East End Theater before
East End Theater after
• Environmental Hazards: Research potential hazards on site, such as lead paint, asbestos, mold, or other contaminants. • Structural Condition: Evaluate the building settlement, deteriora- tion, and local failures or damage to existing elements. • Site Conditions: Examine drainage, the condition of existing pave- ments, and other site features, such as parking. • MEP Systems: Inspect visible mechanical, electrical, and plumb- ing system elements for deterioration and wear or potential areas for new systems. • Building Access: Assess the means of ingress and egress for the struc- ture, including overall accessibility. An important note: Building officials prioritize code compliance before any other project consideration. These six areas are crucial items in any property condition assessment. Every due diligence report should include a review of these compo- nents because these six basic factors will aid in determining the vi- ability of a project, including the extent of repairs needed and costs associated with making the site viable. Developers would be wise to use a professional with significant due diligence and engineering expertise. Having an experienced eye con - ducting the due diligence will reveal potential problems and opportuni- ties that won’t be recognizable to individuals not experienced in deal- ing with these types of issues. For example, a leak in the roof is easy to address while a busted sewer line in the basement is exponentially more difficult. A recent adaptive reuse project in Richmond, VA highlights how these components collectively, or even individually, can make or break the feasibility of a redevelopment. The city’s historic East End theater had fallen into disrepair after decades of neglect. Located in a quickly redeveloping neighborhood, a development team saw the potential to repurpose the theater as a mixed-use project. Although overtaken by vegetation and missing its roof, a due diligence investigation found that the primary structural systems were actually in good shape. Fur - thermore, a scan of the building’s envelope revealed that although the roof was gone, the roof framing could still be used and the existing envelope was large enough to accommodate the proposed new space, saving the developer approximately $100,000 in new roof framing. This cost saving was instrumental in making the renovation more fi - nancially feasible.
Be Ready for a Surprise No matter the adaptive reuse project or type of structure, there will always be a surprise. You won’t be dismayed if you’re expecting at least one unusual finding, although there could be more than one. The surprise shouldn’t be a concern; it’s the extent or degree of the surprise that can make a development team reconsider a project. Common surprises are often related to hazards on site, such as no elec - tricity, asbestos, mold, or even substantial amounts of bird droppings resulting in health hazards. Other common issues include structural damage due to localized failures, fire, water, or termites. Some findings can be so substantial that they prevent a project from moving forward. For example, if the existing structure cannot be repaired economically or is not constructed in a manner that allows for it to be adapted for the proposed new use, developers will give it a definitive “no go.” Another common scenario includes hidden limitations, such as restricted site access or drainage issues with large culverts or piping running under the building or site, that result in a project not being developed as planned or the site not being a viable candidate for redevelopment. A key consideration, and sometimes a surprise for development teams, is making sure you have access to the structure. Can you see above the ceiling and are stairs passable? If not, make sure you have a ladder on site or access to drones when conducting due diligence. One such example comes from a 1910 power plant that was redevel - oped into a stunning and popular waterfront restaurant. The structure had stood vacant for decades and when the development team and due diligence professionals first arrived on site, the building was so full of debris and junk that they couldn’t open the front door. It was literally impossible to enter. The debris had to be removed to simply allow due diligence to occur. Ultimately, the goal of a due diligence process is to ensure that the de- velopment team is fully informed and best positioned to make the right decision. A due diligence report will clearly document existing condi- tions and outline needed repairs. The report won’t include designs for those repairs or give extensive cost estimates. It’s still too early in the process for that level of detail. Thus, it’s important to recognize that
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