CRE N Illinois

Building a case for design-build

Fulton East, 215 N. Peoria Street in Chicago. Fulton East, 215 N. Peoria Street in Chicago.
Fulton East, 215 N. Peoria Street in Chicago. Fulton East, 215 N. Peoria Street in Chicago.
The Cook County Health & Hospitals System’s Central Campus Health Center in Chicago. The Cook County Health & Hospitals System’s Central Campus Health Center in Chicago.
Bob Clark of Clayco and Bob Wislow of Parkside Realty. Bob Clark of Clayco and Bob Wislow of Parkside Realty.

There’s been a revision of late to the process of designing and constructing commercial properties. And it’s almost a return to form, as the design-build method that has been gaining traction emulates the days of the Master Builder.

One of the primary benefits to this model is that it provides a single point of contact. Not only does this simplify and streamline a project on the client side, it illuminates who is in control, and ultimately responsible for, the finished product.

“If you think about an owner hiring an architect to protect their interests, that doesn’t make any sense because the architect really has no financial accountability to the client,” said Bob Clark, chairman and CEO of Clayco. “The builder is where the risk is and where the accountability should lie.”

The design-build model, Clark likes to say, supplies “one throat to choke.” But it’s not just about liability. Also, unlike the Master Builders of old, it’s not design by fiat—this process fosters better cooperation and communication between the design, engineering, construction and subcontractor teams because they are all part of the conversation from day one.

“Having your contractor at the table as part of the team from the onset means that the contractor and the people who are going to actually work on the site and build the building completely understand the design intent, so there are no mistakes,” said Parkside Realty’s Bob Wislow.

The downside of selecting an architect without some sort of contracting focus is that plans can be drawn up in a vacuum, without an all-inclusive vision of how the building will come together. When the design and build teams talk out a project from the very beginning, they can together figure out varied solutions to a design problem that the other may not have thought of.

Wislow and his long-time colleague, Camille Julmy, recently launched a boutique venture, Parkside Realty. One of their first projects is Fulton East, a 12-story, 90,000-square-foot office and retail building at 215 N. Peoria Street in Chicago. Clayco—along with in-house architecture firm, Lamar Johnson Collaborative—is leading the design-build effort for the Fulton Market project.

From floor plates to amenities, Fulton East’s design marries concierge and office lifestyles. The 8,000-square-foot landscaped rooftop park, for example, offers comfortable seating designed for both collaboration and client entertainment, with state-of-the-art connectivity for everything from product demonstrations to movie nights. The 9-by-27-foot balconies on each floor are geared toward meetings just as much as to lounging.

As design-build is all about coordination and cooperation, it’s never too early to coordinate with tenants and the firms that they’ve contracted to build out their space.

“We’re working with one tenant and we brought their interior design firm in before they even put pencil to paper. They said they’ve never been involved in a project this early or involved to the depth that they are on this project,” said Wislow.

As an example, another tenant will occupy multiple floors. Clayco brought them into the early shell and core discussions because they want to incorporate the fire stairway into their space as an aesthetic transfer stair for their employees. The time to have those conversations is now, as it would be costlier to wait and have to tear out walls and replace a utilitarian railing with a more attractive one.

“Speed to market is so important,” Wislow said. “We should be moving tenants in by June of next year. The tenant brokers don’t believe that it can be done that quickly but it will be because every piece of this project was fully integrated from the beginning.”

Everything about the design-build model maximizes cost savings over traditional, siloed architecture and construction. Clients can get more accurate pricing early on in the project and therefore make design decisions as they go along. Value engineering actually becomes part of the design process.

“Costs have done nothing but increase in terms of property management when in actuality, all the technology and the smart building components that we’re putting into the building should be driving costs down,” said Clark. “Owners are just now seeing those costs reverse because of the implementation of technology into these projects.”

Clark and Wislow have partnered on previous design-build projects, including the Cook County Health & Hospitals System’s Central Campus Health Center (CCHC). Design-built in collaboration with Gensler, the CCHC comprises 103,000 square feet of flexible clinical space and 137,000 square feet of highly collaborative administration offices.

The ambulatory care facility provides a continuum of services to Cook County residents, driven by a research- and community-focused design. More importantly, it was completed within the price parameters of the county’s RFP.

“The general feeling is that they got a product at the very high end of what their expectations were,” said Wislow. “When you have a complex project like this, you have your whole design-build team coordinating every one of those aspects of the building from the beginning. Working with each other makes the project smoother, makes the pricing better and makes the execution better.”

With design-build, the scope of the project is defined at the very beginning so that the architecture, construction and subcontractor teams understand the client’s objective and budget, as well as the leasing and operations plans once the property is built.

“We call that enhanced integration, thinking about the building completion at the beginning of the project and working backward to how you’ll clean the building, control the mechanical systems and manage the environmental aspects of the project,” Clark said. “It’s very difficult to do that without a holistic approach to the project.”

According to research from FMI Corporation, design-build is anticipated to account for 44 percent of nonresidential construction spending by 2021. This makes it the fastest growing segment of the construction market. Over half of owners surveyed reported that they have already or will use design-build in the next five years.

“If you would have polled the top architects in America 10 years ago, they would have told you to shy away from design-build, that it’s like letting the fox into the hen house,” said Clark. “Today if you polled those same architects they would tell you that you have to find a builder that knows how to design things and not just try to cut costs out of the project. They would rather have a builder at their side than find out at the end of their schematic design that the design has some flaw in it that they didn’t think of that’s costing a lot of money.”