to assess the various capital project procurement options now available.”

 

Close Up on P3
The P3 Law is, in essence, a turn-key approach undertaken by the private sector and an alternate financing mechanism. Use of the P3 Law is best for complex projects as it shifts the risk from the public sector to the private sector, which is generally more attuned to business risk.
The P3 Law has many benefits, including allowing alternate, upfront financing, private sector creativity and full deployment of its expertise, and reduction of public entity human capacity to manage and oversee a development and construction project.
For municipalities, capital projects must exceed $10 million to avail itself to this procurement process. To date, there have been no P3 project applications submitted to the Department of Treasury Office of Public Finance (OPF) for approval, as required by the statute, although one municipality has gone through the regulatory procurement process for a P3 developer and design/ construction team and is readying for the submission of an application to the OPF for a new municipal complex and recreation facility.

 

Accepting new options

Back in 1976, MLB teams recognized the necessity of participating in the newfound change to the industry known as free agency, except the then-world champion Cincinnati Reds, who chose the status quo approach. Thereafter, the assessment of free agents quickly became a common practice and an alternative approach to the draft for MLB organizations in their quest to give their teams the best opportunity for success.

Like free agency, which was derived out of the legal process, public entities now have been given the statutory tools for the assessment of alternate procurement for the design, development and/or construction of capital projects.

“The first step toward change is awareness. The second step is acceptance.” -Nathaniel Branden

Creative Land Arrangements Power Long-Awaited Projects

Creative Land Arrangements Power Long-Awaited Projects 789 444 DMR Architects

by Charles H. Sarlo, Esq.

Some of the best untapped development opportunities may be held by municipalities whose well-located but outdated schools and administrative buildings can be relocated, unlocking value that can be then used to finance new facilities elsewhere.

DMR has had an up-close view of municipal innovation in two recent situations that solved the problem of locating and financing much-needed reinvention of public buildings without undue pressure on the tax base. In New Brunswick, an antiquated elementary school became the site of a new cancer center for RWJBarnabas Medical Center and Rutgers Cancer Institute, with a new school developed on another city-owned site featuring modern educational resources and functionality that the old building could never accommodate.

In addition to addressing rapidly evolving educational needs, the New Brunswick program had at its heart two dynamics that are dominating the current real estate landscape: the boom in healthcare-oriented development that pushed RWJBarnabas Health, in partnership with Rutgers Cancer Institute of New Jersey, to create a new facility for cancer treatment; and the massive pressure to repurpose and scale-up sites in the face of downtown redevelopment.

In Ridgefield leadership declared its former Borough Hall site on Broad Avenue as an area in need of redevelopment to facilitate a sale, and constructed a brand-new municipal complex on property it already owned that offered superior access and parking. Here the requirement was for municipal services and public safety rather than education, but the driving economic concepts were the same, albeit on a smaller scale in terms of the project itself and the community in which it sits.

Each site represented interesting challenges, and each found their solution in an unusual place: Ridgefield was a perfect match for alternatives to the traditional municipal bidding process, resulting in it contracting for a fixed-price that greatly reduced its risk. And New Brunswick had DEVCO, the City’s vaunted redevelopment resource, at its disposal for both financial and planning solutions.

While residents can sometimes have sentimental feelings about municipal buildings, in both these cases when my colleagues at DMR dug just below the surface, we found that their occupants were eager to trade into something more modern and that there would be no meaningful resistance to moving from within. That tells an important story: that pragmatism about getting the job done overcomes sentimentality among the user-constituents, and once the fiscal and productivity story is told, civil servants and residents alike quickly get on board with making a change.

As schools, police stations, city halls, parking facilities, public works depots and municipal garages age out of their relevance, and as renovation costs continue to be nearly as high as constructing new facilities, we expect to see more of our municipal clients not only updating their facilities, but also turning into the next generation of insightful real estate developers.

Working with Your Architect to Support the Next Generation of Creative Thinkers

Working with Your Architect to Support the Next Generation of Creative Thinkers 960 540 DMR Architects

By Donna Coen O’Gorman

Where STEM and STEAM curriculum were once offered as after-school clubs—and in whatever classroom space was available—that students with an already existing interest or aptitude in math and the sciences could opt into, more schools are now incorporating these education modes into regular classes and expanding the applications beyond science and math.

This shift in education practices requires a physical shift away from the traditional classroom layout with student desks lined in rows facing the teacher to flexible spaces and furniture, materials and spaces that can be incorporated into the lesson plan, and ever-advancing technologies that engage students and better support more forward-thinking practices.

DMR has been the go-to firm for nearly a quarter of all public school buildings in New Jersey since its inception in 1991—responsible for some of the state’s most advanced learning institutions and spaces—with a current roster that includes the new Junior High School in Carteret and several projects in Passaic at the Passaic Academy for Science and Engineering (P.A.S.E), Dr. Martin Luther King, Jr. School No. 6 and Theodore Roosevelt School No. 10.

Building New

In Carteret, DMR’s plans applied the most forward-thinking divergent learning practices to the school district’s program curriculum and the State’s Department of Education Facility Efficient Standards with classrooms for traditional subjects with dedicated spaces for enhanced art and music education, a think tank, a flexible media center that will replace the library, a dance studio, and a STEM lab for the municipalities 600 seventh and eighth graders.  These plans satisfied the community’s need for adaptable spaces that could be easily updated as education practices and students’ needs continue to evolve.

“This Junior High School has been a long time coming, but previous attempts for community support failed, because plans only addressed one issue – overcrowding,” said Rosa Diaz, Superintendent of Schools in Carteret.  “The DMR team’s thoughtful application of knowledge regarding current learning environments and their ability to identify ways that a facility we build today can continue to adapt and support the best educational modalities to come, helped us present a funding referendum that everyone in Carteret could support.”

Our plans were used as background materials that led to the approval of the first new educational facility in Carteret in more than 40 years.

Working Within 

While DMR met Carteret’s needs with a new facility, in Passaic our plans at Passaic Academy for Science and Engineering (P.A.S.E) addressed practical concerns like how to maximize the functionality of an existing space, find adaptable furniture, and provide appropriate ventilation so that the school could expand its biomedical science program.  In this case, DMR’s decision to hang the utilities and the ventilation hood from the ceiling freed up space in the lab for furniture including an anatomage table, a highly sophisticated technology that will position its students on par or ahead of even some college and university pre-med programs.

DMR’s work in Passaic also includes the art studio at P.A.S.E that acts as a classroom and an art gallery for its students through moveable workstations, soft lighting and interactive exhibit areas.  We have also designed state-of-the-art auditoriums in its School No. 6 and School No. 10 and a data center in support of the data analytics program at P.A.S.E, complete with an interactive, LCD tile video wall to be used to teach digital signage technologies.

Looking Forward

The requests for alternative learning options have been growing for several years. In 2018, we completed the Frank J. Gargiulo Campus, where all aspects of the physical facility are incorporated into the learning experience and the building itself doubles as a teaching tool. Numerous architectural elements provide this level of education. Architectural and engineering students learn firsthand about building systems as infrastructure, such as mechanical lines and the school’s server room, are exposed. Students in the culinary program grow their own food in the hydroponic garden. The theatre is not simply a space for large school gatherings, but rather an intimate learning space with functions such as a control room and catwalk. Television production students coordinate the broadcasting of school news and events across academies.

We expect these requests to continue as divergent education spaces like these can prepare and create excitement for careers that are becoming more and more technical and students prove to be more prepared for the modern demands of higher education and the workforce. After location, the school system is the most important attribute that homebuyers look at; even people who don’t have children. Community leaders are wise to invest in creating learning environments that help current students stay competitive in a very crowded college environment.

Divergent Thinking Spaces are a Study in how Education Practices Have Evolved

Divergent Thinking Spaces are a Study in how Education Practices Have Evolved 960 540 DMR Architects

DMR’s four current new school construction projects could be used as a lesson on how much education has changed from the student desks lined in rows facing the teacher of yore to current requests for flexible spaces and furniture, materials and spaces that can be incorporated into the lesson plan, and ever-advancing technologies.

DMR has worked in nearly a quarter of all public school buildings in New Jersey since its inception in 1991—responsible for some of the state’s most advanced learning institutions and spaces—with a current roster that includes the new Junior High School in Carteret that when completed will provide 24 classrooms for traditional subjects with dedicated spaces for enhanced art and music education, a think tank, and a STEM lab for the municipalities 600 seventh and eighth graders.  It is the first new school plans to be approved in that municipality in over 40 years.

“Educators have seen that the design elements supporting the more collaborative learning environments are effective in high schools and are now asking us to apply them to spaces for younger students as well,” said Lloyd Rosenberg, AIA.  “Additionally, where STEAM and STEM learning was once considered an opt-in club for kids with a knack for tinkering and creative thinking, it is now being incorporated into the everyday curriculums with classrooms intentionally designed to support them.

The collaborative spirit that happens in these divergent thinking environments and the use of technology that started in the science and math classrooms is now being applied to English and history classrooms as well.”

DMR also recently designed new schools for the New Jersey School Development Authority—a Middle School in Paterson and an Elementary School Plainfield—that are currently under construction to provide advanced learning options to these growing communities starting in September of 2021 and 2022 respectively.  The design of a new school in New Brunswick is also underway.

“We’re addressing technology needs throughout buildings now instead of just in a dedicated part of the library or a small media room,” continues Mr. Rosenberg.  “This trend will both continue and expand as pens and paper are more widely replaced by Chrome Books, Google Docs and promethean boards, and school administrators explore new ways to effectively implement remote learning options.”

DMR’s work includes Hudson County Schools of Technology-Frank J. Gargiulo Campus in Secaucus which has been open to students since 2018 designed so that all aspects of the physical facility are incorporated into the learning experience through the use of hydroponics, photometrics and locally sourced materials.

“As periodic upgrades to aging school buildings to support larger student populations come up, we will see more requests for alternative learning options,” continued Lloyd Rosenberg, AIA.  “Right now is an ideal time for institutional upgrades because of the low interest rates.”

DMR has supported the education sector for its entire history, with major design and construction projects through the years also including preK-12 projects C.V. Starr Intermediate School, Sparta Middle School, St. Joseph’s School for the Blind and La Scuola d’Italia, as well as higher education projects at Fairleigh Dickinson University, Ocean County College and Middlesex College.

Nearly 25 years later

25 Years later, Building is the Same, but Serving Builders is Very Different

25 Years later, Building is the Same, but Serving Builders is Very Different 960 540 DMR Architects

By Gregg Stopa, AIA

I’ve been with DMR Architects for 23 years, recently becoming a partner in the now 25-year-old firm. This milestone inspired reflection about the architecture industry. For the most part, how buildings are being built is the same. Design-build projects and some new equipment provide a means to go a little faster, perhaps, but building is still all about the steel, sheetrock, concrete, wood and bricks.

Architectural services, on the other hand, have expanded and evolved to the point where the architect of the 1990’s might not recognize the profession today. The most significant change is in information technology, which creates productivity and expedites communication, but also unnecessarily adds a level of stress and complexity.

First, the expectation of responsiveness pressures every facet of our service. Driven by information technology and financial structure, projects now are developed in a context that would be impossible 25 years ago. The Internet contains more information than any architect or person could possibly know. The number of suppliers, products and processes is infinite. We find frequently that clients discover prospective solutions—sometimes when there is no problem to solve—that are not even relevant, never mind applicable, to our work on their behalf. But the requirement that we address the issues is very inefficient and disruptive. And financial structures today impose an enormous pressure on our clients to complete projects at budget and on time, despite variables that are beyond anyone’s control are ever-present. The architect’s function is unrelated to these dynamics but become influencers in how our work is delivered.

Being able to work virtually from anywhere digitally creates a set of expectations for responsiveness that has caused us to change how we operate the business. Because most of us use our own personal devices for work phone calls and emails, we also have seen our workday creep longer. 25 years ago, we received and delivered documents or materials by hand—often through regular mail. 25 years ago the client called us at our desk to confer. We could only get mail once a day. Now we have developed a mindset of being ready to perform virtually on-demand.

These expectations and the technology that fomented them come with many benefits, including a massive improvement in productivity. Is the work any better? Of course, styles change, but good work always looks like good work even when it ages. User specifications, especially in health care and other technical fields, are far more complex than they once were and the efficiency demands on space are far greater. Our profession has not just responded to those demands, we developed design strategies that improved our clients’ businesses and led to new performance standards and real estate practices.

In that sense, the architect has not changed. The architect is still the person that figures out how it should look, what it should be made of and how it should get built. So while the architect of 25 years ago would be lost if transported to today—and the architect of today similarly lost if transported to 25 years ago—the object of our profession is the same. Like everyone else, we are just expected to work harder at it and be better at it than ever before.

Architecture in 2017: Sophisticated Services in a Complex Environment

Architecture in 2017: Sophisticated Services in a Complex Environment 960 540 DMR Architects

By Lloyd A. Rosenberg, AIA

Architecture is a continually stimulating profession, especially for the firm’s owner who addresses complexities in various industries in delivering the service. Most people correctly associate architecture with creativity, as design is at the core of our profession, but the business of architecture incorporates numerous skills and processes beyond aesthetics. No where is this more true than DMR, which is larger and more diverse than most architectural firms, and integrates engineering, planning, environmental, bidding, construction supervision, legal and more into our service mix.

But it does always come back to design, because that is our deliverable. A subject of much discussion in every project, the challenges of design begin not with a blank canvas but with a set of constraints: space limitations, functionality, budgets and available materials are just four of the variables that are addressed by the architect. The real estate business positions the architect as the natural pivot point between the property owner and the contractor, so not only are we engaged for design, the architect is largely focused on managing the business issues of real estate development.

The architect’s role in development has never been greater than in the current environment, where regulatory standards have grown in complexity. For example, in New Jersey, various government agencies responding to Superstorm Sandy have adopted regulations on flood plains that can undermine the viability of projects already on the drawing board. And among other issues we have encountered this year, the unexpected presence of migratory birds prevented us from removing trees, postponing construction. Unknowns adds risk to development, and one of an architect¹s functions is to foresee potential issues and plan around them, eliminating the risk, but it is not always possible.

And finally, there is the variable represented by the market itself. Construction materials and labor costs can change after the planning for a project, but before it is commenced. The architect must monitor these issues so that there are no negative surprises after construction begins. And projects that seemed to be in demand when planned might not find a robust market when completed. All of these issues and many more must be factored not only into our service to our clients, but in the management of our architectural practice.

After 25 years in business, over which time DMR has become the 4th largest architectural firm in New Jersey, we’ve seen multiple cycles in the real estate industry. No economy is like any other, making it impossible to predict the length or impact of an expansion or a contraction. The correct management policy is to be ready to respond to changes in either direction always looking for the best position for future growth. Even when the business climate is in a downturn, there is a right way to contract that allows architects to take advantage of the inevitable opportunities to grow.

At DMR the main principle of stability is depth and diversity. We have structured the firm to weather downs and maximize ups by being able to shift into various practice areas depending on the demand cycle. In expansions, office and residential work is plentiful. In contractions, education and healthcare work may not be as plentiful but technology advancements often lead to redevelopment. By maintaining a staff that has expertise in a broad array of practice areas, we not only protect the stability of our own firm, we provide our clients with a depth of institutional knowledge that can only be developed through taking good ideas from one area and applying them to another.

A complicated business? Yes. But a rewarding one, especially when the day comes that a project is complete and we see it not only for its excellent design, but for all the elements that we blended into accomplishing its development.

Timing and Process Is Key in Development Projects

Timing and Process Is Key in Development Projects 960 540 DMR Architects

By Lloyd A. Rosenberg, AIA

Delays in construction projects can be costly—but perhaps the most expensive delays are the ones that occur before construction even begins. Materials and labor costs continue to rise in the economic expansion, and the cost of projects can increase from 10-20% from the time they are approved to the time construction begins.

The political environment can be very cumbersome, and months or even years can pass between the time a project is originally conceived and budgeted until it actually breaks ground. We’ve worked with some townships on building plans as recently as two years ago that are now not in the budget anymore because they waited.

As we are currently working on more than 12 municipal building projects across New Jersey, we recommend that municipalities calendar a re-budgeting process every three months so that delays can be priced into the final budget; and that bidding for jobs take place as soon as possible after approval. Typically a consultant has been retained to assist in the bidding for the project during its design phase who can be tasked with regular estimate updates. All the costs associated with the project need to be affirmed at regular intervals if there are hang-ups in getting started.

Another important discipline is foresight into what happens with the project in the next generation. For example, if the municipality needs to house 50 office employees now, what happens if the number is 70 in 10 years? Or 30? With growth in government balanced by automation of some functions, requirements of today surely will evolve with time, and a conscious approach to how property assets can be repurposed will save challenges for the next generation.

And finally, the project managers on the municipal side need to be satisfied that they understand all the elements of the project and their ramifications before it commences and specifically articulate all of their expectations. Too often, both sides take it for granted that everything is understood by a review of the drawings. But the business issues are much deeper than the plans, and without a detailed examination of the architect’s buildings plans against the client’s plan for the building, disaster can strike in the form of surprises when the building is complete and it’s too late for alterations.

Challenge your architect to explain how the plans relate to regulatory and other requirements conditions, which will help reveal potential complications in timing, and budget impacts.

With so many elements going into the making of a new building, recognizing that there will be surprises during the construction phase that even your architect or contractor didn’t imagine, and accounting for that ahead of time can save municipalities both time and money. DMR, acting as the project manager for projects including the currently-in-construction Frank J. Gargiulo Campus in Secaucus, is using technologies that allow all contractors on the project to talk daily in real time about potential issues and practical solutions, keeping them on a tight budget and aggressive timeline.

There are risk-management processes that can deliver highly predictable and desirable project outcomes, but often timeframes and budget issues push even the most disciplined professionals off best practices. At every turn, people need to remind themselves to measure twice and cut once. Mistakes mean doing things over, and that is far more expensive than doing them right the first time.

This article also appeared on New Jersey Association of Counties Newsletter.

How architects can take advantage of economic cycles, even the downturns

How architects can take advantage of economic cycles, even the downturns 960 540 DMR Architects

Lloyd Rosenberg, AIA, president and CEO of Hasbrouck Heights-based DMR Architects has been through several economic cycles, including three recessions, since he started his company in 1991.

Fueled by the recent strength of the construction industry, DMR is celebrating its 25th anniversary with its largest headcount and is recording its highest revenue.

While not immune to economic cycles, the firm has used downturns as strategic thresholds in which it increases market share and adapt to new trends, often diversifying into new practice areas and adding key talent in recessions.

According to Mr. Rosenberg, the firm comes by its counter-intuitive growth strategy as a natural consequence of its beginnings: “In 1991, we only had three people, we couldn’t get any smaller so there was no place to go but up.”

Here are some thoughts on how he’s been able to grow his business through three recessions:

Using a Core Competency to Build a Diversified Practice – and Brand:

DMR’s diversification has many benefits and is the work of an intended strategy that had its roots in a single practice area. Working on various project categories with a wide variety of industries not only insulates the firm against cycles, it also keeps the staff interested and challenged, cross-pollinating the firm. But getting there is another matter — diversified professional practices are grown one piece at a time, and creating adjoining and complementary services, while an intended strategy, is more art than science.

Shortly after Rosenberg founded DMR, it earned the reputation as an esteemed school architect, ultimately serving more than 75 school systems throughout New Jersey. While working with schools, he developed relationships with municipal leaders and recognized there was a need for updated municipal buildings and, in some cases, urban planning, inspiring him to create a team that could address these issues as a cohesive unit.

“New Jersey’s multi-family needs have changed over the past decade, necessitating municipalities to collaborate with architecture firms that can not only create a vision plan for them, but also work them through zoning and other practical issues so that they can become a more sustainable community,” said Francis Reiner, PP, LLA, Senior Urban Designer, who joined DMR in 2008.

DMR’s diversification built on its initial strengths in school, articulating out to areas where it could apply its expertise profitably to new client categories.

For example, its assignment for the new 82,000 square foot Meadowlands YMCA includes design, permitting, planning and engineering roles — which are vertical and horizontal integrations of its legacy strength in school projects. Simultaneously, it is the architect for the new High Tech High School, which will be the most advanced high school project in the country.

Keeping Clients Happy/Relationship Building:

According to Rosenberg, “You’ve got to listen to what people are saying and convey that you sincerely care about what they need and about helping to find it.”

In South Toms River, DMR helped administrators see that they could get the municipal building that suited their needs for several generations by repurposing a daycare center. It has also recently worked with Hunterdon Medical to convert an office building into a 55,000 square foot satellite medical office, providing more convenient services to its patients in a warm and inviting atmosphere.

Keeping Staff Happy:

One of the great things about the culture at DMR is that with so many types of projects, there are constant opportunities for staff to collaborate and learn from each other. It makes each project seem fresh to the staff involved and results in more creative ideas for DMR’s clients.

Rosenberg also strives to create an atmosphere that is more like a peppy family than an office, most recently celebrating its 25th Anniversary year by providing staff with 25 daily surprises including a hot breakfast party, in-house massages and several 3 p.m. sweets breaks. Birthdays are a big to-do throughout the year, and they also celebrate the Winter Holidays yearly with an ugly sweater contest.

His employees appreciates his efforts to create opportunities for professional growth and personal comfort; the staff section of the company web site boasts that more than 13 of the staff have been with Rosenberg for more than 10 years.

“It’s energizing to know that while today, I’m working on the interior redesign of an apartment community, tomorrow, I might be managing the adaptive reuse of an office building into a police station, or assisting a local Community College create a space to accommodate for an entirely new administrative process” said Kurt Vierheilig, AIA, LEED AP, Senior Designer and Project Manager.

The staff’s tenure and experience also support the continuity of service in segments whose robustness occurs in different parts of the economic cycle. In turn, DMR always has the personnel base capable of shifting focus as the client base evolves.

This article originally appeared in Real Estate Weekly.

Six Factors to Consider When Making Healthcare Build/Retrofit Decisions

Six Factors to Consider When Making Healthcare Build/Retrofit Decisions 960 540 DMR Architects

Finance leaders in the healthcare sector should be aware that the actual budget for adding to an existing building can far exceed the contractor’s bid once additional costs are added.

By Lloyd A. Rosenberg, AIA

Many hospital administrators find themselves contemplating if they should build on campus or retrofit or move physicians into new spaces in response to the many changes in healthcare today, including hospital mergers and expansions, technology implementations, value-based care, and changing patient demographics and needs.

That decision involves many factors, from obvious issues such as cost to more obscure considerations such as hospitals’ and health systems’ reach in their communities. Here are six areas hospital leaders should consider when deciding how to expand their facilities.

Cost

The architect should provide examples of costs for similar facilities so that hospital leaders can consider all costs, not just the price per square foot for construction.

The actual budget for adding to an existing building can far exceed the contractor’s bid once additional costs are added, including permits, new heating and cooling systems to accommodate the extra space, and other costs associated with construction. Hospital leaders should talk with all the experts—the contractor, architect, electrician, lawyer—to determine what other costs are involved and what items might not be part of the bid.

The architect may not be able to provide a standard check list, because every project comes with its own unique challenges, but hospital leaders should expect that the assigned team of architects has experience on similar projects.

Reach

Many hospitals are feeling the need to compete for patients throughout the state, making reach into other counties a necessity. For example, Hunterdon Healthcare’s main hospital is in Flemington, N.J., Hunterdon County, but hospital leaders were interested in expanding the health system’s services into neighboring Somerset County. They recently opened a renovated 55,000 square foot, three-story building that provides the services of Hunterdon Cardiovascular Associates, Hunterdon Heart and Vascular Center of Bridgewater, Hunterdon Urological Associates, Hunterdon Healthcare Center for Endocrine Health, and Hunterdon Healthcare Physical and Occupational Therapy.  The result is convenience for current and new patients who live in Somerset County needing services and treatments closer to home.

Space

With many procedures that once required overnight stays now being done on an outpatient basis, some hospitals have surplus space that can be repurposed.

One example is St. Peters Hospital in New Brunswick, N.J., which recently refurbished its dialysis lab into admissions, financial advising, and phlebotomy. The relocation and consolidation of these three departments next to the main lobby offers convenience for patients because they typically access those services at the beginning of their hospital stay. In addition, the change allowed for more space and patient privacy, adding to patient satisfaction.

Similarly, new technologies often take up less space, giving hospitals room to reorganize. Even the equipment that was designed around a few years ago has become obsolete. For example, after 15 years, Robert Wood Johnson Health System redesigned a project to accommodate newer, updated technologies.

Interconnectivity of Practices

New construction or retrofit decisions should also include consideration of which practices and administrative services should be together, and which might function more effectively away from the rest of the main building. Placing administrative staff who work directly with patients in the same building as the practices they serve offer convenience and efficiency to patients and staff.

Similarly, providing space for complementary practices, such as housing physical therapy and neurology staff with orthopedists in the same facility, makes it easier for patients to get to their appointments and for physicians to work together to handle patients’ health needs holistically.

Robert Wood Johnson recently redesigned the 3,500 square foot first floor of its Somerset Street medical office building in New Brunswick, N.J., in order to better serve patients by relocating the obstetrics/gynecology and orthopedics offices from the main hospital. Since these services are done on an out-patient basis only, giving them their own space removed the need for patients to find parking and walk through the main building for short visits.  The new facility will include a reception and waiting area for patients, five exam rooms, an X-ray room, and physicians’ and staff offices.

Relationship with Community

Because of increasing life spans, more people are in need of geriatric care, bringing medical practitioners and caretakers out of the hospital and office environment and into the communities. Off-campus space can play an important role in a hospital’s commitment to continue to be part of the healthcare team for this demographic.

These spaces are often off-site and can be in different counties and regions, adding new buildings and staff to the budget.

Transportation and Parking

Once a hospital decides that it is time to expand off-campus, location, as with any real estate decision, is the most important feature of a building. The architect and planner are great resources to help hospital leaders find a location that patients — current and new — can get to easily, either on their own or via public transportation.

This article originally appeared in the Healthcare Financial Management Association Strategic Financial Planning newsletter. 

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