Trying to assemble the costs for design and construction projects during your project planning phase is a frustrating task because there are many variables. It has been our experience that the majority of pet boarding and daycare owners tackle this process, initially at least, on their own. Helping you to think broadly to develop a list and to understand how to categorize these design and construction related expenses is our goal.

To borrow a term from the healthcare system, you want to develop a “global” budget for your project. The global budget is a tool that determines how much you have to spend and then divvies it out in categories. Some of these expenses are more negotiable than others. For example, your location has everything to do with what you will be allowed or not allowed to do on your site. The expenses related to meeting building codes and zoning requirements will trump other expense categories, such as funds available for equipment.

Divide the design and construction related expenses into the categories listed below. The list is not exhaustive. Some may not apply to your situation, or you may need to add to the list.

Pre-Design and Due Diligence

Design Phase

Construction Phase

Pre-construction

Construction

(Permitting and fees, site work, building, contingencies, etc.)

Equipment

(permanent and FF&E)

Systems

Post-construction

Many items fall within each of these broad categories. Below is an overview of what fits into these groups.

These are costs that you may or may not incur prior to getting the design team or contractor on board. They include:

Purchase of land, related expenses including:

Property appraisal fees

Purchase cost

Realtor fees

Property taxes

Finance and insurance charges.

Due Diligence expenses:
(It is recommended that these expenses are investigated before you purchase property or an existing structure to renovate or demolish.)

Asbestos and lead-based paint survey and remediation report

(This is recommended on any renovation project and may be required prior to purchasing an existing structure.)

ADA (Americans with Disabilities Act) evaluation

Re-zoning expenses, which may also include architectural or engineering consultants

Environmental studies, which may include Phase 1, 2 or more in-depth assessments

Survey of the property

Geotechnical engineering.

Design Phase expenses:

Design team evaluation and selection

A&E fees

(Architectural and engineering fees include the architect and structural, mechanical, plumbing, electrical, and fire protection engineers.)

Civil engineering and landscape architect fees

(These designers are considered an extended service to the architect; they may be contracted by the architect but as a separate fee or contracted directly with the owner.)

Renderings and/or architectural models of the project.

(These may be done for marketing purposes or sometimes a rendering may be required by developers of industrial parks or government entities. And these groups may be seeking assurance that your facility design meets a certain visual image expectation or incorporates restrictions, such as no outdoor kennels because of noise ordinances. If you are going through are-zoning effort, you may have to produce colored, conceptual renderings; each jurisdiction is different.)

Classify the construction budget into three sub-categories: pre-construction, construction, and post-construction.

Pre-Construction costs include:

Plans review costs

(This cost may be required by the permitting entities and payable when the architect engineer submits plans for the building permit review.)

Contractor evaluation and selection.

Construction includes:

Building permit

(An often asked question is who pays for the permit? For commercial construction projects, the contractor must “pull” the building permit and payment is required at that time. The permit may be paid for directly by the owner or it may be included in the construction costs.)

– Impact fees, which may be imposed by the county/city

(You will not always know this cost in advance because it is determined by the entity during the permit process. However, you might be able to get a range for budgeting purposes; check with the building department.)

Site work

Site construction (utilities such as water, sanitary sewer, storm sewer, power, fire lines including hydrants, and backflow preventers)

Site entrance drives including acceleration or deceleration lanes if applicable

Site clearing, soil removal or fill

Drainage and retention ponds

Paving

Site lighting

Entrance plaza construction

Landscaping.

Building Costs include:

Soil compaction under the building slab

Building footings and slab including vapor barrier

All masonry

Structural system including columns, floor and roof framing, decking, lintels, etc.

All carpentry work including cabinetry

All moisture protection systems including roofing, moisture and vapor protection materials, and caulking/sealants

All finishes including studs and wall construction, painting, floor finishes, etc.

Elevators (can add $60,000 to $70,000 to your project)

Plumbing systems

Mechanical systems

Electrical systems

Fire protection

Equipment.

Contingencies
It is suggested that your construction loan (or your budget if you are self-financing) include two contingencies. The first contingency, or allowance, is included in the construction cost as a line-item used for unforeseen expenses, such as unknown subsurface debris that costs money to remove. Any expenses charged against this contingency must be approved by you (the owner) and any money not used is returned to you. The second contingency is discretionary, kept in reserve, and not known to the contractor.

Equipment
Equipment falls into two categories: permanent and FF&E (furniture, fixtures, and equipment). FF&E is defined as movable furniture, fixtures, or other equipment that have no permanent connection to the structure of the building or utilities. What equipment you have and who is responsible for providing and installing it will determine if the equipment is included in the contractor’s bid or not. Some equipment is provided and installed by the contractor; some equipment is provided by you and installed by the contractor, and some equipment is provided by you and installed by you. You will determine these specifics with your architect and contractor.

Systems
Also included in the global budget are the security systems, which may include Closed Circuit Television System (CCTV), plus your computer system, telephone system, cable television, wifi, etc. These systems must be designed or planned with the architect and engineers. The design and construction plans will include the conduit and pull wires for these systems but does not include the equipment. These systems are normally provided by the owner and delivered and installed by a contracted company and not by your general construction contractor.

Post-Construction
The architect’s and engineer’s roles are often finished at this point. There is a warranty period that lasts for one year after you receive your Certificate of Occupancy (CO). A service oriented design team and contractor and reputable suppliers will usually assist you with warranty issues. In any case, you may want to budget some funds for warranty follow-up assistance during this one year period. The warranty period will segue into regularly scheduled maintenance efforts.

Final Thoughts
These design and construction costs are part of your overall business plan where you have addressed revenue and expenses for business operations. Accept from the beginning that your budget is dynamic not static. Replace budget numbers with qualified estimates and real costs as you learn them and then make adjustments in your overall allocations. The budget is a management tool to help you avoid biting-off more building than you can chew.

Richard S. Bacon, FAIA, is owner and principal architect at Bacon Group, Inc., an architecture firm that specializes in the design of animal care facilities. Rick is a registered architect with over 35 years’ experience in the design and construction industry. Based in Clearwater, FL, he may be contacted by phone at 800-961-1967 or via email at [email protected].

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