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Renovate Or Build- An Extremely Expensive Question

By: Sanford C. Loy, CCM BArch MSCE
Tel: 865-675-3603, ext. 102
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One would think today’s advanced construction processes, new and more efficient and innovative building materials combined with universal dimensional changes in design standards etc. would mean the cost of new construction would increasingly trend toward being less expensive than the cost of renovating. Add the escalating demands of building codes written to make buildings safer, with healthier air, and fewer barriers to handicapped individuals and the costs to renovate look even less likely to make sense.

That said all those considerations are not consistent enough across county and state lines to formulate a generic definition about where a clear “butterfly line” is, (where new construction makes more sense than renovation, every time). Every situation must be evaluated on its own merits.

What are some typical considerations which do seem to come into play when this age-old question is asked…do we restore or rebuild?

The circumstances or hurdles that make renovation less attractive are:

  1. Environmental issues such as asbestos, lead paint and mold.
    1. Is abatement even attainable and if so, what is the cost and time needed to achieve it.
    2. Does the structure present barriers to which avoiding stagnant air and future moisture intrusion are cost prohibitive.

  2. Fire code issues such as lack of egress and fire separation requirements.
    1. The geometry of older buildings often creates significant challenges to new egress requirements.
    2. Same is true for fire separation requirements in today’s codes.

  3. Design logistics which are inadequate for current needs and difficult to correct.
    1. Structures with heavy timber or concrete columns and beams built around small rooms, and hallways, or large rooms such as gymnasiums etc.
    2. Older buildings typically defined spaces with load bearing structural walls making repurposing a structure for a new and different usage difficult and expensive.

  4. Risk of hidden construction issues where more work must be done than anticipated.
    1. Foundations which were acceptable when originally built, rarely meet today’s standards for safety, especially in areas with seismic concerns or design requirements.
    2. Older buildings often have hidden spaces which have not “seen the light of day” for decades, the possibilities of what will be found are endless.

  5. Obsolete materials in the original building such as old electrical systems, cast iron pipes, asbestos, lead paint and plaster.
    1. Materials which are no longer used in mainstream construction, makes them much less desirable as salvageable elements due to the excessive cost required to repair or replace them.
    2. The lack of craftsmen with training and skills required to repair or restore these older materials/systems are an often-overlooked reality, a perspective which carries an expensive price tag.

  6. The scope of renovation work is typically difficult to define in drawings and specifications.
    1. Thus, making the architectural and engineering services more expensive because they require more time and exploratory missions.
    2. Concurrently, the bidding of the work by contractors is not going to be as accurate because the bids are based upon the same drawings and specifications, resulting in larger contingencies in bids to cover anticipated errors and omissions.
    3. More risk always costs more money.

The assets of a building which make renovation more desirable are:

  1. Historical value of the building, such as irreplaceable architectural features.

  2. Emotional attachment by the community, such as schools, theatres, churches.

  3. The original design is logistically close to what the new function will be.
    1. When restoring an old building, today’s codes and standards are always going to present challenges.
    2. If the original use of a building matches or closely matches the new usage the challenges will be fewer and less expensive.
    3. Theatres, Church sanctuaries, Stadiums, and Hospitals are best restored to their original glory.

  4. The geographical location will create intrinsic value to the renovated building.
    1. Large urban areas which are known for architectural styles.
    2. Buildings which are destination structures and are part of the surrounding culture and identity.

  5. Environmental issues have been dealt with previously or are minimal.
    1. Removing hazardous materials gets more expensive every day so any building which has already been “cleaned” previously gets lots of bonus points toward being salvageable.

  6. The original construction is superior in quality to the point that the building’s major elements currently have a life expectancy of another 30+ years.
    1. Such as structural concrete framing which is not showing decay and fragmenting issues.
    2. Finishes which are becoming cost prohibitive in today’s world, such as terrazzo floors, large windows, or well-maintained wood features such as architecturally accurate doors and cornice work.

  7. The original building has been both well maintained and been a building where it has not had chronic issues.
    1. The existing systems such as HVAC, mechanical, roofing, and plumbing systems are functional with a history of documented maintenance.
    2. No inherent problems such as leaks, mold or other environmental and health related issues in the history of the building.

Most buildings fall into one category or the other if considered objectively. While new construction provides a set of “known” results which are more predictable, there is often a loss of emotional connection many communities have with older historical buildings. The Tennessee Theatre in Knoxville, TN is an example of the assets of a building, as listed above, making restoration the obvious choice. Had the goal been to create a state-of-the-art theatre… it would have made more sense to build a new more flexible structure.

Obviously, the older a building is, the more severe the challenges are to bring it up to current standards and codes. As a result, it is an unfortunate reality that every building passes a point in time where the cost of renovation makes a reasonable return on investment unattainable. That point in time is often difficult to peg. The costs, both direct and indirect, make finding which side of the line a building falls imperative to the pocketbooks of all the parties involved, from investors to taxpayers. Taking the time to make a pragmatic yet historically aware decision is definitely an example of an ounce of prevention being better than a pound of cure.

Sanford C. Loy, CCM BArch MSCE, has 40 years of experience in the Construction Industry. Mr. Loy has Degrees in Architecture and Engineering. A Certified Construction Manager (CCM), he is committed to the Code of Ethics and Standards of Professional Practice established by the Construction Management Association of America. CCM is the ANSI accredited professional designation for construction management and is the gold standard for CM service providers in over 145 countries.

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