3-17-06
That’ll Be How Much?
Last month, we decided what to do with our new space; this month we’re going to enter the exciting and dramatic world of cost forecasting. As theatres know all too well: it’s one thing to imagine something, it’s quite another to fund it. How do you find out what a particular building project will cost?
After much research, I can tell you definitively: much more than you expect. What makes the process particularly complex is the need to continually revise your plans with the budgetary considerations in mind. How much is dry wall per foot? What will it cost to build three stalls in the bathroom instead of two? How much will it cost you to repair that support beam?
Costing a building development is an iterative process of guesswork and prayer. There are several sources for your cost data: square foot cost estimates and contractor estimates. The first number you’ll stumble across is the quick n’ dirty method: your broker or landlord will tell you that commercial spaces cost approximately $120-$150/square foot. This number is handy when trying to decide how large a space you can look at, but isn’t wildly accurate for a theatre, as we don’t have the same ratios of finished to unfinished space or the same fixture counts, or any of the generalized parameters that one uses when designing, say, the 13,000th branch of Washington Mutual. So, assuming the lower range, our planned space (approximately 10,000 sq feet) has a cost of $1.2 million. Hmmm...
One problem. We don’t have $1,200,000. Why so much? What can we cut?
The biggest problem with the square foot estimate is that it doesn’t take into account any of your individual choices. Obviously, a rawer space will cost less than creating the lobby at the Goodman Theatre. But what if you add an extra wall for soundproofing? Or a vestibule between the lobby and house? How do you determine the costs for individual design choices? The more accurate the plan, the more likely you’ll be able to take the project to completion.
Your architect has something called the RS Mean 2003 Square Foot Cost Manual (actually, there’s a 2005 one now, but not when we started)—a real edge-of-your-seat, white knuckled read. This gives a set of formulae for calculating costs of a specific set of floor plans. Doing this work is pretty time-consuming and should really be undertaken once the floor plan has settled down a bit. The RM2003SFCM is filled with exciting tidbits, like drywall partitions cost $2.86/square foot, or that the average cost of a toilet including plumbing is $1,045.
I have to confess that I found this book useless. How can the average reader know how many feet of ducting you will require for your HVAC? Fortunately for you and me, there are trained professionals who know these things. After a careful review, here are some interesting tidbits:
- The new slab to even out the floor will cost approximately $38,000. That’s to make an even floor, not to put anything on it like a finish.
- The roof will require about $21,500 of work to support the new HVAC system.
- The current plans require approximately 30 doors which total $25,000. Doors!
- The heating/air conditioning units will cost approximately $135,000.
- Emergency lighting and generators come to about $30,000.
- Just the ceiling finishes in our space are likely to come to $15,000.
All told, the new space is estimated to come in at $595,000 by our good friend the RM2003SFCM. After adding in the contractor fee (25 percent of build costs), this comes to a grand total of $740,000. This is actually about $75/sq. ft., substantially lower than our starting estimate of $1.2 million, but the costing guide doesn’t include information about theatre equipment (lighting, seats, etc.). After calculating that in, we end up with about $850,000 as our working estimate. A full copy of the cost document is available at www.theaterwit.org/performink/cost_estimate.zip
Heavens. So how accurate is that number? After all, I’d hate to underestimate and end up with a 92 percent built building. Sadly, that number is better, but not wildly so. It’s usually within 15 percent. When the architect told me that, I thought, “Fifteen percent isn’t too bad.” Then I remembered that 15 percent of our build budget is $120,000.
Getting an accurate cost is very difficult and is all but impossible until the plans are completed for city filing. Costing is so arcane, that there are even firms that specializing in costing construction projects. Most of these firms are out of the price range of all but the largest construction projects. The quotes we received were between $8,000 and $15,000 for the cost analysis. In the traditional method (which we are using), the architect finishes the plans and sends them to the city. While the city is reviewing the plans for building permit purposes, your general contractor will be costing the project based on the plans, his own costing guide and specific quotes from sub-contractors. This cost analysis will be considerably more detailed than your earlier one. Its greatest virtue is the level of detail it contains. This estimate should be within 5-10 percent of cost. Or so I am assured.
Another, newer option is to use a design/build architect. These firms act as both contractor and architect, and the cost is done while drafting the plans back and forth. In the design/build process, as you work up the plans, they are contacting various sub-contractors to have bids created. Because they have long standing relationships with their contractors, they can get them to invest the time that this iterative bidding process requires. You make a change to the plan, they get new dry wall figures from the firm doing that portion of the project, they feed them back into the spreadsheets. Theoretically, you can get a much more realistic view of your build cost but the planning/drafting stage takes much, much longer. Proponents of this method argue that you make the time up on the back end because there are fewer construction mistakes. Opponents argue that cost overruns are more likely because you don’t have the independent eye of the architect overseeing the contractor work. The only difference is that the overruns would be built into the original estimate.
I think it would be worth a theatre’s time to explore the design/build option. We just didn’t start down that road, and once you start there’s no going back. Most theatres’ biggest concern in this process is controlling costs, and many theatres end up building substantial debt throughout the construction process, which is carried for years after. Some other brave soul will have to walk that road; if your organization is considering it, drop me a line.
So our final build estimate? I don’t know, as we are in the middle of that process ourselves. In some ways, it doesn’t matter—every contractor warns you to allocate at least 10 percent in reserve for unanticipated costs. “Unanticipated” in this context means “costs you will incur that we just don’t know where to put on the spreadsheet.”
So several folks have e-mailed me with questions along the lines of, “Where is all this money coming from?” Currently, we’re in the game for approximately $1,000,000. Next month, I’ll spill the beans and explore various financing options for theatres. Plus, we’ll visit our expediter and see how our plans are doing in the gentle hands of city government.