Effective Allocation and Management of Performance Risk in Building Envelope Design & Construction – 2

Tom Madigan – Buchanan Ingersoll & Rooney

  • In our last podcast we talked about risk allocation and risk management tools. So, now, despite having employed all of those measures, there are performance issues with the building envelope that lead to litigation. How can the parties resolve their dispute quickly and cost-effectively?
  • So, what are some strategies for resolving building envelope performance litigation early and cost-effectively?
  • Isn’t that done as a matter of course in every case? Doesn’t every party go out and get an expert to work up a theory of what went wrong and who is responsible?
  • By every one agreeing to use a single independent expert?
  • Why isn’t that done in every case?
  • How do you overcome the reluctance to do an early evaluation?
  • Let’s say you weigh the risks and get agreement to do early testing and forensic examination. What kinds of things are you trying to determine.
  • Okay, you do the testing and forensic examination and you arrive at some degree of consensus as to what the extent and cause of the problem is. Then what?
  • What are the keys to getting to a remediation plan that all parties accept?
  • Let’s say you fashion a remediation plan that gets everyone’s buy in; how do you build a settlement around it?
  • That sounds like it would be in all of the parties’ interests. When isn’t remediating the problem the best solution and what are some of the obstacles that can get in the way even when it is?
  • How do you get over those obstacles?

Tom Madigan Bio

Buchanan Ingersoll & Rooney Profile 2017

Law Firm Florida Offices

About The Everything Building Envelope Podcast:
Everything Building Envelope℠ is a dedicated podcast and video forum for understanding the building envelope. Our podcast series discusses current trends and issues that contractors, developers and building owners have to deal with related to pre and post construction. Our series touches on various topics related to water infiltration, litigation and construction methods related to the building envelope.


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The Everything Building Envelope Episode Transcript:

Paul: Welcome back everyone, to the “Building Envelope” podcast. We’re bringing back Tom Madigan today. He was with us in the last episode. It was really interesting, and we had a lot more to talk about. So, Tom, thank you very much for coming back today.

Tom: My pleasure.

Paul: And, I just want to remind everybody before we get into today’s discussion that we have a “Everything Building Envelope” newsletter, and to subscribe to that, all you need to do is text the word, “building envelope” to 22828. Again, that’s “building envelope,” text it to 22828. We’ll get you signed up, and if you’re in the Building Envelope community, there’ll be items of interest to you, technically and otherwise. So, “building envelope” to 22828. So, just to remind everybody from last time, in case you didn’t listen last time, He is the Chairman of the Construction Practice Group at Buchanan Ingersoll & Rooney. Buchannon is a national law firm and has six offices in Florida. So, Tom, today we’re going to discuss, talk, go into creative and cost-effective strategies to resolve building envelope performance disputes. And, in our last podcast, we talked about risk allocation and risk management tools. So now, even if our listeners have employed all those measures, there’s performance issues with the building envelope that can lead to litigation. And if that happens, how can parties resolve their dispute quickly and cost-effectively?

Tom: So, the first thing to recognize is that there isn’t any one size fits all strategy for getting out of lawsuits. If there was, you wouldn’t need lawyers who brought any value to the engagement, right? There’d be a playbook and everybody would follow it. That’s just not the case. Each dispute is unique, and each exit strategy has to be fashioned to the unique details of the litigation. Personalities involved, their historical approach to litigation, how the lawsuit’s being funded, all of those things can impact the ability to resolve the litigation effectively.

However, in general terms, the earlier you can focus on a resolution strategy, and the earlier you can resolve the dispute, the better. That is almost without exception. Lawsuits don’t get better over time. They get more expensive. They get messier. They become a bigger distraction to your business. When a lawsuit first gets filed, you know, everybody’s emotions are high. You’ve likely had, you know, discussions with the parties prior to the lawsuit. There was some effort to determine responsibility and resolve it. Those might have been very heated, very nasty. They were unsuccessful by definition, because now there’s a lawsuit.

At the start of the litigation, everybody’s in their own network chamber. They’re only talking to the people in their business and their lawyers. And everybody’s convinced that they’ve done absolutely nothing wrong. And their objective in the lawsuit is to be completely vindicated. That’s when you hear people say things like, “It’s a matter of principle.” That attitude erodes quickly as the legal bills start to come in every month. What you need to focus on early is the net cost of the litigation or, if you’re the owner, the net recovery. You measure success in a lawsuit by, if you’re a defendant, it’s the net cost. That’s the litigation cost, the lawyer’s fees, the expert fees, the cost of actually litigating the case plus the settlement cost. If you’re owner or other plaintiff, you measure success by the settlement amount minus the litigation cost, right? It’s your net recovery.

So, early on, start thinking about a resolution strategy, look at an opportunity to engage the parties in an effort of resolution as early as it’s practical, and focus on the net cost, or the net recovery, when you’re making bottom line decisions.

Paul: Yeah, so, you know, something that I always say, and, you know, this could be in a dispute or a real estate transaction or whatever, is that it’s good to try to make a business decision, not an emotional decision, because emotional decisions usually aren’t good decisions.

Tom: They’re almost never good decisions.

Paul: Yeah, and it’s tough. It’s tough. So, what are some of the strategies to resolve building envelope performance disputes and litigation early and cost-effectively?

Tom: So, as we’ve identified right out of the box, the earlier, the better. That’s a judgement in itself. Too early, and if people don’t have enough information to make informed decisions, then the likelihood of reaching a resolution is diminished. Too late, and you’ve got a lot of money invested in the lawsuit, and that influences peoples’ decisions. And it affects the net recovery or the net cost, and you miss the opportunity to maximize either. So, identifying the right time, but early, to try to get everybody working towards a joint resolution effort. And the most typical mechanism for that is mediation.

With building envelope performance disputes, because they often, you know, center on questions of, is the problem a design problem? Is it a construction problem? If it’s a construction problem, which element of the construction? Is there a product element? You know, was the right product used? Was there a manufacturing issue with the product? All those things are kind of swirling around, and being able to resolve a case starts with trying to come up with some answers to those questions. But, you got a lot of people with differing interests, right? So, but they also have common interest. And the common interest that you can work on is that idea of the net cost and the net recovery.

And, what I have employed effectively in some of these cases is a mediation involving a technical advisor and the parties’ experts. If you can get the parties to initially try to reach agreement or at least narrow the dispute as to the root cause and extent of the problem, then that allows you to start trying to develop a remedial plan. And it’s the remedial plan that can then be the focal point around which a settlement is constructed.

Paul: Can I ask a question? Is there a difference between a technical advisor and an expert?

Tom: Yeah, so, what I mean by that term is, in this context, everybody typically gets an expert, right? Every party goes out and obtains an expert, but it’s their expert. So, that expert in a litigation is working for a party. It is viewing the dispute from that party’s perspective, and it is independent, moniker notwithstanding. It’s working for that party and the goal is to assist that party reach its objective, which is either recovering the most amount of money or avoiding liability. So, yeah, there are experts involved in almost every case, but they all are aligned with a party. I’m talking, in this context, of going into a mediation and employing an independent expert to try to facilitate agreement among the various party experts. Or to be a sounding board for the various party experts’ opinions as to causation, opinions as to responsibility, opinions as to the appropriate fix.

Paul: How do you get to figuring out what the appropriate fix is?

Tom: Well, Paul, it’s what you do, right, when you’re called in to try to deal with a building that’s got a performance problem. You need to examine the documents. You need to potentially do some testing and forensic examination. All of the stuff that people are going to do or may do, during the course of the litigation in preparation for going to trial, to prove why they’re not responsible or somebody else is responsible. The same exercise, but here it’s being done with the goal of trying to reach some consensus or, again, at least narrow the dispute as to what is the root cause of the problem and how can we go about trying to fix it.

Paul: So, is there any merit in having everybody use a single, independent expert?

Tom: That’s just not feasible, and nobody’s gonna agree to that because you don’t know if the case is gonna settle. And if it doesn’t settle, you still got to gear up for litigation. So, everybody’s gonna have their own experts, but involving an expert in kind of a mediation role, typically that expert is retained by an actual mediator, although paid for by the parties. And that expert advises the mediator who then tries to work with the parties. But it’s key that it’s somebody who’s well respected, that the independent party, the party experts, will take seriously, will respect his or her opinions and recommendations. They’re a facilitator. They’re not an arbitrator. We’re not talking about bringing in somebody that everybody’s gonna agree to abide their decisions.

Paul: So, everybody has independent experts, and with not necessarily, or not usually, I guess I would say, the same opinions. There may be some agreement on some issues and there may be not so much on others. So, how do you bring that all together to basically try to make progress?

Tom: The format of mediation is very important in this regard, because the mediation process is confidential in the sense that the things that are said, the information that is exchanged, the offers and responses, can’t be used as evidence in the litigation. So, there isn’t concern that if I concede a point in my discussion or I conceptually agree to a particular aspect of a repair plan, that that’s gonna be used against me at trial as evidence that I’ve admitted to wrongdoing. So, the form of mediation is key to allowing everybody to come together to cooperate and try to reach a compromise resolution that brings an end to the litigation.

And that word, compromise, is the key. You can’t go into it with the mind that I’m gonna be proven right, that the mediator’s gonna agree with me, and he’s gonna tell everybody else that I shouldn’t be in the lawsuit. People go into the mediation with that mindset, there’s no chance of reaching a resolution. Everybody has to go into the mediation with the understanding that the purpose is not to determine who’s right and wrong, who’s liable or not liable, but to come up with a resolution that ends the litigation, stops the bleeding in terms of the cost, and, for the owner, starts them down the path towards getting the problem that gave rise to the lawsuit fixed, so they’ve got a properly performing building.

Paul: One of my favorite sayings that I’ve heard, you know, which I think probably many of the listeners have heard as well, is that a good settlement is one that none of the parties are completely happy with, which means that they made a compromise.

Tom: That’s right. But having said that, there are settlements that can leave everybody almost happy.

Paul: Well, getting out of the lawsuit would be one of the things that makes people really happy. Particularly, sophisticated folks who’ve been down that path before and have, like, another one of my favorite expressions is, “have felt the pain.”

Tom: Right. I mean if you’re…to think about it, I mean, litigation is a distraction for everybody, right? If you’re a building owner, you spent a lot of money to build the building that you, you know, expect to generate revenues for you, in terms of rent if it’s a commercial building, or to produce goods for you if it’s a manufacturing facility. And it’s not performing and it’s affecting your business. And now you’ve got the distraction of this lawsuit. If you’re a contractor, you wanna be building things, right? You don’t wanna be sitting in a courtroom with a bunch of lawyers instead of pursuing jobs, and you certainly don’t wanna be writing checks every month to a law firm.

Paul: So, with this, with the idea to have mediation as early as possible, and I know I’ve been involved in disputes where there’s reluctance to do that, then how do you overcome that reluctance?

Tom: It can be tricky, and you can’t do it in every case. That goes back to my initial comment that, you know, there isn’t a one size fits all strategy. But in my experience, the key above all else, is that somebody needs to take control. There needs to be one of the parties who takes control of the situation and gets everybody starting to think about working towards a resolution. And in construction litigation, particularly multi-party defect litigation of the kind you get with building envelope problems, you know, there’s a couple of obvious candidates.

One is the plaintiff, typically the owner. If the owner takes control of the situation, demonstrates a willingness to cooperate, demonstrate an interest in solving the problem as opposed to simply getting the largest dollar recovery. But if the owner communicates to the GC and the architect and the other parties that, “Look, my interest in here is fixing the problem so we can move on,” that, you know, goes a long way towards getting the defendants to think the same way. On the defense side, it’s the general contractor and the architect, right? General contractor in particular because he’s responsible for the entire building. But the work was actually performed by his subcontractors. The materials were provided by his suppliers. And, so he’s in a unique position to work with all of the various parties who have contributed to the problem, perhaps, but who also represent the potential for fixing it. So, you need one or a combination of those parties to really take control.

One of the biggest impediments to early resolution of this nature is, you know, the owner will sue the architect, say, “I’ve got all these things wrong with the building, and I think it’s a design problem.” The owner will also sue the general contractor, same lawsuit, but separate claims, “I’ve got all these problems with my building. It’s a construction problem.” And between the two of those, the owner’s position will be, “I know I didn’t do anything, I’m just the owner. It’s either a design problem or a construction problem. You two figure out which.” And the owner doesn’t make any effort to determine what the root cause is because from a legal stand point, it doesn’t have to, is its thinking.

Similarly, the general contractor brings every single subcontractor and supplier into the lawsuit as additional defendants. Those individual subcontractors and suppliers, their first reaction, too, is, “What did I do wrong? How is my scope of work implicated?” And the general contractor’s response is, “I don’t know because the owner doesn’t tell me. I just know, to the extent it’s a construction problem, I didn’t self-perform. It’s one of your all problem, not mine.” And that makes it very difficult to start working towards a resolution because you have no agreement or identification of what the actual problem is, whose work is implicated, who’s responsible, and what needs to be done to fix it. So, that’s why it’s so important that somebody take control of that process and start to work on figuring out what the root cause of the problem is, whose work is implicated. And, only once you do that can you start figuring out how to fix it, which is how you settle the case.

Paul: So, the party that takes control, how do they go about figuring out what the problem is and how to fix it?

Tom: Well, there’s…you know, in the litigation and the adversarial, I mean, that’s part of the adversarial litigation, right? That’s the purpose of the trial. Everybody gets their expert, they go in, they testify as to their theory about what the problem is and who’s responsible, and then the jury sorts it out. You know, 12 people who they pulled off the street who don’t know anything about building envelopes. That’s one way to resolve it.

Paul: And nobody wants to get there.

Tom: So, the other way to resolve it is for everybody to agree to go to mediation, where they bring their experts and their experts give their input. And the mediator, with the help of a technical advisor, listens to everybody’s input and then starts to try to craft some consensus on things. And, you know, the mediation doesn’t have to take place in one day. You can have an initial mediation where everyone gets their input, and you identify, “Well, we seem to have this agreement on this issue.” And the, you know, the experts or the independent consultant, if there is one, can look at that and say, “Okay, is there a way for us to answer that question? Can we go out and do some testing on the building to determine if it is in fact a problem with the sill, the sills, or if it’s a perimeter sealant problem? Where exactly is the source of the water infiltration?”

And if, you know, if the parties are working towards trying to resolve the dispute, short of going to court, they can agree on that testing, collectively fund it, get the results, factor that in to their negotiations and decision making. Hopefully, they can reach some agreement that, “Okay, we’ve eliminated the sealant. So, the sealant supplier is not somebody who we’re gonna expect to participate further.” It’s that sort of, you know, investigative process and consensus building as to what exactly is the problem, who’s potentially responsible, that that’s there before we can start talking about fixing it to resolve the dispute.

Paul: So, you do the testing and forensic examination, and you get to some degree of consensus amongst the parties as to what the extent that caused the problem is. What do you do next?

Tom: Well, if you’ve made it that far, you’re a long way because there’s usually a lot of bumps in the road to get to that point. And if you have actually gotten to consensus as to what the problem is, you have achieved a lot already, and I think the chances of your being able to resolve the dispute are very good. So now, the next step is we have agreement or some sense of agreement on what the problem is or what the likely cause of the problem is. Now we got to agree on how to fix it. What’s the most cost-effective, reasonable way to address the problem? And here, again, we’re talking compromise. So, you know, you’re not gonna get a resolution if the owner’s unrelenting position is, “I will accept nothing less than ripping the entire envelope off of the building and reinstalling the envelope with all new upgraded componentry, and I expect you to pay for it.” That’s not gonna get you a settlement.

Paul: No, and we’ve all been there, done that in that respect. And it’s funny because, you know, when they start out like that, they don’t always end up like that, obviously. And I can think of situations where, where I’ve been involved, where that would actually be the right fix. But even then, there’s no money to pay for it. And the owner ultimately accepted a reasonable settlement that was within the…within the resources that were available, I guess I would say.

Tom: And that, you’re right, Paul. And that’s why I made the comment up front about every situation is different. There are some cases where that is the right fix. But there’s probably a many more cases where it’s not necessary, there is an effective fix short of that, that will allow the building to perform adequately. It may not be…granted, it may not be what the owner had paid for, but again, we’re talking about trying to resolve the dispute and compromise that avoids the expense of the litigation, avoids the risk of pushing this decision in the hands of 12 people who don’t know anything about buildings, and increases the net bottom line for everybody.

Paul: And that’s managing risk, too, isn’t it?

Tom: Yes.

Paul: Yeah. So, let’s say that, you know, all this, everything’s go well. And by the way, this can be years in the making. Hopefully not, but it can be. And you fashion a remediation plan that everybody’s buying in on, how do you build a settlement around it?

Tom: That’s… If you’re that far, you’ve probably solved some of those issues. You know, so for example… And that can be the benefit of an early mediation, too, is identifying what the hurdles are, what the possibilities are. You know, if the owners got the case, if the owner, excuse me, if the plaintiff’s attorney has the case on a pure contingency, or if the owner’s interest really is in just in money, that’s gonna come out in the mediation. If the defendants are trying to work towards a fix, a settlement resolved around a fix, that’s gonna come out. But that’s important information to know, because now, now you know what you’re dealing with. You know where your efforts are best spent.

But we’re assuming that it’s not one of those cases. We have an owner whose interest really is in getting the problem fixed. We have a plaintiff’s lawyer who is amenable to a resolution that is not just a payment of which he gets a piece. And so then, the settlement resolves around that, the implementation of that fix. And, there’s a lot of variations on that depending on the individual facts. You know, A, you need the consultants to have some degree of comfort in both the reasonableness of the fix, that it’s not overkill, but that it’s also effective. You need to get the owner’s buy-in, obviously, that the fix, whatever it is, gives them a building that performs to its expectations or as near to those expectations as possible under the circumstances. That often requires some margin of error in the remediation plan that gives the owner the benefit of the doubt on some of the issues in the dispute. You know, you may not reach agreement that there’s a problem with a particular detail, but you can address it and compensate for it or fix it at a relatively small cost if you take that issue off the table.

You don’t reach agreement, then it’s a problem. But your fix addresses it so that if it is a problem, the owner can be comfortable that it’s addressed. That’s a key, is taking into account that there may not be agreement on what all the contributing causes are. So, you got to come up with a remedial plan that has developed some suspenders, to some degree. And not only fixes what you may think is the problem, but compensates for other potential problems. Getting the designer and the contractor’s buy-in is reasonableness and proportionality. It can’t be an economically wasteful remediation plan. It has to be cost-efficient, and it can’t represent a betterment at the contractor’s expense. If there’s gonna be a betterment element to this, the owner’s gonna end up with a better system that any contractor then paid for, then that ought to be recognized in the settlement, from a financial perspective.

Paul: And how do you make all that happen?

Tom: Magic. And a really good lawyer.

Paul: Seems like it, seems like it. But you’re the magician, right?

Tom: Yeah, I mean, I’ve actually, you know, been involved in cases that have settled this way on a number of occasions. The most advantageous way to do this, if you can, and you can’t in every case, is if the parties, the contractors, the suppliers, the architect, are actually able to provide their goods and services and materials as an in-kind settlement. Because that’s a much lower net cost to them, right? If I’m a manufacturer, the cost for me to supply replacement product is my cost, right? It’s much lower than if I have to write a check to pay for another manufacturer to make replacement materials because there’s gonna be markup and profit margin. It’s gonna be way above cost. Similarly, if you’re a contractor contributing labor, there’s a cost associated, yeah, but it’s, again, less than writing a check for somebody else to do it and make a profit on it. So, whenever it’s possible, having the parties participate in the fix is the most economical resolution.

Paul: So, is there a circumstance where remediating the problem isn’t necessarily the best solution, and if so, what are some of the obstacles that get in the way?

Tom: Yeah, I mean, there’s some initial obstacles that make it not a realistic possibility that we mentioned, where the owner isn’t interested in getting it fixed, right? They’re just looking for money because maybe they don’t own the building anymore. Maybe they sold it, and what they’re seeking to recover is the perceived diminution in the value of the building that they got less for it when they sold it. Or, there’s a plaintiff’s lawyer on a contingency fee arrangement, and it’s difficult, you know, for somebody to take 35% of the value of a fix. And that becomes, not impossible to deal with, but it can be very, very difficult to figure out how the lawyer is going to get his share of the settlement.

And then, you know, you have contractors and manufacturers who aren’t around anymore. They’re not viable, they’ve gone bankrupt, and they’re just not…they’re not available to perform the remedial work or to provide the replacement materials. You’re gonna have to come up with an alternative source of labor or materials. Where there’s really bad blood between the parties, where the discussions before the litigation got really nasty, people don’t trust each other and want nothing to do with each other anymore. That’s a particular problem for contractors and manufacturers. If they have an owner who they believe has been unreasonable, who they believe is simply looking to win the lottery in the litigation, that can be difficult to overcome even if they try to dispel that impression. And they don’t want to be involved with that owner anymore. They’d actually prefer to write a check and be done with them than to go in and provide replacement material or to do the remedial work, and then have to potentially be responsible for the replacement materials or the remedial work, right? Their concern is it’s never gonna end. They’re just gonna keep getting called back, and the owner’s gonna keep asking for more and more.

That is one of those things, that the parties have to work really hard to regain trust and to demonstrate good faith that no, you know, that the effort here is just to get it fixed and that they’re going to be reasonable to deal with going forward.

Paul: So, there are a lot of obstacles to a monetary settlement. Are there strategies for getting over those obstacles or getting around them?

Tom: There are. You need to be creative, and again, people need to be willing to compromise. And you have to maintain the trust between the lawyers, between the parties, between the consultants. You know, there’s some creative financing solutions where there is an element of payment that simply can’t be avoided as part of the settlement. You can look at the saved defense costs that you’re avoiding and that you may have reserved for or that your insurance carrier may have reserved for, and apply those reserved defense costs toward the early settlement, the financial component of it. You can explore cost sharing arrangements where, you know, the owner participates in the cost with the defendants. You can add value.

So, I said earlier that you have to avoid betterment at the contractor’s expense, but one very effective approach is to incorporate a betterment at a discount. The fix upgrades materials, enhances the design, gives the owner more value than he was actually entitled to under the contract, but at a discounted cost. So, the owner shares in the cost of the betterment as does the contractor or the supplier. They supply it at cost or at a steep discount. The owner covers that cost. It’s a win-win. The owner gets actually a better building or system than it originally contracted for, fixes its problem, and the cost to the defendants is either covered or mitigated.

Tom: Okay. The key, and I keep coming back to this, but the key to all of this, key to actually being able to achieve a resolution built around fixing the problem at an early stage of the litigation, is communication and trust. Lawyers need to be able to talk to each other. They need to row in the same direction, towards trying to resolve the litigation, not posture, not try to gain advantage. Because if they start doing that, the other lawyers are gonna see what’s going on. They’re gonna adapt similar approaches because there won’t be trust between the lawyers that they’re actually in good faith working to try to resolve the dispute, as opposed to just trying to better position themselves for the litigation as it heads towards trial.

Same with respect to the parties, to the extent that the parties communicate directly in the process. They need to convey a sincere desire to try to resolve this, to try to repair a business relationship, to try to repair or maintain a reputation in the marketplace, to maintain the trust between the parties that they’re actually trying to solve their problems as opposed to take advantage of the other side. Those two elements, open communication and trust, are the key because if you lose those, if people aren’t communicating, people don’t trust each other, then you’re not gonna be able to reach agreement. And the parties aren’t gonna be comfortable compromising because they’re gonna be fearful that they’ve just been taken advantage of. And nobody likes to feel like they’ve been taken advantage of. So, the default mechanism is to say, “Hold on. Slow down. I’m not gonna do this. I’m not comfortable.”

Paul: Tom, really great stuff. I know it’s of big interest to our listeners who obviously don’t want to be involved in litigation unless their lawyers or experts, maybe. And if they do get involved, you know, the exit strategy, the quick exit strategy’s really, really important. So, thank you very much for, you know, the time. We did two episodes which is really great. And thank you for sharing your wisdom with the listeners, with the really valuable information for them to consider and implement going forward.

Tom: Thanks for including me, Paul. I enjoyed it.

Paul: Yeah, it was great. So, I want to just remind everybody again that we have the “Everything Building Envelope” newsletter that I think that would be of real interest to our listeners. And, to subscribe to that, all you need to do is text the word, “building envelope” to 22828. Again, “building envelope” to 22828. I’d like to thank everybody for listening to the “Everything Building Envelope” podcast, and this is Paul Beers, saying, “So long ’til next time.”

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Effective Allocation and Management of Performance Risk in Building Envelope Design & Construction

Tom Madigan – Buchanan Ingersoll & Rooney

  • What is the difference between risk management and risk allocation?
  • I think we all understand why risk management is important, but why is risk allocation important?
  • I thought the designer was always responsible for the design and the contractor always responsible for construction?
  • What are some of the performance risks that need to be allocated between the architect and contractor, with respect to the design of the building envelope?
  • So what are some things that should be taken into consideration when deciding the best way to allocate risk in the design and construction contracts?
  • What are some best practices in allocating risk between the design and construction contracts when it relates to the building envelope?
  • Let’s shift to Risk Management.  What are some examples where failure to properly manage the design and construction process can increase risk of non-performance?
  • Even when all of these best practices are employed, things still go wrong.   What about contractual remedies and guarantees?

Tom Madigan Bio

Buchanan Ingersoll & Rooney Profile 2017

Law Firm Florida Offices

About The Everything Building Envelope Podcast:
Everything Building Envelope℠ is a dedicated podcast and video forum for understanding the building envelope. Our podcast series discusses current trends and issues that contractors, developers and building owners have to deal with related to pre and post construction. Our series touches on various topics related to water infiltration, litigation and construction methods related to the building envelope.


*** Subscribe to the show and leave us a Review on ITunes!

The Everything Building Envelope Episode Transcript:

Paul: Welcome back, everyone, to the “Everything Building Envelope” podcast. This is Paul Beers. I want to remind everybody, first of all, before we get into today’s topic, that we have a newsletter, the “Everything Building Envelope” newsletter. And if you would like to subscribe to it, please text the word “building envelope” to 22828. So it has technical articles and other things of interest to the building envelope community. Again, for the “Everything Building Envelope” newsletter, text “building envelope” to 22828.

I’m really excited about our guest today, Tom Madigan. Tom is a lawyer. He is the Chairman of the Construction Practice Group at Buchanan Ingersoll & Rooney. Buchanan is a national law firm and has six offices in Florida. And welcome, Tom.

Tom: Thank you, Paul.

Paul: So, Tom and I have worked together in the past. Of course, he’s the lawyer, and I was the expert, and we’re old friends in that regard. And he’s a great guy. And I think it’s really gonna be a very interesting podcast for everybody. So, Tom, before we get going, maybe you could tell the listeners a little bit about yourself?

Tom: Sure. I’m a construction lawyer. I’ve been practicing 30 years now. I am a litigator handling both the prosecution and defense of claims, many of which involve building envelope performance as well as delay claims and other performance disputes arising from construction of high-rise residential, commercial, and industrial projects across the United States. I’ve done a lot of work in the Southeastern United States on issues of water intrusion. I’ve also done work in the Northern United States on water intrusion and air intrusion and energy performance. And my work as a litigator has also given me a perspective on how to avoid some of the problems that I’ve seen. I also advise clients on the front end in terms of contract negotiations and then during projects to try to avoid disputes or mitigate them once they arise and keep them from turning into full-blown litigation.

Paul: I think that that’s really a great word, “avoid.” I know that that’s probably what the listeners are most interested in is not being involved in a long energy-sapping, expensive dispute, but rather do what needs to be done upfront to try to stay out of it.

Tom: Yes. I think that is everybody’s goal, with perhaps the sole exception of the lawyers handling the litigation.

Paul: And maybe the experts.

Tom: And maybe the experts.

Paul: So we were talking about risks and risk management. And, today, we’re gonna talk about effective allocation and management of performance risk in the building envelope and construction. And, Tom, you know, you’ve done a lot of work in buildings with building envelopes, water leakage, air filtration, things like that. Does the building envelope represent a disproportionate amount of claims on buildings?

Tom: It does in the respect that when you have a building that doesn’t perform properly and it leads to litigation, even when it’s not exclusively related to the building envelope, the building envelope seems to be involved. So, whenever there’s a water intrusion problem with a building, you can almost guarantee that the building envelope designer, supplier, installer of all the materials and systems will be named, along with the roof and some other elements. It doesn’t always turn out that the envelope was the source of the water intrusion, but those parties always get dragged in.

Paul: Yeah. Occasionally, I do seminars, speaking gigs, and things like that, and one of my favorite lines starting out is “What’s the easiest way to screw up a good construction project?” And it’s to have water leaking in at the end of the job. All hell breaks loose usually when that happens.

Tom: Well, and I think that the building envelope, with some exceptions, is typically a combination of various materials and systems. And that brings with it integration and coordination challenges, which, if not designed correctly and not installed correctly, create performance problems. So I think it’s also a product of the complexity of the building.

Paul: Well said. So let me ask you what’s the difference between risk management and risk allocation?

Tom: Sure. So risk management involves those things that I think everyone is typically familiar with, and hopefully includes in their business organization: quality assurance and quality control measures; tsupervision, inspection and testing. All the things we do to make sure that the work is of good quality and doesn’t have deficiencies. Or to catch them and correct them. And then on the far end, it involves insurance, to manage the financial loss if the risk comes to fruition.

Paul: So that’s risk management. So what would risk allocation be?

Tom: Risk allocation is simply…and here, we’re talking about contractual risk allocation…it’s the assignment of responsibility for a particular risk. Which party, contractually, will be responsible for making sure that a particular element of the building performs in accordance with the needs of the owner, and will be liable if the end result does not meet that performance requirement.

Paul: For example, say that there’s water leaking into a building, and there’s a litigation, and everybody that’s involved with the exterior of the building is named as a party. Let’s just say stucco, waterproofer, window manufacturer, and others. Is it the window manufacturer saying, “Look, my windows were perfectly fine. And even though the water is coming in near them, it’s not my fault”?

Tom: Now, that is what I would call after-the-fact assessment of responsibility. What we’re talking about with risk allocation is on the front end of the project. When the team is being assembled and the work responsibilities are being divided up through the contracts, determining which of the various trade contractors and suppliers and design professionals are going to be responsible for which elements.

So for example, to use your example where you’ve got a building envelope that involves both EIFS and window systems. Contractually, who is responsible for making sure that the window system integrates properly with the EIFS so that you don’t have a source of water intrusion at that junction. And if you do, who is called on to make it right.

Paul: So I think we all understand why risk management’s important. But why is risk allocation so important?

Tom: Because who you allocate the risk to plays a big part as to whether it is effectively managed at the end of the day. The goal of risk allocation is to place responsibility with the right party; which is the party who is in the best position to manage or mitigate the risk, or to avoid it entirely. Because that increases the chances of successful risk management.

The other goal is to place liability with the person who is best able to avoid the risk. Because that is simply equitable. And then to place it on the party who is in the best position to correct or remediate it, or to carry the financial burden of its failure of performance.

If you allocate the risk to a party who is not in a position to effectively avoid or mitigate it, or who can’t bear the cost of the risk if the performance fails, it just increases the probability that the risk is going to come to fruition, and it’s not going to be adequately remedied. And you’re going to, for example, end up in a multiparty litigation with everybody pointing fingers at each other.

Paul: But isn’t the thought that the designer is always responsible for design and the contractor is always responsible for construction?

Tom: So, in very broad general terms, that’s true. That relates to the traditional design-bid-build process, particularly in competitively bid public projects. But that’s only a general proposition. It’s not an absolute rule. Even in design-bid-build projects, where you have an architect separately contracted to the owner, and a GC under a different contract with the Owner, the responsibility can differ depending on whether you have design specifications or performance specifications.

You know, design specifications are where the plans and specs tell the contractor exactly what to build, what materials and products to use. Akin to a blueprint or a roadmap. The contractor in that circumstance, is responsible to build in conformity with the design. If the construction conforms with the design, but it doesn’t perform as the owner intended or needed, that’s not the contractor’s responsibility.

Performance specifications, on the other hand, simply set a performance requirement that the contractor must meet. But the contractor has discretion on how to best meet that requirement. He has some discretion in the choice of materials, perhaps, in the choice of systems, certainly, and in the approach to the construction. But he then bears responsibility for those choices. And if he doesn’t meet the performance requirements at the end of the day, it’s the contractor’s responsibility.

And, you know, frankly, most private projects are a combination of both. And it’s sometimes not clear whether the specifications are design specs or performance specs; whether the responsibility lies entirely with the designer, or whether it’s been delegated in some respects to the contractor, or exactly how much detail with respect to design is required of the contractor in the shop drawings and coordination drawings and submittals. Those things aren’t always clear, and they’re often the subject of litigation when things go wrong.

Paul: We see a lot of that at GCI Consultants on the construction projects we’re involved with. When a contractor takes on design responsibility or risk, how do they allocate that at that point?

Tom: Could you repeat that question?

Paul: When a contractor takes on design responsibility, how do they allocate their risk?

Tom: So the first key is for the contractor to understand that he’s taking on a design responsibility and to knowingly assume that responsibility. You know, if the building envelope component of the project is design-build and the contractor has the resources and the expertise to take on that responsibility, that’s great.

The biggest problem I see is where a contractor doesn’t understand how much design responsibility he’s taking on. You get disputes over what the purpose of the shop drawings are. The architect is expecting the contractor to provide a lot of missing design detail, to show how systems will be integrated, to show details on joinery, to show details on integration, both of different systems and with the surrounding conditions. But the contractor doesn’t understand that’s what’s expected of him. He thinks he’s just providing shop drawings that show, you know, product detail, and he’s not prepared to take on the larger design responsibility. So that’s the first key, to understand the risk that you’re assuming and make sure that you’re prepared to manage it and perform as required.

The other element that comes up often is where a contractor may agree to take on design responsibilities with the expectation that he’s going to rely on a subcontractor or a supplier to actually do the design work. He’s not actually going to do the integration details, or the design details. He is going to rely on the system manufacturer, but is then not clear in his or her dealings with the system supplier , so that the system supplier does not understand what the subcontractor expects. As a result, it doesn’t commit the right personnel or attention to the application engineering and coordination. Or the contract between the trade contractor and the supplier doesn’t reflect the allocation of design responsibility to the manufacturer, because it is a standard form contract of sale that says something like “We’re just the supplier. We just supply the materials in accordance with your takeoff.” “Application engineering is excluded. Shop drawing preparation is excluded.” So the contractor is taking on a risk it isn’t in a position to perform, and has not effectively allocated the risk downstream to the party that it is relying on.

Paul: Yeah, because if you have a scenario where, you know, let’s say that the design is vague, maybe intentionally vague, with regards to certain systems. And the contractor passes it on to a supplier or a sub or whatever without really adequately covering all the bases, shop drawings, submittals, things like that. Correct me if I’m wrong. They’re effectively letting the subcontractor ultimately design it and probably not properly allocating the risk.

Tom: Right. What happens is a couple of things, you know, because when something goes wrong…you know how this works…it flows downhill, right?

Paul: Yeah.

Tom: So if the building envelope doesn’t perform, the owner looks to the GC and the architect, because the first question is typically, is it a design problem or a construction problem? And with your hypothetical, the architect may say, “Well, I allocated design responsibility to the contractor.” The general contractor then turns around and says, “Okay, Mr. Glazing Subcontractor, I allocated responsibility to you. I don’t care if it’s an installation problem, if it’s a design problem, if it’s a product problem, because you’re responsible to me for all of those things.”

If it is a product problem, or if the subcontractor was relying on the manufacturer to do the design details and coordination, the subcontractor wants to now look to the manufacturer to offload that liability. The problem is that the manufacturer says, “Well, but our contract doesn’t allocate that liability to me. I say I’m not responsible for those things. So it doesn’t matter that you might be responsible to the general contractor for. I’m not responsible to you. I disclaimed those things contractually. The liability stops with you.” Even though the subcontractor may not have done the work, may have been relying on the manufacturer to do it, because the contracts did not line up with the actual allocation of liability, the subcontractor finds itself holding the bag.

Paul: And hence the dispute?

Tom: Yep.

Paul: So what are some of the performance risks that need to be allocated between the architect and the contractor with respect to design of the building envelope?

Tom: So, we just touched on a lot of them in that example, but it is things like starting with determining what the performance requirements are for the building based on its intended use, and based on regional and local code requirements. Where you are [Florida], you have enhanced performance requirements in coastal regions. Who is responsible for, in the first instance, determining what the level of performance is required for the building envelope and its constituent parts? Then, who is responsible for selecting the products to meet those requirements? Who is responsible for making sure that the various components are compatible with each other, and for detailing how they are going to be integrated into the complete envelope system?

You know, Paul, we’ve both seen building envelopes that have combinations of stucco, masonry, brick, metal panels, curtain wall, window wall, sliding doors, storefront. Who is responsible for making sure that each of those individual components meet the performance requirements, perform together, and are erected in the right manner?

Paul: Lots of opportunities for problems there.

Tom: But, you know, an often overlooked piece of that is the definition of the scopes of work and the sequence. And that’s an allocation issue. Is that all going to be specified by the architect? Is the architect going to specify the order in which the various components are installed? And who is responsible for flashing in which areas? Who is responsible for which caulking? Who is responsible for which integration details? Or is all of that going to be left for the general contractor to determine in how it breaks up the subcontract packages? And who is going to be responsible for making sure that the sequences are followed and the work is performed in the correct order so that the people responsible for integration can actually do what needs to be done before the successor work comes along?

Paul: Yes. Doesn’t that often or usually come down to how the contractor buys out the project as far as, you know, which subs are doing what?

Tom: That’s how it is implemented. But, you know, it has to be thought about up front, with not just respect to who’s going to give the best price, but how is this actually going to be constructed. And then during the project, there is the management of making sure that the contractors are getting to the work when it becomes accessible to them and performing their work that is predecessor to somebody else’s follow-on scope of work. You know, so you don’t have somebody coming back, trying to put flashing in after the windows have been installed.

Paul: And on top of that, we’ve got the natural tension that exists in any project between the scope of work and the budget.

Tom: Right. And that is another element of risk allocation. You know, there has to be a proportionality between responsibility and the cost of that responsibility. You know, if an owner is looking to a contractor, or an architect is expecting a contractor, to take on design risk, then they ought to be paid for that. That’s a cost.

And, you know, maybe going design build on the building envelope is the most cost-effective approach, and maybe it’s not. But you have to weigh those things. You have to weigh the potential risk of non-performance versus the cost of buying that risk or selling it to a particular party, and make an informed decision.

The real problems arise when risk is forced on someone, when it is done in a less than clear fashion, and that person doesn’t price the risk into their work. Because if they haven’t priced the risk in, chances are they’re not going to take the steps necessary to manage it effectively.

Paul: Kind of like if you want this job, you’ve got to meet the budget.

Tom: That’s always an element. And, you know, the old saying is, you can have…what is it, “Fast, cheap, or good, you can have two of the three.”

Paul: That’s right. But cheaper is always the one that I see. So what are some of the things that should be taken into consideration when deciding the best way to allocate risk in the design and construction contracts?

Tom: So, we’ve talked about some of them. Certainly, it starts with determining which of the parties – the designer, the general contractor, the glazing subcontractor, the manufacturer and supplier – which one is in the best position to avoid or manage the risk of non-performance. If it is a product manufacturing issue, obviously the manufacturer is in the best position to manage that risk. If it is an installation issue, the installer is in the best position to manage that risk.

Where it gets trickier is where things become…you know, the intersection, product selection, integration of different systems where you have multiple parties involved and there is a need to coordinate their efforts and to oversee their performance to make sure that each does what is required of them. And that’s when you need to look at things like who has the expertise to identify risk, to manage it, to correct it.

Obviously, if it is a pure engineering issue, it is the design team that holds that expertise, and has control and authority. You know, in a typical contracting situation, where the owner contracts with the architect and contracts separately with the general contractor, the architect and engineer’s ability to manage and control the subcontractor, to hold them to the design requirements, is limited. They do not have contracts with the general or subcontractors, and, most importantly, they don not control the purse strings. They do not hold the checks. That is the owner or the general contractor.

You know, sometimes, there are licensure requirements or certification requirements that dictate where the risk has to be allocated. If design drawings have to be signed and stamped, then it is the professional who signs and stamps them and puts his expertise behind the work product and warrants that it is accurate and will perform. With product certifications it is the manufacturer who tests the product and obtains the certification, and represents that the product will perform to that certification.

And then the last thing we touched on was there is a comparative cost of allocating risk. If the owner or GC is going to allocate risk to one of the parties with whom it contracts, then the contract price ought to reflect that risk in order to ensure that the party has the resources and the motivation to manage it.

Paul: So what are some best practices with allocating risk between the design and construction contracts as it relates to building envelope?

Tom: First and foremost are clear documents. If the specifications are going to delegate design responsibility to the contractor for an element of the building envelope, the documents need to make that clear. It needs to clearly specify which elements of the design are to be detailed out or finished by the contractor, so the contractor knows what is expected of it and, again, can price it into its contract.

So, you know, the documents need to be clear as to what is expected. The level of detail required in the shop drawings. If the contractor is to prepare design detailed drawings, what standard will be applied. If there are coordination drawings required, what do they cover. You know, there is nothing wrong with delegating those elements of design to a contractor, and there is nothing wrong with a contractor assuming those responsibilities. But both parties [the party delegating the risk and the party assuming it] need to understand what they are requiring and what is expected of them.

When there is design delegation, it is still important that the architect-engineer be responsible for review and approval. I think that it is also a good idea to contractually require the architect and engineer and the contractor and the appropriate subcontractor or supplier to mutually inspect the work, or do a mockup, and to accept the implementation of the delegated design into the architectural specification.

Specifically with respect to a building envelope, if I am advising an owner, one of the things I will suggest for a large construction project, particularly one that is intended to have an architectural pizzazz to it, and might have a complicated building envelope, is that when you are negotiating with the architect, or when you are interviewing the architect, I want to see a demonstrated expertise in building envelope design. And if I am not comfortable, I would consider contractually requiring the A-E to have a sub-consultant for the building envelope for the building envelope. And, obviously, that is a cost that will get passed to the owner.

The other thing to consider is single-source responsibility for the building envelope. Here, we’re talking about a design-build contract for the building envelope itself, that provides a single source of responsibility for both design and construction. You know, so when things go wrong, it eliminates the typical finger-pointing.

Paul: So let’s shift over to risk management. What are some examples where failure to properly manage the design and construction process can increase the risk of non-performance?

Tom: The big one is what I call “Frankenstein” designs or specifications, that mix-and-match components or system details or get revised, either because the architect has a particular concern from a past project or as part of the value-engineering effort. Whenever you are using multiple materials and systems as part of the building envelope, or are making revisions to standardized details, it is critically important that you involve both the manufacturer and the installer and get their input and approval. There is no surer way for an owner to end up with a lot of finger-pointing than when you have a building envelope that is the product of a whole bunch of value-engineering efforts where system components have been changed or revised and the original manufacturers and suppliers won’t take responsibility because, in the end, it is not the system they tested and warranted.

Paul: What are some of the best practices in risk management to avoid or decrease the risk of non-performance?

Tom: So, again, when we are talking about building envelope systems, particularly those that might integrate various materials or various separate systems from different manufacturing sources, integration and coordination is really the key. And there are a number of collaborative design tools now available to help with that effort.

BIM is probably the best known, Building Information Modeling. It allows for integration of shop drawing and product information into the architectural design. It will give you a depiction of the specific performance capabilities of a product in the design drawings. It will incorporate that information. It will incorporate the shop drawing details into the original design drawings, so everyone has a complete design showing all of the components of the building envelope. It will help to detect clashes between those various components at the design stage, so they can be resolved.

There is submittal management software to help track product submittal or shop drawings and their review, rejection, return, re-submittal, and ultimate approval. You know, that becomes very helpful in projects that experience delays, because it is when a project gets delayed and everyone’s hustling and trying to catch up or to avoid falling further behind that shop drawings don’t get submitted. Or they get submitted, but they get only a cursory review. Or they never get resubmitted, and noone follows up. Or product information is not closely evaluated and potential problems are not detected.

Kick-off and coordination meetings are an old-fashioned management tool. They allow you to work out all the integration and sequencing issues before the work actually starts, get everybody on the same page. Mockups and field testing of complicated building envelopes are invaluable. They allow you to actually build the thing in a smaller scale and test it to make sure that it is going to perform the way it is intended.

Paul: Those are many of the things that are near and dear to our hearts at GCI Consultants as we work on projects, you know, showing everything clearly. We used to get these flat details, 2D details, for corner conditions where a lot of materials are coming together. And there was really a lot of guesswork to try and put it all together and have it work and then getting everybody together at the beginning of the project, the beginning of design, and also the beginning of construction to make sure that all the parties know each other’s roles and are on the same page and working together.

And then, you know, doing a mockup, a lot of times, it can just be an in-place mockup on the building, as early as possible and testing it so that, if you do have a problem, you identify it and solve it before, you know, a year later, everybody’s getting ready to move in and, all of a sudden, you got to go back and do a remediation program.

So, Tom, really interesting. And, you know, I think we’ve still got a lot of things that we could talk about, particularly as it relates to the building envelope and performance and disputes and whatnot. Would you be up to doing a part two of this podcast to kind of delve a little deeper?

Tom: Sure, absolutely. It would be my pleasure.

Paul: Great. Yeah, that would be wonderful, because I know it’s really interesting. It’s great stuff. I would like very much to keep charging into it or diving deeper into it. So we’ll do our next episode. It will be a continuation of this one. And, Tom, again, thank you very much, and I really look forward to doing that with you.

Tom: Thank you.

Paul: So thank you, everyone, for listening to the “Everything Building Envelope” podcast. I wanna remind you again that we have the “Everything Building Envelope” newsletter. And if you’re interested in getting on the list, please text the word “building envelope” to 22828, again, “building envelope” to 22828, to receive the building envelope newsletter.

And that ends this episode of the “Everything Building Envelope” podcast. Thank you for listening. And this is Paul Beers saying so long, till next time.

About GCI Consultants: GCI’s building envelope professionals provide consulting services to ensure clients receive maximum value and return on their investment in the firm’s services, which include:

  • Engineering Services
  • Design Assistance
  • Field Testing
  • Quality Assurance
  • Forensic Evaluations
  • Roofing and Waterproofing Consulting
  • Litigation and Claims Consulting
  • Façade Assessments
  • Catastrophic Damage Evaluations
  • Due Diligence Surveys

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The Construction Industry, our Current Economy and some Predictions

Anirban Basu – The Associated Builders and Contractors

  • Where do interest rates head from here?
  • Is the U.S. economy poised to grow 3 percent in 2017?
  • What impact will a Trump presidency have on construction?
  • What are the construction segments that appear poised for the fastest growth?
  • Should we be worried about inflation this year?

About The Everything Building Envelope Podcast: Everything Building Envelope℠ is a dedicated podcast and video forum for understanding the building envelope. Our podcast series discusses current trends and issues that contractors, developers and building owners have to deal with related to pre and post construction. Our series touches on various topics related to water infiltration, litigation and construction methods related to the building envelope.


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The Everything Building Envelope Episode Transcript:

Paul: Welcome back, everyone, to The Everything Building Envelope podcast. This is Paul Beers, and today I’m really excited about our guest, Anirban Basu with the Associated Builders and Contractors, otherwise known as ABC. And ABC is a national construction industry trade association representing nearly 21,000 chapter members. They’re founded on the merit shop philosophy. ABC and its 70 chapters help members develop people, win work, and deliver work safely, ethically, profitably, and for the betterment of the communities in which ABC and its members work. ABC’s membership represents all specialties within the U.S. construction industry, and it’s comprised primarily of firms that perform work in the industrial and commercial sectors. And I’m happy to say that my company, GCI Consultants, has been a member of ABC in the Florida chapter for many years and they’re really a great group, and we’ve gotten a lot of benefit from it. One of the big benefits is the economic input that we get. Anirban, thank you again for coming on today.

Anirban: My pleasure.

Paul: Can you tell us a little bit about yourself and what you do with ABC?

Anirban: Sure. I’m an economist, and I happen to serve as ABC’s chief economist. The position of chief economist was outsourced to my consulting firm back in 2008, so we actually serve the chief economist functions for other organizations as well, but ABC is probably our most well-known client. And as I say, I’ve been serving as their chief economist for more than eight years now, which means that I was with ABC during the worst of the construction downturn and I have been around to see the subsequent recovery.

Paul: That 2008 period was not a lot of fun. I don’t ever wanna go through that again.

Anirban: And in fact, the worst years for construction followed 2008. Coming into 2008, many construction firms had significant backlog, and so they worked that backlog down in 2008, and some in 2009 as well. Many firms will tell you that their worst year was, in fact, 2010 or 2011. In fact, nonresidential construction spending hits its cyclical nadir during January of 2011. By that point, the broader economy had been in recovery for well over a year, but nonresidential construction recovery had scarcely begun by that point. And so, we have seen some downs and now we’ve seen some ups.

Paul: Well, we’ve kinda gone crazy since then, haven’t we?

Anirban: Certain segments certainly have gone crazy. You know, there is a lot of office space construction right now in America. There’s a fair amount of health construction-related spending, many hotel rooms under construction in America. We continue to see more spending on educational facilities as well, at least in the last couple of years. There are certainly some categories that have not recovered. Many of those are publicly-financed categories like water and sewer and public safety. Public safety includes elements like police stations, fire stations, the prisons, jails. And the government dollar is stretched pretty thin. Government dollars is increasingly going toward entitlements, and this is true for state and federal governments, and, to a certain extent, local governments as well. And so it’s a mixed bag out there. For all the construction, recovery has been quite soft, but there has been some segments in which recovery has been much more robust.

Paul: Yeah. I’m sitting in down here in South Florida. You know, when I said we went crazy, what I was saying was down here, it was insane how much work came. You know, we were so…I don’t wanna use the word depressed, probably a bad word. But the work was so scant and then, all of a sudden, it started up again and it was like, you know they opened the spigots and it just would not slow down. But now it does seem like it’s slowing down a little bit, so I think we’re…

Anirban: Right. So, you’re right. There were five states that were hit hardest by the real estate and construction downturn. Florida was one of them, along with Georgia, Arizona, Nevada and California. So, I became ABC’s chief economist in 2008, and by that time, Florida was really feeling the sting of the recession that began in December of 2007. And shortly after I became ABC’s chief economist, the Lehman Brothers faltered on September 15th of 2008, and that, of course, is when things got really, very difficult for construction firms across the board. Prior to that, it had really been homebuilders who had suffered. But after that, everyone suffered.

Paul: Yeah. You know, I remember the Lehman Brothers, and when they failed we had a big casino job in Las Vegas that was supposed to get their financing and get started. And the day that Lehman Brothers failed was the day that project got canceled. I don’t think they ever built it. And that was really…for us, we had work, a lot of work like that that was actually, you know, ceased to exist, that what we thought was gonna be happening we were all ready for it, and then it was gone. So, really was pretty abrupt.

Anirban: It can be. When capital dries up like that, and capitalism needs capital to operate, when the capital goes away, so too does the economic activity. Particularly, the large-scale economic activity, the things that are financed, like construction. So, yes. But now, here we are 2017 and, undoubtedly, the bulk of construction firms feel much better about economic life.

Paul: Yeah. I think everybody agrees it definitely feels better now than it did but, you know, those of us who’ve been around for a while know how cyclical things are. And you know, when things are going well, we worry about what the future holds. So, for those of us that are in the construction industry, what are the things that we should be paying attention to with regards to the economy, and trying to probably do the impossible and predict the future?

Anirban: Yeah. There are some leading indicators out there. So, one could put forth the idea that certain construction segments are now in the process of becoming overbuilt. We have added a lot of hotel rooms in recent years, we’ve added a lot of office space in recent years. Actually, despite the ongoing growth of the e-commerce economy, there’s actually been quite a bit of construction of retail space. People who work on the residential side of the industry know how many apartments have been built in metropolitan areas across the country in recent years. And I’m starting to sense that some of these markets are becoming a bit overbuilt, and so what people would wanna look for is evidence of slower rent growth for apartments, for instance, or office space.

I’d then want to see or look for indications of higher vacancy rates, slower net absorption of office space, higher vacancy rates in hotels, meaning a fall in occupancy rates at hotels. Because those types of metrics suggest that supply is beginning to outstrip demand. And when that happens, the performance of commercial properties deteriorates, because rent is not growing as quickly and there’s more vacant hotel rooms, or more vacant office space, so on and so forth. And if, after that period, when it becomes apparent to people that buildings are beginning to underperform, that capital begins to dry up. And what that leads to, ultimately, is fewer new construction starts. We’re not there yet. You know, I am just starting to sense some overbuilding in certain segments and certain geography. But for right now, capital is available, architects are busy, which is a leading indicator, and I think that most construction firms can look forward to a quite active 2017 and 2018, based upon backlog data and general business confidence. But at some point, as you pointed out, a cyclical industry, at some point the cycle will end, and I think we’re starting to see the seeds of the end of the cycle being sown right now.

Paul: Yeah, funny. So, I’m not an economist and I really appreciate the insight, but from where I sit, you know, I look at projects coming across my desk. I do a lot of business development for proposals and what not. And they still are coming across the desk and it’s very interesting because, last year, two years ago, there was a lot of residential condominiums, multifamily, stuff like that, and then it seemed to get more into offices, hotels, retail, mixed-use, that kind of stuff. And that still seems to be coming through. And I just feel I’m so gun-shy from, you know, having been in this industry for 30 years now. I just kinda keep waiting for the…no, no. I guess I probably shouldn’t say the bottom fall-out. That’s what happened last time, and I hope that we don’t have that again.

Anirban: Well, I can imagine that we wouldn’t have that again because, in that case, it came down to the notion that almost everyone’s house was overvalued. And that’s a huge bubble. And that’s very different in terms of order of magnitude, relative to, let’s say, an overbuilt hotel market in New York or an overbuilt condominium market in Miami. You know, these kind of spotty disequilibria. That was, the entire U.S. housing stock is overvalued, and that sets a stage for really tumultuous downturn. I don’t think we have bubbles that large and, therefore, that threatening.

That said, you know, one of the distinguishing characteristics of this economic cycle has been the prevalence of incredibly low-interest rates. And that has many implications, but one of them is that anyone looking for investment yield has been forced into riskier assets to find that yield. Some of that money has ended up in the stock market, of course. We know that the stock market has been hitting record levels recently, whether you measure that in terms of the S&P 500, or to the Nasdaq or the Dow Jones Industrial Average. We know that office buildings have become very valuable, apartment buildings have become very valuable based upon very low capitalization rates. And my very strong sense is that asset prices, in many cases, are elevated relative to economic fundamentals. So, I think there are some bubbles forming out there, but I don’t see a bubble of the magnitude that we saw prior to the Great Recession, which affected the entirety of the U.S. housing market.

Paul: So, with interest rates, you mentioned interest rates are very low right now and I know when we read about it almost every day that, you know, that Fed is starting to try to ease the rates up. Where do you see things going from here with interest rates, and how does that affect the economic picture for the construction industry?

Anirban: Right. So, I expect rates to edge higher over the course of the year. Part of that is due to Federal Reserve policy making. They’re going to raise short-term rates and the market guesses right now that they’ll raise short-term rates. I mean, the Fed funds raised, for instance, three times this year. And so that will have, presumably, some impact on the longer term rates at which we transact, the 5-year loan to prime businesses at that rate, or the 10-year Treasury yield, or the 15 or 30-year fixed mortgage rate. The interest rates at which we transact are likely to rise, but I think fairly gradually, as it turns out. I sense some inflationary pressures building up in the economy. A lot of talk recently about rising apartment rents, of surging health care costs, but the biggie, I think, is wage pressure. It has become very difficult to find good workers, very difficult to find workers at all. And I think that wage pressures are really building up. Part of that is due to some of the minimum wage increases we’ve seen in various markets around the country, but a lot of this is simply demand and supply.

So, if I’m right that inflationary pressures are building in 2017 and 2018, one would expect to see interest rates rising in 2017 and 2018. And you asked the question, “Well, what does that means for construction firms?” That probably softens the construction market because, once rates rise and boring costs rise, it makes it less likely that an individual project’s pro forma will pencil out, and that makes it less likely that that project will move forward. And so, one would expect to see some slowing in construction starts, let’s say, by 2018-2019, given the expectation regarding interest rates.

Paul: How’s economy look overall? What’s it supposed to do in the next couple of years? Is it like in ratio, with the inflationary growth? Or how’s that factor in?

Anirban: You know, last year, the U.S. economy grew just 1.6%, meaning in 2016. It was another disappointing year of growth. The forecast for the current year, 2017, is better. Many forecasters predict that the U.S. economy could grow between 2.5% and 3% this year. That’s probably a good guess, 2.5% to 2.6% is probably a good guess, regarding where the economy will end up but there is a lot of wildcards out there. You know, as of this conversation, we don’t actually have a corporate tax reform package in front of us to consider. We don’t know what reform there is gonna be to the personal income tax code. We don’t know if there’s gonna be an infrastructure-led stimulus package, or a border tax or all kinds of things, what immigration policy will be.

So you know, there’s a lot of uncertainty regarding policy-making. That hasn’t dissuaded equity investors, meaning stock market investors, from driving stock prices higher. There’s a lot of confidence out there regarding where we’re headed in terms of policy-making, but a lot of the policies have yet to be really promulgated and, certainly, none of them have yet been passed into law. So, I think the outlook is pretty good, but there’s a lot of good news already built into asset prices. And the new administration in Washington DC really better deliver on some of these assurances regarding tax reform and other pro-growth elements. Otherwise, we could have a real issue out there with respect to the direction of stock prices, rather asset prices, because as I say, a lot of good news is built into those prices already.

Paul: So, what kinds impact do you see the Trump presidency having on construction, given, you know, as you say, I know they haven’t done anything yet, but given what we’ve heard is possibly coming along?

Anirban: You know, I think that the impact is positive in the short-term and unknowable in the long-term. So, here’s what I mean. You know, even before the inauguration in January of 2017, the Architecture Billings Index, which is a favorite leading indicator of commercial construction, surged in December, the month after the election. Architects got busier. And the notion is that if architects get busier upstream, construction firms get busier, eventually, downstream, that first projects are planned and then they are built. And architects, of course, are part of the planning phase. And the data seemed to indicate that architects right now are very busy. That means a lot of planning is taking place. And that, since the election took place on November 8, architects have become significantly busier. So, that’s very good news and it speaks, I think, to the broader issue of growing business confidence in America.

And this is true not just among real estate developers, for instance, this is true among businesses generally. We’ve seen a pickup in hiring recently. We’ve seen a pickup in investment that takes the form of equipment purchases or software purchases recently. Businesses are responding to the new environment and the presumed policy-making to take place. So, in the near-term, it seems to me that the Trump presidency is quite good for construction volume. And by near-term, I mean 2017 and 2018. And this would be particularly true if an infrastructure-led stimulus package is passed, because this would be very good news for road builders and other folks who work on infrastructure-related projects, obviously. But then the longer term outlook is fuzzier. So, the nation is a few weeks away from a \$20 trillion national debt. What will be the impact of proposed tax cuts on the national debt? What will be the impact of increased defense spending on the national debt? Or of the repeal and replacement of Obamacare on the national debt? These things are unknown. What will the effect be of the new administration’s immigration policies? There is some talk that some of the visa programs will be adjusted, whether the H-1B visa program, H-2B, J-1, so on and so forth. And so, if fewer immigrants are allowed to come to America, including to work, what does that mean for the longer term outlook for the economy? So, there’s a lot going on here. Obviously, trade policy makes a difference too, if one presumes that, if there’s a border tax, that this will raise the price of imports and this could spark some inflationary pressures. A lot of wild cards are from the long-term perspective but what we can see right now is the short-term, and the short-term looks quite benign from a construction firm perspective.

Paul: Yeah. So, we’ve been through this period before the last election, I think, on the government side of stagnation, that they were deadlocked and they couldn’t get anything going. Now, obviously, it looks like there could be a lot of changes and, as you say, it’s creating uncertainty. I guess, the overall, from what you’re saying, the overall feeling is that there may be some helpful things coming on the horizon?

Anirban: Well, I think that that’s right. You know, you bring up a very good point. A lot of people will look back on November 8 and say that the biggest surprise was Donald Trump’s victory over Hillary Clinton, and maybe that’s true. But I think also surprising was the fact that the Republicans maintained control of the Senate, because there were a lot of predictions suggesting that that wasn’t gonna happen. That a particular Senator in Wisconsin, who is a Republican, was gonna lose his race. And the same was true of Pennsylvania, and so on and so forth. But the Republicans kept more seats than people thought. And so, not only does Donald J. Trump win the presidency, but he has a Republican House of Representatives and the Republican Senate, and so the notion is that we don’t have stagnation anymore. We don’t have divided governments anymore, and that really meaningful things that can get done. And that includes corporate tax reform and trying to re-shore offshore profits, and an infrastructure-led stimulus package, and personal income tax reform, and immigration reform, and so on and so forth, and that by and large, these things are pro-business. Things like deregulation of the banking sector, at least to an extent, deregulation of the energy sector, at least to an extent, the reform of labor laws.

And of course, many construction firms, among other firms, have complained about onerous labor-oriented regulations. Well, some of that regime is likely to be torn down and, all things being equal, that’s quite pro-business, that allows firms to save costs and enures to the benefit of the bottom line. And if firms are more confident about their financial future, they’re likely to invest more today, and we’ve already, actually begun to be that in some of the data.

Paul: You were talking about the architects are busy, and it makes total sense, so the architects are going now, then it should, in theory, trickle into the builders building later. Have we had periods where architects get busy, but then they never build it? Can we count on that or do we still need to be cautious?

Anirban: No. We always need to be cautious. So, you know, architects were busy coming into 2007. You know, asset prices were still rising then, the stock market peaked on October 9th of 2007. But two months later, we were in recession. And capital starts to dry up during the early stage of the recession and then, of course, we enter the financial crisis of September 2008. But up until that point, architects had been quite busy, and then the market changed very quickly. And so if your question is, “Could that happen again?” the answer is, of course. The market is a fickle. Right now, the market feels very good about the near-term future. The notion is that the U.S. economy is going to grow more quickly. There’s actually indications that the global economy is starting to improve as well, and that enures to the benefit of corporate earnings. That, of course, has been one of the reasons that the stock market has done so well during the early weeks of the Trump presidency, the feeling that corporate earnings growth is going to accelerate because overall economic growth is set to accelerate.

So, right now ,that’s what the market believes. And for a time, at least, it could be a self-fulfilling prophecy. If businesses expect things to get better, they will, because they’re gonna hire people and they’re going to invest in Main Street economies and things are gonna get better. But the question becomes, what is the rate of return on that investment? And so, a good example is what happened a decade ago, many people were building homes. And for a time, it seemed like a very good thing to do, to build really wonderful, beautiful homes, whether condominiums in South Beach or homes in Riverside, California. And then the market changed its mind and determined that these homes are overvalued, that the paper that is supported by the price of these homes is not worth that much, and that the insurance that’s been written against that paper, on that paper, is not worth much either and the financial crisis begins. So, yes, things can change quickly. But I think for right now, if we’re talking about 2017, we’re in pretty good shape.

Paul: Doesn’t seem like we’re…I mean, things are different now, obviously. I look at the way, for instance, luxury condominiums are financed and they’re taking a lot more money from the owners along the way, rather than 10% down and run away. And you have these empty buildings which I thought would never get flipped, but they did, actually. So it’s amazing, the resiliency that happened after all that.

Anirban: That’s a very good point. You’ve made a couple of very good points. One, of course, is that lending standards are more disciplined than they were a decade ago. You don’t hear that much about no-document loans anymore and, you know, people are having to put down larger down payments when they buy property. And the other, or the flip side of that, is that the banking system is much better capitalized than it was in 2007, 2008. You might remember that, even before the failure of Lehman Brothers, Bear Stearns, another major New York investment bank, got into financial trouble. They were excessively leveraged. Eventually, they were acquired by another firm and so the crisis was averted, but no one acquired Lehman Brothers. Lehman Brothers was allowed to fail on September 15th of 2008, and the rest is history. The full-blown financial crisis was born. It was a global financial crisis. But today, when we look at the large banks, they seem to be in much better shape from a capitalization perspective. Their balance sheets are not nearly as toxic. And that’s one of the reasons to think that when there is another downturn, and there will be another downturn at some point, it won’t be nearly as severe as the 2007 to 2009 episode.

Paul: Be softer.

Anirban: Probably a bit softer.

Paul: Yeah. That’s a good thing. from where those of us in the construction business sit. You had mentioned the infrastructure stimulus as being one of the things that has been discussed and may be coming along, so what are the construction segments going forward that appear right now or look to have the best possibilities for growth going forward?

Anirban: So I mean, I think one of the things upon which the president has focused is manufacturing. And I think that there will be some fairly meaningful growth in manufacturing-related construction in 2017. I think we’ve heard about the, you know, high-profile occurrences at Carrier and Ford, and so on and so forth but I think, in general, we will see more investment in factories and equipment in 2017. So that, I think, is one of the categories that to turn around, you know, we’ll continue to see a fair amount of investment in office space and hotels, and in retail space. The capital is out there. One of the things that owners and operators of malls are coming to realize is that they really cannot compete with Amazon in terms of merchandise. So, the only way to really compete with Amazon is the experience, and to improve the customers’ experience means having to invest in brick and mortar. And we’ve seen that, and I think we’ll continue to see that.

One segment in which we might not see much progress is healthcare-related construction. Obviously, there’s a lot of uncertainty regarding where we’re headed in terms of healthcare financing, what the replacement for Obamacare might look like. Will there be a replacement for Obamacare? What will this mean for hospital finances? And I can imagine that many major medical systems will put projects on hold until some of this is sorted out.

And then, as the final point. Absent in an infrastructural-led stimulus package, I think public constructional will continue to be soft. You know, many states are dealing with underfunded pensions. A lot of money at the state levels is going toward Medicaid expenditures, and therefore being deflected away from investment in infrastructure, again, whether it’s roads and bridges, or public safety, or water and sewer systems. And I think that that is likely to remain a weak spot, unless the Trump administration is successful in crafting an infrastructure-led stimulus package that actually passes Congress.

Paul: So we talk about…I was just reading, actually, in the paper within the last week or so, that I’ve heard a word that I haven’t seen much lately, Inflation. What’s the outlook with that, going forward?

Anirban: Yeah. I the inflationary pressures, right now, are fairly well-contained but that inflationary pressures are building. You know, healthcare costs, apartment rents, home prices are rising, of course. All things being equal, that means higher mortgage payments for those who ultimately end up buying a home. And then the biggie is wages. You know, the official unemployment rate indicates that the nation’s unemployment is below 5%. I know a lot of people look with skepticism regarding those types of numbers, but most businesses will agree that it is really difficult right now to find skilled workers. That the recovery has lasted long enough now, that virtually all of the skilled workers have been soaked up, that a lot of people looking for work right now aren’t suitably skilled, at least not for jobs in construction. And that implies that construction compensation costs are headed higher, and that’s true for many industries. That’s true for retailers, that’s true for manufacturers, that’s true for people in logistics. So, as I say, inflationary pressures are building. Things are getting more expensive more rapidly, and that’s consistent with higher interest rates and it also might, ultimately, put some pressure on asset values. Right now, again, with the stock market setting record levels, obviously the stock market is not right now fixated on inflationary pressures. It’s an afterthought. But as an economist, I can see that these pressures are beginning to build and, eventually, that’s going to make its impact felt in financial markets and in other ways.

Paul: You know, it’s funny. So, what you’re saying really resonates for me personally, because my business, on the wage side of things and the employment side of things, we are understaffed right now. And we are having a tremendous difficulty finding, you know, we like to say we like to hire A players. So we’re having a tremendous difficulty finding, you know, good fits for company and it’s because everybody so busy. And of course, you know, one way to get through that is to spend a little more money, and we’re happy to do that. But even with that, the costs on the wage side for us in the construction business are up, and everybody I talk to concurs that we’ve gotten to the point where we started out where people, anybody, you know, you had people that were overqualified taking jobs just to be employed. And now it’s gone full circle that we’re really, really having difficulty filling positions with qualified people.

Anirban: And the same is true in auto repair and in truck driving, and there’s not enough machinists, there’s not enough welders. I mean, as I say, obviously, there are many construction occupation categories implicated by this skill shortfall, but it’s hardly just construction. And ultimately, what this translates into is inflation. And if cities like Seattle or other cities say that the minimum wage worker is gonna make, ultimately, \$15 an hour, well, that means that the coffee you get in the morning is more expensive, and other things, the haircuts, and so on and so forth. It all feeds into inflation, and so the inflationary pressures are building. As I say, right now the financial markets don’t seem to be taking this into consideration very much. They are much more excited about the notion that the economy is going to grow faster, and therefore earnings are likely to also grow faster. But at some point, these inflation pressures become significant enough that the markets have to take note. And maybe that’s not a 2017 phenomenon, but it would not surprise me if we’re not talking much more about inflation in 2018 and 2019.

Paul: So, how do we keep up with all this? You know, for those of us who are not economists, I have to tell you, if you can read the news every day you would just be scared to death. Everything that’s there, I call it the bad news. But how do we get good information? I know that you put out and I’m big fan of the information that comes through ABC, but how do we keep up with economic developments and try to really get a feel for things, going forward?

Anirban: Well, a couple of things there. One, you mentioned the media, and you’re right. I mean, if you watch some of the news channels, I shouldn’t mention any but let’s say CNN, or MSNBC or whatever channels people watch, it’s pretty easy to get nervous very quickly and to think that we’re in the midst of pure dysfunction. But if you watch CNBC and watch the stock market rising to new heights, you say, “My goodness, everything is great.” So one thing, of course, is to diversify one’s source of news. And for folks who only watch one source of news, that’s probably not enough, particularly given the biases of certain news channels these days.

So how do you…you know, your question is, though. bigger than that. It’s how do we monitor these things? There are so many leading indicators out there. Some of my favorite leading indices include the Conference Board, index of leading economic indicators. The Conference Board is a private organization in New York, very solid, leading indicator, 10 components. People who are really interested in the direction of the economy should study those 10 components. The data typically come out on a monthly basis. Look at the data. The Architecture Billings Index we’ve we’ve talked about, is another wonderful leading indicator and that’s specific to the construction industry. The stock market itself can be fairly good indicator of sentiment. And of course, there’s also surveys of business confidence like the National Federation of Independent Businesses, survey of small businesses or the consumer confidence index, if people are wondering about consumer sentiment. I think all of these things are valuable, but not one measure is going to bring you home. You have to look at all these measures together and then juxtapose that against the performance of one’s own firm.

I know a lot of construction firms get nervous if business doesn’t come rolling in for a couple of weeks, and then they wonder, “Is that just us or is that happening to everyone?” I mean, you know, if one looks at the macroeconomic indicators that we’ve talked about, and there’s many others, the Baltic Dry Index, it goes on and on and on. The Federal Reserve produces many reports, including the Beige Book report. People should read those because they give you a sense of what the monetary policy makers in our country are thinking, and they’re at the cutting edge of thinking about the economy. It’s a lot sources of information. It takes time to read it all. I would not fixate so much on the television news, because people will have panic attacks if they do that. Better to look at the raw data and to make one’s own judgment.

Paul: Yeah. I’m smiling as you’re saying, panic attacks because, truly, I call it the bad news. Obviously, their job is to get ratings and I guess that’s effective. The indicators, you know, I think it’s really powerful information to pay attention to what, I guess, unbiased information. I kept hearing you say the word a lot today, confidence. And that’s got a lot do with it, doesn’t it? Just mindset and how people feel about things?

Anirban: Oh, there’s no question about it. You know, we economists have a tough time trying to quantify the effects of what we would call animal spirit, but the fact of the matter is economic decisions are often very emotional. And when a business person is deciding to move forward with a particular investment, or to buy a new vehicle for their business or whatever it happens to be, there is a part of that decision that’s rational and there’s a part of that decision that’s just their gut. And right now, their gut, in many cases, is telling them that things are gonna get better and they should go ahead and buy that vehicle because they’re gonna need it, because they’re gonna get work. And if they don’t have that vehicle, they’re not gonna be able to bid for that work. Or if they don’t hire those workers, they’re not gonna be able to bid for that work. And there’s gonna be a lot of bidding opportunities, that’s the feeling out there.

And you know, you point out yourself, it’s hard to find good workers, you’re looking for A players. And then the question becomes, “Well, my goodness, if I’m looking for A players, those A players probably work for my competitors right now. So, how much do I have to pay those A players to bring them onto my team and keep them on my team? Or do I change the business model and accept some B and C players?” Which, of course, can cost the firm in different ways. It’s a tough world out there. Even when the economy is good, it’s tough. It’s just that the challenges on a good economy are different from the challenges on the bad economy. And in general, people would like to deal with the challenges of a good economy, and that’s where we are. So yeah, confidence plays a big role. Right now, those animal spirits are at work, consumers are confident, businesses are confident, investors are wildly confident, and so it speaks to a 2017 that’s probably gonna be quite good.

Paul: That’s what we like to hear. So, Anirban, thank you so much for coming on. It’s really, really interesting and I know it’s big interest area for our listeners. Now, obviously, if the listeners wanna keep up with you and what you’re doing, I know, obviously, joining ABC is a great way to do that. Are there any other areas that they can follow you?

Anirban: Well, they can come just to abc.org and look at the website. And we, at least three times a month, post new information about the construction economy. Sometimes, we talk about investments, meaning, you know, construction starts, and how much money is being spent on putting construction into place. Sometimes, we talk about construction employment. We talk about materials prices, whether the price of natural gas, or oil, or iron ore or copper. And so we try to be comprehensive in our coverage of construction. And if they go to abc.org, they’ll see some of our ongoing writing there.

Paul: Great. Well, again, thank you very much for coming onto the podcast. It was really interesting.

Anirban: It was a privilege to be with you today. Thank you.

Paul: Okay. So thank you, everyone, for listening to The Everything Building Envelope podcast. I wanna remind that we have a newsletter, and if you’d like to get The Everything Building Envelope newsletter please text the word building envelope to 22828. Again, building envelope to 22828. And until next time, this is Paul Beers saying, “So long.”

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Construction Changes, Building Codes and Mitigating Costs in Development

Rick Chitwood – Trump Group Development

  • What is your background in the construction industry in South Florida?
  • What role do you foresee developer’s playing in the South Florida Building Code?
  • What are developers doing to mitigate the natural disasters that occur in South Florida?
  • What are the main changes you see forthcoming in the construction industry?

About The Everything Building Envelope Podcast: Everything Building Envelope℠ is a dedicated podcast and video forum for understanding the building envelope. Our podcast series discusses current trends and issues that contractors, developers and building owners have to deal with related to pre and post construction. Our series touches on various topics related to water infiltration, litigation and construction methods related to the building envelope.


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The Everything Building Envelope Episode Transcript:

Paul: Hello, everybody. This is Paul Beers. Welcome back to the “Everything Building Envelope” podcast. We’ve got a really interesting guest today, an old friend of mine, Rick Chitwood. Rick and I have known each other probably for longer than we care to admit. Welcome, Rick.

Rick: Good morning, Paul. How are you?

Paul: Really good. Thanks so much for coming on this morning. I know we’ve got a lot that we can talk about that would be of great interest to our audience. So Rick and I, just to give a little background, we’ve worked on a lot of high-rise condominium projects in South Florida over the years. The one that we just finished was called Mansions at Acqualina. It’s a 47-story building right on the ocean, one of the finest residential buildings in the world. How tall is that building, Rick?

Rick: Five hundred and 49 feet…I mean 649 feet, sorry.

Paul: Yeah, which is as tall as they let you build there. And then what’s the new project that’s coming up?

Rick: It is called the Estates at Acqualina. It is two 649-foot luxury condominium towers and what we call the villa, which is a \$50 million five-story clubhouse, which has our amenity packages. We are offering as amenity packages, we call Circus Maximus, which has a skating rink, bowling alley, you know, flight simulators, car simulators, golf simulators. We actually are gonna have a surf wave pool, a slide. It’s going to be more of a resort condo destination. It’s a new twist on high-end condo living on the ocean of South Florida to where you don’t need to leave the compounds of your condominium.

Paul: Wow, that sounds really cool. It sounds like fun actually.

Rick: It is.

Paul: So there’s a lot involved obviously with putting up a 50-story luxury building in South Florida. And I know that, you know, you’ve been at ground zero the whole time. In fact, I remember back…when did we start Mansions at Acqualina? Do you remember when the construction began?

Rick: It was 2013 at least, yeah. It’s ’17 now. It’s been open about a year. About 2013, we actually had the mat foundation, I believe.

Paul: Yeah. And I remember I was in your office a couple of years before that. This was when things were still really, really slow from the great construction slowdown or what I call the construction depression. You were showing me the plans for the building. I remember asking you, “Are you really gonna build this?” And sure enough, you did. In fact, it was probably one of the first buildings at the ground after the big slowdown.

Rick: Yeah, exactly right, Paul. We were probably the first to get the job on the new upswing. It ended up being very, very profitable for us. We sold the building out quite quickly. So sometimes you make the right choices.

Paul: Yeah. And the units went for some real serious money, probably set some records, didn’t it?

Rick: Yes, it did. You have to realize we do turnkey construction now. That means you get all your floorings. Everything is done down to… We give you a Fendi furniture package. So all you got to do is bring your suitcases and come in. You know, we used to build what we call condo-ready. Usually, all you got was a finished unit but no flooring or stuff. So once you closed, it took you some six months to finish your unit. But now, it’s just like going to a showroom. If you walk in and buy a unit, you can customize it. We have packages. It’s a new concept. But it does add a lot of time and effort because you’re moving probably twice as much material into the building.

Paul: How many units are in Mansions?

Rick: Total of 81.

Paul: So you basically had 81 different things you had to do too. Doesn’t it make things a lot more complicated, have 81 different finishes?

Rick: It can be. What we really learned was how important vertical transportation is in these high-rise buildings. We actually did a forensic study with another consultant. And we interviewed all the subs, all the change orders, all the consultants, trying to find out what we did wrong, because we don’t wanna do it again.

And so the two number one things from most subcontractors and general contractor was vertical transportation, because my guys have to wait forever to get up and down the building, and parking. As you know, in South Florida, especially in Sunny Isles, parking is a premium. Bussing workers was not always attractive to some of your high-end workers. The two number one concerns that we got from all our exhausted interviews, every person had that same two items as number one item.

Paul: So have you figured out a fix for that?

Rick: Yes. First off, we use more buck hoists, and we use high-speed double-rail hoists. You know, the industry has been looking at the elevator people. I’ve been trying to sell this idea that you can move the inside cars with the building, and you can use them, but I haven’t heard anybody successful with it. It needs a few more years to be perfected. But that would help, because then you could use your interior cars, you know, four or five elevators, plus your outside cars.

To me, right now, we looked at it, and we’ve talked to a couple of people that tried it. It’s a little too risky. You’re not getting returns you need yet. But it will come in the future I think, so almost like building the elevator in stages as you go up to the building. So let’s say you get to the 20th floor, you’re using the elevators already to the 15th floor, a pretty interesting concept.

Paul: It is. I know in construction, you’ve got all these things to deal with, like stuff coming down from above and what not that you have to worry about. If you think about it, I guess it does make sense. You’ve got, you know, the infrastructure there. Why not use it?

Rick: Yeah, absolutely. It makes some sense

Paul: I got a little bit ahead of ourselves here. And I wanted to tell everybody, you know, a little bit more about you. So you work for the Trump group. And just to let everybody know, I know you’re sick of hearing this probably, but it’s not the Donald. It’s a different Trump. So maybe you could just kinda tell the listeners a little bit about your background and, you know, what brought you to where you are today.

Rick: Okay. I was born and raised here in Miami, South Florida, North Dade, a little section of town called Ojus. My dad was a general contractor, him and his brother, in Miami called Chitwood Construction. They did some high rises here in Miami. They also did some high rises in the Bahamas. And we did some high rises in New Orleans. So I was raised in construction. I started when I was 12 on the sites on the weekends. My dad had me straighten nails and put it back in the box. It was a little brutal.

But then by the time I was 18, I was a full-fledged journeyman union carpenter. They had all the problem of putting me in at a young age of 15. But my dad, being a contractor, was able to pull some strings, and I was able to get a good training through the apprenticeship program. And then working up through the industries, I’ve worked for a lot of very large developers in South Florida. I have done some building in upper state New York, in Long Island, for the Holiday group, some large housing projects and some other projects. Most of my construction has been here in Miami and South Florida. Like I say, like you and me, we worked together, I was at the Ocean Club with the 11 builders. I was there nine years with Mr. Hanson, the developer.

And I am presently now with the Trump Group, vice president of construction, director of development. And I’ve been here about 12 years. As you know, the original Acqualina project, which is a five-star Forbes hotel and condo, and that’s our first project. It’s a 52-story building, but it’s a 100-foot shorter than the new building. The new building is the Mansions, which is 649. And now we have our new project coming up in the end of this year, which is the Estates. We also do building in California and New York. But I have been with Jules and Eddie Trump for the last 12 years, and they’re a pleasure to work for.

Paul: Great. So, you know, it’s interesting to hear that your father was in construction. Now, your son, Rick Junior, has a prominent role also. So it’s kind of a generation to generation thing, isn’t it?

Rick: Yes, it is. So my son actually works for me right now. He’s basically our field project manager. He kinda runs the site stuff, and I keep the legal, the paperwork, permits, and the rest of the stuff going. Then I have Eric Bartos, one of the top estimators, I think, in town. As you know, Paul, he does my numbers work.

Paul: Yeah, Eric is great. We all work together down at the Ocean Club job way back when. So you’ve got a very impressive team.

Rick: You’re right, Paul. I believe in teamwork, being an airborne ranger serving in Vietnam. I built strong teams. And then nothing gets done without a team, as you know. So, my team, we stuck together. Most of my guys had been with me at least 15 to 20 years.

Paul: Yeah. And something as complicated as these really tall buildings and these really tight sites and these very demanding specs and owners and everything else, I mean, you’ve got to have the A-team or you’re never gonna pull it off.

Rick: Yeah, correct.

Paul: So let’s talk a little bit about building these really tall buildings on really tight sites in South Florida. Let’s talk a little bit about the code, the South Florida building code. It’s unique. And how does that play into all this, with having to, you know, build these really ultra luxury buildings? What’s the developer’s role in how the building code works with it?

Rick: Well, over the last couple of years, we have informal meetings with most of the top developers in South Florida. We have a round table session. Usually, every two months or so, I started these to try to…I hate to let people make the same mistakes I made, just because I made it… You know, I keep telling these guys…yeah, we’re almost like professional coaches. We, you know, have different teams, and we do different projects. But we all have the same problems. So we should share those problems. Why should we all make the same mistakes over and over again? So I’ve been really successful with that.

And maybe who I am, because I do all of my own permitting and government approvals through all the federal state and local governments for all my projects. I am also a very strong in the developing of the Florida building code, which you know is forever changing. So we review all the changes. And, if necessary, I contact the other developers and the homebuilding associations. And we negotiate with the state to change language or tweak the code to where we think it needs to be.

What we are noticing is we think it’s an important step for us to get everything in writing, because, as you know, the industry, a lot of people we deal with everyday and have been for years are getting…like me, will get over and not gonna do this forever. So it’s a whole new generation. There’s different ideas and different ways of doing things. So some things, you know, we take for granted, we can’t do that anymore. We need to get them in writing, so we’re covered, protect ourselves against, you know, high expense and construction costs.

Just lately, we fought two different fights here. They were trying to get seismatic into South Florida building code. We’re in a zero zone. There’s really no history of ever having a quake. They’ve had one reading, but they think it was actually dynamiting of mines out in the west. So, you know, we fought that, and we won. It kinda stopped up north of Ocala. That was started by a building official in Jacksonville. I guess they might get a tremor there once in a while. But we fought that.

Again, lately, they wanted to put snow loads in South Florida building codes. I mean, that to me is ludicrous. I don’t even know how it even got on the agenda, but it did. And if it got passed, it’s just adding costs that’s not necessary to the cost of building, which then in turn I pass on to my consumers. So I’m not only protecting myself. I’m trying to protect the consumer.

And so I find these group that we’ve been doing help a lot. I’ve learned a lot of things to apply to my new building from guys experienced and the problems they’re having on their projects. And they gained the same from me. We here in South Florida, I don’t know how many people know about it, we use a lot of CPVC for fire sprinkler. There’s been a lot of claims, and there’s a lot of problems with the product. We had a major issue on one of our projects, and we have learned. We do not use CPVC for fire sprinkler anymore. We only use steel. The only person that really saved was me because it’s cost-efficient and plastic. But once you’ve been through one of these failures, it’s not cheaper. So now we’d rather pay up front and know that we do not have these problems. And we pass all that information along to the other developers and share these same ideas.

You know, once I started with Jules, I learned that through John Hanson that the Ocean Club, I believe in the good neighbor policy. You know, I try to stay in contact with my neighbors, because construction is nasty, is dirty, and is an inconvenience. So the more you can soften this up with your neighbors and your city, the better off you are. We have a real good working relationship with local governments. It’s important. You need to know who and what you’re dealing with.

Paul: What are some of the big challenges that you see with the building envelope?

Rick: As always, window openings. You know, you’re my window consultant. Actually, you do my window, roofing, and waterproofing and have for years. And all three of those are, as you know, major issues. And for people that don’t know South Florida and the condominium, we have what we call a 558, which every condominium files, which means you turn your plans and specs over to the association. They hire an independent engineering firm and come and inspect your documents and all your building and list any and all discrepancies they find. So it’s a big process. Usually, one of them is about the size of a phonebook the time you get a high-rise of this size.

So the envelope of the building is one of their primary points, you know, from stucco to windows, especially any type of water infiltration. And here in South Florida, as you know, the big item to us is waterproofing. We’ve learned through the years not to value engineer or be prudent, but don’t overvalue engineers, especially your building envelope items, especially waterproofing.

Paul: You’re talking about the part of statutes, chapter 558 claims, and you’d say that, you know…well, I know it’s not funny at all. But I had to chuckle about the phonebook of alleged defects. How many of those are real at the end of the day?

Rick: I would bet you it’s at least 65% are real, you know, because construction is not exact science, as you know. Measure every tread riser in a 52-story building of the stairs going up, and you got an eight-inch plate. It’s pretty hard to build sometimes with that, but it’s a requirement. So they’ll catch anything and everything. A lot of them, you know, you just negotiate out, because they’re not worth handling.

And the forensic engineers are very good. And we try to keep up on what they do. One of their big issues is post-tension cables and how they are terminated and patched and all of that. They actually chip pockets out, measure, and all that. And if they find something wrong, they would make you chip every post-tension pocket on the building. Well, as you know, that could be 50,000, 60,000 you’d have to chip on the exterior of the building and fix. So, being prudent as we are, we hired, again, another consultant to come out and privately inspect the cable systems, so I can protect myself a little bit.

We’ve learned now that one of their new tricks is they’ll go into a unit, finished unit. When they’re walking it, they’ll turn the air conditioning up, real down, real low, getting the whole unit real cold, turn the air off. Then they use infrared cameras to camera the walls, and they measure the screw spacings. And if the screw spacings don’t match the LOA or the specs for that installation, guess what, you’ll be going and adding screws to finished walls of units where people are living in.

So, you know, every two years or so, they’ll get a hot item, something new they can do. You know, they just follow it through. So, you know, during our developer meetings, one of the things I talk to guys about, they’re gonna come after you post-tension, you’re better off spending money upfront, get it right. Paul, as you know, anytime you got to return and swing a building and start chipping on the outside, it’s expense.

Paul: You don’t have happy people inside the building either.

Rick: Oh, no, you sure don’t. You sure don’t.

Paul: So when you got all these defects you have to deal with, how do you make them go away?

Rick: Well, subcontractors. First, I go to…as you know, we use general contractors. We don’t self-perform. We go to our general contractor, and he goes to the subs. And luckily, the fact is, you know, you did some work for us, our project little north of here, Luxuria in Boca, I just finished that 558 report, and it’s completely signed off. Like I said, they’ll bring the subs back. If it’s wrong, they got to fix it. I mean, usually, they don’t squabble. The bad part is, you know, during the turndown, a lot of subs went away. Even with Acqualina, I have some issues. And subs aren’t there anymore. So that presents a problem. But if you use a reputable general contractor, in his contract, he knows, because he knows, if he’s been to South Florida very long, he’s been through what we call the condo wars. So he’s quite used to what’s going on.

And then, of course, Paul, there’s always a little negotiation of, you know, maybe I’ll paint the building again. That’s what I did at Luxuria, because, as you know, that building got caught in the turndown. So sales dropped off. So I have so many units. It took me, you know, like, eight years to close out before I could even dip the turnover. So the building needs to be painted anyway just by longevity. So, you know, we painted the building, and I put some new cooling towers on it. And now I am released. And so it’s at least signed off, and it’s completed. It’s a long process, though, and expensive.

Paul: And the alternative is to have a big fight and get the lawyers involved, and then nobody wins.

Rick: And you go to court. You’ll probably spend more in legal fees than the whole thing would cost you anyway. I put in my budget for just, like, a building we just finished here for turnover of \$750,000 that, I, the owner, will spend to get out of it, you know, to mitigate my problems. So, now, you know, with these reports, if it’s not a construction defect, it can be a design defect, you know? So that’s another issue we deal with. A lot of times, we can deal with that in different ways.

Paul: Yeah, it’s pretty complicated.

Rick: You probably spend a lot of time in litigation like that, because I know you’re a consultant. So I’m sure you go through a lot of this with these guys, with a lot of different developers.

Paul: Well, you know, that’s right. So we do expert witness work. And I have to say you handle it as well as anybody I’ve ever seen. And one of the things that you do is you just fix. If it’s something wrong, you fix it. You don’t fight about it. You fix it. And I see, you know, the good examples, and that’s not easy. And then we get involved…on the other end, we have a developer that’s maybe new to the process or maybe just, you know, doesn’t get it, and they fight. And I tell you it ends up nobody wins in that, nobody at all, except maybe lawyers and experts.

You know, it’s unpleasant. I know you don’t wanna spend \$750,000, you know, to get through it. But you would spend ten times that much or more with the big fight and then, you know, sully your reputation you know, not have repeat buyers. I mean, there’s a million reasons why it’s worth quite a good money.

Rick: It used to be kind of practiced years ago here for these settlements like this, you just write a check. You know, “I’ll give you the \$750,000. Just go away,” you know? That’s not the answer. I didn’t buy it, you know, to where it doesn’t meet code or doesn’t work like it was designed. So why should I pay for it? I think my general contractor, subcontractors owe me what I bought. That’s the way we went about it.

Paul: Yeah. And kudos to you because, like I say, it’s a really difficult process, and I’ve seen a lot of people do it. And, as I say, you do it as well as anybody.

Rick: A secret I did learn about it with these engineers is, you know, they always say, “This doesn’t meet the code,” or “This doesn’t do the intent of the code.” Here’s what I tell them, “Well, then I have to build what I have permitted. And it was approved by the building official. And he has the right, for being the person of jurisdiction, to interpret the code. And if that’s the way he interprets it and that’s the way they permit, that’s the way I’m gonna build it.” So what I tell them is “I’m not gonna even answer these. If you want answers to why you don’t think it meets the code, you go talk to the building official and you find out, because I have no choice but to build what’s permitted. If you don’t like his interpretation of the code, I don’t know what you do about that.”

A long time ago, I’d spend a lot of money with architects and paying consultants and architects to tell them why it isn’t or is in the code. I’ve stopped doing that. I’m not gonna explain myself. The explanation is “I built what is approved. I can’t do anything different.” So it’s been a big help to me of… It probably takes, I don’t know, a third…no, I wouldn’t say a third, maybe an eighth of the items out of the report right off the bat. “I’m just not gonna address them. You go address them.”

Paul: Because they’re trying to interpret the code differently than the building official, basically.

Rick: Well, Paul, you know as well as I do, if I ask five people to interpret the code, I’m gonna get five different answers. People just read things different, and it’s the way they see it. So, you’re right. Yes, that’s exactly my point. In fact, I guarantee you, he doesn’t see it the same as the building official.

Paul: Yeah, that’s so funny. You can’t win because…

Rick: I’m not gonna fight it. You go fight it. I don’t need to fight it.

Paul: Yeah, makes sense. Let’s talk about natural disasters a little bit. You know, I used to go to the National Hurricane Conference. I haven’t been in a while. But I know you go every year. I know you’ve gotten some other major awards for the work you’ve done with them. Can you maybe tell us a little bit about that? And then we can talk about how it relates to the buildings?

Rick: Yeah. Well, first of, I got started with… And you’re right. I go every year. I’ll go again this year, because I learn a lot. I take classes, and I talk to people. And it’s a great place to network, as you know. I got started with it because of Key Biscayne. You know, it’s an island. They have their own police force, own fire department. They had a public works department of about three people. So I started an incentive with them to where I would supply all the manpower, tools, everything they needed from… Again, small building department, they had one plumbing, one electrical, one of every inspector. I started a plan with them that in a case of a disaster, we would be their relief. We would help. I would bring in my architects. They could put one of their inspectors with four of, let’s say, my architect or my structural, whoever they needed. Let’s say it was the electrical inspector that was with the team. Now, I give an architectural guy, a structural guy, a mechanical guy to walk the teams to do the assessments of the homes, because you got to assess anything before we let anybody back. So that basically gave them…went from one team to five teams. And I could supplement them on equipment and manpower and all of that. And for that, it was, you know, at no cost. We did it at no cost to the city, you know, as a part of our good neighbor policy with Mr. Hanson.

But what also that allowed me to do is they gave me and my people and my workers the same pass that any other city employee had. They’ll let you back on the island. As you know, it’s an island, so they just stop you at the bridge. Nobody comes or goes unless you have one of these. So what that enabled me to do was to get people into my project ahead of everybody else and take care of my problems. So it was a two-way street. I actually got the governor’s corporate award that year for sending us on new projects. That was in ’99, So that’s what really got me started in enjoying what we could do to help each other during natural disasters, which in South Florida, as you know, is usually storms or flooding.

I love to build to mitigate, as you know. All my buildings now, and I built in South Florida, all ground level penetrations, doorways, vents, everything gets flood barriers, flood-proof barriers, that we can install to seal the building completely, even the garage entrance as a hydraulic steel lift door that seals off that garage, where I can handle a flood surge up to about four feet and get no water in my building.

We learned, as you know, Paul, here, I can get a flash thunderstorm that can drop…you know, one that really got us…dropped 10 inches in like 10 hours. Well, Collins Avenue, FDOT, all the drainage systems, they were overtaxed. The water was everywhere. Well, it ran into my Acqualina building and, you know, caused damage to some very expensive cars in the garage. So that’s when we learned, okay, you don’t need protection just for the big storm that you could plan on, but some for the…when it comes…they tell you you got an hour till it’s coming.

Like with our garage barricades, they actually operate two ways. You can manually do them with the hydraulic or they float, because the water gets too high, it starts rushing too quick. It just floats up and closes itself. So if that flashflood gets in there and you’re not ready, it will kinda work by itself to help protect you.

You know, the other one, like you know, is wind. Like we did at Luxuria, like, try to do sometimes mostly is the code only requires, you know, large missile impact up to, what is it, 30 feet, I believe, Paul? I don’t know the exact measurement.

Paul: Thirty feet.

Rick: Yeah, somewhere along there. But, you know, to me, okay, If I was a penthouse buyer and the guy downstairs had what I can see a better product, I’d be a little upset. So, to me, I just put large impact everywhere, and everybody gets the same protection. It doesn’t cost more. But I think it’s prudent again. You know, I mean, with these storms, I’m not worried about something blowing from the ground up to the 15th floor. But I’m worried about that furniture and table on that 15th floor patio going through that glass door. So, you know, even though they’re supposed to take it all off and all that, it just sometimes don’t happen, Paul.

So we try to mitigate everything that… I can, there are natural disasters for South Florida. Why I go to these conventions, I’m looking for better ways and better ideas to mitigate water intrusion, wind damage, and those type of normal event.

Paul: Yeah. As you know, we’ve been through some storms on some of our projects before. I remember at Ocean Club at Key Biscayne, they call it the storm of the century. It was a February storm, and hurricane-like effects. I remember getting a call from Tom Moses, who was your boss at the time, and I think he said to me something to the effect of “I had six reports of leaks.” This is, you know, we had 10 buildings.

Rick: Yeah, yup. That’s why it’s important to have consultants, because, listen, these guys in the field get paid to do a job. I’m sure most of them try to do the best they can. But I think the industry has lost a lot. You know, there’s not really an apprenticeship program for very many people today. It’s just poor training. It’s not the A-team installing your windows. Let’s put it that way. That’s why guys like you… And even the waterproofer, how much do you think he pays that guy putting down that hot mix out there. If somebody’s not watching, who knows if he’s got the right mills or whatever. I mean it’s important to inspect and control the workers on site.

Paul: And like the waterproofing, to me, I mean, it’s a crappy job. It’s messy. It’s hot. It’s dirty. And you know, it’s not a career path people are choosing these days.

Rick: It goes along with your other ones, if you look at a lot of roofs. I wouldn’t wanna be a roofer myself, Paul, either.

Paul: Even a roof consultant, you know, our guys that go up on the roofs, they get to a certain point, and they don’t ever wanna go on the roof ever again. That’s why our new drones are gonna really help out because we can…

Rick: Yeah. That’s why I think, like you say, you know, there’s gonna be a lot of changes coming in the construction industry. Drones are, I think, a good one. Especially for you, I would think not having to put a guy on the roof to where he could get hurt, it’s got to be a big asset to me.

Paul: It’s a game changer, not just the roof but also the facade. You know, you think about all the effort in getting swing stages out there and, you know, and you talk about vertical access. So they’re trying to do the work, and then we need to inspect and things like that. If we can fly drones, we can cover a lot more ground a lot less expensively with, you know, zero impact, basically. I don’t know if I’ve told you this or not, but, you know, we’re FAA-certified, and we’ve already branded ourselves Air GCI, and we’re flying the drones already. And it’s a huge, huge benefit for being able to cover a lot more area a lot more cost-effectively. It benefits everybody, especially our customers.

Rick: What I build, I survey buildings of both sizes photographically. Then I set up settlement points. I mean, I try to monitor it. To me, it’s to mitigate claims later. And I think, again, the drones will help that. I mean, I had to do it with high-resolution cameras, you know? And it works good. I mean, I can see a crack on a wall. I can zoom in on anything. Again, for anything like that, for pre-construction survey of your neighbor’s building, because you know it’s gonna be a claim when you’re done. Always is, always will be.

One thing we do a little differently is we try to be proactive and get an agreement between us and our neighbors. You know, we know we’re gonna do certain things. We’re gonna get windows dirty. We’re going to get some concrete on your pavers. And I’m gonna wash about a thousand cars and things like that, things you can’t help building high-rise buildings at close proximity. So I think drones are gonna help a lot with that in the future too.

Paul: It’s exciting. So what are the changes you see forthcoming in the construction industry going forward?

Rick: As you know, it’s all electronic now. Guys can actually be in the field and have the plans on their iPad. We can actually send them RFIs so that they can read it on sight. And electronics, everything, the BIM modeling, the 3D modeling on the designs and stuff, technology is, as you know, changing leaps and bounds, which is good and bad. The bad thing is cell phone service. You know, I put a brand new building up and put the cell phone system in the building. When I bought it, the time I get it in, it’s obsolete. You know, I mean, we went from 3D to 4G. So next time, we’re gonna try a little something different. We’ll put in the infrastructure, the wiring, the cabling, and the piping and all. But don’t buy any equipment or anything until you’re ready to open. And then it’s probably only gonna be good for a couple of years anyway.

The big change in the construction industry that really hurts us is cell phones. You see, more guys standing around on cell phones instead of working. I wish there was a way to limit that. Of course, you can’t. I mean we built years and years. We didn’t have cell phones. You know, you had either radios. Or if somebody really needs it, we had megaphones, so and so, whatever. To me, if there’s a way to control that, you’d probably get a lot more productivity. But I don’t see how you do it. That’s one of the fallbacks we see. I see it all the time, everyday, somebody sitting around on their phone, instead of working. They might be calling their office. I don’t know. I don’t know. When I see guys texting and playing games and stuff when they should be working, I think it’s costing companies and people a lot of money, a wasted time.

Paul: Yeah, they’re a big distraction, no question about it. I never really thought about it. Yeah, I mean if they were doing Facebook or whatever when they should be installing things and…

Rick: And, you know, they got that phone on and their, you know, headphones on, you’re really not hearing. You know, you’re not looking, you’re not aware of where you’re at. If you’re on a construction site, as you know, it don’t take a one small thing and it could kill you. Construction sites are dangerous places. You need to be aware and on top of your game when you’re onsite. It’s my opinion.

Paul: Could you ban headphones?

Rick: Well, you know, we tried to do a lot of things. We don’t allow people to eat in the building because of rodent control in South Florida. We do a lot of rodent control. I mean, I don’t know. It’s a lot of policing, you know? One of the good things I see changing now is electronic, you know? For years, and we still do it today, everyday, the sub tells me how many people he’s got onsite, because we have to do our man count. I like to track manpower to see how many… Do I need more electricians? He’s behind or whatever. Well, that guy could tell you anything he wants. I guarantee you you don’t go around count how many plumbers there are and all. You kind of depend on them.

But now, if they all get badges and stuff and if they come through the gate, it electronically reads them, tells you who it is. And the other thing is, which is kind of neat, it tells you when they leave. If I paid him for 10 hours for the plaster work two hours overtime, but his tag went out at 3:30, why am I getting charged for 10 hours? So that’s one of the good things, because there’s a lot of information with that badge too, the name, who he works for, a lot more information, you know, just readily available to you.

And sometimes I wouldn’t doubt, Paul. The system would be able to tell you where he’s at on the job. If the plumber is supposed to be on the ninth floor, what’s he doing on the 18th floor? You know what I mean? At some point, I might think it’s gonna get that good, which I find is a helpful tool.

Paul: The cost to manage resources and make things more efficient. We don’t even know what’s coming, you know?

Rick: I know. That’s the sad part. You’re right. We can’t even think about what’s coming, I don’t think. It’s coming.

Paul: I love technology. It’s intimidating. But there’s some amazing things that you can do within this geolocating and things like that. It’s gonna be mindboggling. Artificial intelligence and all these things that sound like outer space and sci-fi are becoming real. And I think you always need people in the buildings to build them, but we can help them, you know, build better, basically.

Rick: The iPads and the information you can get to the guy in the field, he ain’t carrying around a roll of plans, not roll them out, you know? It’s a pretty cool stuff.

Paul: Yeah, because when you ask to bring the plans, you know, he’s not gonna do it. I mean, plans on these big buildings, you need a wheelbarrow, basically, to cart them around.

Rick: And they’re changing daily. It’s pretty hard to give a guy a new sheet every couple of days. It just much better just update your internet and, boom, there it is. What you got is latest and greatest. Again, probably puts into the general contractor or even like you, maybe they got to have IT people that can maintain all the stuff for you.

Paul: That’s a huge challenge. I can tell you, for us, you know, we’re using technology a lot. We have to collect all, you know, our data now on iPad, which I can tell you, Mansions, up until near the end, we weren’t doing that, because the technology wasn’t really…

Rick: Right.

Paul: Yeah. We can deliver reports, you know, same day, next day, where it used to take us a week or two. We take pictures. We take photos. We go back to the office, write the report, match the photos. Now, we can give a better report, and we can give it real-time, and it’s really spectacular.

Rick: It’s important. Like you say, it used to take us a week. So that week, there’s nothing even get done if you think about repairs. So I see that as a very positive move too.

Paul: Yeah, they cover up all the work, you know?

Rick: Because they didn’t get the department. That’s what he saw a week ago, you know? It’s crazy.

Paul: Exactly. Well, listen, Rick, this has been really, really interesting. I thank you so much for taking in the time. I know the listeners are gonna get a lot of good intel and really interesting stuff that we talked about. So thank you very much again for coming on.

Rick: You’re more than welcome, Paul. Thank you for all your support throughout the years.

Paul: Yeah, no. It’s been great. So I just wanna remind the listeners that we have a newsletter, the Everything Building Envelope newsletter. And if you’d like to subscribe to that, all you need to do is text the word “building envelope” at 22828. So for the newsletter, text the word “building envelope” to 22828. And with that, I’ll say goodbye. Thank you everybody for listening to “Everything Building Envelope” podcast. Until next time, this is Paul Beers saying so long.

About GCI Consultants: GCI’s building envelope professionals provide consulting services to ensure clients receive maximum value and return on their investment in the firm’s services, which include:

  • Engineering Services
  • Design Assistance
  • Field Testing
  • Quality Assurance
  • Forensic Evaluations
  • Roofing and Waterproofing Consulting
  • Litigation and Claims Consulting
  • Façade Assessments
  • Catastrophic Damage Evaluations
  • Due Diligence Surveys

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Waterproofing, Window and Door Flashings

John Babun – Sika Corporation

  • What are the largest challenges you see right now pertaining to window and door flashings?
  • What are the benefits of liquid applied flashings?
  • What are the benefits of a cementitious waterproofing for windows and doors?
  • Is one flashing appropriate for all applications?

About The Everything Building Envelope Podcast:      Everything Building Envelope℠ is a dedicated podcast and video forum for understanding the building envelope. Our podcast series discusses current trends and issues that contractors, developers and building owners have to deal with related to pre and post construction. Our series touches on various topics related to water infiltration, litigation and construction methods related to the building envelope.


*** Subscribe to the show and leave us a Review on ITunes!

About GCI Consultants: GCI’s building envelope professionals provide consulting services to ensure clients receive maximum value and return on their investment in the firm’s services, which include:

  • Engineering Services
  • Design Assistance
  • Field Testing
  • Quality Assurance
  • Forensic Evaluations
  • Roofing and Waterproofing Consulting
  • Litigation and Claims Consulting
  • Façade Assessments
  • Catastrophic Damage Evaluations
  • Due Diligence Surveys

Be Social With Us-








Laminated Glass and it’s Applications

Bob Ford – Eastman Chemical Company

  • The Advanced Materials Division within Eastman Chemical
  • Laminated Glass and it’s Applications
  • What is laminated glass?
  • How is laminated glass made?
  • Architectural & Automotive Applications
  • Security, Safety, Sound, Solar, Storm, and Style

About The Everything Building Envelope Podcast:     
Everything Building Envelope℠ is a dedicated podcast and video forum for understanding the building envelope. Our podcast series discusses current trends and issues that contractors, developers and building owners have to deal with related to pre and post construction. Our series touches on various topics related to water infiltration, litigation and construction methods related to the building envelope.


*** Subscribe to the show and leave us a Review on ITunes!

The Everything Building Envelope Episode Transcript:

Paul Beers: Today we have as our guest Bob Ford, with Eastman Chemical Company. Bob, thanks for coming on today.

Bob Ford: Well, Paul, thank you for having me, it’s a pleasure to talk to you this morning.

Paul Beers: So you’re with the Advanced and Material Interlayers, is that right?

Bob Ford: Correct I am with the AMI group with Eastman Chemical, and basically what that is, Paul, is at the interlayer division of Eastman. Eastman acquired Solutia, which many of our listeners may recognize as a brand name of PVB, back a few years ago, and so we now are owned by our parent company, Eastman, and I’m with the interlayer division.

Paul Beers: And what we’re going to be talking about today, is laminated glass.

Bob Ford: That’s correct. Several applications we’ll go into and obviously our podcast here is more architecturally oriented, so that would be the focus.

Paul Beers: Yeah, so, when I have people asking me like customers or lay people, whatever, about laminated glass, I always say, hey, you know, it’s the stuff that’s in your car windshield, basically.

Bob Ford: Hey, you’re exactly right.

Paul Beers: And then they get it.

Bob Ford: A lot of the applications we have within the automotive market has actually moved beyond the windshield, and we can touch on that here this morning.

Paul Beers: Okay, yeah, that is interesting. So, before we go onto that, won’t you just tell the audience a little bit about who you are, and then, you know, a little bit about yourself?

Bob Ford: Yeah, so I’ve been in the glass industry a little over 15 years. I’ve worked for both the fabricator side of the market, with inter-pane glass back in the early 2000s, and most recently with Viracon, where I was their North Florida and Alabama architectural rep about the last 6½ years. But Viracon’s certainly one of Eastman’s biggest customers, as are Oldcastle and Trulight, and other glazing fabricators within the United States. So within Eastman, as I mentioned I’m in their advanced materials division, and I handle accounts on the East Coast of the United States and Canada. I basically work with the laminators to help them use our products more efficiently and get them into market.

Paul Beers: Great. Now let’s just jump right into laminated glass. We talked about this a little bit, but let’s just kind of talk about it, you know, go, go back and just run through the basics so that the listeners are on the same page with us. So, what is laminated glass, and, and how is it made?

Bob Ford: So, laminated glass is a composite material that consists of two or more layers of float glass. They can be various thicknesses, eighth-inch all the way up to half-inch wide, and then the interlayer acts as the glue or the sandwich in between the layers to form a cohesive unit. So the process basically starts with laying up two or more lites of glass with an interlayer in between them and that interlayer can be PVB, or it can be ionoplast, or it can be glass-clad polycarbonate laid up in between the lites of the glass. It is then run through an oven and a nip roller which heats the glass to about 160 degrees, and then compresses it through the nip roller somewhere between 80 and 110 psi. So once the glass unit comes through the nip and the oven process, it’s then placed in an autoclave, where it’s in there for about 3 hours. There’s about an hour of ramp-up time and it’s held at a temperature of somewhere between 275 and 300 degrees Fahrenheit for about 45 minutes, and then the glass is cooled, and what happens on the other side of that, is a piece of glass that has very special properties, the biggest thing being is most of the applications that we’re going to discuss is that, that composite retains glass shards and pieces should the glass be broken.

Paul Beers: When we talk about laminated glass, that’s not just all this stuff glued together, is it?

Bob Ford: Well, the laminated glass that we’ll talk about is, if you say “glued together,” you know, the glass is laminated and then autoclaved together, so yeah, it can be a 9/16th piece of glass, it can be used in an insulated unit, down here in Florida where I am, the hurricane code requires laminated glass, but the energy code often needs you to have an insulated piece of glass as well, so we can incorporate a laminated unit of glass into an insulated application.

Paul Beers: So Bob, what I was trying to get at was, when you think of taking all these, the interlayer, the two lites of glass, and you go through this process, it’s not just like it’s adhesively stuck together, I mean, I know I’ve seen where people try to pull it apart, and it’s like all integral together. Is that correct?

Bob Ford: Yeah, it isn’t anything like applying a glue or anything like that where it could be pulled apart. When a glass goes through this process, the interlayer binds with the glass, and basically what you have is, it’s a new product, it’s a composite product, with the properties that make it stronger, as well as much safer than standard float glass.

Paul Beers: So we talked a little bit at the beginning about the applications being automotive and architectural, and I’m interested, and I’m sure the listeners are about the automotive uses, just kind of a quick summary, just so we understand where things are there, which probably crosses over, or will cross over into architectural, and then we’ll jump in on the architectural side.

Bob Ford: Well that it does, and a lot of the applications are similar in principal, so what they mention on the outset of automotive really began in the windshield. The windshield and **** are still probably our largest volume market, and the way we go to market with that is we’ll work with big laminators like Carlex or AVC, who then will sell that product to Ford, or BMW, or whatever automobile manufacturer it might be, and, again, windshields ****, are important, but even that has changed. A lot of vehicles now have heads-up displays, and a lot of our newer projects, and more most interesting projects are actually within HUD units, and basically what the PVB does is it allows, or rather I should say prevents the ghosting of the image within a heads-up display there’s a small projector, which projects various information onto the windshield of a car, and what the HUD does, is basically, the HUD PVB will allow that image to be more sharp for the driver and prevent ghosting along the edges. In other parts of the vehicle, acoustics is one of the biggest growth areas that we see in automotive PVB. For awhile, architectural, or excuse me, acoustic skylights were kind of a premium product on only the higher-end models of cars. Now we’re seeing acoustics throughout the offering of automobile manufacturers like Ford, for example, and a lot of that growth, Paul, is really from the fact that, you know with their cell phones now, and being safe and hands-free driving and hands-free communication, not hands-free driving, but hands-free communication with your phone is very important, and in order for that to happen, when you’re speaking into the cabin of your car, and you’re listening on the speakers, you need a quieter cabin, so that’s where these acoustic products that really help make the, the cabin quieter, and to allow hands-free devices to work more effectively.

Paul Beers: Yeah, and you know we talk about the crossing over into architectural markets, I know acoustics are big and getting bigger, you know as things urbanize, with areas that we have more people on the planet, acoustics is becoming more and more important in the architectural market as well, which is where laminated glass began, even before the hurricane market they were using it in airports and things like that, so, are there any other crossovers from automotive that we’re seeing now, or we may see in the future?

Bob Ford: Yeah, I think acoustics is probably the biggest one that kind of translates back and forth. If you think of the idea of a windshield, that if something is to hit it from the outside, obviously the driver doesn’t want glass flying into his face or the passenger’s face, so the fact that the laminated windshield will retain those glass pieces, that thought process, if you will, translates into security as far as bomb blasts, it transfers to hurricane applications. It’s hard keeping the building envelope intact, and not allowing glass to fly into the building, so I would say that the basic technology of the laminated glass is probably the biggest crossover. Getting more specific to that, I would say yes, acoustics, and that’s becoming a growing segment of our market as well. I think something like 90 percent of the world’s population inhabits 10 percent of the land, so that automatically is going to bring us toward people in closer proximity together, and though we love our fellow man, we sometimes like a little bit of privacy as well, and as you mention in highly urbanized areas, high-rise buildings, the use of acoustic glazing is more important because it does provide more occupant comfort, and it also increases the sellable cost of buildings and rental spaces if these buildings have acoustic, better acoustic performance it’s just a more pleasant place to live and the owners can get more money for that.

Paul Beers: I’ve got a future guest coming up that’s gonna be talking about retrofitting hotels, and one of the big drivers for them is the acoustics, and they did a job, I know, they were telling me about in New York City, where they retrofitted the windows with laminated glass, and it made a huge difference for them, and for the property they could get a return on their investment just because they had better rooms, and they could basically charge more money for them.

Bob Ford: That’s correct, and I think the same design thought goes into hotels that are located in or near airports. Obviously, with jets taking off day and night, you typically see some really aggressive acoustic applications there, and within acoustics, the way PVB works, is it basically breaks up the sound wave. Glass itself is fairly rigid, so that rigid medium is going to transfer that sound wave pretty cleanly. The PVB is a softer material than the glass, so it disrupts that wave, provides dampening, and that’s where a lot of aesthetics is of laminated glass comes from it’s not only a thicker make-up, and a bigger barrier to get through when you combine two pieces of glass versus one, but you also have that dampening effect as well.

Paul Beers: So, let’s run through the list of the, you know, the architectural uses for laminated glass, and why they’re used for various different effects, and then we’ll go back and visit each one and talk about that a little bit more. So what’s the big list of reasons to use laminated glass?

Bob Ford: Well, within our company and the industry we like to refer to that as the Six S’s, and that would be Security, Safety, Sound, Solar, Storm, and Style. You know when a lot of the low-e coatings out there that a lot of our fabricators produce and use, solar’s probably a little bit lower on that list, because frankly, low-e coatings do a much more efficient job of controlling solar heat gain coefficient, or solar heat gain. However, on the security side, that’s probably one of the most important growing trends right now, as far as bomb blast goes and forced entry, but safety is also very important too. Safety’s probably the most generic usage. When we’re in a building and we’re talking about safety glass on the interior you know our ANSI, Z91 standard allows us to use just regular tempered glass, so that if that glass breaks, it would break in very small pieces, and won’t seriously hurt anybody, but laminated glass also qualifies as a safety glazing, and again, like many things we’ll talk about today the ability of the interlayer to retain the pieces of broken glass and make it ideal for a safety application.

Paul Beers: You know, the Six S’s, what I was just thinking about when you were going through them, is, if you, let’s say you pick one of them, say, let’s just say safety, you get the other five S’s along with that, in some degree on every single application, but do you not, well maybe not storm, because that’s designed specifically for that, but you get a lot of the, if not all of the other S’s every time you use laminated glass, do you not?

Bob Ford: That’s a great point, Paul, you’re absolutely right. So, let’s talk about as an example, one of the most rudimentary makeups that we’ll have for a laminated glass unit, so two pieces of quarter-inch glass with a 60-gauge PVB interlayer, and that product is fairly typical for both safety applications that I mentioned earlier in interior partition. It can be used for a handrail from a blast standpoint, you know, .060 PVB probably covers the majority of blast requirements for courthouses and airports and other buildings like that. Obviously there are specialty buildings, like embassies, that have higher degrees of blast requirements to them, but if you have a piece of .060 PVB in your glass, you have basically what’s in, I would argue, 70 percent of the blast application out there, which is just .060 PVB. As far as sound goes, .060 PVB will provide a very good improvement in STC, or sound transmission class, when compared to say, quarter-inch float glass. And then finally with style, when I refer to style, I sometimes speak about the colors that are, are available within the PVB family. Most of us who deal with float glass every day, you know, that if we’re buying float glass, we’re kind of limited to greens and blues and greys. Most of the major float manufacturers out there, even their specialty products, like Guardian’s crystal gray, or PPG’s solar blue, are basically in that blue, green, gray family. So, within Saflex’s PVB interlayers, we have reds and yellows which can be combined over 10,000 different colors available to provide a myriad of colors, like oranges, and lime green, and bright reds, and different shades of blue that typically aren’t offered in float glass colors, so when we speak about style, that’s kind of what I refer to is color. And again, all of those can be combined with our standard clear PVBs, to build a makeup, that would be appropriate for a hurricane application.

Paul Beers: We have a lot of architects in our audience, I know and this color discussion I’m sure is going to excite and interest them a lot, because it can take you out of the ho-hum, as you say, blue-green-gray spectrum, and pretty much give you anything you want, is that true?

Bob Ford: Yeah, it really is. The different base colors that we have really allow you to mix and match, and we have a website, vanceva.com, that your audience can visit, and you can see the various base colors that are available. We have earth tones, as well as more vibrant colors, and by putting up to four layers of these colors together, you can literally create thousands and thousands of different shades. To add to that, we also have products that provide opacity, or I should say interlayers that provide some opacity to glass, so if you have an area where you need privacy, you still want to get some natural light in through the window, but you want to have an obscured view, our cool white and artic snow interlayers, for example, will allow you to, I guess, diffuse the light, is the best description, and they can also be combined with color, so you really have quite a few options, if you’re an architect, that wants to go beyond the standard pallet of greens, and grays, and blues, that you find in float glass.

Paul Beers: Really exciting. One thing I want to just jump back on that I had thought about when we were talking before was, you mentioned the solar, that the low-e coatings do such a good job these days, and you can have low-e coatings in a laminated glass unit, correct?

Bob Ford: Yes, that is correct. Most of the time, and if we’re talking for the majority of the country that’s using, from the hurricane standpoint, you are required to use insulated glass. So, the basic makeup would be your quarter-inch outboard lite, with your low-e coating on the No. 2 surface, that’s subject to the air ****. You then have your half-inch air space, and then your laminated unit on the inside. However, Paul, there are also applications where we want to use a 9/16th lite of glass, with a low-e coating and an interlayer, and in those cases yes, PVB interlayer can be put right up against many of the low-e coatings that are offered on the market from manufacturers like Guardian, Viracon, or PPG.

Paul Beers: Yeah, so not everything always works, but a lot of it does, and so an architect, or **** buyer would work with these manufacturers to find out exactly what they offer in that regard, correct?

Bob Ford: That’s correct, yeah. It would again depending on the performance required in your building as far as U-value goes, or solar heat gain and the colors that you want, because, as we know our low-e coatings will impart color, so we often have a little caveat that if an architect wants a red accent piece, or a yellow accent piece, make sure they get that sample with a low-e coating in place, because as you know, a lot of our low-e coatings that are most popular today, particularly the triple-filtered coating lend a little bit of a green hue to the glass, and that’s where, you know, we want to have a sample or a mockup done before so the architect knows exactly what they’re getting, and Paul, that kind of segues me into another area of that speaking of that green hue to the glass, I know a lot of our audience are trying to find coating and glazing solutions to kind of get rid of that green, so a lot of low-iron glass being used in the market today, and we actually have a structural product that is intended for use with low-iron glass that, goes more toward a slightly blue cast rather than a green cast, and it looks really, really nice when used in low-iron substrates.

Paul Beers: And low-iron just so we’re all on the same page here, low iron is like super-clear glass, that, would that be the right –

Bob Ford: Correct. Correct, and you might hear the term ultra-clear, and basically the process is that it’s further refined from standard clear glass, where more of the iron is removed, and it’s the iron in the glass, particularly when it’s heat-treated, that kind of gives it that, that greenish hue. So, when we pull more iron out of the float batch, we can get a low-iron product, and all of the major float manufacturers out there do offer a low-iron product. You may have heard of a, you know, PPG fired the Starfire, for example, so different manufacturers have their different low-iron substrate on the market.

Paul Beers: Now I just want to throw this out there not to be a downer, but it is more expensive, also.

Bob Ford: It is kind of that…you get what you pay for, and, yeah. So low-iron glass, typically will add in, if you’re using two units of it, or two pieces, **** typical one-inch makeup, you’re going to be looking at somewhere around $1.00 to $1.25 a square foot premium for each of those lites of glass.

Paul Beers: And I have to say, so I’ve worked on a lot of projects with consultants or with an architect that looked at low-iron, and in the past they’ve been budget-busters. They have a budget, they want the low-iron glass, and then they get the prices, and they can’t afford it, but it sounds like the delta has come down a lot, if it’s only $1.00 or $1.50 a square foot, it used to be a lot more than that.

Bob Ford: Yeah, Paul, actually, I think I actually misspoke there. That delta is closer to $2.00 to $2.25. The other thing I was gonna circle back to here, when we’re talking about laminated glass and in a safety application is heat soaking, and being able to prevent nickel sulfide in the heat soaking aspect of it is more the $1.00, $1.25 a foot. You are correct, I did misspeak, that the low-iron glasses are typically $2.00 to $2.25 a foot premium, based on a quarter-inch substrate, so that was my mistake.

Paul Beers: No, that’s fine but even that has come down from, I think what it used to be, so I think there’s more possibilities out there to maybe use that, and I know a lot of architects like that kind of a color influence that they’re looking for, so that’s good information.

Bob Ford: And especially if you’re looking at, you know, you look at the cost of the entire laminated unit, I mean a piece of inch and 5/16 laminated glass, depending on the interlayer, and the low-e coatings in the substrate, may be anywhere from, you know, 20 to 25 bucks a square foot. So you look at it from that aspect and the delta for the low-iron is not quite as big as jump as far as the percentage of the whole unit is concerned.

Paul Beers: That’s right. So, let’s talk about security, a little bit of more blast and forced entry. You know, the blast thing, unfortunately, has become a lot more prominent over the years, with the, the rural events, I guess I’d call it, being what they are. The forced entry, I don’t think laminated glass gets enough credit for how it performs in that regard, and if you just think about it, typically, like a storefront, you know, like a shop, you know, the thing in the past you would always have would be a tempered glass unit, and, **** a mischaracterization but everybody gets it, tempered glass I described as the glass that breaks into a million pieces, so if somebody breaks the glass, it’s basically on the ground, and there’s a big hole in the building, and laminated glass, what happens there?

Bob Ford: So that’s an excellent point. This is something that I think a lot of my folks, for example, about 2 years ago had, they live in down in Fort Myers, so they had hurricane blast windows installed in their home. You know, I think they were just thinking, yeah, you know, we’ll be safer in a storm, but as a secondary, benefit of it, is absolutely the prevention of forced entry. To go through a piece of tempered glass with a blunt object is fairly easy to do. I mean, tempered glass, as you know, is twice as strong as heat-soaked glass, which is twice as strong as regular float glass, as far as blunt impact, but you can break it fairly easily with, with a bat or some other implement. Laminated glass, on the other hand, you can go at that for 20 to 30 minutes, and you’re not gonna make any sizeable hole in it. The other thing is that, you know, in both areas where this glass is located, residential areas, you know, someone’s banging away at your sliding glass door with a piece of laminated glass is gonna draw a lot of attention. So, as a secondary kind of passive benefit is the security and safety from a forced entry standpoint is one that is very little thought of features of it, but absolutely is one of its strongest attributes.

Paul Beers: Yeah, and you know, I always said, if we were back when the hurricane market was developing, we were talking about the other benefits of glass, and you know, **** back then was, if you have I guess we’d call it an opportunistic thief, who was trying to throw a brick through the window or hit it with something, they’re gonna get tired and go somewhere else, because if it’s not going to work out then it won’t go well for them.

Bob Ford: Correct. And particularly in Florida you have a lot of part-time residents down here, and a lot of houses that are basically, no one’s living in them for several months out of the year. Those might possibly be a victim or a target for some thief, but, again the forced entry resistance of even regular .060 PVB, as most people are having laminated glass in their one- or two-story homes they have likely 090 PVB or an even stronger interlayer. Unless you have really specialized cutting tools, a saw, and things like that the average opportunistic thief, as you say, is not going to be able to make any kind of entry through a window like that.

Paul Beers: So people are thinking, “Well, what about if there’s a fire how does the fire department deal with that?” And they do have those sophisticated tools you just referenced, right?

Bob Ford: They do. They do. Yeah, I mean the glass, obviously, like anything else, it does have its limitations. I mean, for a thief with a crow bar or a baseball bat or a brick or a rock, yeah, he’s not gonna have any luck getting through it. A fireman, however, they have special equipment which basically allows them to saw through the glass, much like they would go through any other kind of wall and create an opportunity to get in or out of the structure. So, yeah, from a firefighting standpoint, they all carry that type of equipment on board so that they can get through that laminated glass fairly quickly. The average thief doesn’t have all that in the, trunk of his car.

Paul Beers: Yeah, no, no, no. My hope is that we don’t have any thieves listening to the podcast, so, but, another thing the fire department can do is they can chop through it with their high-tech axes as well.

Bob Ford: Correct.

Paul Beers: You know, the thing with the security applications, is gonna segue us into talking about storm as well, and that it provides passive protection, and maybe you’d talk a little bit about that, because that’s a really big deal as well.

Bob Ford: Yeah, so, again, one of the nice things about laminated glass is that it’s always there, 24 hours a day, 7 days a week, 365 days a year. Particularly for a storm application the alternative product as far as opening protection may include, boarding up your house with plywood, putting up hurricane shutters, things like that, but those do have their drawbacks, first of all is that if you’re boarding up your house for the winter, the summer, rather, to go back north, it’s pretty obvious to people looking at your house from the outside that you’re not home. The other aspect is the difficulty of storage and putting up those shutters every time a storm comes in can be a bit difficult, particularly for some of our older population, that doesn’t want to be up on a ladder, or pulling these heavy pieces of metal or vinyl or other materials out of their garage, so laminated glass is always in place. It’s always there working, and it’s just a very logical solution, particularly you know, Florida has a lot of retired folks out here, and that just gives them good peace of mind that their home is protected from a variety of threats.

Paul Beers: So I live in Palm Beach Gardens, Florida, I’ve had this house that I’m in now for I dunno, 10 or 12 years. It was built to the new code, and it was provided with removeable storm panels, which work very well, but I have to tell you, every time a storm comes, it’s a major undertaking to get them out of the garage, and get them set up on the house, and if you hire somebody to do it they’re gonna charge you, like, a thousand dollars or more to do it, and it’s a major hassle, so you start thinking to yourself, if a storm’s approaching, is it gonna hit, should I do it, shouldn’t I do it? So, last year I decided to put hurricane impact windows in throughout the house with laminated glass, and, you know, it wasn’t inexpensive, but we did it, and got rid of all the shutters, which was great, and so this year, Hurricane Matthew was approaching the east coast of Florida, and it was a big deal. They thought it was gonna hit West Palm Beach, and it, you know, ultimately it didn’t, but I was on vacation in Morocco, hiking, when all this was going on, so, you know, obviously I’m concerned. I didn’t have a lot of connectivity, I was texting my son and whatnot, but the great news for me was, we were good. All we had to do was make sure the doors were closed, doors and windows were closed and locked, and we were ready for it, and I have to tell you, the, the difference, the peace of mind, and the confidence that it gives you to have that passive protection all the time, and with the breaking and entering and whatnot, it really makes a lot of sense if you live in an area that needs something like that.

Bob Ford: You’re, you’re absolutely right. I know when a storm is coming like that, you know, having lived in Florida since the late 90s, I’ve seen a lot of hurricane reports on the news, and when a storm is coming your way, there’s a lot of other things to do, like having a plan if you need to evacuate or take care of pets or if you’re going to stay, stocking up on your water, and food, and all those things. There’s a lot and life gets really busy when a storm comes in, and if you don’t have to put up hurricane shutters, that’s one less thing to worry about. I know I can also offer a kind of a personal story here. Before my folks down south had gotten their hurricane windows in, they had shutters up, so when my folks go north I came down to help my father remove them, and he had the old metal panels that screw in, which work very well, they also tend to be very heavy at times, and sometimes a little clumsy to handle. I ended up dropping one of those on my foot, so about you know, 30 minutes later, and 14 stitches later, I had a nice permanent reminder on my right foot of the benefits of laminated glass versus hurricane shutters, so, a lot of the products are now becoming so much more affordable as far as windows go, and I think that anyone who either is a part-time resident, or let’s face it, a lot of us travel for our jobs, and if we have a storm, we might not always be able to get there to put up those shutters, so having laminated glass is absolutely good peace of mind.

Paul Beers: In 2004, I was in Seattle doing water testing on some hotel projects as an expert witness assignment, and I had my son with me at the time, he was helping out, and I remember we went and paid a lot of money for a plane ticket, took the red-eye home, which is not part of my normal DNA, and flew all the way back to Florida so we could put our shutters up, and it’s insanity, basically, but the whole plane from Seattle to Atlanta was loaded with people going back to Florida for the very same reason. It’s really interesting.

Bob Ford: Yeah, it’s you know, as I am now in my mid-40s, and I really don’t want to find any reason to get on a ladder if I can help it, maybe to put up Christmas lights, but that’s about it. But handling those panels, and the weight of them, it’s just that laminated glass is a much simpler solution, and is there a, more of an investment up front, absolutely, but I think all the benefits that it provides just really makes it a good investment.

Paul Beers: And then on the business side of things, you have people that may be responsible for putting shutters up, if you have shutters on your facility, have families at home, they have the same worry, all the same worries we just talked about, so it makes, even, maybe even more sense, in commercial and multi-family applications, you know, not to mention when you get up in the air above the first floor, to have the passive protection so that that’s just one less thing to deal with, because these things sneak up on you. I’m out in Morocco, clueless, and all of a sudden there’s a hurricane about to wipe out south Florida, and I wouldn’t have been ready for it, so it really it’s compelling, I think.

Bob Ford: And the thing that they can change their track so quickly, and their intensity so quickly. I remember when Hurricane Wilma came through south Florida back a few years ago, and it was kind of off the coast, it really didn’t look like anything that much, and then all of a sudden, it just ramped up into a pretty damaging storm, so, yeah, you know, with hurricanes we are very good at or getting better at predicting where they’re gonna go, and how strong it’d be, but there’s still a lot of randomness out there and chance, so, better to be protected, and again, laminated glass is one less thing to worry about when that time comes.

Paul Beers: That’s right. So, for hurricane windows and doors and commercial systems, what has to happen to actually become a hurricane window, for a product to actually be a hurricaner, and they use, by the way, “hurricane proof,” I hear “hurricane-proof windows,” and that’s not a good term, and in fact Will Smith, who works for us, just wrote a little blog article for us last week talking about the misnomers that people need to understand, even with the hurricane windows, that they provide protection, they keep the hurricane out, that doesn’t mean that they’re shatter-proof or anything like that. But let’s just talk about what does it take to be called a hurricane rate, or a rating for hurricanes or wind-borne debris, with a window or glazing system.

Bob Ford: So, it’s basically two components. So we can talk about hurricane-resistant glass, I think is a better term, and like you mention, Paul, hurricane-proof indicates that the glass won’t break. I’ve had, you know, architects have asked me before, “Well, you know, if it breaks during the hurricane then we have to replace it,” and I tell them, “Yes, you’ll have to replace that window, but it’s better than replacing your entire building.” So when we’re testing, we’re basically looking at their framing system, now that can be most of my life is spent in the commercial segment, so that could be a curtain wall, that could be a storefront, that could be a fixed opening, or it could be a residential window. So, when we talk about the testing, we need the framing portion, and then the glazing in-fill that goes in it, and basically the main part of the glazing in-fill is the laminate, or the laminate interlayer. As the testing goes, glass, if it’s annealed, and heat-strengthened or fully tempered, it’s not necessarily manufacturer-specific. You could be getting your glass from Cardinal, or Guardian, or Viracon, or Oldcastle, Trulight, whoever. It’s the interlayer that has to be tested with a specific framing system. So what they’ll do is they’ll build a mock-up of this, and it’s also gonna be size-dependent, so you’ll have a given size, and it’ll end up in the commercial size of things, most people test up to about a 40-square-foot piece of glass. So let’s say we have our five-by-eight test specimen, it’s either gonna be, insulated-laminated, or just laminated glass, and there’s two different tests, Paul, that we do. The first one is called a large missile, and that’s meant for any glazing that’s from ground level to 30 feet in the air, and this is typically a 90-gauge PVB, or it could be a specialty higher-performing interlayer, an ionoplast material, or a composite PVB, and basically during the test, it’s comprised of two components, the first is an impact portion, where they fire a 9-pound piece of two-by-four lumber at 50 feet per second, which is about 34 miles an hour, and they impact, the glass with that, and then the second test is the cycling, and that’s basically to replicate hurricane winds that could last, you know, 4 or 5, 6 hours if the storm moves through your area, and that requires positive and negative cycling with 4,500 cycles each at varying degrees of the test pressure, and basically that impact and pressure test, if the glass makes it through that, it will be determined to be passed as a hurricane assembly, and so, again, we have to be cautious of not just putting any piece of laminated glass into any framing system. That piece of glass being an interlayer makeup must be tested specifically with that given framing system.

Paul Beers: That’s a great point, too, the magic glass doesn’t just make it into a hurricane window, it’s gotta go through this design and testing process, and then it’s actually gotta be approved, put in the product approval system, the State of Florida would be one, and I know Miami-Dade County was the first one, still **** leadership position there as well, so people often ask me, you know, ” I’m looking at getting new windows for my house, or for my building, what do I do?” Well, the first thing you start with is getting the Florida building codes, or Miami-Dade product approval listing, and make sure that it’s **** testing, make sure that it meets those required wind blows **** for your project.

Bob Ford: That’s correct. I often have worked with some architects on retrofits and, you know, they want to see if they can get away, and it typically doesn’t happen in Florida, since the market’s been so developed down here, but you know, “Hey, we want to remove this existing quarter-inch glass and put in hurricane glass in the same frame.” Well, that would certainly mitigate the potential damage, yet it would not be considered a hurricane-resistant system. Again, that word “system” means glass tested with a specific framing system.

Paul Beers: The other thing I was thinking about when you were talking about the hurricane glass, what about tornados? I know there’s not a certification program, but I’ve often thought, well, not thought, I know this is just instinctive, that you see these tornados, we’re getting into tornado season, and well actually it’s the springtime, but coming up, and every year there’s these horrible tragedies where towns get hit, you know, I remember Tuscaloosa, Alabama was one, and I’m trying to think where the other was, I think, Kansas. We had hospitals that were badly damaged, and I thought and wondered, why, like if you have a hospital in Tornado Alley, why wouldn’t you put in a hurricane-type of window which would give you a much better chance of surviving, whether it’s rated or not. Have you seen any projects where that’s been done?

Bob Ford: Yeah, well we have something down here, when I mentioned different large-missile impact, we also have something down here what are called “essential facility,” and those are what they refer to as “Level E” glass. And as I mentioned, the standard large-missile test fired a 9-pound two-by-four at 50 feet per second. With the Level E, that two-by-four is fired at 80 feet per second, or about 55 miles an hour, and what that requires, Paul, is a, a hardier interlayer to handle that impact. Now, if you’re going from that to a tornado there’s a FEMA standard out there that I think they want the missile to be fired, the two-by-four, at something like 100 miles an hour, and that is an incredibly difficult test to pass. We have done some and worked with some of our partners to try to create double-insulated makeup basically creating almost like bullet-resistant glass, to be able to resist something like that, like a 9-pound two-by-four at, at 100 miles an hour. You know, as far as those buildings that are in Tornado Alley are subject to that, you know, if you get the right tornado hitting you unfortunately, there’s probably not much that glass, you know, if you got caught in a 4 or 5 tornado, it’s just, there’s not really a whole lot of building material out there that can withstand that. With that said, laminated glass would do a lot and would go a long way to mitigating some of that damage. Again, the idea of maintaining and keeping those broken glass pieces in place, adhered to the middle layer, and try to protect the building envelope would certainly be a benefit in a lot of cases where hospitals and first responders and folks like that, when their buildings are subject to a storm like that.

Paul Beers: Yeah. And I’ve just thought that the hurricane window probably works in a lot of other areas, not a failsafe, but certainly a epic improvement over not doing anything.

Bob Ford: Absolutely. Correct. Again, a lot of the other benefits we talked about with laminated glass particularly the acoustics, and a lot of hospital settings that would have an added benefit, and from a design standpoint, particularly a lot of the children’s hospitals that we’ve seen that are going up, architects are often using very bright colored windows interspersed amongst the curtain wall and again, you can accomplish all those things with laminated glass.

Paul Beers: So this segues into my closing question, which relates to the architects and owners that are listening to the Everything Building Envelope podcast, why should they use laminated glass?

Bob Ford: Well, I just think it provides so many different benefits and again, depending on the application you’re talking about, but, basically, it’s an enhancement over standard float glass. Again, from a color standpoint, your pallet of colors is completely opened up to you. As far as from a security standpoint, if you’re designing for hurricane, and you’ve got 90-gauge PVB in your building, guess what, you’ve probably got serious blast protection already in place as well, as well as very good acoustic, as well as prevention of forced entry. So, I think this one product just has so many attributes about it, when applied to the architectural market, that, you know, laminated glass is more expensive than regular glass. I mean, if you’re comparing a 1-inch insulated unit to an inch and 5/16th insulated laminated unit you know, you’re talking several dollars a square foot more. However, all of these other benefits that come along with it, you know, just give you a really good bang for your buck as a designer, and I think we’ll see this trend continue for the projects that we see on the horizon.

Paul Beers: It’s a very, very good performing glass system, basically.

Bob Ford: Yeah.

Paul Beers: So, Bob, thanks so much for coming on, it was really interesting, it was insightful, it was thought-provoking, I thought it was great, and it’s really good to talk about this, and let the listeners know, some of or a lot of this stuff, but to really be able to hear the whole picture, and then give them something to think about going forward.

Bob Ford: Well, Paul, I appreciate you having me, and I did want to thank you for one thing, that the fact that we’re recording this November the 7th, you didn’t ask me any political questions, so, I thank you for that. I was waiting for one of those, though, and the only thing I was going to add, was that something both sides of the aisle, you guys agree on here, is that actually, Saflex interlayers are used to protect our nation’s most prized items and charter to freedom, that being the Declaration of Independence, the U.S. Constitution, and the Bill of Rights. All those, if you go to the National Archives you’re going to view them beneath layers of Saflex, laminated glass, so a lot of applications perhaps you don’t think of every day.

Paul Beers: Good stuff. So, thank you, everyone, for listening to the Everything Building Envelope podcast, this is Paul Beers, ’til next time, so long.

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Building Conception to Completion from an Architect’s Eye

James LaGreca – DSS Condo

  • Who is required to obtain a 40-Year Recertification?
  • What does the 40-Year Recertification consist of?
  • What gets inspected?
  • When does an owner need to perform the recertification?
  • When is the report due?
  • Where does an owner obtain 40-year Recertification information in order to start the process?
  • Where do we find a qualified Architect/Engineer?
  • Why do we need to perform these inspections?
  • How do we get the 40-Year Recertification done?

Building Conception to Completion from an Architect’s Eye

Our Guest: James LaGreca with DSS Condo. DSS Condo is actually a sub-division of DSS which stands for Development Service Solutions.  In this podcast, Paul talks with Jim about his professional experience as an Architect with DSS and some of the most interesting projects he has been a part of.

About The Everything Building Envelope Podcast: Everything Building Envelope℠ is a dedicated podcast and video forum for understanding the building envelope. Our podcast series discusses current trends and issues that contractors, developers and building owners have to deal with related to pre and post construction. Our series touches on various topics related to water infiltration, litigation and construction methods related to the building envelope.


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The Everything Building Envelope Episode Transcript:

Paul:   Welcome back everyone to the Everything Building Envelope podcast.  We have a very interesting show today that I’m excited about and our guest is James LaGreca with DSS Condo, welcome James.

James: Thank you. Good to be here.

Paul:   I just want to tell everybody before we get into this and remind them that we have the Everything Building Envelope newsletter and if anybody’s interested in receiving that, they need to text the word buildingenvelope, all one word, buildingenvelope to 22828.  So again,. text buildingenvelope to 22828.  They’ll put you on the list.  It’s a really interesting newsletter with some interesting technical articles and other general interests related to the building envelope.  So anyway, James, you’re with DSS Condo and our firms have worked together on some projects already in fact quite a few I think.

James: Right, that’s correct.

Paul: We thought it’d be really interesting to the audience to hear it’s different than a lot of the stuff that we talk about, you know, a lot of times we are focused on new construction and things like that.

James: Mm hmm.

Paul: And we’re, you know, we’re working on existing buildings and, you know, a lot of times they’re 40 years old or older so I thought that’d be pretty interesting to talk about but before we get into that, could you please just tell the listeners a little bit about yourself?

James: Yeah, sure. Absolutely. Well, I’ve been involved in the construction industry since I was a child.  I actually started out in the roofing and siding business working for my father.  He was a roofer and sider which eventually he got into general contracting.  At that point in time we got involved basically with all aspects of the construction trade and I did that throughout my early years and when I was about 33-years-old I decided to go back to school for architecture.  I studied architecture.  I got my Master’s Degree in architecture and shortly thereafter I started working with DSS, Development Services Solutions.  In addition to that I actually wound up getting a teaching position at the university where I studied, FIU, and I actually teach structural systems and design for architecture students and we cover steel, wood and reinforced concrete and then throughout the last few years I’ve also managed to become certified in post-tension cables repair. I thought that would be pretty helpful considering all the work that we do.  We do a lot of plaza deck repair architect repair and we know that there’s quite a few buildings out there that use post tension cable systems so that would help as well.  And I’ve been working with DSS for about 3 years now so it’s been quite the experience.  The work that we get involved in is never the same so it definitely keeps things interesting.  I learn new stuff every day.  It’s been a fantastic ride.

Paul: Some of the most interesting projects that we worked on with DSS, you know, as you say you gotta put your thinking cap on because you’re never gonna do the same thing twice.

James: Mm hmm.

Paul: And it’s fun and we really enjoy working with DSS and working on the projects.  Can you tell the listeners more about DSS and DSS Condo?

James: Yes, absolutely.  DSS Condo is actually a sub-division of DSS which stands for Development Service Solutions.  Development Service Solutions was founded by Donald Kipnis.  Donald Kipnis has been in the construction industry down here in Miami for probably the last 35 years.  He is a construction guru and his knowledge and experience has enabled him to create this company which helps clients manage their construction projects from beginning to end.  So basically, we’re owners represented as construction managers and as I said we help the client manage the entire construction process.  DSS Condo in particular however caters strictly to Condominium Associations where DSS caters to commercial.  DSS Condo what we do is we help out the Associations navigate through the lengthy and daunting process, associated with any large scale construction project.  We take them through the design process, the permit process, bid solicitations, contract negotiations, construction management from beginning to end and we make sure that the project stays on schedule and within budget.  That is our main goal.

Paul: How does DSS add value to the process for a Condo Association?  I mean, why can’t they just use an architect or an Engineer to do all this?

James: Well typically architects and engineers first and foremost, they’re not construction managers.  They are architects and engineers and architects will design how they see fit – what their vision is and while they might take input from the client, more often than not they do not design to budget.  Engineers pretty much do the same thing.  They will engineer things to make sure that it is being engineered to the point where, where they won’t get sued.  So basically, yes.  Sometimes they have a tendency to overcompensate and what we do is we thoroughly review the design whether it’s a design generated from an architect or it’s a design generated from an Engineer.  We’ll review that.  We’ll question it.  We always question it.  We question everything and more often than not we find ways to tackle the project that are more cost effective and can be done quicker so that’s the main benefit of what we do.  In addition to that, I mean, of course we manage the entire project from conception to completion.  We track everything that comes along with the construction project and we manage all the key players in the projects, architects, engineers, contractors, suppliers, sub-contractors, so on and so forth and we have to keep the client’s best interest in mind so basically we handle everything on behalf of the Association or the client in general so that they don’t have anything to worry about.

Paul: We collaborated and worked with DSS on a project in Coconut Grove a couple years ago that was a major 40-year re-certification that involved concrete remediation, redoing big time plaza decks that were over a parking garage, we replaced windows, we restored handrails, we, we did a lot of stuff and I have to say it was brilliant the way Donald brought everything together and, you know, they were way over budget.  They had an engineering firm originally involved that put together this budget that was just not realistic.  Donald came in and kind of sliced it and diced it and broke it all up into parts and pieces and then brought in a team of contractors or subcontractors to basically accomplish the same thing in a much more efficient way and our firm was involved in helping with that – re-engineer it and, and that re-engineering brought them within the budget and then we had had a full-time inspector on the project for – which, which lasted over a year and it was a very successful end result to customer, financially was within their budget and they were happy and technically everything was done to a very high level of quality and level of care and really a great experience for something that was quite frankly off the rails when, when DSS and when Donald got involved with it.

James: Yeah and as a matter of fact there’s so much money left over in the budget that the Association actually was able to take that money and apply it to changing all of the windows, the corner windows on the building.

Paul: And that’s really adding value obviously.

James: Absolutely.  Absolutely.  That was a great success story.

Paul: Yeah.  So that was the building called building recertification.  You know, it was the impetus for getting that started was this requirement for a 40-year recertification.  Can you kind of talk about what that requirement is?

James: Yes.  Absolutely.  Uh, well basically it’s a two-part inspection that caters to the structural and electrical components of the building.  And it is imposed by the Florida building code and it states that all buildings 40 years of age must undergo an electrical and structural inspection by a licensed architect or engineer.  This must take place in order to be recertified by the building department.  Subsequent to that forced recertification the building is also required to obtain an additional recertification every 10 years thereafter.  So this process is again imposed by the Florida Building Code and it’s ultimately the owner’s responsibility to make sure that when their building is approaching that age of 40 years that they have to get this process done.

Paul: So when you say there’s a structural portion and an electrical portion, what exactly is looked at with regards to those two big subcategories.

James: Okay well, for the structural portion the structural engineer who is gonna be inspecting the structural components of the building, they’ll take a look at everything structurally related and they’ll go – they’ll inspect the foundation, the floor systems, the framing systems whether it’s steel, concrete, wood, what have you, they’ll look at the masonry walls, the roof systems, balconies, windows, etc. and they’ll basically write a report which states the current condition of those structural elements and if they are in need of repair then they will write a report which will dictate the repairs needed.  As far as the electrical is concerned, they’ll look at the electrical service the circuits, the conduits, the lighting and generators, the fire alarms, smoke detectors meter electrical and mechanical rooms, electrical panels, etc.  The electrical engineer will cover all that.

Paul: So does this have to be started on the 40th birthday of the building or does it have to be something that they need to look ahead and have it completed by then, how does that work?

James: Well, it, it’s actually supposed to take place 40 years after the building receives it certificate of occupancy when it was originally built so that is when it’s supposed to take place.  Could you do it a little bit before that?  Absolutely, and it’s actually recommended to start the process a little bit sooner.  Uh, you can’t start it too many years in advance however you can start it within let’s say the year prior to its 40th birthday and you can start the process by vetting engineers and because the process of selecting an engineer is in it of itself can be a lengthy one.

Paul: Yeah and obviously you’ve gotta start with the engineer and then find out where you stand. Now with your experience with these 40 year recertifications.  Do the engineers ever go out and look at the building and say everything’s good or what do you typically see coming out of that initial survey?

James: Well I wouldn’t say typically the building is deemed okay or not.  Nothing is – seems to be typical these days so anything can happen but more often than not they’ll find a few things that might need some repair.  Hopefully for the owners’ sake that it’s not too much that needs a tremendous amount of repair but there are some instances where the damage is, is quite severe and then that usually triggers a much bigger project – a remediation project.

Paul: If a Condominium Association, you know, gets to the 40th year and they had their report done and it turns out they have to, you know, do concrete repair on, on the balcony which his not inexpensive.  Or they have, you know big system problems to the elevators or something like that that looks, say you had a seven figure repair bill, that can be pretty much something that they’re not prepared for – what, what can they do to make sure when they get to 40 years they don’t get smacked?

James: Well, that’s where we come in.  So what we do is we will look at the scope of work that was created from the inspecting engineer and based on the repairs that are needed that will determine which professional needs to be hired in order to remedy the situation and we’ll go through the entire process on the owner’s behalf and we’ll vet all the professionals, we’ll vet all the contractors, we’ll put together an entire team to remediate the work and then we’ll manage the process and make sure that the owner is getting the best value for the work that’s needed.

Paul: Let’s say that I’m living in, in a building that’s, you know, is 38-years-old and really starting to understand that this is coming up.  Regardless of whether the building – you think the building is in great condition or not how does one go about getting this done?

James: Okay.  Well, the owner or the owner’s representative needs to hire a registered architect or engineer to perform the electrical and structural inspections for that building and then submit a completed report of the inspection to the local building department for their review and approval.

Paul: So what if the report contained items that were not passed on some of the inspection items that says that there’s deficiencies.  What goes on at that point?

James: Okay at that point then the architect or engineer writes up a recommended scope of repair based on his or her reports.  The building owner will need to hire the appropriate contractor to perform said work.  Once the work is complete, the architect or engineer will inspect the work performed and approve the recertification assuming the work was performed as required.

Paul: So what’s the main items that show up?  I know every – every – every building is different but what’s some of the typical items that show up on these recertification inspections that need to be remediated?

James: Well if there’s a lot of issues with the building envelope more often than not and it might be a low level repair where there’s some stucco delaminating or it might be a lot more expensive where you have some spalling concrete.  Obviously here in Miami a lot of these buildings have balconies and over time the, the steel reinforcement corrodes, the balconies – the spalling process starts and the concrete starts to break off it becomes a very unsafe condition and those balconies will need remediation.  The extent of the remediation of course depends on the extent of the deterioration but in any event those are pretty typical.  You’ll have issued with the windows and the openings around the windows.  Sometimes you’ll have issues with the foundation or structural elements of the building columns, beams and so on.  In the instance where the building has elevated decks for parking, full decks or plaza decks – those decks need to be remediated as well when there’s deterioration taking place and depending on the system will determine the type of repair basically getting down to the steel and removing the corrosion from the steel in order to remediate those areas of, of the deck per say but also then in, in the event where it’s, uh, it’s a post-tension cable then it, it’s a different type of repair but, but nonetheless those are the types of repairs that we typically stumble across throughout the 40 year recertification process.  And in addition to that, in addition to the remediation of course comes waterproofing systems that will need to be implemented after the repairs are done.

Paul: So, like, this building – the one that we talked about in Coconut Grove, basically that involved concrete remediation which was, you know, pretty invasive.  I mean, people weren’t allowed – obviously allowed out on the balconies and all the bad materials had to be removed and the steel had to be replaced and then the balconies had to be tied into the **** and then the, the balconies had to be rebuilt and in conjunction with that there was repairing the railings, there was a whole inspection of the stucco.  You mentioned stucco delamination.  I’m really glad you did because that’s something I think that we see a lot of.

James: Absolutely.

Paul: Not just in Florida but everywhere and that involves, you know, it’s a pretty comprehensive inspection and you gotta basically determine often times by sounding it with a hammer or other some type of device you have determine which stucco needs to come off and be repaired.  Now when that’s being done how do you make sure that what needs to be repaired gets repaired and what doesn’t need to be repaired doesn’t get repaired.  Does that make sense?

James: Absolutely.  Yeah, and that’s where you guys come in.  So we’ll reach out to a company like this – like yours, and we get an engineering firm like yourself to come and do that preliminary inspection and basically to write a scope of work for us and, you know, by method of sounding it’s pretty typical.  Visual inspections as well and sometimes there is some invasive inspections that take place, but nonetheless more often than not we’re very confident at the end of this process that the scope of work is as accurate as it can be.  As far as making sure that the repairs get completed as per the specifications from a firm like yourself.

James: Yeah and that’s where you come in again and your inspectors who inspected the work product in the process of the repairs is a very important part of the overall process.  Having that third party inspector represent the owner is a very helpful tool to make sure that the work is being performed properly.

Paul: So once we fix the – we do the concrete remediation and we fix the stucco, typically what happens I think on many of these 40 year recertifications is they then get resealed, they get repainted, re-caulked and basically make everything look brand new again.

James: Right. That’s right.

Paul: So what can buildings do…   say people are out there that have buildings that are 20-years-old, you know, 10-years-old, 30-years-old, what can they do along the way to not have this huge repair scope when they get to the 40 year required recertification.

James: Well, maintenance is the key and what a lot of building managers don’t realize and what a lot of Associations don’t realize is that they need to maintain all parts of their building throughout the entire course of the year.  The elements here in South Florida in particular are  very harsh elements. The sun, the humidity the salt in the air and so on and so forth and if the building is not being properly maintained, painted every so many years maintaining the waterproofing membranes, maintaining the roof membranes, maintaining any elements of the envelope most importantly.  These are things that they sometimes just put on the back burner and if to many years pass then it comes back to bite them.  What they could do also is prepare for these big ticket projects is they could have a reserve study performed and this will help them start to save money for things that have an expected lifespan whether it’s a mechanical system in the building or something dealing with the building envelope. At least it enables them to prepare financially in advance.  They can prolong the life of these systems within their building through the maintenance that I was mentioning a minute ago.

Paul: So like with the exterior facade, you know, I think a lot of buildings are more into keeping up with their roof than other parts of the building because it’s easy you can, you know, a lot of times you just ride the elevator or walk up a flight of stairs and then and walk around and they can keep up with that and it’s pretty normal to do regular roof inspections and if you do, you know, repairs and maintenance along the way it clearly extends the lifespan of the roof.  You might get 25 years doing it that way then you got 15 if you didn’t do it but what we don’t see and I’d like to hear it from you are seeing that people don’t really inspect their facades so if you have a stucco crack on the 13th floor, nobody ever sees this ’til stucco starts falling off.

James: Right and that has been our experience as well.  We will come into a building to take a look at Items A through E and none of those items are dealing with stucco delamination – it’s things that they’ve managed to overlook more often than not we’ll see it and we’ll let them know that, hey listen, you have an additional issue here let’s, let’s do a proper inspection so we know what we’re up against because if you leave it too long it just, it worsens exponentially. You have  to maintain the building envelope, you know, and if you have to – to have regularly scheduled painting performed every call it 10 years and more often than not they don’t and it just leads to bigger issues down the road.  What typically happens is they don’t want to spend the money, they don’t have the money so they put it on the back burner but it winds up being so much more expensive down the road.  You can’t keep kicking the can down the road.  You, you gotta address the issues as they come up and actually be proactive and have a maintenance schedule for every single part of your building if you want to stay ahead of the curve.

Paul: So instead of throwing in X dollars per unit every year in keeping up with things you end up with this sometimes multi-million-dollar repair bill which involves assessments and causes extreme hardship to residents that may not have the financial means to cover an $100,000.00 bill out of nowhere because they didn’t spend a little bit every year along the way to prevent that.

James: That’s right.  That’s exactly right.

Paul: Yeah.  So James, really interesting.  I, I think, um, great information for the listeners.  It’s just insightful and I, I think it’s thought provoking and I really appreciate you coming on today so we’ll have to do it again sometime.

James: Yeah absolutely.  Thanks for having me.  It’s definitely, a pleasure I appreciate it.  Thank you.

Paul: Great. So I want to remind everybody again about the Everything Building Envelope newsletter and texting the word buildingenvelope, all one word, buildingenvelope to 22828.  Again that’s buildingenvelope to 22828 for our newsletter which contains technical articles and other things of interest to those who are in the Building Envelope community or interested in it so thank you everyone for listening to the Everything Building Envelope’s podcast.  This is Paul Beers saying so long ’til next time.


About GCI Consultants: GCI’s building envelope professionals provide consulting services to ensure clients receive maximum value and return on their investment in the firm’s services, which include:

  • Engineering Services
  • Design Assistance
  • Field Testing
  • Quality Assurance
  • Forensic Evaluations
  • Roofing and Waterproofing Consulting
  • Litigation and Claims Consulting
  • Façade Assessments
  • Catastrophic Damage Evaluations
  • Due Diligence Surveys



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Landmark Restorations – Frank Thomas and David Westbrook

Frank Thomas and David Westbrook – Landmark Restorations

  • About Landmark Restorations.
  • What sets Landmark Restorations apart from its competitors.
  • What drives most of your work—from a client standpoint?
  • What are the challenges in this business?
  • How has the market/clients changes over time?
  • What do you see as the future of Landmark Restorations?


Episode Notes

Paul Beers: Hello everyone. Welcome to another episode of Everything Building Envelope podcast. We’ve got a really interesting topic today with Frank Thomas and David Westbrook of Landmark Restorations Ltd. in Atlanta. Welcome guys. Thanks for coming on today.

Frank Thomas: Thank you, Paul.

David Westbrook: Thanks for having us.

Paul Beers: So, we met a couple months ago in Atlanta and we just sort of had a say hello sit down and fact build. I remember, Frank, you actually ran into one of my guys there in a coffee shop with his building envelope shirt on and that got the conversation going. It’s the power of marketing, right?

Frank Thomas: Yeah, it was quite a morning. I looked across and so I said I’ve got to talk to that guy, so it worked.

Paul Beers: And Hall Brody, he’s one of our principals. He runs, our Atlanta operation. So we sat down and the guys were telling me and showing me what you do with restoring facades and glazing systems and whatnot and I thought it was really cool and somebody said, you know you should get those guys on the podcast. I’m, really, really excited about it. I know it would be of big interest to the audience. It’s unique, it’s different, it’s innovative. So, I think that’ll be really, really good. So, to start out let’s talk about Landmark Restoration a little bit. Frank can you tell us about the business, what you guys do and how you operate and whatnot?

Frank Thomas: Thank you. We’re basically starting our 36th year. Like, November of this year we started the company. It’s hard to believe it’s 36 years and so my background really is in the high rise commercial waterproofing industry. I had the opportunity to work 5 years’ sort of like a summer internship with a company in New York, in the northeast and it was invaluable that experience, with that company, the company Landmark Restorations really evolved from the traditional waterproofing of the commercial building into the façade retrofit company we are today. Our goals have always been to create a high performance façade company and David Westbrook, when he joined us, I knew immediately that that piece of the envelope would increase tremendously, and David brings a lot of three-dimensional talent looking at windows and doors of facades, and his background as a preservationist, thus his master’s degree, really gives us the opportunity to sit down with an owner or an asset manager and help them develop again a façade program that we’re extremely proud of.

Paul Beers: Yeah and David you have a very interesting and appropriate background for this that I was really impressed with some of the stuff you’re doing. Why don’t you please tell our listeners just a little bit more about your background and how you got to the point where you’re working with Landmark Restorations now.

David Westbrook: Sure. Well I got a bachelor’s degree in English literature and went to a year of graduate school and then decided I wanted to take a different path and, at the time I had some good friends who had their own stone masonry and timber frame business, and so I got a crash course in stone masonry and timber framing, and you know, they really did it right. They were very proud of what they did and called themselves kind of an old world, you know, they looked back to Europe and those guys whose buildings were 600 years old or more over there, so they kind of really took a lot of pride in doing that stuff right. So, I learned a lot from them, and then from there I just did general carpentry and remodeling framing for about 6 years. They gave me kind of a crash course in general construction, kind of more on the residential side though, and then in 2007 I moved to Atlanta and got into the master’s program for historic preservation at Georgia State University, and through that program I got a job interestingly at a cemetery here in Atlanta. It’s the oldest cemetery in the city, and at the time it was recovering from a tornado that had hit, and it damaged a lot of the historical monuments and markers and things out there, and, so, they knew I had a background in masonry and repair, and so I kind of helped take and guide that restoration somewhat, and it was going to be just a temporary gig and it turned into a longer gig where they got a grant to restore. There was, like, 55 mausoleums or mausolea the plural of mausoleum in the cemetery, so, I had developed a scope of work for each one to figure out, you know, repointing stained glass window restoration. There were different types of stone, sandstone, limestone, granite that these things were made out of, all in different degrees of deterioration. So, we had to figure out what scope or how to best repair that, all keeping in the historic interior of secretary, the standards of preservation. So, we would have to take that scope of work that we developed for the City of Atlanta, to the Urban Design Commission who oversees the landmarks in the city and get it all approved, and then execute the work, and so after that was all done, I started sending out resumes and actually I sent out like three resumes at first and Landmark Restorations was one of the companies I sent my resume to, and Frank called me a couple days later and here we are.

Paul Beers: Yeah and you guys are working on some really some really interesting projects and you guys work in a very wide geographic area like the whole country isn’t that right?

Frank Thomas: We do provide nationwide contract service stuff as David mentioned we’ve got several projects on the west coast in San Francisco, LA, San Diego. We work with a large group in Seattle. We’re in New York, Boston, Minneapolis, Atlanta. In fact, we’re looking at projects as well in the Fort Lauderdale area right now. So, yeah, we do cover a large area. Our clients, of course, like everyone else, dictate a lot of where we go. We’re fortunate we have excellent crews. They’re our crews. We don’t subcontract our work. They’re our own people, and I think that makes a big difference as to why we have those capabilities to travel as well as we do or as extensively as we do.

Paul Beers: Yeah and what kind of client base do you have and what kind of folks are your typical clients?

Frank Thomas: It runs the gamut, really. I mean we have owners that we work directly through. We have real estate companies who own a lot of real estate and have a lot of buildings and then we also work with property managers, management companies of properties and we work for Reit, the groups that owns hotels all across the country. And then we’re doing small jobs like little house museum type things, you know, for little non-profit things. It just really runs the gamut.

Paul Beers: So, so in addition to actually doing the work, you guys actually design the solutions. Here’s what we need to do and here’s what we recommend and here’s how we’re gonna do it is that right?

Frank Thomas: That’s probably our strongest asset Paul. So I appreciate you bringing that up, and we literally, David and I can go in and sit down and whether it’s upgrading the existing façade, or creating a double skin with the new high performance windows and doors, you know, we actually can sit down and help with the budgeting. Probably one of the strongest things we do is help people create a budget or take an existing budget and value engineer the work required.

David Westbrook: Frank likes to say our job is to help our clients figure out the best way for them to spend their money and get the best bang for their buck, and that’s really when we’re doing our jobs, so we can help them do that. Yeah, because the budget obviously is always a very primary consideration. Here’s how much money we have. What can we do with it?

Frank Thomas:So, something to add to what David just said we also help people whether they’re buying or selling a property. Sort of a due diligence, you know, what are they getting involved in? What, what kind of numbers are they going to be required to do, because the banks and the lending institutions have really taken a stronger position, as you know, over the last probably 8 to 10 years, so that when a new acquisition occurs there’s typically as they call it, a tip list of things that the bank is gonna require the owners to perform and so we play an integral part.

David Westbrook: Yeah, that’s interesting when you bring that up. One of our GCI Consultants projects right now is a 10-million-dollar façade restoration on a major resort property in South Florida, you know, stuccos, granite, leaks and things like that. The property was sold and it was conditioned by the lender, who was basically funding the acquisition, that the façade had to be repaired and it needed it too.

Paul Beers: Yeah, when we were talking just before we started the podcast, you were telling me that you guys have different levels of services that you provide on projects, and other, Level 3, Level 2, Level 1. Could you talk about that a little bit more? That was interesting also.

Frank Thomas: Yeah, David developed a means and method of strengthening an existing sliding glass door frame, which in the hotel industry really is, you’re talking about running the gamut, they run from one end of the spectrum to the other. The biggest issue is the wind pressure on doors, and so David developed a method of strengthening the existing frame, and so when you talk about Level 1, that’s the Minneapolis project. New rollers, track guides, locking systems, strengthen up the frame. Clean up, a general tune-up, we call it, the existing glass stays in place, but higher comfort levels for the hotel and the guest inside, and when we talk about the Embassy at LAX again, David and a gentleman that is really our, kind of field supervisor, Randall Alterano developed a method of taping the existing doorframes, where we can take the existing glass out. In this case, it was quarter-inch standard float glass, and we installed high-performance, low-e and soundproofing. The hotel is directly across the street from the LAX airport, or in this case, the jumbo jets and the cargos take off. That was a complete façade retrofit program. The doors were all field-grade finished, by the way a new color. The condensation, we had to take into account, we had our engineers in Seattle develop a low-e factor so that the condensation was significantly reduced or, in some cases, it doesn’t exist at all. The Burlingame Embassy in California is a new door system. Without taking out the existing frame, cap, we were putting in new doors, new triple-locking system, very high performance low-e, and high performance enhanced sound control blast into the opening. All field refinished, clear coat over the coating itself, the existing paint that we were putting on – not existing, but the new paint, and the owners are in love with it. It’s a Hilton property as well, so, we’re getting a lot of exposure on a corporate basis. I can tell you that all rooms on every level are put back into service the day that we finish, so there was no interior work whatsoever.

Paul Beers: I know the hotel guys love that. It minimizes the disturbances to the guests.

Frank Thomas: It makes a big difference. David works very closely on the scheduling. There’s a, rotation that is extremely critical. There’s a lot of cooperation on everyone’s part and David develops the schedule. You may want to chat about that for a quick second. I think that sometimes we forget about communication efforts and we focus just on the, kind of, the nuts and bolts, but the communication that David creates with these schedules, I’d like him to just chat about that for a second.

David Westbrook: Sure. Obviously the hotels want the rooms back in service as quickly as possible, so we work with them at the front end and say, you know, look, depending on the time of year, how busy the hotel is, how many blackout dates they have where they’re gonna be sold out completely and in some cases work has to stop on some projects and so based on their feedback, then we can develop, and then know how many rooms they can give us at a time. That factors into it as well. Then we figure out, okay, what we can do, based on this amount of rooms, we can get this many done, say, in 3 days or 4 days or 5 days, and then we set up a rotation where we give them completed rooms at the end of a day, inspected by, you know, the engineers of the buildings. They sign off on it and it goes back into service, and then they give us a new set of rooms that are out of service for the night, you know, that night, so we can get in first thing in the morning and start working again, and we thought all this out on just a simple Microsoft Excel spreadsheet and everyone has a copy of it. Randall, the guy who’s the field supervisor that Frank was telling you about earlier, he meets every day with the managers sometimes, and then definitely the engineers for the property, and, you know they, just so everybody knows what rooms are being worked on and see if there’s any issues that we need to address, just so everyone is aware and you know, like Frank says, communication. That’s what’s going on.

Paul Beers: By the way, one of the aspects, what I want to touch on or refer to really quick, and then I want to move along is that these are all custom. This is not a one size fits all. Every one of these projects is custom made, from that door opening, from the glass to the aluminum coating finishes, locking systems, adjustments, because we look at a long-term basis for the operations and maintenance going forward, so we remain in place with the hotel, in this case as they go down the road a few years for adjustments and again, whatever is gonna affect operations and maintenance, we’re gonna be involved as well down the road.

David Westbrook: So David you showed me when I was in your office a few months ago some of your techniques used at the suites at LAX, there was a couple of things that Frank already mentioned which is you actually took out the monolithic glass and replaced it with a thicker piece of glass, and also talked about field refinishing. That’s not easy to do. I mean, it, especially with the varying thicknesses of glass. I thought maybe we would do a deep dive into it and describe some of the things that you did on that project and how you did it, and it was really pretty impressive, I thought.

David Westbrook: Sure, like Frank said each project is different. It depends on what you’re dealing with that’s in place first and foremost, and then determining, all right, we can make this work here or maybe it won’t work, but, for that particular project, the doorframes, they were solid. I mean, they were high pretty thick gauged aluminum and the frame itself was wide enough to receive a thicker piece of glass, so we just opened it up a little bit, and we put, like, a 7/8ths inch thick ICU in there, and then, of course, we put in heavier gauge rollers to support that weight and that’s it, really. I mean, it takes some work in the field to do it. We’re lucky that we have great crews, and they are very attention to detail oriented and they know how to execute it, once we give them a scope of work and what we want done, but that’s basically it, you know? We just figure out what are the parameters here, and then determine the sizes of glass, the gauges of aluminum, and then what works and then, in terms of field refinishing, I mean, you know, I don’t know, I’m not a painter, but, you know, our guys are just, I mean, it really comes down to the materials, to be honest. The prep work and the materials we use when it comes down to painting. I mean, we clean it. We scour it a little bit to rough up the surface, make sure you get a good bond with your primer, and then it’s just the guy’s spraying. He does it, puts a good finish on it, and good technique then he masks everything off, of course, to protect the room so there’s no overspray getting on anything.

Frank Thomas: Paul another thing is –

Frank Thomas: David has done some research. Infrared heat lamps that you probably see in automotive shops. They’re brought in because, again, we’re dealing with the elements. We set up trailers that are conditioned for parts to field refinish, so, we take aluminum paint, or paint ****, while we may not be the painters, we have a great crew. Their techniques, they are constantly honing them, and we’re always on the outlook for a different piece that can, you know, help them in the field.

Paul Beers: So, on this particular job, you start out with some, I’m gonna say it’s older sliding glass doors. They’ve been in place for quite a while.

David Westbrook: Over 30 years.

Paul Beers: Yeah, 30-year-old doors, and then the end result was that they, basically, without creating all the dust and the dirt of ripping everything up and replacing it and expense too, in fact that’s another interesting point which I’d like you to talk about, but you started out with a 30 year-old door, and when you finished work it had new high-performance glass. It had a new paint finish. It had new hardware, so basically, taking the skeleton and then making a new door out of it. Did I say that well, or –

Frank Thomas: Yes.

Frank Thomas: I mean it’s basically a brand new door, and performs 100 percent better, not only just from an energy standpoint, but sound was a big issue on this project, so, we went down from, well, 80-something decibels in the room with jets down to the mid-30s. I mean it’s incredible, really the transformation.

Paul Beers: How is the hotel getting their return on this investment? I mean have they actually monetized and looked at the money that they spent on the investment side.

Frank Thomas: It’s an interesting point you just brought up. We were in a meeting, I was in a meeting at San Francisco at an Embassy where we performed the same task at LAX, and Hilton came back to the hotel and said that they were going to get an energy award and that they had reduced their energy consumption by 40 percent.

Paul Beers: Wow.

Frank Thomas: So, while we do this on the front end sometimes, we’ll do the energy, look at the building and provide comparative numbers, you know, what does this low-e mean at different levels. I can tell you that we just finished a test project at one hotel and we took and changed the temperature coming through float glass, where it was 103 degrees, and when we installed the new window system, David designed the interior temperature level at 76 coming through the glass. So, it’s things like that, and I mean, that’s what a lot of our testing does. We actually put samples in. The Morgans hotel is a great example, 5 years ago. We put in a variety of different scenarios. When we finally arrived on the one that worked both for decibel levels, those were in the high 80s. Madison Avenue where the temperature in the rooms that you could not maintain the P-TAC system continually ran both in the summer and winter, and that all changed. So, owners are coming back to us and in this case, the most recent meeting I did was at the Embassy South Sand and Hilton was giving them an award for a 40 percent decrease in energy consumption.

David Westbrook: Now, with the Morgans project, that was one of the ones that we looked at when I was at your place a few months back, and the increased guest comfort, I guess I’ll call it. You know? Not so hot in the room and quieter. Have you heard any feedback on whether they can help them with their room rates or their occupancy or anything like that?

Frank Thomas: Well, and another good point. They actually, let’s talk about the front end, before the glass got changed, or before the system was installed. They were giving away, because of room complaints, a significant amount of money, some 40 to $50,000.00 a month. You know, when you start multiplying that over several years, then it becomes a big number and it sort of gets to the point where, “Let’s do something.” The noisiest part of the Morgans Hotel right now is the fan motors in the P-TAC system. Comfort level has increased significantly. The Vice President and another officer stayed in two rooms that we had done as test units. It was 9 degrees outside. Again, Madison Avenue, and, in fact, it was around Christmastime, so it was very busy. I basically took them to dinner, but before we went to dinner, I said, “Tell me what you want your temperature you want to see to maintain in the room,” and they were both around 72 degrees. We came back from dinner. I shut the system off. They had reached 72. That morning, one room lost 3 degrees and the other one lost 4 degrees, and we really attribute that mostly to the hallway door. So, those are the kinds of tests that we enjoy getting involved in. We are, you know where officers or owners get into the rooms, they can hear, because you can promise all the decibel levels you want or the amount of energy savings. You know, if a guest inside their room isn’t happy, you know and handing them a piece of paper and telling them, “Well, we reduced it by 40 decibels,” doesn’t really mean much.

Paul Beers: So, and I agree with it, that you’re a big proponent of in-place performance mock-ups where you ultimately do the work?

Frank Thomas: Yeah, absolutely.

David Westbrook: That’s our largest selling point by far. I mean, the mock ups, just, speaks for itself, and, like, Frank says, the key principles, come, look at it, see what they’re buying, and see the performance right before their eyes. So, I mean, that is a huge selling point for us.

Paul Beers: And, so, at this Morgans Hotel, David, what did you do to get this dramatic improvement and performance? Because you didn’t remove the existing windows, is that correct?

David Westbrook: That’s correct.

David Westbrook: Basically, like Frank says, we asked a group in Seattle to help us with the sound control glass, and we gave them the parameters. We said, “Look, we would like, what can you make, glass wise and here’s the opening size. Here’s the depth of the pocket we have to work with, and what can you build for us that performs best from a soundproofing standpoint?” And, so, they get to work and then they say, you know, “This is what we think we can get for you,” and then we say, “Great,” and we place the order, install it, and that’s it. I mean, we talk a lot, though, besides just what can you build? I mean, what other, can we install, you know, a secondary piece of glass that’s maybe not, you know, 1-inch think insulated unit. Maybe it’s just a ¼-inch laminated, or 3/8ths laminated piece or something like that. And so, we just have a conversation, and then we install it, and it’s usually just, once and it’s in place, I mean, you just get the results, and it really works, and those guys are great and they know what they’re doing. They help us a lot, and then, also, this particular job, it wasn’t just the windows. It was the P-TAC unit Frank mentioned. I mean, they were wall units, so, a lot of sound came through that, and so we took it out, insulated the cabinet of the P TAC itself, filled in holes that were through the floor, gaps between the exterior louvers and frame of the P-TAC unit, but all that lets all that sound and air and everything else in, and so that helps as well, besides the glass. So, you know, we looked at everything that’s going on in the room, and from the exterior wall, at least, and try to come up with solutions. So, for the Morgans, just, addressing the P-TAC and then also putting in not only an insulated glass unit, but backing up and we put in a secondary piece as well.

Paul Beers: So, what’s the market like these days in your business? Are, you know, I know you’re in the construction world and things are going well. They have been going well for a while, which, I mean, at some point they might start to slow down, but in the restoration side of things, what are the trends that you’re seeing right now?

Frank Thomas: The trend is really on the façade, the total façade, retrofit, as we talked about from top to bottom. We’re seeing more redevelopment, and that’s not so much restoration, but the redevelopment of existing warehouses, midrise, conversions. Some are healthcare Reits, quite a few hotel acquisition and it is unprecedented right now. So, when we look at that façade, that’s where we’re seeing tremendous amount of money being spent to not just, from an appearance or aesthetic standpoint, but how do they really change the concept or the look of a building. You got to retain some of the character, and in some cases the terra cotta the envelope itself, and we see that aspect of the business, actually increasing, and in some cases, we can’t get to these projects. There’s that much involved.

David Westbrook: Well at least here in Atlanta, right now, there’s a lot of old existing, like, turn-of-the-century warehouse-style buildings are being repurposed. Which is great and they’re not tearing them all down. So, we get a lot of calls on those types of projects, where they have these old steel-framed windows. You know? What do they want to do with them if they want to keep them? Old wood windows where they don’t want to rip them out, so how do they go about refurbishing those. There’s a good project on our web site under project gallery, called 84 Walton Street, 75 Marietta Street. It’s an old, 1906 vintage building. We did a whole restoration of the façade on that building and it was just old double-hung wood windows, we repainted them, installed an interior storm window, refinished terra cotta, **** brick, a little bit of everything going on, but it was an historic building. But we are seeing a lot of that as well, I guess, the redevelopment of older buildings, which is good.

Paul Beers: So, your web, you mentioned your web site. The web address for that, I’m looking at it right now is www.landmarkrestorations, with an S on the end of it, all one word, dot come, and it’s got, some of these projects we talked about and some other ones, and some really interesting stuff. So, what do you guys see as the future from here? Where do you go from here?

Frank Thomas: Well, we’ve made initial contact last year David and I actually a year and a half ago at the Glass show here in Atlanta, and the security screen railings, wire mesh, perforated mesh aspect of that portion of the business, we think, has a lot of potential. Existing parking garages, the openings, are being, from a security standpoint, looked at for the wire mesh, and it involves aluminum and, it’s different types of perforated and wire mesh installed. It increases the awareness of the garage, the appearance, without spending a lot of money and it also increases the security aspects of it. One of the projects in San Francisco during the door retrofit program, the fourth floor was a plaza area, pool with outdoor activities, and if somebody wanted a sliding glass door to be open, then they were vulnerable to somebody just walking in on them. The new system that we installed has a stainless steel security mesh screen door that you could open the operating section. You can keep that closed. You can still get daylight, airflow through, and that aspect of the business is another piece, again, when we talk about high-performance façades, that’s becoming an integral piece of our business.

Paul Beers: I’ve never heard of that application before, you know, screens are basically, in my world, I’ve always known of them as insect screens, so it keeps the bugs out, but not much else in or out. You know, there’s even issues sometimes with people falling out of buildings through the screens and whatnot, and, it’s pretty interesting to me that there’s actually a, I guess you’d call it a structural application with the stainless steel wire mesh that can prevent people from coming in or going out for that matter?

Frank Thomas: Paul, it’s a good looking piece as well, but I can tell you that you can take a baseball bat. You can’t cut it. If you did cut it, you can’t rip it out. It’s literally locked into the frame. It’s not a bolt gasket, and so, you know, high schools, university systems, as I mentioned, the parking garages, hospitals where aesthetics are important, and we can provide now a custom-built frame with the stainless steel mesh. They can be fixed. They can be operating. They’ll look good, and they’ll stop and allow all the functions of the window or the door needs to perform, and yet they’ll provide the security while they’re aesthetically look like they belong on the property.

Paul Beers: Yeah, so that does sound like a really good growth opportunity.

Frank Thomas: It fits the façade program that we’re developing, or we’re continuing to develop.

Paul Beers: It gives a whole ‘nother benefit that really, so many people don’t even know it’s available. So guys, that’s really interesting. Like I said, I was fascinated when I came and met with you a couple months ago, and impressed and that is why this podcast got organized for this podcast recording, so, thank you very much for, for coming on.

Frank Thomas: Thank you for the opportunity, Paul.

David Westbrook: Yeah, thank you very much.

Paul Beers: Yeah, I look forward to staying in touch and, and keeping up with what you’re doing because it really is interesting, and we know that our listeners are gonna be interested as well, and I’ll encourage them again to just check out your web site, and again, that’s landmarkrestorations.com, and they’re in Atlanta, not to be confused with the other companies with similar names in other cities. So, again, guys, thanks so much, and with that, thank you everybody for listening to another episode of Everything Building Envelope podcast. We have an Everything Building Envelope newsletter. If you’d like to receive that, please text the word buildingenvelope. It’s all one word, buildingenvelope to 228-28. Again, text the word buildingenvelope to 228-28 to sign up for the Everything Building Envelope e-newsletter. It has some technical articles and other things of interest, so I think our listeners will enjoy that, and with that, this is Paul Beers saying, thank you for listening and so long.

Pre-Glazed, Unitized, Impact-Resistant Windows & Doors – Ray Crawford

Pre-Glazed, Unitized, Impact-Resistant Windows and Doors – Ray Crawford – Crawford-Tracey

  • Advantages of the unitized systems over the traditional stick-built glazing systems
  • Crawford-Tracey’s Pro-Tech line of pre-glazed systems have a water rating of 100psf; the industry average is 12 to 15 psf. What is the significance of having such a higher water rating?
  • The Pro-Tech system uses a single seal as a moisture barrier. The benefit of using a single seal versus a dual seal. Is the single seal adequate?
  • How the updated FL Building Code affected requirements for exterior glazing systems. Has it changed how your systems are manufactured?

Industrial and Custom Structural Skylights – Paul Simony

Industrial and Custom Structural Skylights – Paul Simony – SKYCO Skylight

  • Why are skylights a must have for large buildings?
  • What kind of skylights are available?
  • How has the industrial skylight evolved over the years?
  • ICC-ES Listings and why they are important
  • Photovoltaic, BIPV Systems

Skylights and similar products.

Expert: Paul Simony, 30 Years Experience, sits on several boards,

Company: SKYCO Skylights

SKYCO Skylights is an industry leading industrial and custom structural skylight manufacturer located in Costa Mesa, CA. SKYCO Skylights has a full range of products including Industrial Skylights, UL Listed Smoke Vents, Custom Structural Skylights, Photovoltaic Skylights and Canopies and rooftop safety and security products. All of SKYCO Skylights product come with a 10 year warranty. For additional information, you may reach SKYCO Skylights at 949 629-4090 or email SKYCO Skylights at info@skycoskylights.com


  1. Why are skylights a must have for large buildings?
    1. Energy savings with natural daylighting
    2. Reducing the carbon imprint
    3. Codes require a certain amount of daylighting
    4. ASHRAE recommends the use of natural daylighting
    5. Enable Architects to achieve LEED Credits


  1. What kind of skylights are available?
    1. Residential
      1. Fixed
      2. Operable
      3. Elaborate custom designs
      4. High performance glazing options available
      5. Various models to meet International Building Code (IBC) requirements
    2. Commercial/Industrial
      1. 4×8 Unit Skylights
      2. UL Smoke Vents with Polycarbonate dome for natural daylighting
      3. Louvered bases for air circulation
    3. Custom
      1. Gable Ridges, Polygons, Flatglass, etc…
    4. Photovoltaic
      1. Skylights and Canopies
        1. Building applied photovoltaics
    5. Safety/Security Products
      1. Fall-protection systems
      2. Security/Burglar Bars


    1. How has the industrial skylight evolved over the years?
      1. Louvered bases for building breathing
        1. Purpose
          1. Lowers moisture
          2. Provides fresher air
          3. Allows the roof structure to be ventilated reducing degradation from humidity
        2. Issue with old systems
          1. The old systems were prone to leaking
          2. Poor sealant compatibility
          3. Not subjected to National Standards for performance
        3. New designs
          1. I.E. The VORTEX
          2. Leakfree
          3. Birdscreen
          4. Optional insect and dust filters
      2. Polycarbonate domes
        1. Purpose
          1. Stronger
          2. Last longer against yellowing
          3. Code compliant – Meet OSHA Fall-protection
          4. More versatility for solar heat gains, light transmittance
        2. Issues with old systems
          1. Acrylic – not impact resistant
          2. Prone to cracking, brittle
          3. Varying thicknesses required to meet loading requirements per Code
        3. New designs
          1. SKYWAVE design adds more light transmittance – features 30% more light-collecting surface area
      3. Capped vs. Cappless
        1. Purpose for capped
          1. Stronger
          2. Cracking of domes eliminated as there is not penetration through the dome
          3. Air and water infiltration – High performance
          4. ICC-ES Listed (Meets AC16 Standard)
        2. Issues with Capless
          1. Screw penetrates dome causing cracks
          2. Prone to leaking – no seal between dome and frame
          3. Air and water infiltration – will not pass
          4. NOT ICC-ES LISTED! Or tested to AC16


    1. Can you elaborate on ICC-ES Listings and why they are important?
      1. Recognized by building code officials as the “Gold Standard”
        1. Elaborate on what it is
        2. A way to ensure the products being put on a roof are safe
        3. Quality control requirements per AC10
      2. Requirements for ICC-ES Listing
        1. Capped
        2. Fire Testing
        3. High performance Air Infiltration and Water penetration requirements
        4. Structural testing for positive and negative pressure – Translates to stronger and safer skylights
      3. Some manufacturers are quoting and supplying roofers with non-ICC-ES listed skylights and letting the contractor and building owner believe they are covered
        1. This is a huge liability
          1. Will not actually meet the code requirements – may subject the GC or Owner to replacement costs to meet code compliance
          2. People fall though – Not tested to OSHA fall-protection requirements
        2. Bait & Switch tactic – It is done because a manufacturer wants to offer a skylight at a specific price point so they offer a non listed and let people assume it is
        3. If there isn’t an ICC # it is not listed and the Architect/owner/contractor is liable
          1. SKYCO’s ICC# ESR-3837
        4. To be clear there are no capless industrial skylights available with ICC #’s.
          1. Contractors need to know if they get capless they are not getting what they paid for.


  1. The Photovoltaic, BIPV systems seems really interesting, can you elaborate on those?
    1. Difference between BIPV and BAPV
    2. Benefits of BIPV
      1. Federal Tax credit (30% extended to 2012)
      2. Energy savings and reduced carbon imprint
      3. Building value increase – free power for tenants
    3. Fun Projects where people have benefited
      1. Apple
      2. Tiburon
      3. Novartis
    4. What are the possibilities?
      1. Large skylights can be changed in BIPV by switching glass and adding the solar integration components
      2. Up to 40% Light transparency with Energy generating efficient glass
      3. Many Cities and States are adopting a 50% requirement for sustainable energy in new construction – this appears to be an expanding trend