Field of Dreams: How to Showcase Your Company’s Best Assets Through Marketing

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Stephanie Woodcock

By STEPHANIE WOODCOCK

At the time of this writing, I am stranded at a hotel near The University of Massachusetts Amherst for my son’s first college prospect baseball showcase. Our predicament is courtesy of “Henri” making landfall on the New England coast as a category one hurricane for the first time in 30 years. Though it was downgraded to a tropical storm, it was angsty enough to cancel our return flights to St. Louis. Not good. The showcase got moved from the campus’ pristine baseball fields to an upper gymnasium with no air circulation. The camp was reduced from 8 hours to 2.5 hours. The school tour was canceled. The only originally scheduled event was our free lunch at UMass’s “award winning dining hall.” What should have been a delightful campus stroll to lunch morphed into a gusty, mad dash through a torrential downpour. It was a no-frills, soaking wet showcase.  

Let’s not let this happen to you.     

When a company asks me, “What’s the best way to spend my marketing budget?” I say, “Create professional marketing assets that showcase your company’s talent, identity and culture.” I get really excited. “Let’s turn your work into art,” I add.  

“Why?” They react. “Don’t we want to sell, sell, sell? Print up a flyer about our services? Promote our great products with a blast?”  

While these things are important, “No,” I say, smiling. “Sit down. You’re making me nervous.”   

Then I explain how professional, well-executed marketing assets like video and photography can transform a company’s image and brand to showcase the best part of who and what they are. When done right, these marketing tools are elevated to art. They evoke a sense of something bigger than a sales vehicle, while still becoming the engine that drives your sales. 

It’s difficult to convey the culture of a company – the “who” behind the “what.” So much of our business comes through our relationships, longevity in the industry, reputation and referrals. It’s the nature of our industry. We network.  

So how do we extend those relationships in this digital age through our marketing efforts?  

In an age of endless Zoom, Microsoft Teams and digital influences – when everyone is grappling to be heard – production-value video and custom photography tell a deeper story.  These assets provide more long-term, greater traction than the traffic and buzz of today’s next big thing in digital marketing.

Photography and video should portray something intangible about the identity of the companies they showcase. They create brand voice, a major marketing component necessary before unleashing the salespeople with flyers and promotions.

In other words, when you’re inviting a client to come to your proverbial “campus,” we need to show them the green, well-groomed baseball fields before we drag them through the rain to the dining hall. We need to show them our culture and identity – why we are worth doing business with – before we get to the hot upper-level gym.    

I recently asked CEO of Solstice Productions, Amanda Aschinger, how important video is to our marketing. She gave a great answer: 

“There are some set standard expectations in the A/E/C (architecture, engineering and construction) world, such as on time, quality, safety and on budget. What makes one company a better fit for a given project often comes down to the people, the experience and the approach. Construction is a long, sometimes painful and expensive process. The ‘who’ of the team can greatly impact the ‘how.’ Aside from an in-depth in-person session, a well-crafted video is the best way for prospective customers and employees to experience the who and how of your team.” 

Aschinger adds, “Video is not a standalone solution. Like any marketing or sales tactic, it works best when used in a full strategy. All of the channels (social, email, web, trade show) can be made more effective when video plays a role.”  

She recommends a standard package of videos that every A/E/C company should have:

  • Company intro or overview 
  • Capabilities-specific videos (one for each) 
  • Market expertise-specific videos (one for each) 
  • Core values/culture – something that works very well for both business development and recruiting, and is really focused on your people 
  •  

Aschinger also recommends highlighting key milestones as part of ongoing video campaigns. Adding a new division, targeting a new vertical, celebrating an anniversary, completing a high-profile or unique project and releasing a new product are all great times to use video to help communicate your wins.

The value of seeing and hearing a company’s faces and voices through video is more than a sales avenue. It is a way to portray a company’s true identity, culture and mission, beyond what we have to sell. In the relationship business, we don’t want to lead with sales slicks, fancy flyers or rock bottom deals. We want to lead with our voices. We want to show, not tell.

My dream clients are ones who need and want content creation. They want to figure out the best way to tell their story and convey their culture. Great marketing educates, energizes and engages. When a story is told right, customers get excited, too. They see the beauty of the campus, the “field of dreams” and can envision their own success. When a story is told right, customers see the company’s best assets and want to “go the distance.”

Stephanie Woodcock is president of Seal the Deal Too, a St. Louis-based marketing, creative and communications firm. She can be reached at stephanie@sealthedealtoo.com.

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New Bankruptcy Law Provides Welcome Changes for Small Contractors

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Chapter 11’s New Subchapter V Helps Achieve Successful Restructuring

By ROBERT E. EGGMANN and THOMAS H. RISKE

Thomas Riske
Robert Eggmann

Shortages of materials and skilled labor continue to put increased pressure on some small construction contractors and subcontractors to consider bankruptcy reorganization. Unfortunately for them, the hope of re-emerging in Chapter 11 is often unsuccessful because the rules are complicated, challenging and not traditionally well-designed for their needs.

Last year, the federal Small Business Reorganization Act (“SBRA”) became law, added a new “Subchapter V” to Chapter 11 that streamlines bankruptcy procedures for small contractors and provides new tools designed to achieve more successful restructuring.  Subchapter V should be welcome news for many small contractors facing financial difficulties, although individual circumstances will dictate whether this is the right course of action.

Eligibility

A person or entity must be engaged in commercial or business activity with an aggregate liability below $2,725,625. At least half of the debt must have arisen from the business. The CARES Act provides for a temporary increase of this threshold to $7.5 million that is scheduled to roll off in 2021.

Creditors’ Committee

In Subchapter V, no creditors’ committee is appointed unless a court orders otherwise, making it the exception and not the rule and saving the small business money.

Appointment of Trustees

The SBRA created a new type of trustee, a Subchapter V trustee, to be appointed in every case. The trustee’s duties include appearing at the first status conference and hearings that concern major case milestones, facilitating the development of a consensual reorganization plan, and making payments to creditors under the plan. 

Disclosure Statement

No disclosure statement is required unless a court orders otherwise, which removes a common source of protracted battles among the parties involved.

Reorganization Plan

Only the small business debtor may file a plan of reorganization under Subchapter V and must do so within a shortened 90-day timeframe from the order for relief. The rules for the contents of a Subchapter V plan of reorganization are more debtor-friendly. Notably, a loan secured by a principal residence can now be modified if the proceeds of the loan were used for the business.

Plan Confirmation

There are two ways to have a plan confirmed:

  1. Consensual. Subchapter V strives to help the debtor and creditors reach a consensual plan. Confirmation of a consensual plan terminates the trustee and the debtor receives a discharge upon confirmation, two important incentives for debtors.
  2. Cramdown. A plan can still be confirmed if some or even all classes of creditors don’t accept it, so long as the plan doesn’t discriminate unfairly, and is “fair and equitable” to impaired unsecured creditors.  A “reasonable likelihood” of repayment must be demonstrated, and the plan must provide remedies to protect creditors if payments are not made.

Voting

Voting rules change significantly under Subchapter V. As mentioned above, a debtor can now confirm a plan with no votes from creditors.

Absolute Priority Rule

In Subchapter V there is no absolute priority rule, allowing debtors to retain ownership without adding new value – provided the reorganization plan does not discriminate unfairly and funds the repayment of creditors in three to five years by committing all projected disposable income.

Robert Eggmann and Tom Riske both serve as Chapter 11 Subchapter V trustees in the Central and Southern Districts of Illinois, respectively.They practice in the financial restructuring and bankruptcy department at Carmody MacDonald P.C. in St. Louis. Contact any of Carmody MacDonald’s attorneys at 314.854.8600.

This column is for informational purposes only. Nothing herein should be treated as legal advice or as creating an attorney-client relationship. The choice of a lawyer is an important decision and should not be based solely on advertisements.

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The Cost Today. The Cost Tomorrow.

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Mike Chollet

Think about the last time you bought new tires for your car. Unless you are really into cars, that event was probably preceded by a length of time where you knew the purchase was necessary but, due to the cost and inconvenience, was postponed for a too-long period where you knew you were maybe in some danger but still put off the inevitable. (In Congress, this period of time before actually doing something is called, “Admiring the problem”.)

Once the new tire purchase project was complete, you were most of a thousand dollars less well-off and, aside from vanquishing the nagging feeling of needing to do something you didn’t really want to do, you didn’t really get the pleasure of having spent the money on something more fun. Money spent on maintenance; things like new tires, roofs, HVAC systems are equal parts important and unsexy. But we do these things to avoid even more cost and inconvenience down the road. Being able to plan and save up for such expenditures always trumps unpleasant surprises.

It’s easy to see why maintenance and infrastructure are so easily deferred by elected officials. Such expenditures are rarely popular with the tax paying electorate and the practical gains are generally hidden. No one ever arrives at home thinking, “Awesome, my car did not disappear into a giant pothole today!”

Unlike the rest of us, politicians have the luxury – the imperative actually – of deferring necessary expenditures in exchange for another term or two in office. Who else is rewarded for such short sightedness?

Love him or hate him, our current president is pushing forward the boldest infrastructure plan since the 1930’s. Regardless of the final price tag this will greatly benefit the construction industry. Not only will the country be able to address long neglected matters of maintenance and safety, the vast bulk of expenditures will directly benefit the building community.

Hopefully, we will have the workforce required to get the big jobs ahead done. Baby boomers aging out of the workforce are not being replaced in sufficient numbers. Estimates are that companies will have to double the number of workers now being hired to address the tidal wave of work coming our way. A recent U.S. Chamber of Commerce survey found that 88 percent of commercial construction contractors reported moderate-to-high levels of difficulty finding skilled workers, and more than a third had to turn down work because of labor deficiencies.

A number of local and national companies and organizations are developing programs to attract and retain young people to the construction industry. These efforts are to be lauded. The importance of assisting these efforts cannot be overstated. 

A recent New York Times article tells us that “Community colleges, which offer a variety of vocational training programs, have suffered steep declines in enrollment. A recent estimate from the National Student Clearinghouse Research Center found that community colleges were the hardest hit among all colleges, with enrollment declining by 9.5 percent this spring. More than 65 percent of the total undergraduate enrollment losses this spring occurred at community colleges, according to the report.” Remember this when considering things like the propriety of money for colleges in the upcoming infrastructure bill.

Our lead article this issue highlights work done on the Blanchette Bridge which connects St. Charles and St. Louis Counties. This 43-year old bridge handles an average of 165,000 vehicles per day and is arguably the area’s busiest bridge. Its longest span is 480 feet. Its westbound width is 60 feet with an eastbound width of 68 feet. The last major repairs to the eastbound bridge were joint replacements done in 2006, according to MoDOT. Projected to take two years to complete renovations, the job was completed in just nine months. The total cost was $33M.

Yes, thirty-three million dollars is a sizeable sum of money but, for scale, just one trillion dollars would fund the similar renovation of more than 33,000 other bridges.

There is a growing sentiment in the country that, now that we will not spending $300 million dollars per day in Afghanistan, that money can be put to better use at home attending to needs that have been long neglected. Everyone who knows what Washington is capable of, understands that a new tornado of cash will always be subject to the money grab of special interests. Hopefully cooler heads may be able to focus spending on actual needs.

I am in my late sixties now and have a lot of discomfort about how my generation has governed the country and conducted big business. Ours has been a privileged generation which has focused too much on the “what’s in it for me”. Hopefully we can pivot to a position which addresses current needs with greater emphasis on the future. Dealing with those needs while being appropriately fiscally responsible will benefit our industry and the country on the whole.

The work can be done now while the federal government is committed to do what is necessary and the cost of money is cheap or we can put it off until neither of these is true.

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Clayco Celebrates Groundbreaking of 26-story Skye on 6th, a New Luxury Residential Tower in Downtown Phoenix

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Today national design-build firm Clayco celebrated the groundbreaking of a new 17-story student housing tower, The Standard at Columbia, located at the corner of Washington and Assembly Streets in downtown Columbia, just blocks away from the University of South Carolina (USC) campus.

Designed by LJC, the 443,000-square-foot, urban-infill property will include 247 fully furnished units and 678 beds with an amenity package that boasts a podium-level rooftop pool, grilling stations, resort-equipped fitness and wellness center, game-day lounge and ample group and private study lounge space.

“We are thrilled to bring our integrated design-build method to Columbia on this premier student housing tower,” said Matt McKenna, Clayco’s Vice President of Residential Construction. “We look forward to delivering this project safely and efficiently for the students of USC.”

The building’s exterior cladding is comprised primarily of masonry, stucco and aluminum framed glazing. Building information modeling (BIM) is being used to coordinate all site utility, mechanical, electrical, plumbing and fire protection systems around the post-tension and reinforced concrete structure. The building is designed to earn National Green Building Standard (NGBS) certification. 

Clayco is a full-service, turnkey real estate development, master planning, architecture, engineering, and construction firm that safely delivers clients across North America the highest quality solutions on time, on budget, and above and beyond expectations. With $3.8 billion in revenue for 2020, Clayco specializes in the “art and science of building,” providing fast track, efficient solutions for industrial, commercial, institutional and residential related building projects. For more information visit www.claycorp.com.

LJC is a full-service design and architecture firm committed to enhancing the quality of the human experience and to improving how design and architecture can impact each individual’s emotional being. By harnessing the power of integrated design, including architecture, workplace strategy, interior design, landscape architecture, urban planning and engineering, the company achieves its clients’ goals and aspirations. For more information, please visit www.theljc.com.


CRG is a privately held real estate development firm that has developed more than 9,000 acres of land and delivered over 200 million square feet of commercial, industrial, institutional and multifamily assets exceeding $12 billion in value. CRG leverages a powerful North American platform with local market expertise and offices in Atlanta, Chicago, Columbus, Southern California, St. Louis and Philadelphia. CRG’s philosophy of developing for the future and anticipating the enhanced needs of next generation users led to the creation of its industrial brand, The Cubes, and its multifamily brand, Chapter. For more information, visit CRG’s website at www.realcrg.com.

Ranked as the nation’s most active student housing developer and top student housing contractor, Landmark Properties is a vertically integrated developer and owner-operator with over $7.5 billion of assets under management. Landmark’s current portfolio includes more than 75 student housing properties across the country and over 50,000 beds, including over $3.5 billion in assets currently under construction. For additional information, visit www.landmarkproperties.com.

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Perspectives: Building Safety

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The tragic building collapse in Surfside, Florida, hit the news as we were in the middle of putting together this issue of CNR. It was sheer coincidence that our 2021 editorial calendar, determined many months ago, included this issue’s feature about building security and safety systems and a feature story on Resilient Buildings that will appear in our upcoming September-October 2021 issue.

When coverage of the Surfside incident began to unfold, we reached out to some of our trusted sources in engineering, architecture and other related disciplines to ask for their thoughts on the Surfside collapse and what cause or causes might have precipitated that horrific event. Even though these companies had no connection to the tragedy, we found no one who was ready to dip their toes into the unfolding story due to the massive loss of life and what undoubtedly will be years and years of litigation.

Early reports about the Surfside collapse uncovered warnings from earlier inspections that the building was in need of massive, expensive repairs. This building was reportedly a middle-class residence, and it seems the cost of repairs would have been overwhelming – tens or even hundreds of thousands of dollars per family. While it is too soon to know for certain, early stages of the investigation suggest this tragedy was entirely preventable and we will be following the story closely as more is revealed. American building standards are among the best in the world. There is clearly an ongoing need to review, update and, in some cases, improve enforcement, but I think we are most fortunate that catastrophic building collapse of this magnitude is incredibly rare in our country.

 Owners and occupants of commercial structures have a vested interest in attending to the more common safety and security matters that affect everyday life. The attention those issues receive is driven largely by insurance companies who strongly prefer prevention over remuneration. Fire protection has long held a position at the top of the building security pyramid. Over the last decade, other ascendant concerns have come to the forefront such as how to prevent people with malicious intent from entering spaces to which they should never have access, protect business software and computer data systems from a world full of hackers, and provide protections that keep building occupants as safe as possible in the midst of a worldwide pandemic.

While our team loves reporting on exciting new projects and product innovations (and we hope you enjoy reading those stories) safety is and always will be an aspect of the construction industry that we take very seriously. We consider it a privilege to serve as an information source for our readers, especially when the subject matter is so very important.

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We’re Back in Circulation and Life is Opening Back Up. Now What?

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Tom Woodcock

Things are opening up and people are crawling out of their basements. Commerce is coming back to life. We’re beginning to see business after Covid. Even though the construction industry held strong through the various incarnations of lockdowns, business still was not quite as usual.

Now companies will need to reengage their sales strategies.

The big question is this: Exactly how do you accomplish that? The first step is to take a breath. Review what was effective prior to the pandemic and take the successful elements into consideration. Your outside sales effort will still be vital to ongoing success, especially if the market turns in any fashion. By meeting with customers face to face, you can gain a pulse of what’s trending.

The opening of associations and organizations is a good place to begin as you interact with your customer base. Attend consistently and be sure to focus on customer-rich groups. This will allow you to connect with a larger pool of clients and potential clients. Get to as many events as possible and maintain consistent involvement.

Frequenting proven networking groups and events can also reignite your sales mojo. Casual business functions provide the opportunity to be more relaxed and knock off some of the rust.

Oh, you will be rusty. For some, it has been a year since they’ve engaged with customers in any format that doesn’t include a computer screen. It is already becoming apparent that Zoom meetings will not be the differentiator. People who prefer these types of virtual meetings over traditional in-person sales work will be forced into more intense pricing situations and less development of true customer relationships.

Relationship growth is always the differentiator in sales. It increases the level of trust and creates a fertile environment for gaining critical information. Two crucial elements tilt the scales in your favor: 1) The opinion that sales work can now be done from the comfort of one’s home, which is misguided, and 2) That salespeople will be the drivers of businesses’ recovery, which is absolutely true.

As for crucial element number one, if we’re already seeing people taking sales appointments post-pandemic, it’s only a matter of time when those who don’t get out publicly will attract less attention.

I’ve witnessed multiple revolutionary sales trends over the years that eventually fade, and there is a return to the tried-and-true methodology of outside selling.

Covid dealt a severe blow to many in the sales realm. Some were forced to move in new directions, others are coming out of it hungry. Those with an appetite will be aggressive and leave those who are hesitant in the dust. Waiting to see what transpires may seem prudent, but this strategy could put you behind the frontrunners. Markets are a bit unpredictable at the time of this writing; the one thing that will be a constant is that the most active sales personnel will be those who bring the greatest results.

As for crucial element number two, as PPPs, unemployment compensation and backlogs fade, people will become more anxious to produce. Those with the responsibility of selling will need to be the drivers. New business will need to be secured, and there is a great deal of instability in the construction industry. The combination of escalating material costs with tight labor pools can compress opportunity. This will require an expansion of your customer base to cover fluctuations.

Clients who may have previously been consistent, recurring business may no longer be as reliable. Qualifying new customers and beginning the process of winning some of their projects will not happen overnight. Getting in front of them before the rest of the pack could give you an edge.

I feel the need to reiterate that I’m not trying to set a standard for anyone concerning their response to the pandemic. That is an individual choice. I’m simply pointing out what is already becoming apparent: The choice to engage with the customer base is going to prove effective in moving the sales bar. Not all customers will be ready to embrace the return to traditional sales work initially, but plenty are jumping at the chance to get out and reconnect.

The question is this: Are you ready?

Tom Woodcock, president of seal the deal, is a speaker and trainer for the construction industry nationwide. He can be reached via his website,  www.tomwoodcocksealthedeal.com, or at 314.775.9217.

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Could an Employee Incentive Program Help You Hire and Retain Skilled Workers?

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By Brennan  P. Connor

Brennan Connor

Attracting and retaining quality employees is a concern of all businesses but, in today’s economy, is of particular importance in the construction industry. According to a recent press release from the U.S. Chamber of Commerce, more than half (52 percent) of contractors say they will hire more employees in the next six months, up from 46 percent in Q1 2021. However, according to the same press release, 88 percent of contractors surveyed stated they are currently having moderate to high levels of difficulty finding skilled workers.

One way contractors and construction business owners can attract potential employees and retain existing employees is to adopt an employee incentive plan. Awards made under an employee incentive plan can provide employees with additional income and/or equity ownership, motivate employees by tying such awards to the employer’s financial results and incentivize employees to remain with their employer until such awards vest and are paid out. 

Before designing and adopting an employee incentive plan, employers need to consider the related legal and tax implications, particularly when awards under an employee incentive plan are considered “deferred compensation” by the Internal Revenue Service. Below is a summary of different types of employee incentive plans and a high-level overview of the tax considerations when adopting a plan that features awards of deferred compensation.

Overview of Different Types of Employee Incentives

There are a wide variety of employee incentives that employers can consider when designing and adopting an employee incentive plan. Popular employee incentives include, but are not limited to, the following:

  • Phantom Stock – an unfunded, unsecured promise to pay the value of stock in cash, in the future. This is designed to replicate company stock without giving away actual stock.
  • Stock options – a right to purchase stock at a set price.
  • Stock appreciation rights – a right to receive the excess of the fair market value of granted stock over the exercise price for such stock.
  • Cash bonus – additional cash compensation which is generally tied to achievement of certain financial metrics by the employer and/or the employee.

Employee incentive plans may – and typically do – provide that awards granted under the plan shall vest over a period of time and then be paid out at a later date or upon the occurrence of certain events, such as retirement, change in ownership of the employer and others. In other words, the award is earned in one taxable year and then vests or is paid out in a later taxable year or years as deferred compensation.

If an individual’s employment terminates before his/her award vests or is paid out, the award is generally forfeited.  Accordingly, employees receiving awards of deferred compensation have an incentive to remain with their employers until their award vests or is paid out. Employers should be aware, however, of important tax considerations which arise when granting awards of deferred compensation. One of these tax considerations involves the requirements of Section 409 of the Internal Revenue Code.

Section 409A

Internal Revenue Code Section 409A governs all awards of deferred compensation and imposes penalties on employees and employers for noncompliance. While a detailed breakdown of all the requirements of Section 409A is beyond the scope of this article, employers should be aware that to be compliant with Section 409A, an award of deferred compensation:

  1. Must be made pursuant to a written plan.
  2. The plan must specify the form of distribution of the award, such as lump sum or installments.
  3. The award may only be paid out upon the occurrence of certain events, such as: an employee’s separation from service, disability or death; a fixed time or schedule; a change in control of the company’s ownership or a substantial portion of its assets; or an unforeseeable emergency.
  4. The award may not be accelerated/paid early, except in highly specific circumstances.

Noncompliance with 409A results in the employee being subject to income tax in the year the deferred compensation award becomes vested, regardless of when deferred compensation is scheduled to be paid. An additional 20 percent excise tax is also imposed on the employee plus any applicable penalties and interest, while the employer may be subject to penalties and interest for failing to timely report and withhold taxes for a noncompliant deferred compensation award.

While deferred compensation awards can help contractors and construction companies attract and retain employees, employers must take the requirements of Section 409A into account when designing and implementing an employee incentive plan to avoid unintended and adverse tax consequences.

Brennan P. Connor is an attorney at Carmody MacDonald in St. Louis. He focuses his practice in the areas of taxation, business law, estate planning, and real estate. He can be reached at bpc@carmodymacdonald.com or 314-854-8706.

This column is for informational purposes only. Nothing herein should be treated as legal advice or as creating an attorney-client relationship. The choice of a lawyer is an important decision and should not be based solely on advertisements.

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PPI Jumps 24% in 12 Months, Preventing Contractors from Passing Along Cost Increases

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By KERRY SMITH, EDITOR, ST. LOUIS CONSTRUCTION NEWS AND REVIEW MAGAZINE

Increases in prices for wood, metals, plastics and gypsum continue to narrow the margin between what contractors pay to acquire raw materials and what they’re able to charge the project owner.

Ken Simonson, chief economist for the Associated General Contractors of America, said the construction industry Producer Price Index – which measures the average change over time in the selling prices received by domestic producers for their output – has climbed 24.3 percent over the past 12 months, increasing 4.3 percent in May 2021 alone. The 12-month climb, he says, is nearly double that of any previous year in history.

“This increase far outstrips contractors’ ability to charge more for projects,” said Simonson. “This gap means contractors are being hit with huge costs that they did not anticipate and cannot pass on.”

Meanwhile, the PPI for new nonresidential construction – a measure of what contractors say they’d charge to build five types of commercial structures – increased only 2.8 percent over the past 12 months. AGC’s recent analysis included narrative from contractors across the nation who said they’d held their profit expectations down to compete for a limited number of new projects.

According to the AGC, the PPI for lumber and plywood more than doubled, increasing 111 percent from May 2020 to May 2021. The index for steel mill products increased 75.6 percent over the same period. The copper and brass mill shapes PPI rose 60.4 percent since May 2020, and the aluminum PPI rose 28.6 percent. The PPI for plastic construction products increased 17.5 percent, while the index for gypsum products such as wallboard climbed 14.1 percent.

Fuel costs, Simonson says, along with surcharges on freight deliveries, have also jumped.

AGC officials including CEO Stephen Sandherr, are urging the Biden administration to end tariffs and quotas on steel, aluminum and lumber as the first step toward easing pressure on construction costs and supply chain bottlenecks.

“Ending tariffs on Canadian lumber, along with tariffs and quotas on steel and aluminum from numerous allied countries, is good policy,” Sandherr said.

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COVID-19 Pandemic Increases Coworking Space Demand, Spurs Flexible Lease Options

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Despite the COVID-19 pandemic uncertainty, markets have demonstrated that the demand for coworking or flexible workspaces will continue to grow. Commercial real estate firm Jones Lang LaSalle predicts 30 percent of the office market will be flexible by 2030. Employers are now seeking to reduce costs and office density, while employees are demanding more flexibility in their work schedules following a year of working from home.

In response, many companies are embracing hybrid work models. According to PricewaterhouseCoopers, 87 percent of executives anticipate shifts in their real estate strategy over the next year. Some organizations have turned to consolidating offices and providing memberships to coworking and flexible spaces to better support remote workers or employees who wish to work outside of the office one to two days a week.

Opportunities for New Construction

This increase in hybrid and remote work structures provides opportunities for mid-size cities such as St. Louis, following the exodus of workers from larger metropolitan areas such as New York and Los Angeles. With workers relocating to smaller markets, employers can still retain the best talent by utilizing coworking spaces. This shift has led to new development in the St. Louis area. Recently, the St. Louis Cardinals partnered with The Cordish Companies to develop a 30,000-square-foot coworking space in Ballpark Village; it will include a mixture of individual workstations, private offices and suites. This is the third location for The Cordish Companies’ coworking brand, with locations in Baltimore and Kansas City’s Power & Light District.

Modifying Existing Spaces & Leases

More than just an office, coworking and flexible spaces are also a favorite amongst small business owners seeking collaboration, flexibility and growth. St. Louis-based coworking spaces such as CIC@Cortex, ThriveCo, OPO Startups or RISE Collaborative Workspace, offer members part-time and full-time private offices, collaborative spaces and business amenities such as Wi-Fi, furniture, coffee bars and community events space. A touted benefit of a coworking space is the opportunity to meet other individuals. Many members have found success establishing new clients and business connections due to the relationships they have built in the shared space. With month-to-month memberships, companies and individuals can try different locations to find the best fit without worrying about long-term leases. Coworking spaces such as ThriveCo also provide tailored concierge services that grant access to virtual assistants, business consultants, graphic designers and more. Accountants are also available in some coworking spaces to promote business development and success.

ThriveCo’s co-owner Katie Silversmith says her firm has seen an increase in interest during the pandemic. ThriveCo reported a waitlist for new members seeking offices in this coworking space.

According to Coworking Insights’ 2020 Future of Work Report: What the Future Holds for Coworking & Remote Work, 71.5 percent of workers who used coworking spaces prior to the pandemic will continue to do so, while 54.9 percent of remote workers who had not previously used coworking spaces are considering joining one as a remote or hybrid work model option.

Conclusion

With the future of office space continuing to evolve, industry sources project a substantial growth in flexible workspace supply and demand. Investors are expected to incorporate more flexible leasing options in their real estate operational models. Therefore, we anticipate a growing need to negotiate contracts for redeveloped spaces and renegotiate existing leases to reflect the changing market. Following the opening of St. Louis’ first coworking space in 2010, more than one dozen distinct coworking locations have developed across the greater St. Louis area, each with its own unique atmosphere and amenities. While still a developing market, one-third of commercial real estate portfolios could include coworking or flexible space by 2030.

Ashley N. Dowd is an attorney at Carmody MacDonald in St. Louis and focuses her law practice in the areas of banking, real estate, corporate and business law. She can be reached at and@carmodymacdonald.com.

This column is for informational purposes only. Nothing herein should be treated as legal advice or as creating an attorney-client relationship. The choice of a lawyer is an important decision and should not be based solely on advertisements.

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EV Charging Stations: Office buildings Will Need Them, and Soon

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By MIKE LAWLESS AND ZACH CARTER

One byproduct of the coming exponential growth of electric vehicles will be a growing demand for charging stations away from EV owners’ homes. Workplace parking lots and public parking garages will be ideal locations for these stations but building owners may find their infrastructure inadequate to support them.

The City of St Louis has already passed an ordinance that doubles the electrical load and design requirements for the electrical service for parking garages. This ordinance is a minimum that may not meet the expectations for visitors as the number of EVs and demand for charging stations continue to grow.

Accommodating charging stations will become a long-term need in the architecture, engineering and construction industry, and it will be critical for electrical infrastructure to be designed with the agility to respond to changes in technology. The infrastructure must allow for faster charging – increased capacity on the building system – and a greater quantity of charging locations. There also will certainly be an appeal from EV owners for the sustainable creation of the energy for their fuel, such as solar. Therefore, owners should evaluate their infrastructure for EV and solar simultaneously. Industry standards to make buildings EV-ready and solar-ready are easily accessible and simple to implement.

Electrical reliability (i.e., EV owners expect to see their battery bar grow) will become a consideration for the power supplies to these EV charging stations. This will lead to consideration of redundant electrical feeds, emergency generation and, more importantly, pairing charging stations with solar and energy storage. Such measures will ensure power always is available so that EV drivers can get the charge they may need to make the trip home.

At the electrical utility level, integrating fast charging of electric cars will add to the demand on an already taxed electrical grid. Initially, this additional power may have to be provided by non-sustainable sources such as gas-powered and coal-powered plants – dirtier sources of power that will offset some of the environmental benefit of electric cars. This will not be the case in the future, however, as decarbonization of the grid continues to take hold. In addition, we will adapt how and when we charge vehicles as well as how we utilize the megawatt hour of battery power that exists in electric vehicles.

Building owners are already currently considering new strategies to accommodate the return of tenants and employees to the workplace as COVID-19 vaccinations increase and restrictions ease. In addition to providing for current and future health and safety requirements, owners who truly want to prepare for the “office of the future” should include charging stations as part of their overall strategy. The growing surge in EVs will lead to an ever-growing demand for charging stations, however, so multiple car charging stations will be necessary. Having multiple EV drivers vying for a limited number of charging stations is not a viable situation, so providing a building capable of accommodating numerous EVs will be an amenity the workforce will welcome with open arms.

The future holds many opportunities as the vehicle fleet is electrified. Imagine charging electric vehicles during the day from renewable sources and then using a portion of that energy to supplement home energy use in the morning and evenings. Moving renewable energy to time periods when photovoltaic (solar) power is not available to meet demand makes the grid more efficient and renewable.

The technology already exists for a bidirectional (two-way) charger for home use. This would allow homeowners to charge and discharge so the EV battery can be used to power their homes. This same technology could expand to commercial applications. An electrical vehicle parking garage, for example, could be a renewable power storage source/sink that supports maximum efficiency for a portfolio of buildings. It could simultaneously provide a source of revenue for the owner, satisfy a need of EV-driving employees and be an added amenity for attracting new tenants – a particular advantage over competitors who fail to provide charging stations.

Energy storage – whether in the form of electric vehicle batteries or building-scale energy storage – will be part of the solution for optimizing renewable energy usage and should be considered when designing charging stations. Doing so will not only support the vehicles of the future but also positively impact the environment as a whole – something 50-year-old electrical technology and design cannot accomplish.

Mike Lawless, PE, FPE, LEED AP, is director of innovation at IMEG Corp. He can be reached at Michael.J.Lawless@imegcorp.com.

Zach Carter, PE, LEED AP BD+C, is a senior electrical engineer working out of IMEG’s St. Louis office, and can be reached at Zachary.W.Carter@imegcorp.com.

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