Today's Hotelier - October 2016 - 38

DEVELOPMENT & RENOVATION approval. Some building shells and dimensions may not fit the prototypical room criteria of certain brands. For example, a building may work for extended stay, but not full-service, or vice versa. The market may not be conducive for a particular brand or the desired brand may not be available. We have found that franchisors will do their best to accommodate less-than-ideal footprints if the location is desired by the brand and the developer/ sponsor is a partner with whom the franchisor has confidence in their ability to develop and operate the property in accordance with brand standards. Once a building has been identified, and both the municipality and prospective brand (if desired) have interest, it is time to dig deeper into a host of due diligence and entitlement challenges before the jackhammers and saws are powered on. This process includes determining the fitness of the physical plant, i.e. structural integrity, mechanical/electrical systems functionality and confirming the available utilities such as water service, sewer, power and gas. An article in itself can be written on each of the above challenges, but let's touch on a few of these issues. The best candidates must begin with a building that is structurally stable and sound. It is good practice to engage a structural engineer to verify the building's integrity. The mechanical, plumbing and electrical components should also be inspected to determine their remaining useful life. Today's mechanical and electrical systems are more PHOTO: LIBRARY OF CONGRESS. FORGING AHEAD complex than 50 years ago. They are typically smaller in size and offer energy savings that might not have been available when the building was constructed, let alone meet the needs of the new lodging use. Most buildings will need their electrical systems upgraded to meet current electrical codes. The data and wireless communications will also need to meet code as well as guest needs. If readapting a building that was not previously used for lodging, the availably of water and sewer capacity must be verified with the local municipality. Since lodging facilities typically have a minimum of one bathroom per unit and 3 8 | OCTOBER 2016 | TODAYSHOTELIER.COM additional restrooms servicing the public spaces, there are more fixture units that impact the utilities capacity than a typical office or manufacturing facility. Not having the available capacity will impact the number of rooms that can be developed. Significant cost increases will also be incurred if the municipal utility systems require upgrading. With cities typically having budget challenges, often this burden is passed on to the developer. Municipalities will be looking closely at the need to extend infrastructure, as well as the impact on traffic. In general, hotels and office buildings have reverse traffic patterns, guest arrive when office users are departing. However, in a residential area, hotels typically add to the traffic congestion, which may cause officials and the local residents to demand an expansion of parking facilities. ANALYZING COSTS Labor costs are an important consideration in all locales, as well as the availability of skilled trades. Some of the most attractive locations in strong major metropolitan or coastal markets may be areas where building activity is already straining labor capacity and driving up costs. This assumes you can find the workers at all. Timing is everything. How much will it cost? Total costs of an adaptive reuse will include the cost of financing, pre-development explorations, construction cost, both building materials and labor, the procurement of FF&E as well as pre-opening operational costs. Financing for an adaptive reuse development might be a bit more expensive http://www.TODAYSHOTELIER.COM

Table of Contents for the Digital Edition of Today's Hotelier - October 2016