The Professional Contractor Summer/Fall 2012 by The Warren Group

THE PROFESSIONAL

SUMMER/FALL 2012

A Publication of the Associated Subcontractors of Massachusetts, Inc.

BIG PLANS FOR

BOSTON’S WATERFRONT New Live-Work Neighborhood Coming to Life

Across State Lines Lien Laws Vary by State

Health Care Pioneer

ASM’s New Health Insurance Co-Op

Buy-Sell Agreements Agreem Everything You Need to Know

THE PROFESSIONAL

A Publication of the Associated Subcontractors of Massachusetts, Inc.

cover story

16 Big Plans for Boston’s Waterfront

New Live-Work Neighborhood Coming to Life

features

12 PHANTOM STOCK 04 PRESIDENT’S VIEW Shedding Light on a View from the Seaport: Key Employee Retention Tool The Future Looks Bright for ASM 14 GALLERY 06 NEWS with ASM Events ASM a Health Care Pioneer New Health Insurance Co-op 20 LIEN LAWS Once You Cross the Border, 07 TECHNOLOGY Lien Laws Vary Scheduling the Use of Technology 24 ANNUAL GOLF TOURNAMENT 08 INSURANCE ASM Members Enjoy a Great Installation Floater Insurance Day of Golf and Entertainment at 17th Annual Tournament 10 LEGAL Understanding Buy-Sell Agreements

departments 28 MEMBER NEWS

The Professional Contractor

PRESIDENT’S VIEW

BY DAVID G. CANNISTRARO

View from the Seaport: The Future Looks Bright for ASM

ost people assume that any child working in a family business must have always wanted to be working there. This is not always true, of course, nor was it true for me. Having two older brothers already in the business when I graduated from college, I felt I would seek my fortunes elsewhere. Seven months later, those fortunes were nowhere in sight, so I reluctantly agreed to come aboard my family’s ship and see what would happen. I soon found myself walking on the roof of the World Trade Center Boston on a sunny but cold day in January, scouting locations for some equipment that would have to be set by a helicopter, and I said to myself, “This is cool.” The views of the harbor from up there are spectacular, and I came to realize that day that working on real, tangible objects was the thing for me. I have never looked back, nor regretted working here for the 22 years since. In a very real way my career started in the Seaport District. I am very excited to see the development that has taken place there since, and look forward to what the next 20 years will

bring. I hope you enjoy reading about some of these projects in this issue. I am even more excited to announce that the Associated Subcontractors of Massachusetts, Inc., has recently been approved as a “group health insurance purchasing cooperative,” one of only three association “cooperatives” to be named as part of a pilot program in the commonwealth. This program has great potential, allowing us to leverage our 350 member companies and their thousands of employees to buy health insurance at a lower price than any one of us could hope to achieve in the open marketplace. Cross Insurance and our own ASM staff have worked long and hard on this project for over a year, achieving our top non-legislative priority. I commend them and thank them for their hard work. Having significant cost-saving programs that our members cannot obtain anywhere else is one of the keys to our longterm success as an organization. Read more about the new ASM Health Insurance Co-op on page 6, and stay tuned for more details in the coming weeks. s

David G. Cannistraro is executive vice president of J.C. Cannistraro in Watertown, and president of ASM.

The Professional Contractor is published by The Associated Subcontractors of Massachusetts, Inc. One Washington Mall | Fifth Floor | Boston, MA 02108 tel 617-742-3412 | fax 617-742-2331 mail@associatedsubs.com | www.associatedsubs.com

ASM Officers

President: President Elect: Vice President: Vice President: Vice President: Treasurer: Past President: Past President:

ASM Directors

David G. Cannistraro J.C. Cannistraro, LLC Richard R. Fisher Red Wing Construction Joseph H. Bodio Lan-Tel Communications, Inc. Steven P. Kenney N.B. Kenney Co. Gregory A. Porfido Mark Richey Woodworking & Design, Inc. Russell J. Anderson Southeastern Metal Fabricators, Inc. Sara A. Stafford Stafford Construction Services, Inc. Scott H. Packard Chapman Waterproofing Co.

Summer/Fall 2012

The Warren Group Design / Production / Advertising www.thewarrengroup.com custompubs@thewarrengroup.com ©2012 The Warren Group, Inc. and Associated Subcontractors of Massachusetts, Inc All rights reserved. The Warren Group is a trademark of The Warren Group Inc. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without written permission from the publisher.

WE’RE MADE OF: THE TOOLS YOU NEED.

Construction Division Whether you’re a plumber, electrician or builder, you need a risk plan developed by an agent who knows your business. As one of the largest independent insurance agencies in New England, we provide detailed support to design the most competitive and comprehensive insurance plan for you. For an in-depth review of your program, call Eastern Insurance at 508-620-3478 today.

Find out what we’re made of S M at easterninsurance.com General Contractors



Homebuilders



Specialty Contractors



Surety



Eastern Insurance Group LLC is a wholly owned subsidiary of Eastern Bank.

Trade Contractors

NEWS

BY TRISH LAMBERTI AND MONICA LAWTON

ASM a Health Care Pioneer with New Health Insurance Co-op

f there is any one issue that dominates the news today, it’s health care. With the Supreme Court upholding the 2010 Affordable Care Act, and the presidential elections looming, health care is on everyone’s mind, and with good reason. In 2010, the health care industry represented nearly 20 percent of the national economy. For the most part, paying for health care falls to employers; according to a study from the Kaiser Family Foundation, the National Center for Health Statistics, over half of the population in the U.S. under 65 receives health insurance from their employers. The rising cost of health insurance remains one of the most pressing concerns for employers today; but as we have seen in Massachusetts, employers steadfastly continue to offer health benefits, as an important financial incentive to retain valued employees and compete for new talent. This holds true for construction employers, including ASM members. In an effort to provide relief to small employers, who are often hit hardest by premium increases, Massachusetts passed a law in 2010 allowing businesses with up to 50 employees to band together in small group purchasing cooperatives, on a pilot basis, in order to achieve lower rates. Not long after the bill was passed, the Associated Subcontractors of Massachusetts began the long and rigorous application process to become a cooperative, and in late spring, received notice it had been certified as the third group purchasing cooperative in the state, effective July 1, 2012. Certification allows ASM to partner with major carriers in the state to offer health plans to ASM members, and receive a discount from rates offered to small businesses outside the cooperative. The discount will be determined by the carriers based on the cooperative’s robust wellness program, and in the fourth year, by the accumulated claims experience of all employers in the cooperative. In other words, rates will be driven by factors never before available to small employers! When it officially launches this fall – November 1 is the target date – the ASM Health Insurance Co-op intends to offer members a range of choices for health coverage, including plans with no deductible or several deductible options, as well as limited network and tiered network plans where employers could see immediate savings from standard plan designs, aside from the discounts provided by the health insurance carriers. But that is just the beginning. The cooperative will realize even greater savings for members in the long term because of the ability to aggregate claims information from 6

Summer/Fall 2012

the insurance companies, identify the manageable cost drivers in the population as a whole and educate employees on healthy lifestyle choices. This targeted approach is largely unavailable to small employers today, as carriers do not give claims information to fully-insured groups with under 100 lives, and comprehensive wellness programs are largely unaffordable for small groups. TGA Cross Insurance, the managing broker of the cooperative, will bring to bear its experience and expertise with large groups to assist ASM in this solution, which is at the forefront of the health insurance industry in Massachusetts. While the insurance program offered by the ASM Co-op will be available only to businesses with up to 50 employees, the wellness program will be open to all member companies, regardless of size. The ASM wellness program is a truly innovative approach to wellness that is adapted for the small business owner. Members of the ASM Co-op will have exclusive access to an interactive online health and wellness community powered by FiVi Health Networks. Employees will be able to access a wide array of educational articles and videos, take part in fun, community-based health challenges, track exercise and health goals, and much more. Meeting the wellness participation requirement will be easy, because TGA Cross and FiVi Health Networks will work together to design highly personalized wellness offerings that speak to the individual needs of ASM members. The online component provides convenience and round-the-clock access to a growing list of resources to help members and their families lead healthier and betterinformed lives. There is much to do before our target start date of Nov. 1, 2012, but ASM’s certification as a group purchasing cooperative marks the first step in helping members find solutions for their health insurance needs and the next step in a long tradition of providing the best services available. Employer meetings to describe the chosen health insurance plans and the wellness program in greater detail will be held during the month of October in several locations around the state. To accommodate those who will not be able to attend the meetings, webinars will also be scheduled. More information about the dates and locations of the meetings and webinars will be announced shortly. For more information, please contact Monica Lawton at ASM, mlawton@associatedsubs.com or 617-742-3412, or the following at TGA Cross Insurance: Andrew Godfried, agodfried@tgacross.com or 781-224-5738; or Trish Lamberti, plamberti@tgacross.com or 781-224-5706. s

TECHNOLOGY

BY TOM PALANGE

Scheduling the Use of Technology When it Comes to Software, it’s All about Getting in Early

ith each passing year, it becomes increasingly apparent technology is the engine driving America forward. Within this brave new world of business, however, archaic industries still exist that are rooted in traditional methods and are slow to accept changes to the status quo. For decades, those involved in the construction industry (namely contractors) have been accused of stubbornly resisting change. Truthfully, though, many of the country’s top specialty contractors are using some of the most game-changing technology and innovative thinking to solve age-old industry problems.

Beginning with BIM The industry has been rallying around the value of building information modeling (BIM) for years, and mechanical and sheet-metal subcontractors were some of the first companies to invest in the platforms that bring BIM to life. When it comes to innovation in the world of specialty contracting, BIM tools are only part of the story. Owners and construction managers rely on specialty contractors for the means and methods of constructability. In other words, electrical contractors understand every last detail involved with installing panel boards and conduit, while mechanical contractors have the real-world experience needed to build complex piping systems. Since each specialty trade is responsible for its own constructability model, it is only natural for project teams to work together or “colocate” with the design team to complete one comprehensive model. “Mechanical trades often make up as much as 40 percent of a project’s total costs,” explains John Cannistraro Jr., president of mechanical construction firm J.C. Cannistraro LLC, based in Watertown. “By now, the entire industry understands that a project ultimately benefits from the reallocation of costs and resources to

Tom Palange is the director of marketing for J.C. Cannistraro LLC, www.cannistraro.com, Watertown, Mass. He can be reached at tpalange@cannistraro.com.

the design phase in order to make way for early collaboration.” Cannistraro’s claims are supported by his company’s growth and success since adopting a collaborative mindset that accompanies the use of BIM. “Our first 3D coordinated project was a terminal expansion at Boston’s Logan Airport over 10 years ago,” adds Cannistraro. “We quickly learned that while 3D visualization and the ability to prefabricate improved our quality and efficiency, the technology that lay ahead had the potential to innovate how we sequence and deliver our projects in the future.”

Field Power Companies like Cannistraro are now using technology to prepare for mechanical installations not only before materials and equipment arrive on site, but before the concrete floor is even poured. Using this GPS technology, the model is populated with data points that aid in the installation of sleeves and hanger assemblies with 100 percent accuracy and zero capacity for error. Projects on which Cannistraro has empowered field personnel to use total station technology have resulted in faster construction schedules and safer jobsites. On today’s projects, time on site is limited by divided release dates, compressed construction Continued on page 23 The Professional Contractor

INSURANCE

BY BERNARD K. QUINLAN, CIC, CRM, CPCU

Installation Floater Insurance A Primer

n installation floater provides coverage for loss resulting from theft or damage to a contractor’s building materials, including the value of labor, delivery costs and earned profit up to the time of loss. Installation floater policies are offered by a number of underwriters, including Acadia, CNA, Chubb, Hanover, Hartford, Liberty Mutual, Peerless and Travelers, among others. As with contractors’ equipment insurance, analyzed in the last edition of The Professional Contractor, this coverage is not subject to a standard policy form, so coverage offered by two underwriters may differ significantly.

Why do subcontractors need an installation floater? • Builders’ risk property insurance covering a large project may carry a substantial deductible (as much as $100,000), and the subcontractor may be responsible for losses within the deductible. • A builders’ risk policy purchased by an owner or general contractor may contain exclusions or limitations that expose a subcontractor’s materials to uninsured loss. • Renovation or installation projects may not be covered by a builders’ risk policy. • Riggers or truckers may not be liable, or their liability may be limited, for losses occurring while a contractor’s material or equipment is in their care, custody or control. Covered property includes the contractor’s “materials, supplies, machinery, fixtures and equipment” being installed at a construction project or site. Similar property owned by others, while in the care, custody or control of the contractor is also covered. Most policies also cover scaffolding, construction forms, temporary structures, and fences. Following are types of property that are excluded from coverage under many installation floater forms: • Existing buildings or structures to which an improvement is being made. • Machinery, tools and equipment that will not become a permanent part of the building. A contractors’ equipment floater is intended to cover this type of property. • Airborne or waterborne property.

Bernie Quinlan is a principal with Sullivan Group. He can be reached at 781-514-1331, bquinlan@sullivangroup.com, or by visiting the company’s website at www.sullivangroup.com.

Summer/Fall 2012

Additional Coverage Installation floater policies may include, or may be endorsed to include, the following: • Soft costs such as additional interest on loans, additional architect or engineering fees, and additional taxes. • Extra expense to cover transportation, lodging and meal expenses of the contractor’s employees. • Increased materials costs and expediting expenses to accelerate the delivery of replacement equipment or materials. • Debris removal covering the costs of removing damaged property. • Pollutant clean up and removal to extract pollutants from land or water caused by direct physical loss (such as by fire) to a contractor’s building materials or equipment. • Loss resulting from pneumatic or hydrostatic testing of equipment. When does coverage begin and end? Coverage begins when the covered property is at the risk of the contractor. Many policies state that coverage will end at the earliest of the following dates: • When the construction or installation project is completed. • When the building is occupied for its intended use. • When the subcontractor’s interest in the project ends. • When the building or installation project is accepted by the owner. • 60 days after the installation work is completed. • At the expiration or cancellation of the policy. Where does the policy provide coverage? Policy territory is the United States, its territories or possessions, and Canada. Contractors should consider the limits needed to adequately address their risk for the following exposures: • At any one jobsite. • Catastrophe limit for any one occurrence (such as a hurricane or tornado affecting more than one jobsite or location). • In transit on the contractor’s vehicles, common carriers, riggers’ vehicles, etc. • At temporary locations such as riggers’ yards or warehouses. • Building materials, stock and equipment located at the insured’s warehouse or storage yard are excluded by many policy forms, because property insurance can address this loss exposure. Contractors performing

pre-fabrication work at their shop should make sure that any such exclusion or limitation is deleted from the policy.

Exclusions Installation floater policies are typically written on an “all-risk” basis, covering all perils except those specifically excluded. Contractors should carefully review policy exclusions with their insurance agent. Some of the more typical exclusions are: • Dishonest acts of employees. Contractors must purchase employee dishonesty or fidelity bond coverage to address this loss exposure. • Earth movement, flood, sewer backup and water below the surface of the ground. Coverage for these perils can be purchased for additional premium. • Terrorism. Coverage can typically be included for 1 to 2 percent additional premium. • Contamination, wear and tear, depreciation, etc. • Electrical injury and mechanical breakdown. • Voluntary parting due to fraudulent scheme. • Building ordinance or law. • Mysterious disappearance or shortage discovered by inventory reconciliation. • War, nuclear hazard, government seizure. The premium for installation floater policies is a function of the value and type of covered material and equipment, protection (fenced jobsite, security guards, etc.), job locations/territory, type of work performed, and deductible. Contractors should confirm that the policy includes coverage for the value of their labor, delivery costs, and earned profit up to the time of loss. The policy may have a coinsurance clause requiring the insured to purchase limits equal to 80 percent, 90 percent or 100 percent of total value. If the policy includes a coinsurance clause, take care to meet this insurance to value requirement. Whenever possible, negotiate an agreed value provision to eliminate the coinsurance requirement. An installation floater is important insurance coverage for most subcontractors. Remember that all policies do not provide equivalent coverage. Work closely with your insurance provider to specifically tailor coverage to address your needs. s

We know there’s more on your mind than the safety of a building alone. Construction is a business where risk is around every corner. You need an insurance company that understands that. Not just from an insurer’s perspective, but from yours. Acadia. We’re closer to your business. Visit acadiainsurance.com or contact your local independent agent for more information about the ASM Safety Group and Dividend potential.

Maine • Connecticut • New Hampshire • Massachusetts • New York • Vermont

ACAD-0137 ASMAD4.75x4.75.indd 1

12/16/10 3:53 PM The Professional Contractor 9

LEGAL

BY NICHOLAS J. COLANTUONO

Understanding Buy-Sell Agreements Insuring the Continuity of Your Subcontracting Business

hether you are a sole proprietor or have one or more partners within your subcontracting business, your business has likely become your passion over the years, as well as one of your most valuable assets. However, have you ever stepped back and asked yourself what would happen to your business and your family should you or one of your partners pass away or become disabled? Surprisingly, many business owners are not properly prepared for such a scenario. As uncomfortable as the topic may be, business succession and transition planning should not be ignored. Ask yourself these few simple questions and consider what is at stake: • Do your heirs have the proper knowledge and experience to continue to operate your business on a day-to-day basis? • Would the event of your death or an unforeseen disability force your heirs to sell your business? • If your heirs were forced to sell your business, would they receive a fair price? Simply put, a properly structured buy-sell agreement is a legal arrangement between the owners of a business that outlines the manner in which ownership would transfer should a “triggering event” occur, such as one of the partners retiring, resigning, divorcing, becoming disabled or passing away. A buysell agreement is sometimes referred to as a “business will” and in many ways it is the equivalent of a prenuptial agreement for business owners. The main idea behind buy-sell planning is to preserve continuity by structuring an agreement between owners detailing who can purchase shares of the business, and to do so at a price that both the buyers and sellers feel is fair. The are four ways to structure a buy-sell agreement: an entity agreement, a cross-purchase agreement, a wait-and-see agreement, and a no-sell buy-sell agreement.

Entity Agreement When an entity agreement is properly structured and placed in force, a triggering event would legally obligate the business entity itself (i.e. the partnerNicholas J. Colantuono is a co-founder, partner and advisor at Wayside Financial Partners in Sudbury, Mass. He can be reached at 978-460-1741 or Nick@WaysideFP.com.

Summer/Fall 2012

ship, corporation, LLC, LLP, etc.) to purchase the deceased or disabled owner’s interest in the business. An entity agreement involves having a business with one or more owners take out separate life insurance policies on each owner with death benefits equal to each owner’s respective share in the company. The business owns, pays for, and is the beneficiary on each partner’s life insurance policy. In the event of a death, the funds provided by the policy are used to pay the deceased owner’s estate for its inherited share of the business and allows the surviving owners to avoid any out-of-pocket expenses. One major advantage of an entity agreement is that each owner can assure their loved ones that their respective stake in the business will be paid to them in cash, while assuring that the actual ownership of the business is passed on to the remaining partners.

Cross-Purchase Agreement In a cross-purchase agreement, each partner pays for individual life insurance policies on each of the other partners, naming themselves as the beneficiary. In the event of one partner’s death, the surviving partners will then have the immediate means to purchase the deceased partner’s stake in the company and provide the deceased partner’s family with the monetary compensation equal to their loved one’s share in the business. Much like an entity agreement, a cross-purchase agreement allows for ownership rights to transfer to the surviving partners while allowing the deceased’s ownership value at the time of death to transfer to their heirs.

Wait-and-See Agreement A wait-and-see agreement provides flexibility to business partners by allowing them to delay the selection of either a cross-purchase or an entity agreement until one of the owners dies, becomes disabled, or retires. With a wait-and-see plan, either the surviving owners, or the business entity, have the option to purchase the deceased owner’s business stake upon their death. If both the surviving owners and the business entity choose not to purchase the deceased owner’s interest, then the deceased owner’s estate is obligated to do so.

Funding the life insurance policies within a wait-and-see plan is the obligation of the party that has the first option upon the death of an owner, usually the surviving owners or entity. The wait-and-see approach creates an instant market for the business at a pre-arranged market value without specifying the ways in which ownership shares will transfer.

No-Sell Buy-Sell Agreement The no-sell buy-sell agreement differs from the previously mentioned agreements in that it aims to allow for the heirs of a deceased owner to participate in the future gains of the company without having the hassle of ownership. In essence, the no-sell buy-sell is for business owners who want the future appreciation of their company stock to go to heirs, but not the outright ownership. Thus, the controlling rights of the business are passed to the surviving owners, but the deceased ownerâ&#x20AC;&#x2122;s non-voting interest is passed to their heirs; this involves re-capitalization. Once a business is re-capitalized into voting and non-voting shares, each owner receives 99 non-voting shares and one voting share. Life insurance policies are purchased by each owner for the amount of their respective business value, and the owners agree to buy-out the one voting share of the owner that passes away. Thus, the family of the deceased owner receives their 99 non-voting shares as well as their death benefit from the life in-

surance policy, and the surviving business owners receive their one voting share.

Summary It is important when structuring your buy-sell agreement that you cover all bases by preparing for the events of death, disability and departure. Disability income insurance funds the buy-out of a disabled owner and is just as important in business planning as life insurance. Permanent cash-value life insurance is used due to the immediate funds that are available upon the death of an insured, as well as the accumulated cash value used to compensate an owner upon their retirement or departure. By establishing a properly structured buy-sell agreement, you can rest assured that you are preparing yourself, your heirs, your partners and your business for all of the â&#x20AC;&#x153;what-ifsâ&#x20AC;? that life has to offer. In addition, businesses with properly structured buy-sell agreements experience an immediate market value as well as tremendous tax advantages. With interest rates at historically low levels, now is an optimal time for you and your business partners to talk to an experienced financial planning professional about a buy-sell agreement, whether that means reviewing the plan you currently have or creating the plan you should have. s

The Professional Contractor

PHANTOM STOCK

BY PAUL BARDARO, CPA, ABV

Shedding Light on a Key Employee Retention Tool

t’s an ongoing challenge for many contractors and construction firm owners in virtually any phase of the business cycle: how to motivate and retain employees who are essential to the company’s success, without granting them an actual ownership stake. True, during this prolonged economic recession, any serious thinking by owners about long-term employee incentive programs has probably slipped to the bottom of the to-do list. But as the construction industry slowly climbs out of the doldrums, it may be time to think ahead. Keeping this rare and valuable category of employee in the fold may require certain innovative incentives beyond the traditional 401k, health insurance and other typical perks. But at the same time, the business owner may not (yet) want to enter the no-return zone of ceding true ownership control. One solution is the little-known practice of issuing so-called “phantom” stock. As mysterious as it may sound, the technique has numerous and comforting benefits for both the employer and the key employee. For owners, that list of benefits includes: • Less hassle to set up and monitor – unlike its more conventional brethren, the issuing of phantom stock is considered a non-qualified benefit. As such, it avoids much of the paperwork, restrictive rules and reporting requirements that are typical of traditional qualified benefit plans. • Complete control of plan terms – as a non-qualified arrangement, owners have total flexibility to determine how the plan contract is drawn up, which employees participate, when and how many shares are granted, terms of vesting, payout schedules and similar details. • Protects ownership control – since phantom shares come with none of the statutory shareholder rights under corporate law, the full authority for company decision making remains with the owner(s). Any rights of the “phantom shareholder” are limited to rights specifically stated in the phantom plan. • Spurs employee motivation and productivity – high-value workers now have more than just a job Paul Bardaro is a partner in the Boston-area accounting and business advisory firm Rucci, Bardaro & Barrett, PC. For a copy of “Top 10 Questions to Ask About Phantom Stock Plans,” contact him at 781-321-6065 or paulb@rb-b.com.

Summer/Fall 2012

and a paycheck to keep them interested. They are in it for the long haul, especially if payout terms are tied to long-term company performance.

A Sense of Ownership with Little Risk At its core, phantom stock is a highly effective compensation tool that allows key employees to enjoy a sense of ownership in the company – to share in its future success without necessarily sharing in the voting control, profits, dividends or distributions that normally come with the issuance of legal equity or stock options. From the employee’s standpoint, the potential financial reward of participating in a well-designed phantom stock plan closely mimics the payoff of actual equity or stock options: hence, the names “mirror stock” and “shadow stock” that are sometimes used to refer to these plans. Yet many of the risks and liabilities that ordinarily come to executives and others with direct, legal equity ownership are avoided with this pseudo version of company stock. For instance, the employee isn’t required to infuse cash into the business, isn’t exposed for corporate governance issues, and isn’t required to personally guarantee company debt. Here’s an example: Let’s say the business owner awards one of his high-value executives 5,000 shares of phantom stock. Rather than having actual equity value, the phantom shares mirror the value of real company stock at, say, $20 a share. The phantom stock plan that the owner has devised beforehand typically spells out a customized formula or generally accepted method for valuing the shares at some point in the future, say three years down the road. When the time comes, the company schedules a valuation and determines that the owner’s stock is now worth $40 a share. The employee receives a payment of $20,000 – his or her reward for staying with the company and contributing to its growth. When it comes time to reconcile the tax implications of the transaction above, the company benefits from a $20,000 tax deduction, and the employee declares the amount on his or her tax return as ordinary income. Notice that the original grant of phantom stock by the company is not a taxable event; nor was the even-

tual receipt of the proceeds from the stock considered a capital gain on the employee’s tax return. These are two of the ways that phantom stock differ from actual equity and options, and are factors that need to be considered when contemplating the pros and cons of establishing a phantom stock plan.

The Story of Acme Construction In many respects the benefits of this arrangement can outweigh the drawbacks for both sides, which was the case for a company that, for the sake of the story, we’ll call Acme Construction, Inc. The company, a family-owned and operated commercial construction firm, was enjoying years of steady growth and profit, thanks in part to two dedicated executives – its chief estimator and its lead project manager. Recognizing their value to the company’s success, the owners set up a phantom stock plan, and issued each executive phantom units equivalent to 5 percent of outstanding common stock as an incentive to stay with the company. The vesting schedule was built around a combination of time periods of continued employment and certain economic milestones. The units would be re-purchased (i.e., the executives would receive their payouts) only in the case of certain triggering events – their eventual retirement at age 65, liquidation of the company, or the merger or sale of Acme Construction to another owner. Sure enough, about six years later the company was approached by a national player in the commercial construction SullGroupTPC

1/29/09

3:49 PM

Page 1

Insurance Relationships:

industry that was attracted by Acme’s track record and prospects for further growth. Buy/sell negotiations ensued, and within the year, Acme was sold. As a result, the value of the owners’ original equity increased nearly three-fold. And because the value of the phantom units held by the two key executives mirrored the owner’s common stock, both benefited handsomely when one of the triggering events that had been planned for (the sale of the company) eventually came to pass.

A Unique Benefit at a Modest Cost To be sure, there are some administrative costs to establishing and maintaining a phantom stock plan – legal fees, accounting fees and periodic reviews to help determine the value of these pseudo shares. However, these costs compare favorably with those of a relatively inflexible employee stock ownership plan or a qualified or nonqualified stock option plan. Furthermore, the setup and administrative expenses are no match for the price of losing just one of your key managers or executives. In fact, some experts estimate the cost of turnover at the senior level to be between 100 and 150 percent of the person’s annual salary. Rather than face that type of financial burden, most business owners would agree, it’s far better to retain your top people with a thoughtful approach to compensation that truly benefits them, and keeps them engaged, productive and happy. For both the company and the key employee, the phantom stock option can truly be a win-win solution. s

BUILT TO LAST

Risk Management • Employee Benefits • Property & Casualty Insurance • Bonding • Financial Services

Many of our clients in the commercial building industry have been with us for decades... Risk Management...more than just Insurance.

Work with an Owner.

Sullivan Group professionals will assist your company with contractual risk transfer, selection of appropriate deductible and retention levels, claims management, and loss control.

Our 20 18 principals directly service the risk management and insurance needs of our clients.

Access to Markets. Sullivan Group enjoys strong relationships with all of the major underwriters servicing the construction industry.

1.800.649.1553

•

www.sullivangroup.com

One Chestnut Place • Worcester, MA • 01608-2804 • 508-791-2241 72 River Park • Needham Heights, MA • 02494-2631 • 781-449-8323

The Professional Contractor

GALLERY – ASM EVENTS ASM/CFMA Joint Presentation: It’s the Law Hot Legal Issues in Construction April 3 1 Speakers Michael Sams of Kenney & Sams, PC, Carolyn Francisco of Corwin & Corwin, LLP, and Robert Lizza of Hinckley, Allen & Snyder, LLP, provided an overview of legal issues trending in the industry at a joint ASM/CFMA presentation. 2 ASM President David G. Cannistraro socializes with members during the cocktail reception. 1

3 Members catch up before the ASM/CFMA joint presentation.

HR Tips Traps and Best Practices April 12 4 HR speakers Brendan J. King and Leto Papadopolous of King

& Bishop and David B. Wilson of Hirsch Roberts Weinstein, LLP enlightened members with an entertaining and interactive HR seminar. 5 ASM members learn how to employ proper HR techniques.

ASM Dinner Meeting: Projects in the Pipeline May 17 6 ASM President David G. Cannistraro, Corwin & Corwin attorney David E. Wilson and ASM board member Nancy Salter interact before the dinner event. 7 The dinner featured speakers from the Division of Capital Asset

Management, the Boston Redevelopment Authority and the Massachusetts School Building Authority. 8 Members engage with speakers during the heavily attended seminar. 9 ASM members mingle and network during the cocktail reception.

ASM Safety Roundtable May 23 10 Members get “hands on” experience at the roundtable. 11 Speaker David Tibbetts of Harvard University explains the

proper way to perform job hazard analyses (JHAs) as conducted at Harvard. 12 Members listen as Tibbetts breaks down the most effective ways to prevent accidents on the jobsite.

Summer/Fall 2012

ASM Breakfast Meeting How Not to Get Caught Holding the Bag: Releases, Insurance Gaps and Other Legal Risks June 13 13 The breakfast featured attorney Carolyn Francisco of Corwin & Corwin and David LeBlanc of Acadia Insurance. 14 Attendees listened attentively as the eventâ&#x20AC;&#x2122;s speakers outlined important insurance and contract traps. 15 ASM members, paying attention.

25 MPG!

Your Commercial Truck Headquarters! Receive up to $1,000 toward your eligible vehicle when you install a comparable amount of eligible upfits for your RAM Pickup, Chassis Cab or Cargo Van!

CALL US TODAY! 603603-772772-3702

The Professional Contractor

BIG PLANS FOR BOSTON’S WATERFRONT New Live-Work Neighborhood Coming to Life BY SCOTT VAN VOORHIS It’s been called the Seaport, the South Boston Waterfront and now the Innovation District. And who knows, given plans to double the capacity of the already massive Boston Convention and Exhibition Center, another name change may be in the works before long. The revolving door of names could be seen as a sign that Boston’s newest neighborhood is still in search of an identity. But that would be missing the broader picture. Rather, the name parade reflects a broad and vibrant mix of uses taking shape on downtown Boston’s waterfront, once a neglected backwater with one or two legendary waterfront dining spots perched amid acres of ugly surface parking lots. The Hub’s newest neighborhood encompasses conventioneers and cutting-edge startups, luxury apartments and corporate offices, and hip restaurants, not to mention the ICA’s dazzling new waterfront art palace. It is fast shaping up to be a young, energetic neighborhood constantly on the move. Yet the Seaport has been and remains a longterm work in progress, decades in the making with decades more of development and evolution ahead before it fully matures. “When you look at it through Google Earth, it is amazing how much land there is to be developed there,” said James Kirby, president of Boston-based Commercial Construction Consulting. “The fact

[that] there are finally some projects moving forward again after a four- to six-year hiatus is a good thing.”

A Waterfront Building Surge The basic building blocks of the Seaport are finally falling into place, but it would not be an exaggeration to say it is has taken decades to get this far. After years upon years of misfires and false starts, three multibillion-dollar waterfront projects near the Moakley Courthouse are starting to move ahead. The first is veteran waterfront developer Joe Fallon’s Fan Pier project. Fallon is building out hundreds of thousands of square feet for Vertex Pharmaceuticals, with Turner Construction doing the work. “Boston’s waterfront is central to our past, present and future and the Fan Pier development exemplifies its vitality, bringing more jobs, residents, businesses and life to one of our city’s most promising neighborhoods,” Boston Mayor Thomas M. Menino recently remarked at the topping off ceremony for the Vertex buildings. Fallon is also starting to lay the groundwork for a 15-story luxury condo project. If it moves forward, it will be the first new condo tower built in years in Boston, an island of ownership in a growing sea of rentals. The Professional Contractor

If Fan Pier sounds familiar, it should. Plans to develop the 24acre site next door to the massive Moakley Courthouse have been in the works for nearly 30 years. After failed attempts by other developers, including Chicago’s billionaire Pritzker hotel family, Fallon rode to the rescue in 2005, buying the key waterfront tract for $115 million. Literally across the street, long-time Hub tower developer John Hynes has rolled out plans for a multibillion-dollar retail, apartment and office complex called Seaport Square. In a hopeful first move, Hynes has begun construction on a 12,000 square foot innovation center designed to be a haven for startups and entrepreneurs. It’s the first private construction on

entrepreneurs and startups. The convention center has even bigger plans, including a billion-dollar-plus expansion that could double the size of the hall and which might include a major new hotel as well. In a major step forward, the Massachusetts Convention Center Authority is reportedly exploring a deal for a 5.5 acre site near the Summer Street convention center on which to build a hotel tower alongside the expanded hall. With encouragement from the Massachusetts Convention Center Authority and Boston City Hall, other hoteliers are eyeing opportunities to build on sites near the sprawling meeting complex.

the site since former owner Frank McCourt began talking about building a new Back Bay on his land by the harbor back in the 1980s. Hynes has also cut deals with other developers interested in building on pieces of his prized tract, with Skanska USA Commercial Development and Twining Properties recently announcing plans for a new high-rise with 300 apartments on Block K. “The Innovation District provides one of the most exciting opportunities for development in Boston in many years and we are eager to contribute to this area,” said Shawn Hurley, executive vice president and regional manager of Skanska USA Commercial Development in Boston, in a press statement. Finally, the third big development to come to life on the waterfront is the long-delayed Pier 4 project, to which mall king Steve Karp first acquired the building rights in the late 1990s. A 22-story apartment tower is planned. Meanwhile, a few blocks back from the waterfront, other equally impressive, in some cases even larger projects are also moving ahead or on the drawing boards. In the Fort Point section, Oregon developer Gerding Edlen is pushing forward with plans for a 21-story apartment high-rise. Next door to the city’s aircraft-carrier-sized convention center, developer John Drew recently kicked off construction of a 236 unit residential high-rise. The $120 million project will also include some retail shops and 7,000 square feet of space for

Waterfront Attracting Corporate Heavyweights

Summer/Fall 2012

In another sea change, the Seaport is becoming a rival for the Financial District when it comes to the financial services giants that have long been the engine of growth in Boston. And the corporate sector has also increasingly taken a liking to the Seaport. Commonwealth Ventures has a deal to build a 500,000 square foot office complex for State Street at the Channel Center project in the Fort Point section, while other developers are converting some of Fort Point’s early 1900s warehouses on Summer and Melcher streets into offices. This adds to an already sizeable contingent of white collar professionals based in the Seaport, with Fidelity and Manulife employing thousands in Seaport high-rises. The district is also becoming a haven for fast-growing tech and even biotech firms. “There are 1.7 million square feet of offices coming on or getting redeveloped – those are some pretty substantial numbers,” noted Ben Hux, a broker at Jones Lang LaSalle. The Boston Redevelopment Authority has been long pushing to make the Seaport a destination for cutting-edge companies, and a large portion of the waterfront around Fan Pier and the Moakley Courthouse was renamed the Innovation District. The recruitment drive helped convince up-and-coming biotech star Vertex to ditch Cambridge for the waterfront, with a number of smaller tech and life sciences firms also starting to set up shop in the area.

Budding Residential Demand The influx of scientists and technology geeks, as well as young lawyers and executives, is expected to spark demand for rental housing – and developers are responding. They are pumping hundreds of millions into upscale apartment high-rises, betting that hot-shot young entrepreneurs and rising young executives at Vertex, State Street and other big companies will be tempted by the possibility of living a few blocks from work and the attractions of the waterfront. The apartments are designed to cater to young professionals, with smaller layouts in the 500- to 800-square-foot range and lots of one-bedrooms, some two-bedrooms and few three-bedrooms. “These are not thirty-somethings with children looking at private schools,” said Vivien Li, president of the Boston Harbor Association, of the target market of the new crop of waterfront apartments. “They are catering to the very sophisticated, well-paid young professionals who will be working at the Vertexes of the world.” The surge of waterfront apartment construction comes atop a series of successful rental high-rises rolled out over the past decade by Fallon and other developers. In some ways, the rental boom is making a virtue of necessity. Both the market and banks have turned against new luxury condos, with financing for such projects extremely difficult to land. Apartments don’t provide the same bang for the buck when it comes to up-front profit, but banks are willing to lend on new rental projects.

The result may be a much different feel for the emerging neighborhood than city planners and developers first envisioned a decade or two ago. In fact, there was concern that Fan Pier and other waterfront projects would become havens for multimillion dollar condos, effectively turning the redeveloped waterfront into an exclusive playground for the rich. “It’s going to be very youthful, fun, and welcoming, with a much greater diversity in age,” Li said.

More Changes Ahead? As steel goes up for new apartments and hotels, few expect the current iteration of the Seaport to be its final form. Apartments may very well be converted to condos in the years ahead. Veteran waterfront developers fully expect more changes in the years and decades to come. And, as has been the case since efforts began to redevelop the waterfront by Fan Pier and Pier 4 back in the 1980s, the pace of development is likely to remain two steps forward and one step back. Seaport projects stand out for their breathtaking size and cost – millions of square feet and billions in development costs. It can take years to get all the financing pieces in place, not to mention the city and state permits also needed to begin work. By the time everything is in place, the business cycle can shift, freezing in place development plans until the next upturn. “There is too much land to build out in one cycle,” Kirby said. “It could take three cycles and more than 20 years.” s

Lead by Example We believe in leading by example. At Griffin Electric, we’ve been doing that for over 34 years. We strive to be among the best in the electrical contracting industry by listening to the needs of our customers, offering cost-effective solutions, and delivering superior results. You can rely on us to take the lead on your next project. Corporate Headquarters: 116 Hopping Brook Road Holliston, MA 01746 (508) 429-8830 North Shore Community College Allied Health Building Danvers, MA

www.waynejgriffinelectric.com

Regional Offices: Charlotte, NC Raleigh, NC Duluth, GA Pelham, AL MA Lic A8999

The Professional Contractor

LIEN LAWS

BY CAROLYN M. FRANCISCO, ESQ., AND JENNIFER M. KOCH, ESQ.

Be Aware: Once You Cross the Border, Lien Laws Vary

o matter your trade or the size of your operation, it is likely that there are private construction projects in our neighboring states that catch your eye. Perhaps you regularly take on such jobs, or perhaps you’ve lately been tempted to expand your geographic scope. In any case, it is important to realize that once you leave Massachusetts to work in our neighboring states – New Hampshire, Connecticut, Rhode Island, New York – you leave the confines of the Massachusetts lien law, M.G.L. c. 254, and enter into foreign waters. A mechanic’s lien is a valuable tool to protect payment rights on private construction projects. A mechanic’s lien is a security interest in the property comprising the project that secures payment of amounts due to those furnishing labor and materials in construction of the project. Once established, a mechanic’s lien acts much like any other lien or encumbrance, such as a mortgage or attachment. If taken to conclusion, the court can order the sale of the property at auction, subject to prior encumbrances. Frequently, a mechanic’s lien is the only security available. Security is particularly important because of the unique nature of the construction process. Those furnishing labor and material must pay for such before they can even requisition for payment themselves. By the time they actually receive payment, they may have incurred costs of a minimum of two to three months’ work, and when they do receive payment it is usually no more than 90 percent of the amount owed, with 10 percent retainage withheld until some future date. Each state’s legislature enacts its own laws governing lien rights, and they can differ widely (see charts, pages 21 and 22). Important elements which can vary state-to-state include: The time within which to file and/or give the required notice of lien. In Massachusetts, a claimant generally has a 90-day window from Carolyn M. Francisco is a partner and Jennifer M. Koch is an associate at Corwin & Corwin LLP, one of the oldest law firms in New England dedicated solely to construction law, and counsel to ASM since 1950. They can be reached at cfrancisco@corwinlaw.com or jkoch@corwinlaw.com, or at 617-742-3420.

Summer/Fall 2012

the last work under the general contract to make the initial filing (absent specified circumstances such as the recording of a Notice of Substantial Completion). New York, by contrast, allows up to eight months to act. The date and event from which the clock starts running. Massachusetts looks to the last day of work of any party under the general contract, while in New Hampshire, Connecticut and New York, the clock starts ticking from the last day of work of the party claiming the lien. Moreover, trivial work undertaken after completion may not extend the time for filing, though these determinations are left to each state’s legislature or judiciary. The work secured by the lien. Liens filed in Massachusetts or New Hampshire reach back to the first labor or materials furnished by the claimant under the contract. That is not so in Rhode Island. A lien filed in Rhode Island covers work performed during the 200 days prior to the filing, and retainage which is earned but unpaid. Also, whether and/or to what extent design professionals and certain material suppliers may file a mechanic’s lien is governed by each state’s lien law and case law. Contractual waivers of lien rights. While New Hampshire’s legislature has not followed suit, our other neighboring states (Rhode Island, New York, Connecticut), like Massachusetts, prohibit contract provisions containing an advance waiver of the right to file a mechanic’s lien. Many statutes require specific forms to be filed and notices to be sent. The charts on the following pages are intended to provide a general guideline of the mechanic’s lien deadlines and requirements for contractors and subcontractors on private construction projects. It’s important to remember each state’s law has its nuances, as well as specific requirements as to how and in what manner the documents are drafted, filed and served. Notice, filing and service requirements and deadlines are strictly enforced by the courts, leaving no room for error. A lien can be declared invalid and unenforceable if filed or served improperly or too late. An attorney should be consulted for specific advice and assistance in filing a lien. While business relations and harmony on any project are important, always be wary of waiting too long to stake your lien claim, as liens provide valuable protection which can easily be lost with a simple misstep. This is true no matter where the project is located. s

Claimant

When to Act

CONNECTICUT

Parties under contract with owner

Parties under contract with general contractor or subcontractor

What to Do

• No later than 90 days after lien claimant’s last work

• File Certificate of Lien with town clerk

• Within 30 days of filing Certificate of Lien

• Serve attested copy on owner

• Within one year of recording Certificate of Lien (or 60 days of final decision of appeal in action by owner to discharge or reduce lien, whichever is later)

• File law suit in court and record Notice of Lis Pendens with the town clerk

• No later than 90 days after lien claimant’s last work

• Serve Notice of Intent to claim lien on owner (and original contractor, if original contractor recorded requisite affidavit with town clerk)1

• No later than 90 days after lien claimant’s last work

• File Certificate of Lien with town clerk

• Within 30 days of filing Certificate of Lien

• Serve attested copy on owner

• Within one year of recording Certificate of Lien (or 60 days of final decision of appeal in action by owner to discharge or reduce lien, whichever is later)

• File law suit in court and record a Notice of Lis Pendens with town clerk

1. The original contractor (i.e., general contractor) is only entitled to notice if, within 15 days of commencing performance, it recorded an affidavit with the town clerk containing the name under which it conducts business, its business address and a description of the property.

MASSACHUSETTS Parties under written contract with owner or general contractor

Parties under written contract with subcontractor

• No later than 90 days of last work by anyone working under the general contract

• File Notice of Contract in Registry of Deeds; and if lien claimant is a subcontractor, send copy of notice to owner2

• No later than 120 days after last work by anyone working under the general contract

• File Statement of Account in Registry of Deeds3

• Within 90 days after recording Statement of Account

• File law suit in court4

• Within 30 days after filing law suit

• Record attested copy of complaint in Registry of Deeds

• No later than 30 days after commencing performance

• Send Notice of Identification to general contractor by certified mail, return receipt requested5

• No later than 90 days of last work by anyone working under the general contract

• File Notice of Contract in Registry of Deeds, and send copy to owner6

• No later than 120 days of last work by anyone under the general contract

• File Statement of Account in Registry of Deeds7

• Within 90 days after recording Statement of Account

• File law suit in court8

• Within 30 days after filing law suit

• Record attested copy of complaint in Registry of Deeds

2. If a Notice of Substantial Completion or Notice of Termination is recorded, file Notice of Contract in registry no later than the earliest of: 60 days after the recording of a Notice of Substantial Completion; 90 days after the recording of a Notice of Termination; 90 days after last work by anyone working under the general contract. Subcontractors must provide the owner with actual notice of the recording of the Notice of Contract. Send a copy of Notice of Contract to the owner by certified mail, return receipt requested for proof of actual notice. 3. If a Notice of Substantial Completion or Notice of Termination is recorded, file Statement of Account no later than the earliest of: 90 days after recording of Notice of Substantial Completion; 120 days after recording Notice of Termination; 120 days after last work by anyone working under the general contract. 4. If a lien bond is recorded pursuant to M.G.L. c. 254, §14, suit must be filed within 90 days after receipt of the notice of the bond’s recording or the filing of the Statement of Account, whichever is later. 5. Failure to send a Notice of Identification will not invalidate a lien, but will limit its value to no more than the amount owed by the general contractor to the subcontractor with whom the lien claimant is under contract. 6. If a Notice of Substantial Completion or Notice of Termination is recorded, file Notice of Contract in Registry no later than the earliest of: 60 days after the recording of a Notice of Substantial Completion; 90 days after the recording of a Notice of Termination; 90 days after last work by anyone working under the general contract. Actual notice to the owner of the recording is required. Send copy of notice of contract to the owner by certified mail, return receipt requested for proof of actual notice. 7. If a Notice of Substantial Completion or Notice of Termination is recorded, file Statement of Account no later than the earliest of: 90 days after recording of Notice of Substantial Completion; 120 days after recording Notice of Termination; 120 days after last work by anyone working under the general contract. 8. If a lien bond is recorded pursuant to M.G.L. c. 254, §14, suit must be filed within 90 days after receipt of the notice of the bond’s recording or the filing of the Statement of Account, whichever is later.

The Professional Contractor

Claimant

When to Act

What to Do

NEW HAMPSHIRE

• No later than 120 days after the lien claimant last furnishes labor or materials

• File suit and obtain Judicial Mechanic’s Lien attachment from court and record related papers with Registry of Deeds

Parties under contract with general contractor or subcontractor

• Before lien claimant furnishes labor or materials to the project9

• Send written notice to owner that claimant intends to file a lien

• If above notice is given, then furnish accounting every 30 days after notice provided

• Furnish written up to date accounting to owner of labor and materials furnished and payments received

• No later than 120 days after lien claimant last furnishes labor or materials

• File suit and obtain judicial mechanic’s lien attachment from court and record related papers with Registry of Deeds

Parties under contract with owner

9. Notice may be given to the owner after commencement of the work, but in such circumstance the lien is valid only to the extent that sums are due or thereafter become due from the owner to the general contractor.

NEW YORK All lien claimants (general contractors, subcontractors)

• No later than eight months after lien claimant last furnishes labor or materials, or four months in the case of a single family dwelling (excluding certain subdivision exceptions), with variation where lien is for retainage10

• File Notice of Lien in county clerk’s office

• Within five days prior or 30 days after filing Notice of Lien

• Serve copy on owner, party with whom lien claimant contracted, and general contractor if lien claimant did not contract with general contractor

• Within 35 days after the Notice of Lien is filed

• File proof of service with county clerk

• Within one year after Notice of Lien is filed (unless extended as provided in statute)

• File law suit in court and file Notice of Pendency of Action with county clerk

10. Liens for unpaid retainage may be filed up to 90 days after retainage was due to be released.

RHODE ISLAND Parties under contract with owner

Parties under contract with general contractor or subcontractor

Summer/Fall 2012

• Within 10 days of commencing work

• Send owner a Notice of Possible Mechanic’s Lien by certified mail, return receipt requested

• Within 200 days of lien claimant furnishing labor or materials

• Send a Notice of Intention to owner by certified mail, return receipt requested and record Notice with recorder of deeds. (Note: Notice of Intention secures the labor and materials furnished 200 days prior to the service and filing, plus retainage earned but unpaid.)

• Within 40 days of recording the Notice of Intention

• Record Notice of Lis Pendens with recorder of deeds and send copy to owner by certified mail, return receipt requested

• On the same day as the recording of the Notice of Lis Pendens or within seven days thereafter, but in any event no later than within 40 days of recording Notice of Intention

• File law suit in court

• Within 200 days of lien claimant furnishing labor or materials

• Send owner a Notice of Intention by certified mail, return receipt requested, and record Notice with recorder of deeds. (Note: Notice of Intention secures the labor and materials furnished 200 days prior to the filing and service, plus retainage earned but unpaid.)

• Within 40 days of recording the Notice of Intention

• Record Notice of Lis Pendens with recorder of deeds and send copy to owner by certified mail, return receipt requested

• Within 40 days of recording Notice of Intention

• File law suit in court

Scheduling the Use of Technology Continued from page 7

schedules, and the concurrent work of multiple trades. As a result, contractors are turning to offsite prefabrication and just-in-time delivery to help sequence their work and deliver increasingly complex projects in half the time. Companies like Cannistraro believe most concerns surrounding critical sequencing and installation are assuaged by involving all trade contractors (including steel, concrete, and architectural) early in the coordination process. In a traditional project structure, commonly awarded on a design-bid-build basis, specialty trade selection is segmented; with many subcontractors being brought on board after design or even later. When even one trade is involved too late, that contractor begins its responsibilities behind schedule. Such scenarios leave subs scrambling to catch up, and leave little room to review the program for alternate, more cost-effective equipment or layout options.

Encouraging early collaboration on a project provides benefits to the entire project team, not strictly the subcontractors. Just as the specialty contractors are able to make suggestions about the scope and design, the construction managers and design team can use this input to shape the design and deliver a more cost-effective project for their client. On a project for one of the country’s leading pharmaceutical companies, Cannistraro won a competitive bid based upon early schematic design and worked in tandem with the design team to build the building (both virtually and in reality). The end result was a 250,000-sq. ft., LEED Gold research facility that was delivered ahead of schedule. Involving Cannistraro early allowed the owner to maximize the value of the specialty contractor through the use of last-planner scheduling, just-in-time delivery, and prefabricated utility racks. At the end of the project, the owner also received a

complete turnover package of all operations and maintenance data tied directly into the model, thus adding value to the owner’s BIM investment. The new tools of the trades are justifiably heightening expectations for leaner, smoother-running projects, but technology can only take the industry so far. Behind every model lies a group of modelers. Behind every piping assembly lies a team of tradesmen that has carefully considered how each component fits into place, and how it will be used after installation. As owners increasingly turn to design-assist and integrated project delivery alternatives to structure their projects, teams must be willing to not only embrace new technology, but more importantly, the specialists that put the technology into action. s Reprinted with permission from the March/April issue of Constructech magazine, www.constructech. com. It has been edited for style and clarity.

New name, new venue, same great experience. The Boston Society of Architects, long-time co-producer of Build Boston and Residential Design & Construction, are proud to introduce ArchitectureBoston Expo—the new conference and tradeshow for New England’s design and construction industry.

FREE ADMISSION to the Exhibit Hall and workshop

discounts if you register by October 31.

2012 November 14–16, 2012 Boston Convention & Exhibition Center | Exhibit Hall C

Produced by the Boston Society of Architects

The Professional Contractor

ANNUAL GOLF TOURNAMENT

ASM Members Enjoy a Great Day of Golf and Entertainment at 17th Annual Golf Tournament

Members intently watch the Long Drive exhibition.

Erik Maseng and team with Long Drive Champion Trez Simmons.

he 17th Annual ASM Golf Tournament held at Pinehills Golf Club in Plymouth on July 23 was a great success! The day featured picture-perfect weather, enthusiastic golfers and for the first time, entertainment by national Long Drive Champions, Trez Simmons and Jeff Farley, who amazed golfers with their more than 400-yard drives and golf stunts. In addition to a spectacular day of golf, members were on hand for award presentations, contests, prizes and an old fashioned barbeque lunch and dinner. The 2012 ASM Scholarship Award winners were also honored at the event. Proceeds from the event support the scholarship awards. Winners were presented with a certificate and a scholarship check for $2,000. Many thanks go to Steve Kenney and the golf committee for an extraordinary job well done. The introduction of Long Drive Champions was a wonderful addition to the event. The committee continues to surpass expectations year after year. s

ASMâ&#x20AC;&#x2122;s PR Manager Jackie Rafferty keeping the lines of communication flowing.

Members enjoy the eveningâ&#x20AC;&#x2122;s festivities.

Summer/Fall 2012

17th Annual Golf Tournament Sponsors

Golf Committee Chair Steve Kenney kicks off the 17th Annual ASM Golf Tournament.

Committee Chair, Steve Kenney and Karina Rincon with Long Drive Champs Trez Simmons and Jeff Farley.

Team Cannistraro taking their best shot. Golfers having a great time with Long Drive Champion Jeff Farley.

Happy volunteers!

Members taking a brief photo-op.

ASM team of volunteers keeps things running flawlessly.

Taking a break from the course to enjoy an old fashioned barbeque lunch.

Trez Simmons performs crowd-pleasing stunts and tricks.

One of the winning teams receives a golf prize during the reception.

Chair TGA Cross Insurance, Wakefield Long Drive Specialists Acadia Insurance Company Dinner J.C. Cannistraro, LLC Acadia Insurance Company Reception Alliant Insurance Services, Inc. Lunch Energy Insulation Golf Carts The Protector Group Wayne J. Griffin Electric Pin Flags Enterprise Fleet Management Robert W. Irvine Company Practice Tee Colony Hardware Beverage Carts Lockheed Window Corp. Siemens Industry Nicklaus Course Banner Corwin & Corwin Rees Jones Course Banner N.B. Kenney Co. Hole in One Insurance Eastern Insurance Golf Balls Airgas East Scholarships ENE System McGladrey R&R Window Contractors Royal Steam Heater Southeastern Metal Fabricators William F. Lynch Co. Raffle Chapman Waterproofing Frank I. Rounds BlumShapiro Buckley Associates Delaney & Associates McGladrey Closest to the Pin Herlihy Insurance Milwaukee Valve Company PHCC of Greater Boston Southeastern Metal Fabricators Closest to the Line Atlantic Contracting & Specialties Zurich North American Surety Long Drive Greater Boston NECA Milharmer Score Cards NorthStar Insurance Vibra-Conn Golf Clubs Stebbins-Duffy Victaulic Putting Green Salem Glass The Professional Contractor

ASM Presents 2012 Scholarship Awards ASM’s 2012 scholarship winners were also recognized during the event. ASM President David G. Cannistraro presented each of this year’s winners with a $2,000 scholarship award for excellence in academic and civic achievement. Congratulations to the 2012 winners: Dominic Cauteruccio of Holbrook, sponsored by Capone Iron; Catherine McQuestion of Waltham, sponsored by NB Kenney Corp.; and Sierra Wilbar of Foxborough, sponsored by Southeastern Metal Fabricators. ASM’s scholarship awards are funded by proceeds from the annual golf tournament. Sierra will pursue a degree in global studies at Providence College. Dominic will apply his many talents in his pursuit of an actuarial math degree at Bryant College this fall. Catherine will attend the University of Notre Dame in the fall to pursue her future career goals and make a positive contribution to the world. 11-0234 Boston Cedar_Layout 1 7/11/11 11:10 AM Page 1

Summer/Fall 2012

ASM President David Cannistraro and the 2012 ASM Scholarship winners.

Three Generations of People Protecting People The Herlihy

Construction Division

CALENDAR OF EVENTS

We speak your language. Our Construction Division has specialized in your industry for over 85 years.

SEPTEMBER 19. Safety Roundtable

29. BC/Clemson Game OCTOBER 22. BIM Seminar NOVEMBER 8. GC Showcase 28. Safety Roundtable

888-756-5159 www.herlihygroup.com/construction 51 Pullman Street, Worcester, MA 01606

Jim Herlihy CIC, CRIS jimherlihy@herlihygroup.com Mark Herlihy CIC, CRIS mherlihy@herlihygroup.com

Member: Associated Subcontractors of MA | Builders Association of Central MA HIG.Contractor2012.F.indd 1

1/25/12 10:24 AM

Protection starts here

and here.

Reach general contractors, subcontractors, builders, developers, building owners, designers, engineers, suppliers, and other major players in the commercial, industrial, and residential areas.

ATTRACT NEW CUSTOMERS THROUGH THE PROFESSIONAL CONTRACTOR. CALL NOW TO RESERVE ADVERTISING SPACE CALL 617.896.5344 OR E-MAIL CUSTOMPUBS@THEWARRENGROUP.COM

DeSanctis Insurance Agency

Serving the Bonding and Insurance needs of the N.E. construction industry for over 35 years. Ad a m De Sa n c t i s Gre g o r y Ju w a Ja m e s A xo n Mi c h a e l Ca rn e y Wi l d e r Pa rk s Mi c h a e l Gi l b e r t Br y a n Ju w a Da v i d B o u t i e t t e Pa u l Pa t a l a n o Dick Caruso DeSanctis Insurance Agency, Inc. 36 Cummings Park Woburn, MA 01801 (781) 935-8480 www.desanctisins.com

The Professional Contractor

MEMBER NEWS Wayne J. Griffin Electric, Inc. (Holliston) has completed the electrical installation work at the Cambridge Rindge and Latin School in Cambridge. Griffin Electric was responsible for the installation of new lighting, lighting controls and power within the facility, plus systems for fire alarm, sound/paging and lightning protection. Additionally, the Griffin team installed a generator, telecommunications and distribution equipment, as well as, photovoltaic panels on-site. 1

Wayne J. Griffin Electric, Inc. (Holliston) announced the completion of the electrical installation work at two projects in Taunton, Mass.: the updated Taunton High School and new John F. Parker Middle School. The Griffin Electric team was responsible for installing state-of-the-art interior and exterior lighting, with energy-saving controls, new high voltage services, life safety systems, telecommunications, data and A/V systems. 2

J.C. Cannistraro (Watertown) expresses appreciation to division manager Bill Fitzpatrick, who will retire after nearly 40 years in the HVAC industry. Fitzpatrick served as the HVAC division manager at J.C. Cannistraro for the past 12 years, where he was the driving force behind the company’s advanced prefabrication operations. Under Fitzpatrick’s guidance and leadership Cannistraro’s portfolio of HVAC projects grew exponentially, and featured signature projects such as the Mass. General Hospital Lunder Building, Genzyme World Headquarters and multiple terminal expansions at Boston’s Logan International Airport. 4

4 5 Mark Richey Woodworking (Newburyport) is the first company of its kind to use a new state-of-art robotic spray system that applies a consistent coating on a variety of products. It scans the parts and optimizes spray patterns to create the best possible finish. They are the first company in North America to implement this new technology.

Summer/Fall 2012

Abbot Building Restoration (Boston) recently completed a major masonry restoration project at 266 and 274 Summer St. in Boston’s historic Fort Point Channel waterfront district. Once serving as warehouses, both buildings had significant rearwall leakage due to age and erosion. The building also had serious safety concerns due to the deterioration of iron pins used to fasten steel shutters in place. Abbot completely restored the brick masonry walls and replaced all the iron pins with brick. 6

Pavilion Floors (Woburn) has recently expanded its ceramic/stone team to include all areas of raw material resources, fabrication and installation. Pavilion boasts a successful track record of completing stone projects including St. Cecilia’s Church on Belvidere Street in Boston. The church features a stone annex housing a stone stairway. A unique feature of the project was a 28-foot stone wall that required the inside wall to appear as if it were part of the exterior wall. Another example of Pavilion’s commitment to new technology was Burton’s Grill in Peabody, which utilized seven different materials, including cultured stone, tile and unique wall features. 8

Pavilion Floors is also proud to announce the addition of Vincent Poulin, who will join the team in the capacity of senior stone/ ceramic estimator. He brings many years of experience as an estimator and engineer to this new role.

10 Marr Crane & Rigging (South Boston) is pleased to announce that John Shaughnessy has joined Marr Crane & Rigging as rigging manager. He has more than 30 years of experience in the crane and rigging business and will be a tremendous asset to Marr.

The Professional Contractor

MEMBER NEWS 11 12 13 Marr Scaffolding Company, Daniel Marr & Son and Marr Crane & Rigging (Boston) just completed a significant project that involved three divisions of Marr Companies. Daniel Marr & Son erected 3,000 tons of structural steel utilizing two tower cranes and multiples crews, up to 50 ironworkers and four operating engineers, completing the work on time despite an aggressive schedule. Marr Scaffoldingâ&#x20AC;&#x2122;s Aerial Life and Hydro Mobile Divisions made their mark with the installation of 527 linear feet of suspended staging and the erection of two, F-200 Series Hydro Mobile Mast Climbers for use by exterior trades including Drywall Ltd. Marr engineered two different rigging systems to accommodate the unique architectural design of the building, allowing access for the roofing contractor to complete the roof installation while work on the exterior continued. Marr Crane & Rigging performed miscellaneous crane work on the project and provided the siteâ&#x20AC;&#x2122;s temporary construction elevator. s

Mark Richey Woodworking crafts and installs high-end architectural millwork for corporate, institutional, retail, restaurant, and residential clients. Our reputation is founded on peak performance and keen attention to client satisfaction.

www.markrichey.com 30

Summer/Fall 2012

Coming this fall!

ASM Health Insurance Co-op Offering ASM Members: X Best available rates on health insurance for small businesses (up to 50 employees) X Several plan options from major carriers X Low cost, user-friendly Wellness Program, through FIVI Health Networks â&#x20AC;&#x201C; open to all!

Learn More: X ASM Website X Live Informational Sessions â&#x20AC;&#x201C; after Sept. 1 X Webinars X TGA Cross Wakefield, Managing Broker

Helping You Build Your Future

401 Edgewater Place, Suite 220, Wakefield, MA 01880 Toll Free: 1-800-531-5211

Proud Sponsor ASM / Acadia Insurance Program