Construction Today - Winter/Spring 2013

Construction TODAY

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WINTER/SPRING 2013 Published by the General Building Contractors Association, Inc.

A Look at the Future for Construction in Philadelphia 123rd Annual Business Meeting

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16TH ANNUAL CONSTRUCTION EXCELLENCE AWARDS 2013 CALL FOR ENTRIES

The 16th Annual GBCA Construction Excellence Awards program is approaching. This is YOUR chance to be recognized for your outstanding achievements. Visit http://awards. gbca.com to learn more about award categories and eligibility, and how to submit project(s) for consideration.

The program will recognize the most outstanding projects in the following categories: BEST COMMERCIAL PROJECT (OVER & UNDER $10M) BEST INDUSTRIAL/INSTITUTIONAL PROJECT (OVER & UNDER $10M) BEST HISTORIC PRESERVATION PROJECT BEST ADAPTIVE RE-USE PROJECT EXCELLENCE IN CRAFTSMANSHIP

BEST SPECIALTY CONTRACTOR BEST DESIGN BUILD PROJECT BEST GREEN BUILDING PROJECT THE SAFETY EXCELLENCE AWARD

ELIGIBILITY AND APPLICATION The Construction Excellence Awards (CEA) is open to all GBCA members in good standing. General Contractors and Subcontractors/ Specialty Contractors are eligible to submit entries in specific respective categories. For details, please visit http://awards.gbca.com.

All projects must be located in Pennsylvania, Delaware, New Jersey, or Eastern Maryland, and must be substantially completed between January 1, 2011 and June 1, 2013.

Register online at http://awards.gbca.com.

| NOTES FROM THE PUBLISHER In case you haven’t noticed, the General Building Contractors Association has undergone many substantive changes since the fall of last year – fostering an atmosphere of energy and enthusiasm that extends to almost every facet of the organization. During the course of this transformative process, we’ve learned new and different ways to approach matters, giving rise to a culture in which optimism abounds. And so it stands to reason that the tone of the articles in this edition of Construction Today magazine reflect the positive outlook shared by GBCA stakeholders, their customers and others who follow our Association and industry.

Social media is as ubiquitous as cannoli in South Philadelphia. And while some people politely say no to dessert, many of us are hooked on a steady diet of social media. Platforms such as Facebook, LinkedIn, Twitter and YouTube enable friends, family, colleagues and acquaintances to stay connected and share information with one another. But what is the benefit of using social media in a business setting, and does it make sense for you? Contributing writer Lance Wyllie examines these questions and others in his article titled, “What Role Does Social Media Have in Your Business?”

One of our two features looks at the future for construction in Philadelphia seen through the eyes of a developer, a contractor and an architect – each of whom has a unique and insightful perspective on the local construction market. Meet Brandywine Realty Trust CEO Jerry Sweeney, Clemens Construction president Stephen Pouppirt and JKR Partners managing partner Jerry Roller, and learn why each of them is bullish on Philadelphia.

Another hopeful sign of industry progress comes in the form of renewed and improved relationships between GBCA and city officials including the mayor, his cabinet and City Council. Our second feature story is an account of the inaugural “Conversation between the Construction Industry and Key City Officials” and what this dialogue means for GBCA member companies and the industry. Learn how GBCA is making inroads at City Hall and working towards the goal of establishing the Association as the principal thought-leaders for the region’s commercial building and construction industry.

“Mitigating the Risk of Subcontractors and Supplier Default” is an informative read that discusses the factors driving increased default risk, why and how to qualify subcontractors, performance security, risk management plans and other related considerations. Also, catch up on the news about the 123rd Annual Business Meeting featuring former U.S. House of Representatives Speaker Newt Gingrich and the ACE Mentor Program Annual Scholarship Breakfast honoring architecture, construction and engineering leaders.

It’s been a very busy and productive first half of the year as evidenced in this issue, but there’s still another six months to go and we’ve only begun to scratch the surface. The Calendar of Events on page 8 is just a sampling of things to come and I encourage you to regularly check the GBCA website, read our News-at-a-Glance weekly e-newsletter, and follow us on Linkedin, Twitter and Facebook for event and Association updates. This is your GBCA – and I hope you won’t hesitate to let us know if there’s anything we can do to improve your membership experience.

ConstructionTODAY PUBLISHER Steven S. Lakin EDITOR Melissa Wyatt ADVERTISING/SALES Harry Eaby, Paradigm Grafix CONTRIBUTING WRITERS Terrence Casey / Jonathan Halloran Lance Wyllie / Amanda Gibney Weko DESIGN & LAYOUT Joelle C. Miller ACCOUNTING Michelle Pinto

4 ConstructionTODAY

Join us on LinkedIn or Twitter @GBCA and check out gbca.com/construction-today facebook.com/theGBCA

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Submissions for editorial review should be sent to the above address. Neither the publisher nor any individual associated with any branch of production, nor the advertisers will be liable for misprints or misinformation contained herein.

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By Author

14 A Look at the Future for

Construction in Philadelphia

Features

On Topic

12 2013 Annual Meeting 10 The Role of Social Media 19 Announcing GBCA Advantage 24 Mitigating the Risk of Default 20 Conversation with City Officials 33 Ace Mentor Scholarship Breakfast

In Every Issue 8 37 40 41 42

Contributing Writers Construction Notes CT Classifieds Referral Directory Advertiser’s Index

Cover Photo credit: iStock Photography. Contents Photo: GSK Corporate Headquarters Lobby.

Winter/Spring 2013 7

| CONTRIBUTORS

1

Lance Wyllie has 20+ years experience helping organizations both large and small, start-up or established, negotiate the everchanging world of marketing. Connect with Lance on Twitter: @ lancewyllie

1

3

2

Amanda Gibney Weko provides writing and communication strategy for the design and construction community as a principal of AGW Communications. She is a board member of the ACE Mentor Program Eastern Pennsylvania Affiliate.

3

Jonathan Halloran serves as Executive Vice President, Client Services at Textura Corporation where he overseas several aspects of client-facing activities including Textura’s online contractor qualification management system, PQM.

2

4

4

Terrence Casey is the managing editor of Region’s Business, a weekly journal of business and politics based in Blue Bell and covering the Greater Philadelphia region. He joined the magazine as an associate editor in August when they launched the inaugural edition and was promoted to his new role in the spring.

GBCA CALENDAR OF EVENTS IMPROVING PROFITABILITY IN CONSTRUCTION July 17 LocationTBD

GBCA NIGHT AT THE PHILLIES September 12 Sponsored by the Associate Member Executive Committee Citizens Bank Ballpark...............5:30 – 10:00 pm MEMBER NETWORKING NIGHT September 19 Tague Lumber Showroom

LEGAL & INSURANCE ISSUES: WHAT YOU NEED TO KNOW TO SET YOUR BUSINESS UP PROPERLY September 25

CONSTRUCTION EXCELLENCE AWARDS PROGRAM AND RECEPTION October 30 Sheraton Downtown Philadelphia................5:00 – 7:00 pm

ENERGY BENCHMARKING November 19 Location and Time TBD

GBCA OPEN HOUSE December 4 GBCA...............5:00 – 7:00 pm

GBCA ANNUAL MEETING January 20

The Union League of Philadelphia................5:30 – 9:00 pm

LocationTBD...............3:30 – 6:30 pm

GREEN INSURANCE ISSUES October 24

Location TBD...............3:30 – 6:30 pm

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8 ConstructionTODAY

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215-676-3000 Winter/Spring 2013 9

ON TOPIC | Social Media

What Role Does

SOCIAL MEDIA Have in Your Business?

By Lance Wyllie

T

his is a challenging question to answer for most executives and business owners. There are many reasons a business may find it difficult to effectively harness the constant chatter and endlessly evolving world that social media facilitates. So what is the solution?

Social Media is NOT the solution.

How can this be? Let’s face it, any person or any business can open a social media account. But then what? Simply having a social media account does not guarantee anything. In fact, the focus of a business should never be on social media, but should instead be on your customers’ buying behaviors.

In his 1997 best-selling book, “The Innovator’s Dilemma,” Harvard Business School professor Clayton M. Christensen coined the term “disruptive innovation.”

Christensen separated new technology into two categories: sustaining and disruptive.

10 ConstructionTODAY

Disruptive technologies will blindside established companies because they are often dismissed early on, allowed to mature, and then gain market share.

Technology has disrupted the way your customers behave. This disruption affects everyone: every demographic, Gen X, Gen Y, Baby Boomers … everyone. Understanding the role social media plays in this disruption is key to discovering the role that social media will have in your business.

Social Media is about people.

Marketing 101 says to go where the people are. But it does not end there. We cannot simply show up on social media and expect people to flock to us. We have to first understand how people behave, how they interact, how they learn, how they make decisions, how they influence, and how they are influenced. We have to understand how people connect.

Social Media | ON TOPIC Technology is changing customer behavior.

This changing behavior is a part of a lifestyle change. Once a person is “digitally bitten” they change the way they do everything. They read the news differently.

They look for movies differently. They see different ads. They learn to connect with everyone and everything differently. This includes how they find and connect with you and your business.

The underlying driver of social media is mathematics.

In the past, a consumer’s connection to a company was primarily a one-way connection. Consumers were told by companies (through TV, radio, newspaper, and other types of media) what their experience would be with the company.

Today, the connection between customer and company is both a two-way connection and a multi-point experience. Social media will not only reach your audience, but it also has the potential to reach your audience’s audience. Thus we see videos, ads, news, etc. go “viral” when multi-point networks connect rapidly. More amazingly, no matter how small your network or social media circle, in most instances we are all connected to large networks by one or two links. What does this mean for your business?

Today, if a business truly knows its customer and understands that its customers are changing because of the technology to which they are now exposed, a business can not only reach and engage the customer, but can also reach the customer’s network, and other large and small networks that connect to each other. Think about this for a few minutes.

Let’s Illustrate: Company A is cruising along comfortable with the status quo.

Company B, is focusing on engaging its customers and reaching the connected networks of these customers. The change will be slow for Company A to identify.

However, the mathematics of networks will cause this change to accelerate rapidly as Company B disrupts Company A’s customer base. For a simple demonstration of how connected networks behave, go to: http://ccl.northwestern.edu/netlogo/ models/GiantComponent. Brian Solis, a leading analyst from the Altimeter Group,

We cannot simply show up on social media and expect people to flock to us. describes this as “Digital Darwinism.” In his recent book, “What’s the Future of Business,” Solis explains that shared influence due to digital connectivity destroys the traditional sales funnel and businesses unwilling to adapt fail due to this Digital Darwinism.

A company’s survival is dependent on its understanding that consumers are looking for answers, solutions, and products differently than ever before. The technology and platforms people are using everyday are now part of our customers’ lifestyles.

These changes are good for the consumer, but even better for the business that figures out how utilize a connected customer relationship of real-time interaction and ongoing engagement.

So what role does social media have in your business?

We have to look at our customers for the answer. We have to understand how they connect. We have to understand how they behave, how they interact, how they learn, how they make decisions, how they influence, and how they are influenced. Your customer has changed and is continually changing and social media is a large part of this change.

We cannot simply create a Facebook page, a LinkedIn account, or a Twitter handle. We have to know how our customers find what they are looking for and how they make purchasing decisions. It is not about where they make the purchase but how they got there. It is knowing the role social media played in the journey and harnessing this information and improving upon it. Take a good look at your business strategy. Social media needs to be a part of it. How much? That is for your customers to decide.

Winter/Spring 2013 11

FEATURE | GBCA Annual Meeting

123

RD

annual business meeting of the The general building contractors association

By Melissa Wyatt

O

n January 7, 2013 the General Building Contractors Association (GBCA) held its 123rd Annual Business Meeting at the Union League of Philadelphia with over 300 construction industry executives, suppliers and service providers in attendance. The event was elevated by the presence of special guest Newt Gingrich.

Gingrich, best-selling author and former Speaker of the United States House of Representatives, participated in a book signing and photo session at the start of the evening, then mingled with members as he worked his way through the pre-event cocktail reception along with distinguished guests Congressmen Jim Gerlach, Charlie Dent and Mike Fitzpatrick.

As members found their way to their seats, GBCA Executive Managing Director Steven Lakin welcomed the attendees and introduced Board Chairman Rudy D’Alessandro. D’Alessandro began with some opening remarks and concluded by informing the members he was stepping down and announced the election of his successor, Mack Stulb. He and director Chris Melograno then read aloud the board election results:

OFFICERS: Chairman of the Board: Frank M. “Mack” Stulb, L. F. Driscoll Co. Senior Vice Chairman: Emily L. Bittenbender, Bittenbender Construction, LP Vice Chairman: Jim J. Dolente, Sr., Madison Construction Co. Treasurer: Patrick S. Pasquariello, III P. Agnes, Inc. Immediate Past President: Rudy E. D’Alessandro, J. S. Cornell & Son, Inc. Past President: Francis A. Pietrini, B. Pietrini & Sons DIRECTORS ELECTED TO A NEW TERM: Roger S. Ball, Shoemaker Construction Co. Frank T. Lutter, Frank T. Lutter, Inc. Gregory C. Stewart, Gilbane Building Co. Dinner was highlighted with remarks from Speaker Gingrich, who focused on his vision for America, entrepreneurship, the current political environment and his upbringing in Harrisburg. He spoke about several life experiences, fondly remembering his frequent visits to Philadelphia’s museums and historical sites, which influenced him to become a history professor.

Dinner concluded on an enthusiastic note with news about several projects slated for Philadelphia in 2013 and beyond.

© Photography by Kelly and Massa

Special Guest Newt Gingrich signs his book for GBCA members

Newt Gingrich and Harry Rosenberg

The Recipients of Supervisory Training Program Certificates: From Left: Fomer Chariman Fran Pietrini, Justin Napierkowski, Robert Jackson, Michael Coughlin, Anthony Racity, Thomas Bollinger, and STP Instructor Frank McGovern 12 ConstructionTODAY

GBCA Annual Meeting | FEATURE

Board Senior Vice Chairman and Government Affairs Committee Chair Emily Bittenbender

Mack Stulb accepts his elected position as GBCA 2013 Chairman of the Board

Newt Gingrich with Affiliate Member Council Chairman Michael Youngblut

Members network and enjoy cocktails upon arrival at the Union League

2012 Chairman of the Board Rudy D’Alessandro

Newt Gingrich with Board Member Craig Melograno Newt Gingrich with Board Member Judy Ritter

Newt Gingrich with Board Member and Education Committee Chair, Charlie Cook

GBCA Executive Managing Director Steven Lakin with Congressman Charlie Dent and Newt Gingrich

Winter/Spring 2013 13

COVER | Construction in Philadelphia

A Look at the Future for

CONSTRUCTION in Philadelphia

By Melissa Wyatt

W

ith the hum of construction vehicles on the street and cranes dotting the skyline, the construction industry in Philadelphia appears to be moving in a positive direction. But who better to hear it from than business owners seeing it firsthand. To get a true feel for the state of the market, we decided to look at it from several perspectives, which is why we spoke to a developer, an architect and a general contractor. And for the first time in a long while, all agree that the future for construction in Philadelphia is getting brighter.

Jerry Sweeney, President and CEO of Brandywine Realty Trust, has been a significant player in the redevelopment of Philadelphia. For example, with the development of the Cira Center, Brandywine successfully brought new businesses to University City, giving companies and their employees easy access to public transportation with its prime location adjacent to 30th Street Station.

Brandywine Realty Trust (NYSE: BDN) is headquartered in Radnor, PA and one of the largest, full-service, integrated real estate companies in the nation. Organized as a real estate investment trust (REIT), Brandywine owns, leases and manages an urban, town center and suburban office portfolio.

14 ConstructionTODAY

Sweeney reports that Brandywine has definitely seen an increase in office leasing activity, with tenants looking for higher quality space. “There’s been a tightening of the Class A space, with rental rate levels at a 10-15 percent increase.” He commented, “Tenants are using this point in the cycle to upgrade the quality of their office space.” During the recession, space in newer buildings opened up, allowing companies on the move to take less square footage in return for more efficient space.

Brandywine Realty Trust also has a large investment in multifamily developments throughout the Philadelphia region. “Multifamily construction (of apartments) remains very strong,” says

Construction in Philadelphia | COVER Sweeney. “The downtown market has driven demand and has the ability to absorb the new construction currently under way.” Most of the new apartment construction is Class A with upgraded finishes such as hardwood floors, granite countertops, stainless steel appliance, higher ceilings, more amenities and better parking ratios. Sweeney

During the reces­sion, space in newer buildings opened up, allowing companies on the move to take less square footage in return for more efficient space.

feels this will upgrade the stock of inventory in the downtown area, making downtown living even more attractive.

However, with the number of projects on the drawing board, he expects those that do not start in the next two to three years will not come to fruition.

Brandywine currently has a number of exciting projects underway in downtown Philadelphia. In partnership with Campus Crest and Harrison Street Investors from Chicago, development of The Grove is underway at 30th and Chestnut Streets. This 33-story residential project is targeting graduate students from Drexel and Penn as well as young professionals. The project includes high-end amenities with a bi-lev-

Jerry Sweeney, President and CEO of Brandywine Realty Trust onsite at The Grove.

Photographed by Ken Yanoviak.

Walnut Street Tower • • • • • •

“Mixed –Use” tower 260 Luxury Residential Units 500,000 SF of Office Space 12,000 SF of Retail Transit Oriented Development Keystone Opportunity Improvement Zone until 2025

The Grove • • • •

345 Units 450,000 SF High-end Residences Designed for Graduate and Undergraduate Students & Young Professionals • September 2014 Delivery • 7,000 SF of Retail

Riverview Green • One (1) acre elevated park with stunning views of river and City.

View looking down on green space between Walnut Street Tower and The Grove.

Winter/Spring 2013 15

COVER | Construction in Philadelphia

Stephen Pouppirt stands in front of the Southstar Lofts site on the northeast corner at Broad and South Streets. Photographed by Ken Yanoviak.

Residential Lobby entrance at Southstar Lofts.

Rendered by JKR Partners.

View of Southstar Lofts looking north along the Avenue of the Arts. Rendered by Tim Sienold.

16 ConstructionTODAY

el fitness center, rooftop pool and a premier location just one block from 30th Street Station. The Grove is scheduled to open in 2014. Brandywine also has a mixed-use project, Walnut Street Tower, underway at 30th and Walnut Streets with 250 apartment units.

In the office market, Brandywine is currently redeveloping the Stock Exchange building at 19th and Market Streets into 450,000 sq. ft. of Class A office space.

The building, currently Class B office space, will be fit out with new entry ways, new exterior skins and new mechanical systems as part of the upgrade.

Stephen Pouppirt, President of Clemens Construction, has also seen an increase in the development of the downtown area as well as the shoulder neighborhoods. He said, “We’ve seen a dramatic turnaround in multifamily projects due to the demand for Center City apartments and condos. We’re working on projects as small as a renovation of two brownstones into 21 apartments to projects as large as Parktowne Place, where we are installing new electrical and mechanical systems.” Clemens is also overseeing the construction of Southstar Lofts, an 86-unit mixed-use apartment building

Construction in Philadelphia | COVER

Corner two-bedroom apartment looking north at City Hall. Rendered by JKR Partners.

Southstar Lofts is a transit-oriented development, adjacent to the Broad Street Subway. Rendered by JKR Partners.

at Broad and South which is slated to be LEED Silver certified.

Clemens has also seen a spike in commercial development. They are currently halfway through the renovation of the Radisson Warwick Hotel at 17th and Locust Streets. The hotel is being upgraded and renamed to become part of the Radisson Bleu brand. Clemens also recently completed a PNC Bank at the corner of 10th and South Streets and the new ULTA cosmetic store on the 1600 block of Walnut Street, which opened in May. In addition, they have been renovating multiple buildings on the campuses of the University of Pennsylvania and Drexel University.

In the construction industry, the architects usually have an early indication whether the industry is moving in a positive direction by the amount of new work and inquiries they receive. Jerry Roller, Managing Principal of JKR Partners, is

He also points out that the downtown borders have expanded as far south as Washington Avenue and as far north as Girard Avenue, providing more areas of opportunity for future development. Shoulder neighborhoods like Brewerytown, Point Breeze, Fishtown and Pennsport are filling in and quickly closing the gaps between themselves and Center City with a younger population moving in.

JKR Partners also does a large amount of retail work, representing national retailers such as Capital Grille, which is building new restaurants throughout the country. They have also seen a lot of building by movie theaters in Moorestown, NJ, the Jersey Shore, Wilmington and New York. “Movie theaters have been expanding at a steady rate because they provide cheap entertainment,” states Roller. The firm has also benefited from the booming

seeing exactly that. After a very positive uptick in 2012, JKR Partners is seeing even more encouraging signs with new work and inquiries this year.

“Residential is hot in multifamily across the board,” reports Roller. “We are working on projects in Harford, Pittsburg, the Jersey Shore and Center City Philadelphia.” In Philadelphia, they are seeing a mix of work in large multifamily buildings as well as clusters of townhouses, both for rent and

The archi­tects usually have an early indication on whether or not the industry is moving in a positive direction by the amount of new work and inquiries they receive. for sale. The firm is also working on an office conversion to residential apartments at 1616 Walnut Street, scheduled to open in 2014. “The multifamily market is pent-up with demand, especially in the downtown market,” said Roller.

“People are getting jobs, moving out of their parents’ house and graduating from college.”

Jerry Roller in front of JKR Partners residential rehab project, 1616 Walnut. Photographed by Ken Yanoviak.

Winter/Spring 2013 17

COVER | Construction in Philadelphia health care industry, with current projects at Cooper Hospital and the Abington Lansdale Campus.

While Philadelphia certainly has many desirable attributes, other things need to fall into place to lure new residents and keep the city thriving. “The City needs to invest in its infrastructure,” says Sweeney. “Our public transportation system is scheduled to get updates it’s needed for many years and our bridges and roads need maintenance.”

Sweeney would also like to see more development on the City’s waterfronts. “The Schuylkill River Development Corporation has received more public funding and we’d like to see more money spent on the Delaware River Waterfront where there is a great opportunity to grow.”

Additional obstacles to overcome include rental rates, the business tax and an increase in construction costs. Construction costs are what determine whether or not a project will move forward. “Philadelphia is among the highest in building costs in the nation, said Pouppirt.”

Located in the heart of Center City, 1616 Walnut Street is a former office building which is being converted into 206 luxury apartments and three floors of retail space.

Regal Cinemas at the Moorestown Mall is a new 12 screen, approximately 58,500 square foot movie theater that will be constructed on the existing footprint of two previously occupied mall spaces, a 6 screen United Artists Theatre and an indoor skate park.

The theater will reflect the high level of design, finishes and excitement associated with a Regal Cinema.

18 ConstructionTODAY

Sweeney added, “If we can move commercial rental rates to meet the levels of Chicago’s rates, we can generate $80 million for the city. In order to do that, we have to attract new businesses and our current tax structure is discouraging to potential clients.”

While Philadelphia certainly has a number of things going for it, many things need to fall into place to keep the city thriving and desirable for new resi­dents.

Philadelphia has been building upon its ever-growing restaurant and entertainment scene and many think that it will continue to draw the younger generation and emptynesters to the city for years to come. With the current momentum, future plans for expansion along the rivers, and upgrades in our public transportation system, Philadelphia has the potential to continue growing as one of America’s best cities.

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FEATURE | City Officials

CITY OFFICIALS DISCUSS

PHILLY CONSTRUCTION Xxxxxxxxxxxxxxxxx

By Terrence Casey

C

Councilwoman Quinones-Sanchez argued that an adjustment to the Use and Occupancy Tax would, based on new property assessments, only reduce taxes for business owners. Outside of the panel, she had spoken more on using the additional revenues to help fund the Philadelphia School District.

Philadelphia’s students are key to improving the local construction industry long-term, the panel insisted. Both the City and industry leaders need to have a greater presence in schools and at career days to explain the value of working in the field, panelists said.

Such an effort would encourage qualified students from diverse backgrounds to become trained for jobs needed throughout the region, they said.

© Photography by Ken Yanoviak

ity officials joined Philadelphia construction industry leaders at the Ritz Carlton hotel for a candid conversation about the issues that impact GBCA member companies and the City’s economy.

Deputy Mayor Alan Greenberger, Councilman Bill Green, Councilwoman Maria Quinones-Sanchez and Licenses and Inspections Commissioner Carlton Williams each talked about their roles in City government relative to the construction industry and fielded questions from the audience on an array of subjects.

Though the conversation covered the upcoming expansion of the Philadelphia International Airport, union collaboration and minority inclusion in the workforce, the majority of questions and answers focused on the City’s tax structure.

Panelists from Left: Councilwoman Maria Quinones-Sanchez, Councilman Bill Green, Deputy Mayor Alan Greenberger and Licenses and Inspections Commissioner Carlton Williams 20 ConstructionTODAY

City Officials | FEATURE

Deputy Mayor Alan Greenberger addresses the crowd.

From left: L&I Commissioner Carlton Williams, GBCA Executive Managing Director Steven Lakin, Deputy Mayor Alan Greenberger and our panel moderator, Terrence Casey of Region’s Business

From Left: Paul Rambo, Amy Hennessey, Charlie Cook, Councilwoman Maria Quinones-Sanchez, Doug Carney and Former Chairman of the Board Fran Pietrini

Licenses and Inspections Commissioner Carlton Williams tells the audience about a new electronic filing system being implemented for licensing applications.

Barbara Capozzi and Maryann Campbell

From left: Mark Devito, Elissa Viscelli and Michael DeGrand

From left: Roland Noreika, Michael Sklaroff and Roman Petyk

From Left: Board Senior Vice Chairman Emily Bittenbender, BIA President James Sherman and Chairman of the Board Mack Stulb

Councilwoman Maria Quinones-Sanchez reviews several projects she’s working on in her district.

Doug Carmen and Education Committee Chair Charlie Cook

Winter/Spring 2013 21

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BUILDING QUALITY OF LIFE

22 ConstructionTODAY

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GENERAL BUILDING CONTRACTORS ASSOCIATION 36 South 18th Street, Philadelphia, PA 19103 Phone 215-568-7015 Fax 215-568-3115 www.gbca.com

Winter/Spring 2013 23

ON TOPIC | Mitigating the Risk

Mitigating the Risk of

SUBCONTRACTOR

AND

SUPPLIER DEFAULT

By Jonathan Halloran

A

s the construction economy recovers from the downturn, optimism has begun to spring up among building contractors in Philadelphia and around the country. The AIA Architectural Billings Index (ABI) was 54.9 for February, indicating the strongest architectural billing growth since early 2008 1. The ABI historically predicts construction activity to come. Developers, while still cautious, are breaking ground on long delayed projects. However, lenders continue to be wary, often demanding 30% or more equity to fund projects.

This makes only the best deals feasible and continues to pressure contractors to provide competitive bids. Still, there is reason for optimism that 2013 will be better than 2012 and 2014 still better.

Ironically, the recovery presents the riskiest time for default among all of the boom and bust phases of the construction economic cycle. The Surety & Fidelity Association of America reported

a 22 percent loss ratio for the top 100 sureties in 2013; up from 12 percent five quarters ago. While the rates are still historically low, the nearly doubled loss ratios in a little over a year has drawn everyone’s attention.

Factors driving increased default risk It may seem surprising that the highest default risk occurs during economic recoveries rather than during the downturns. The 2008-2011 downturn was actually a time of lower default risk.

Many general contractors and subcontractors carried large, high-margined backlogs resulting from the prior boom period. As contractors took on new work with lower margins, their strong cash positions began to wane.

So, the number and severity of defaults was lower during the downturn.

Even when defaults did occur, it was often possible to re-procure the work with a new subcontractor for less than

AIA Architect, March 22, 3012, “Billings and Inquiries Strongest Since Early 2008: Broad-based recovery in design activity appears to have survived federal budget uncertainties,” by Kermit Baker, Hon. AIA. 1

© NC3D24 ConstructionTODAY

Mitigating the Risk | ON TOPIC the balance left with the defaulting subcontractor. This could lead to a net gain for the general contractor or owner.

During the current economic recovery bid prices have stabilized. However, it is largely a “margin-less recovery,� where profits are not strong enough to help companies return to the healthy balance sheets they previously had.

Thus cash flow and reserves diminished with the current low-margin work and defaults become a much higher risk.

Those contractors who had to use cash reserves to stay afloat during the recent economic downturn used up the cash cushions necessary to live through difficult projects now.

Today contractors who used to be strong are now only stable; contractors who were weak before may finally have to resort to bankruptcy. It has, therefore, become more important to safeguard projects and owners against default risk.

This is exacerbated by the current trend of general contractors being pushed to finance work for owners; and, by subcontractors being pushed to finance work for general contractors – with suppliers financing everyone. One small disruption in this supply chain can have ripple effects throughout the project.

In this article we will review five approaches to mitigate default risk: • Qualification • Bid leveling, de-scoping,

awarding, and contracting • Performance security • Managing payments and cash flow • Risk management plans.

While there are doubtlessly other areas to focus on, these five represent danger points for nearly all general contractors.

Why and how to qualify subcontractors Subcontractor qualification is a relatively new practice in the construction industry. It traces its roots to the invention of SubguardŽ, Zurich North America’s subcontractor default insurance (SDI) program launched in 1996. Subguard and other SDI programs require

Today contractors who used to be strong are now only stable; contractors who were weak before may finally have to resort to bankruptcy. general contractors to qualify their subcontractors to reduce default risk. Subcontractor due diligence also generally leads to better project outcomes. Over the last ten years even contractors not using SDI programs have begun to see

the value of qualifying subcontractors.

Qualification programs come in many different shapes and sizes today. Many of the country’s largest builders run sophisticated programs. Other builders still rely on a more traditional qualification program, namely acquiring a performance and payment bond on all subcontractors. Or, they may have no qualification program at all.

In between a sophisticated program and no program are a variety of qualification programs. Some attempt to qualify all bidders or at least those to whom the GC wishes to award work. Some

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Winter/Spring 2013 25

ON TOPIC | Mitigating the Risk programs are run by a centralized team with those buying subcontracts simply required to check qualification lists prior to awarding work. Others programs rely on project teams to collect and analyze qualification data themselves.

So, there are a number of options and considerations to building a successful qualification program.

Building a successful qualification program First, building a program that can be consistently executed is much more important than building one that will never pass a weak subcontractor. From an operational standpoint, a program that is workable and used is much more important than a program that on paper will identify

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all weak subcontractors – but is not used.

Qualification is an area where the “great” is frequently the enemy of the “good.”

Too many qualification programs involve long forms that are 15 pages or more. Subcontractors frequently balk at them while general contractors struggle to find the resources necessary to review and monitor these long forms. A set of key questions and information requests will generally separate subcontractors with potential problems from stronger subcontractors. Long questionnaires can be reserved for those who fail an initial screening or those who are strategically more important, such as critical path trades or hard to replace scopes of work.

From an op­erational standpoint a program that is workable and used is much more important than a program that on paper will identify all weak subcontractors– but is not used.

Second, maintaining an up-to-date database of qualified subcontractors and distributing it to those making bidding and purchasing decisions is critical. A perfectly executed qualification process that is not communicated to buyers is of little value. In order to make an informed decision a purchasing manager or project manager estimating or buying out a job needs easy access to the latest qualification information. This should include data on how much work is currently contracted with the subcontractor being considered. An otherwise wellqualified subcontractor may be the wrong one to award a job if you judge his aggregate ability to do work for you is $1,000,000 and you have already awarded him $3,000,000.

Third, focusing on the wrong items will not only bog down a qualification process but will also lead to poor decision-making. When building a qualification program, a general contractor must decide which factors are most im-

Mitigating the Risk | ON TOPIC portant in qualifying for bids or awards.

Financial strength is at the top of nearly everyone’s list of qualifiers. What else is important? Safety, quality, project experience, management capabilities, litigation history, surety relationships?

All of these categories (and tens of others) can be important. Deciding which are the most important based on your experience, priorities and strategy as a general contractor and focusing on these indicators is often the difference between success and failure.

Finally, there are a number of other considerations important to building and executing a qualification program.

Internal organizational buy-in; subcontractor communication and onboarding; and, on-going program monitoring and evaluation are just as important to the on-going success of a program as the first three considerations are to the establishment of a program.

A number of technologies can aid in developing and maintaining a program.

However, by itself, no technology can ensure a successful program. Qualification is not entrenched or understood enough in the industry to simply drop in a technology solution to replace process. Good qualification technology will supplement and support a process.

However, technology cannot be the qualification process. When exploringing qualification technology consider the support that accompanies it for both the general contractor and the subcontractor users.

A thorough bid evaluation and lev­eling process, including detailed de-scoping of preferred bidders, is the best way to avoid the nightmare scenario of a subcontractor walking away from a job. scope was missed or a wrong assumption was made about means and methods. This experience is painful for both the general contractor and the subcontractor (and frequently for other trades as well).

A thorough bid evaluation and leveling process, including detailed descoping of preferred bidders, is the best way to avoid the nightmare scenario of a subcontractor walking away from a job after realizing he cannot complete it profitably due to bidding errors. While every general contractor fears losing a job because he refuses to carry an irresponsible subcontractor bid that his competitors may carry, sometimes your best job is the one you lose. While the time to de-scope a bidder may be limited on a hard bid, there are quick ways to identify bid issues by comparing item-by-item spreads to drill down to

the questions to ask a low bidder. On negotiated work, an in person meeting to review bid quantities and costs is the best way to identify and avoid issues.

When awarding and contracting, best practices followed rigorously will help avoid issues. Communicating standard terms to bidders before a bid is a good start. Next, breaking out detailed budgets can help to clear up questions.

Finally and most importantly, executing the contract quickly will help avoid the legal “no man’s land” occupied by disputes that arise under interim agreements such as letters of intent or handshakes. It is often necessary to start work before a full contract can be executed. The more detailed the interim agreement and the shorter the period between start-of-work and full contract, the more likely you are to avoid no man’s land.

Performance Security Performance and payment bonds as well as other security have long been considered the most important part of reducing default risk. Performance security instruments include surety bonds, Subguard or other SDI programs, letters of credit, personal indemnification, and parent company guarantees. Each provides a guarantee that the subcontrac-

Bid leveling, De-Scoping, Awarding, and Contracting The construction buyout and contracting processes are often viewed as much art as science. Estimators, purchasing managers and project managers bring critical skills in making the decision with whom to subcontract. Nearly every builder has experienced a mistake in contracting. A subcontractor submits a bid that is significantly below other bids and in all ways seems qualified to do the work. After construction begins, however, the general contractor and lucky subcontractor both realize too late that the bid was low because significant

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Winter/Spring 2013 27

ON TOPIC | Mitigating the Risk

Draw Process Review / Approve or Reject Invoices

Collect Invoices

Compliance Management

Prepare Owner Billing

Lien Waiver Collection & Tracking

Communicate Track / Hold Payments Requirements Communicate for NonStatus compliance

On System Sub Lien Waiver Collection

Off System Sub-Tier Tracking & Collection

Hold Payments for Non-Compliance

Disbursement Process Review / Approval

Payment Details

Distribution

Reduce payment risk with technology

tors will perform their work and/or provides remedies in the case they do not.

There is a lot of literature available on the topic so I will touch on a few highlights only.

Not all guarantees and security providers are the same. It might seem obvious but the procurer must verify the financial condition and ability of the guarantor to perform if the subcontractor fails. The security or guarantee’s liquidity should be examined since maintaining cash flow is important. While performance security can provide some peace of mind to a general contractor or owner, it is naïve to think of it as a panacea. When a subcontractor defaults, it is almost never smooth sailing.

Like insurance, performance security is something you hope to pay for and never have to use.

Managing payment risk The monthly draw process is one of construction’s most tedious processes.

It is also fraught with risk. If a sub-

28 ConstructionTODAY

contractor fails on a project, general contractors can suffer economic loss in many areas including overpayment of the defaulted subcontractor and having to pay the defaulted subcontractor’s vendors twice. A well-executed monthly draw process can help avoid these payment issues.

The monthly draw process is one of construction’s most tedious processes. It is also fraught with risk.

Overpayment of the defaulted subcontractor can arise for many reasons.

Frequently, so much time and effort is spent ensuring documents (invoices, lien waivers, sworn statements, etc.) are mathematically and legally correct that not enough effort is put into verifying the percent complete and the quality of work put in place. Similarly, poor communication between a superintendent

and a project manager can lead to a subcontractor’s overpayment. The reason for paying the defaulted subcontractor’s vendors twice is failure to verify payments all the way down to sub-tier subcontractors and suppliers. This is a tedious but critical task. Failure to verify subcontractor payments to their subcontractors and suppliers can lead to thousands or millions of dollars of additional cost when a prime subcontractor defaults.

To reduce payment risk contractors spend significant time and effort ensuring transactions are carried out properly.

Technology that automates the monthly draw process can help eliminate errors.

State-of-the-art technology is available to help manage at least four parts of the draw process: invoicing; lien waiver collection and tracking; compliance management; and, electronic payment.

Technology cannot eliminate all payment risk, but automation of the many traditionally manual processes allows the project team to focus on the most

Mitigating the Risk | ON TOPIC important part of the payment process, namely verifying percent complete and payments to sub-tiers and suppliers.

Technology can also play a key role in automating the collection of sub-tier lien waivers and facilitating direct payment of sub-tiers and suppliers.

Risk Management Plans No general contractor can always hire the desired subcontractors. The construction marketplace and reality requires tradeoffs. As mentioned earlier a top-notch subcontractor can only be awarded so much work before a general contractor is overexposed. Some specialty trades have limited pools of subcontractors who can perform that type of work and in some cases there may

Creating and executing a risk man­agement plan can turn the selection of a weak or “problem” subcontractor from an ulcer-inducing experience to a tight­ly controlled process with an above average chance of success. only be one firm that can complete a given project scope. In these cases even though the subcontractor likely fails a contractor’s qualification process there are no other options. Sometimes, general contractors feel they must carry a low number even though they have significant reservations about the subcontractor’s bid. Luckily, there are many techniques that can mitigate default risk even when you must work with an unqualified or marginally qualified subcontractor.

Creating and executing a risk management plan can turn the selection of a weak or “problem” subcontractor from an ulcer-inducing experience to a tightly controlled process with an above average chance of success. No mitigation plan can eliminate risk. But a well planned and executed risk mitigation plan can either avoid problems or

reduce their cost if they arise. Elements of a risk management plan may include: • Additional performance security - Performance and payment bond - Irrevocable letter of credit - Parent company guarantee - Personal indemnity (including spouse) - Indemnification for loss from owner or other upstream party • Payment Management - Additional retention - Additional review of payment applications - Joint checks

- Sub-tier lien waivers - Early pay/reduced retention (to improve subcontractors cash flow) • Project Management - Additional supervision (including dedicated superintendent) - Weekly job site meetings - Weekly/monthly schedule review/sign off.

The elements included in a risk management plan vary depending on the reason for instituting it. For examples, a financially weak subcontractor may

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Winter/Spring 2013 29

ON TOPIC | Mitigating the Risk require joint checks, careful payment management or additional retention whereas a poorly skilled subcontractor may only need additional supervision. No matter what the reasons, design, communication and execution of the risk management plan are critical. Design largely consists or drawing up the mitigation steps based on the risk characteristics and consideration

Technology can play a powerful role throughout the five risk mitigation areas discussed. of what a project team can reasonably be expected to execute. Communication requires that everyone (including

general contractor executives, project managers, superintendents, subcontractor management and field teams) knows what is expected and how the mitigation step will be measured. Execution means that there is not just a risk plan but a system of accountability as well, including monitoring and reporting on its completion.

Technology and Risk Mitigation Technology can play a powerful role throughout the five risk mitigation areas discussed. IT systems can help automate steps, improve process and reduce errors. But technology can also create problems as well as solve them. Take time to look at the needs and attitudes of the company to see if a particular type of technology is best suited to help.

Consider whether purchasing installed software or, rather, software delivered through the Internet is a better choice.

If other parties will use the technology, consider their perspective. Finally, consider the support that comes either with the package or that can be purchased separately. Underestimating the amount of support required for an implementation and on-going system usage is common.

Summary

The construction industry is technical, complex and fast-paced, and you need counsel that can get up to speed fast and keep moving. For over 20 years, Cohen Seglias has provided clients representation for virtually every type of construction-related issue. Our experience and insights enable us to anticipate client needs and help mitigate risk.

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30 ConstructionTODAY

Default risk will continue to be elevated for at least the next 24 months as the construction recovery continues. Default on a project can happen at any organizational level and affects all parties involved in the project. Understanding where default risk lies is the first step to mitigating it. Some key steps reviewed here to reduce default risk are: 1.) To set up a thorough qualification program; 2.) Perform bid leveling and analysis; 3.) Use performance security; 4.) Manage payments and cash flow; and, 5.) Utilize risk management plans for weak subcontractors.

Each step taken to reduce risk can help – but nearly always comes with a cost.

Setting up good process and following through diligently can help mitigate – but not eliminate – the risk and cost of subcontractor default while minimizing the burden of implementation.

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Winter/Spring 2013 31

Glaxo Smith Kline at the Navy Yard. Photo Credit: Francis Dzikowski / Esto for Robert A.M. Stern Architects, LLP. 32 ConstructionTODAY

Shaping and Honoring | ON TOPIC

SHAPING – AND HONORING – ARCHITECTURE, CONSTRUCTION, AND ENGINEERING LEADERS ACE Mentor Program of Eastern Pennsylvania Hosted the 12th Annual Scholarship Breakfast on May 29

By Amanda Gibney Weko

The ACE Mentor Program of Eastern Pennsylvania hosted members of the architecture, engineering, and construction communities on Wednesday, May 29, 2013 for its annual recognition of industry leaders and announcement of scholarships to regional students.

Mentor Program statistics, more minorities and low-income students are enrolled in the ACE program than any other afterschool programs. Female ACE Mentor Program participants enter college engineering programs at twice the national rate of their non-ACE counterparts.

ACE Mentor Program The ACE Mentor Program of Eastern Pennsylvania, an affiliate of a national non-profit organization, engages and encourages high school students to consider careers in design and construction through mentoring, scholarships, and grants. Students are recruited from public and private schools in greater Philadelphia, with special efforts made to reach traditionally underrepresented populations of women and minorities. Students engage in interdisciplinary projects led by volunteer mentors from firms representing architects, construction managers, engineers, and owners. From November until May, teams meet biweekly to experience the entire design and construction process, including site and office visits.

The ACE Mentor Program successfully encourages students to pursue careers in architecture, engineering, or construction.

Sixty-nine percent of ACE alumni currently major in these fields or are already employed. According to national ACE

The ACE Mentor Program successfully encourages students to pursue careers in architecture, engineering, or construction.

The ACE Eastern Pennsylvania Affiliate’s scholarship breakfast annually attracts more than 400 members of greater Philadelphia’s integrated design and construction community, who join the ACE Mentor Program board of directors, mentor volunteers, students, and sponsors to celebrate completion of the academic year’s project and to honor regional industry leaders and student participants. In 2012, the Eastern Pennsylvania Affiliate raised more than $100,000 for scholarships.

“As the organization’s primary fundraiser, the annual scholarship breakfast raises funds to support the program and

Winter/Spring 2013 33

ON TOPIC | Shaping and Honoring our students,” said ACE Eastern Pennsylvania Affiliate Director Heidi van Steenburgh. “It also provides our biggest forum for attracting new mentors. We encourage GBCA members and Construction Today readers to learn more about ACE.” 2013 Award Recipients At the 2013 scholarship breakfast, the ACE Eastern Pennsylvania Affiliate presented three industry leadership awards.

John Grady, president of Philadelphia Industrial Development Corporation was recognized as Community Leader of the Year. Five Crescent Drive, GlaxoSmithKline’s double LEED® platinum certified facility in Philadelphia’s Navy Yard was recognized as Project of the Year. Gerald M. Cope, FAIA, RIBA, RSA, founding partner of Cope Linder Architects, was recognized posthumously with a Lifetime Achievement Award. Several scholarships were also be presented to ACE Mentor Program student participants.

ratables to the City of Philadelphia, John Grady was recognized with the 2013 Community Leader of the Year award.

Grady has been president of PIDC since 2011 and an instrumental part of the organization since 1998. During his presidency, Grady helped PIDC achieve certification as a Community Development Finance Institution, partnered with Goldman Sachs to bring $10 million in

Community Leader of the Year For his leadership of Philadelphia Industrial Development Corporation (PIDC) and its work to attract investment, jobs, and tax

John Grady, President of PIDC

new lending resources to the city’s small businesses, secured $110 million in New Market tax credits, and created StartUp PHL, a $6 million early-stage seed fund for Philadelphia companies in partnership with First Round Capital.

Grady was responsible for leading PIDC’s acquisition, planning, and redevelopment of Philadelphia’s Navy Yard, attracting more than 130 companies, 10,000 employees, and over $1 billion in revenue since 1998. He and PIDC continue to grow the Navy Yard as a progressive, urban campus for jobs and investment. They are also involved with planning a Lower Schuylkill River hub for innovation, energy, and logistics.

Grady holds a master’s degree in government administration from the University of Pennsylvania and a bachelor’s degree in economics from LaSalle University. He is an active board member of the Greater Philadelphia Chamber of Commerce, Philadelphia Sports Congress, Philadelphia Convention and Visitors Bureau, Schuylkill River Development Corporation, Philadelphia Works, East Falls Development Corporation, and Collegiate Consortium for Workforce and Economic Development.

The newly built Glaxo Smith Kline building at the Navy Yard. This project was built by GBCA member L. F. Driscoll.

Photo Credit: Francis Dzikowski / Esto for Robert A.M. Stern Architects, LLP 34 ConstructionTODAY

Shaping and Honoring | ON TOPIC Project of the Year In April, GlaxoSmithKline (GSK) officially opened its new double LEED platinum certified building in the Navy Yard Corporate Center. The 208,000-square-foot building at Five Crescent Drive represents an $80 million investment by joint-venture developer Liberty Property/Synterra, L.P. and a $70 million investment by GSK. GSK signed a 15.5-year lease for the building. For GSK’s commitment to Philadelphia, and for the building’s innovative workplace and environmental responsibility, Five Crescent Drive was named 2013 Project of the Year.

A progressive building that furthers Philadelphia’s reputation for modern architecture, the design incorporates significant sustainable and high-performance features that place a focus on the comfort and enjoyment of its occupants, promote collaboration, and respect and celebrate the Navy Yard environment. The building was designed by Robert A. M. Stern Architects.

Francis Cauffman provided interior architectural design and workplace strategy.

The four-story, glass-encased building with an open floor plan and grand central stair has been awarded both Core &

ShellTM and Commercial InteriorsTM LEED Platinum certification from the U.S. Green Building Council. It is the first double platinum building in Philadelphia – marked by such innovative features as a heat recovery system, energy-efficient and LED lighting, whole building metering, water-efficient low-flow fixtures, carbon dioxide monitoring, and a building management system – and is expected to save as much as 30 percent of energy use when compared to a traditional building.

The vegetated green roof further reduces energy costs, absorbs stormwater, and provides a tranquil outdoor space for working or gathering.

In the building’s office-less interior without assigned seating, employees are locat-

ed in “neighborhoods” and can work in a variety of settings throughout the day, from custom-designed sit-to-stand workstations to team meeting spaces, social areas, and quiet rooms. The healthy, stimulating environment is designed to encourage physical movement and minimize sitting.

At the ribbon-cutting ceremony, Philadelphia Mayor Michael A. Nutter called the building, “one of the most innovative, healthy, and green work spaces in the U.S.” Lifetime Achievement Award Influential architect, urban designer, philanthropist, mentor, and Philadelphian, Gerald M. “Gerry” Cope, FAIA, RIBA, RSA, left an indelible mark on the region’s skyline and in the memories of many. He

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Winter/Spring 2013 35

ON TOPIC | Shaping and Honoring was a founding partner of Cope Linder Architects with which he completed projects in Canada, Spain, the Caribbean and the U.S., including Philadelphia’s Aramark Tower, One Penn Square West (The Graham Building), and The Great Plaza at Penn’s Landing. For his contributions to the built environment and commitment to mentoring, Cope was the posthumous recipient of the 2013 Lifetime Achievement Award.

Born in England in 1928, Cope understood firsthand the importance of mentorship. Although he modestly eschewed the term “self-made,” Cope was the first in his family to attend university as the recipient of a full scholarship for his undergraduate degree in architecture at Northern Polytechnic Institute. After graduation and professional internships in London, he received another full fellowship to the University of Pennsylvania’s Master of Landscape Architecture program. Under the direction of pioneers Ian McHarg, Louis I. Kahn, Vincent Kling, Oscar Stonorov, and Edmund Bacon, Cope was immersed in progressive design and thought leadership that inspired him to build a practice and life in Philadelphia.

Gerald Cope

He founded Cope Linder Architects in 1966 and evolved from small shopping centers, townhouses, and streetscape improvements to award-winning corporate office buildings, regional malls, major hospitality and casino commissions, and multi-family developments.

Cope served on the boards of Central Philadelphia Development Corporation, The PenJerDel Council, University of Pennsylvania Graduate School of Fine Arts Board of Overseers, and The Walnut Street Theater. He was a passionate, 30-year trustee and sponsor of the Carson Valley School (now Carson Valley Children’s Aid). In 1986, he was elected to the College of Fellows of the AIA. He was a member of the Royal Institute of British Architects, a Fellow of the Royal Society of the Arts, and a member of The Carpenters’ Company of the City and County of Philadelphia and the Athenaeum.

The greatest source of professional pride for Cope was the fact that his firm traditionally hired drafting apprentices and then sponsored their formal architectural training. Many former Cope Linder employees have gone on to establish thriving practices of their own, and will freely credit the diverse experiences gained at the firm and Cope’s personal sense of responsibility as a mentor, for profoundly influencing both the architecture of the region and their professional development and success.

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36 ConstructionTODAY

CONSTRUCTION NOTES |

ALVIN H. BUTZ, INC. ANNOUNCES TWO NEW HIRES Alvin H. Butz, Inc. recently hired Matthew Mengel and James Messick as Project Managers.

Mengel earned a Bachelor of Science degree in Construction Technology and Management from the Pennsylvania College of Technology. He has more than six years construction industry experience. His strengths include a thorough knowledge of mechanical, electrical and plumbing (MEP) systems.

Mengel’s past experiences include a new four-story building at Princeton University as well as multiple laboratory renovations and relocations for Johnson & Johnson Ortho-Clinical Diagnostics in Raritan, New Jersey.

Mengel is currently part of the Allentown Arena Block Development project management team.

Messick earned his Architectural degree from Temple University and Masters in Construction Management from Drexel University. He is also LEED© AP BD+C certified, and has documented six LEED certified projects.

With more than 10 years construction experience, Messick brings extensive knowledge of healthcare facilities and higher education.

Most recently, he completed a human gross anatomy teaching laboratory at Thomas Jefferson University and a biological engineering laboratory renovation at Temple University. He also has extensive experience utilizing Building Information Modeling software for design, documentation, presentations and construction coordination.

Currently, Messick is the project manager for the Medical Imaging of Lehigh Valley Lobby renovation / addition and Neuroscience renovation projects at Lehigh Valley Hospital – Cedar Crest.

In their role as Project Managers, Mengel and Messick oversee and manage all phases of a construction project from preconstruction to completion including the development of a project schedule, construction plan, and project phasing. During construction, they are responsible for managing and directing the work of the specialty contractors and personnel.

“We are pleased to welcome Matt and Jim to the Butz family,” says Greg Butz, president and CEO of Alvin H. Butz, Inc. “Both Matt’s experience working with MEP systems, and Jim’s knowledge and understanding of key markets will prove invaluable to our company and clients.”

Matthew Mengel - Project Manager

James Messick - Project Manager

JACOBY DONNER P.C. ANNOUNCES FIRM LEADERSHIP SUCCESSION

As a legal services business, not just a law firm, Jacoby Donner takes great pride in practicing what they counsel. There is no better illustration than the manner in which the firm has set about carefully planning and now executing its leadership succession plan. In this regard, managing financial partner Bill Denmark has succeeded Henry Donner as managing partner. Henry will continue his active practice and retain the title of Chairman of the Firm.

Jacoby Donner’s internal succession process has set the stage for a seamless transition in which the top priority is to ensure the firm continues to provide outstanding legal services to all of its clients. In a sense, the firm has its numerous clients to thank for the succession plan as it has worked closely with them over the years on leadership transitions – among many other aspects of their businesses.

William A. Denmark Managing Partner

Henry J. Donner Chairman of the Firm

Winter/Spring 2013 37

| CONSTRUCTION NOTES

TORCON SUPPORTS ST. CHRISTOPHER’S HOSPITAL FOR CHILDREN EXPANSION

Since 1875 St. Christopher’s Hospital for Children has been a nationally recognized provider of pediatric care for the Greater Philadelphia area and beyond. In continuing its rich history of healthcare innovation and leadership, St. Christopher’s is embarking on a $110 million expansion, which will allow the hospital to further increase the scope and efficacy of its medical programs. Torcon is handling all pre-construction and construction management services for this historic project, with renovations of the Operating Room Suite already underway. The Torcon team is undergoing this effort in conjunction with Philadelphia-based architectural firm EwingCole.

One major phase of the St. Christopher’s job involves the construction of a four-floor 135,000 square foot Pediatric Critical Care tower. The $91 million Critical Care Tower will be a focal point of the facility, with plans to include 50 new critical care beds and 60 Level IIIC neonatal intensive care unit (NICU) beds, on top of the 189 beds already in use at the hospital. The additional beds will be installed in larger, more private critical care rooms, each incorporating advanced medical technologies and designed to comfortably accommodate visiting relatives and friends.

The project’s second significant component will consist of a new two-floor, 30,000 square-foot medical office building intended to house the Center for the Urban Child (CUC). Consisting of two floors with duplicate layouts, the $19 million CUC will house multiple pediatric practices within its walls. It is being designed to provide high-quality and cost-effective medical care and accessible healthcare options to urban children. The medical center will allow children with disparate health issues to have their

Pediatric Critical Care Tower: A new four-floor 135,000 square foot Pediatric Critical Care tower with plans to include 50 new critical care beds and 60 Level lllC neonatal intensive care unit (NICU) beds.

medical needs attended to and cared for in a timely and attentive manner. The formal groundbreaking ceremony was held in May 2013, and it is anticipated that the CUC will open its doors to the

Center for the Urban Child: A new two-floor, 30,000 square-foot medical office building consisting of two floors with duplicate layouts, the Center for the Urban Child will house multiple pediatric practices within its walls.

38 ConstructionTODAY

CONSTRUCTION NOTES |

SHOEMAKER/PERRYMAN COMPLETES LEAP ACADEMY STEM SCHOOL Shoemaker Construction Co., in a joint venture with Perryman Building and Construction Services, Inc., recently completed the LEAP (Leadership, Education, and Partnership) Academy STEM Campus Addition in Camden, NJ. The specialized STEM High School program focuses on science, technology, engineering, and mathematics.

“This was an important project for the Camden community,” says Roger Ball, President of Shoemaker Construction Co. “The new school will provide an exciting learning environment for students who otherwise may not have had the benefit of a curriculum rich in the sciences and technology.”

The project involved the demolition of seven vacant buildings, three of which were behind the façade of Camden’s historic Chaney Mansion. The façade was preserved and integrated into the new structure which was of vital importance to the owner and community.

Features of the new 3-story high school include: • State-of-the-art classrooms • Science and technology laboratories • High technology computer laboratories • Commercial kitchen/dining room • 150-seat lecture hall • Administrative and support space

public in the beginning of 2014.

Additionally, the Center for the Urban Child will seek to address the social determinants of patients’ health – such as food insecurity and violence – in order to provide a truly holistic approach to patient care. With already more than 350 children visiting these clinics each day, the expansion will allow the hospital to accommodate up to 50 percent more patients.

While these two major phases comprise the heart of the project, the expansion will also include a new operating room suite, as well as upgrades to campus parking facilities and other essential restorations throughout the hospital premises. The sizeable expansion, along with the general refurbishments around campus, will allow for comprehensive, first-rate pediatric care, while fostering an atmosphere of security and prosperity for patients and families alike.

The hospital expansion will not only improve Philadelphia’s healthcare landscape, but will also add more than 300 permanent jobs to the local economy in addition to the jobs created over the course of construction.

“We are proud to have been able to successfully complete this project and contribute to the promising futures of these students,” says Ball.

The LEAP Academy STEM High School offers a specialized academic curriculum that focuses on science, technology, engineering and math in order to improve the mastery of math and science for Latino and African-American students in ninth through twelfth grades.

Winter/Spring 2013 39

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Coming in the next issue of REGION ON THE RISE

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REUSE AND REFIT FOR A GREEN ECONOMY

Tuesday, March 13, 2012 8:00 AM – 9:00 AM Registration, Breakfast, Networking & Exhibits 9:00 AM – 10:30 AM Program Loews Philadelphia Hotel Philadelphia, PA 19107

SUSTAINABILITY

Join us at our annual event, presented in partnership with the Greater Philadelphia Chamber of Commerce (GPCC), to discuss The summer issue focuses on the latest sustainable building trends. Topics to be how the construction industry and developers are using innovative techniques to restore the region’s industrial assets and covered in this issue include: green retrofitting solutions for existing buildings, improve energy efficiency.

In addition to a green keynote presentation, Q&A session andstreetscapes. exhibiting opportunities, will have plenty of time to buildinginformative design,panel anddiscussion, improving green Theyouissue will ask network and build your business.

contractors what challenges they face in building green and what the future of green construction will look like. Finally, the issue will look at government and Panel Discussion: Development Forecast Industry experts will discuss the ever growing need to retrofit existing properties in our region for energy private initiatives impact the ofconstruction of sustainable structures. efficiency purposes; additional topics includethat the reuse and renewal our region’s industrial assets.

Keynote Presentation: Roya Stanley, Office of Weatherization and Intergovernmental Programs, U.S. Department of Energy

To register or for sponsorship opportunities visit www.gbca.com.

44 ConstructionTODAY 40 ConstructionTODAY

REFERRAL DIRECTORY | ASSOCIATIONS & UNIONS

ATTORNEYS

CONSULTANTS

INSURANCE & BONDING

DVMI - Delaware Valley Masonry Institute, Inc.

Jacoby Donner, P.C., Attorneys at Law, 1700 Market Street, Suite 3100, Philadelphia, PA 19103. P215-5632400, Web Site: www.jacobydonner. com.

EisnerAmper, LLP, Construction Real Estate Services Division, 101 West Avenue, Jenkintown, PA 19046. P215881-8800, 856-354-6054, Web Site: www.grgrp.com.

Conner Strong & Buckelew, James M. Hanrahan or Steven Raffuel. P1-877861-3220, Web Site: www.connerstrong.com.

SEE OUR AD ON PAGE 26.

SEE OUR AD ON PAGE 29.

SEE OUR AD ON PAGE 31.

GBCA, General Building Contractors Association, 36 S. 18th Street, Philadelphia, PA 19103. P215-568-7015. Web Site: www.gbca.com.

SEE OUR AD ON PAGE 22-23.

LDC, Laborer’s District Council, 500 Lancaster Pike, Exton, PA 19341. P 610-524-0404.

SEE OUR AD ON PAGE 42.

LECET, The Laborer’s - Employer’s Cooperation and Education Trust and The Laborer’s District Council of Metropolitan Philadelphia & Vicinity. P215922-6139, Web Site: www.LDC-PHILAVIC.org.

SEE OUR AD ON PAGE 43.

BUILDING MATERIALS

DEMOLITION

George F. Kempf Supply Co., Philadelphia, PA. West Chester, PA. Trenton, NJ. Wilmington, DE. P1-800-326-5367, Web Site: www.kempfsupply.com.

Geppert Bros Inc., Demolition Contractors, Main Office 3101 Trewigtown Rd., Colmar, PA 18915. P215-822-7900, F215-822-0635.

SEE OUR AD ON BACK COVER.

SEE OUR AD ON PAGE 27.

CONCRETE PRODUCTS

EDUCATION & TRAINING

Fizzano Bros., P610-833-1100, Web Site: www.fizzano.com.

Laborer’s District Council, Education and Training / Apprenticeship School, 500 Lancaster Pike, Exton, PA 19341.

P610-524-0404, Email: jharper.e&t@ ldc-phila-vic.org.

SEE OUR AD ON PAGE 11.

CONSTRUCTION LITIGATION

Steel Erectors Association of Metropolitan Philadelphia and Vicinity.

Cohen Seglias Pallas Greenhall & Furman PC, 30 South 17th Street, 19th Fl., Philadelphia, PA, 19103. P215-5641700, Web Site: www.cohenseglias.com.

SEE OUR AD ON PAGE 36.

SEE OUR AD ON PAGE 30.

SEE OUR AD ON PAGE 43.

GENERAL CONTRACTORS & CONSTRUCTION MANAGERS

Union Iron Workers of Local 401, “Building America Since 1896” 11600 Norcom Road, Philadelphia, PA 19154. P215676-3000.

Haverstick-Borthwick Company, Builders and Construction Managers, 400 Stenton Avenue, PO Box 766, Plymouth Meeting, PA 19462. P215-248-3000, 610-825-9300, Web Site: www.haverstick.com.

SEE OUR AD ON PAGE 9.

SEE OUR AD ON PAGE 25.

SEE OUR AD ON PAGE 6.

Engle-Hambright & Davies, P1-800544-7292, Web Site: www.ehd-ins.com.

SEE OUR AD ON PAGE 5.

PRINTING & DOCUMENT MANAGEMENT TECHNOLOGIES Paradigm Digital Color Graphics, 105 James Way, Rear Building, Southampton, PA 18966 P215-942-7500, F215942-7533, Web Site: www.paradigmdigitalcolor.com.

SEE OUR AD IN CLASSIFIEDS.

SPECIALTY CONTRACTORS B. Pietrini & Sons, 111 East Church Road, King of Prussia, PA 19406. P610265-2110, F610-265-6068, Web Site: www.bpietrini.com.

SEE OUR AD ON PAGE 2.

Winter/Spring 2013 41

| ADVERTISER’S INDEX

Cohen, Seglias, Pallas, Greenhall & Furman, P.C. . . . . . . . . 30 Conner Strong . . . . . . . . . . . . . . . . . . . 6 DVMI . . . . . . . . . . . . . . . . . . . . . . . . . 31 EHD . . . . . . . . . . . . . . . . . . . . . . . . . . 5 EisnerAmper . . . . . . . . . . . . . . . . . . . . 29 Fizzano Bros. . . . . . . . . . . . . . . . . . . . 11 GBCA . . . . . . . . . . . . . . . . . . . . . . 22-23 George F. Kempf Supply Co. . . . . . . . . . . . . . Back Cover Geppert Brothers . . . . . . . . . . . . . . . . 27 Haverstick-Borthwick . . . . . . . . . . . . . 25 Jacoby Donner P.C. . . . . . . . . . . . . . . . 26 Laborers . . . . . . . . . . . . . . . . . . . . . . . 42 L.E.C.E.T . . . . . . . . . . . . . . . . . . . . . . . 43 B. Pietrini & Sons . . . . . . . . . . . . . . . . . 2 Paradigm Digital Color Graphics . . . . 40 Steel Erectors Assoc. . . . . . . . . . . . . . 36 Union Ironworkers Local 401 . . . . . . . . 9

42 ConstructionTODAY

TODAY’S LABORER APPRENTICE Your Skilled Workforce Tomorrow...

To learn how our Apprentices can help your company contactJames Traci C.Harper, Woodall contact Jr.atat610-524-0404 610.524.0404, email TWoodall@ldc-phila-benefits.org e-mail jharper.e&t@ldc-phila-vic.org LABORERS’ DISTRICT COUNCIL Education and Training/ Apprenticeship School 500 Lancaster Pike, Exton, PA 19341

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Winter/Spring 2013 43

The right materials.

Right to the site.

Only one supply company operates the largest, most diverse trucking fleet for consistent on-time delivery, pin-point loading and helping projects stay on budget and on schedule. That’s why the area’s largest distributor of building materials for commercial and multi-family construction is George F. Kempf Supply.

CONVENIENT LOCATIONS Philadelphia 5200 Grays Avenue Philadelphia, PA

Wilmington 1101 East 7th Street Wilmington, DE

1-800-326-5367 www.kempfsupply.com