Opening a Community Takes More Than Meets the Eye

by Jeff Shaw

Make sure the operator and general contractor work together as residents move in.

By Chad Suitonu

You, as the owner/developer of a brand new senior living community, just finished the grueling construction effort. Now it’s time to hand the building over to your senior living operator and sit back and make some rent money. 

But wait a second — your job as owner is not over yet. You’ll be involved with the project for months to come as the operator (specifically the executive director and facility manager) take over the facility.

As with any new and complex building, there are going to be problems that will arise that were not caught and corrected during the construction punch list. HVAC units are not going to cool sufficiently, doors are not going to close properly, leaks will be discovered. 

Your general contractor (GC) was also likely under significant pressure from the owner to just get the building to pass the certificate of occupancy (CO) inspection so that the operator could start moving in residents and generate revenue. When the GC is under pressure, there is usually going to be a lot of fine construction work yet to do long after the certificate arrives.

There will likely be tension and ill will between your GC and your operator’s facility manager. The facilities manager will wonder why, and be upset that he is not getting a completed and fully operational building. 

He or she might view any problems with the building as shoddy workmanship and be critical of the GC. The facilities manager is also under pressure to make sure the building is in good working order because residents are moving in.

Your GC, who just spent 18 to 24 difficult months building a challenging project, doesn’t take kindly to a facilities manager, who just got hired a few months ago, being overly critical of the quality of the construction. This new building is certainly expected to have some problems that will only be flushed out and discovered after residents start moving in.

It is your job as developer/owner to manage the relationship between your GC and your operator. Set expectations early with the facilities manager and executive director that the punch list will likely take months to complete — and that there are going to be a lot more problems that weren’t on the punch list that will be discovered after residents start moving in. 

Have a good attitude toward and support the executive director. Remember that he or she is the one responsible for bringing in the rent money, so do what you can to help make that person successful. 

Finish the punch list ASAP

Your GC is likely going to be exhausted from the project after receiving the certificate of occupancy. But the owner has to monitor the GC to ensure the work on the punch list is finished ASAP.

 Residents are moving in, and even though the building is more than 99 percent complete, that remaining unfinished 1 percent is usually the visible finishes that everyone sees. 

There has to be a formal and written work-order system so that, as problems arise with the building that the GC has to fix under its warrantee, the system can notify the GC and track the status of the fix.

For some warrantee items, instead of having the GC be a middleman, the work-order system may involve the facilities manager contacting a subcontractor directly to make a repair. If a light fixture burns out, no need for the facilities manager to involve the GC. The facilities manager should be able to reach out to the electrical subcontractor directly to fix the problem. 

Train the operator

Ensure you get equipment training scheduled between your facilities manager and the GC well before the building opens to residents. This training should be on all major systems, including HVAC, electrical, hot water heaters, boilers, water softeners, fire alarm, fire sprinkler, landscaping irrigation, pool equipment and more. 

Related to operator training, operations and maintenance manuals will be a reference source for the facility manager to troubleshoot a piece of equipment to try to get it operational. Make sure your GC provides manuals on all equipment when the project closeout documents are delivered to you and the facilities manager. 

As-built plans are building plan sheets that document and reflect how the building was actually built. These as-built plans may deviate a little from the plans your architect and engineers created, and it is best for your facilities manager to have the as-built plans. 

Your GC should email the owner and facilities manager a digital version of as-built plans, but you might also consider having the GC provide the facilities manager with a full-sized, hard-copy set of the as-built plans. It’s sometimes easier and faster to unroll a hard copy set of as-built plans than it is to look up a detail in the plans digitally on a computer screen. 

The GC will usually provide as-built plans for structural, fire sprinkler, fire alarm, plumbing, electrical, HVAC and utilities. 

Plan for future fixes

Attic stock is extra material left over from construction that your GC provides to the facility manager so that he or she can replace items as they become worn out or damaged. Typical attic stock items are all the different types of flooring, ceiling tiles, paint, wallpaper, wall tiles, light bulbs (sometimes fixtures), door hardware, millwork hardware, plumbing fixtures and window treatments. Your architect should list the attic stock requirements the GC has to furnish to the owner in the specifications. 

Extra paint is usually an attic stock item, but can get used up, dried out or thrown out easily. 

If the facilities manager knows the brand and color name of all the paint colors in the facility, he or she can easily go to a home improvement store to get the matching color. 

In conclusion, set expectations early with your operator that the building won’t be perfect at turnover, and it will take months to fully finish all the construction. 

Make sure that your GC finishes the punch list quickly, and establish a work-order system for warrantee problems. Have a positive attitude toward the executive director and be supportive with his or her facility concerns so that he or she can focus on getting residents signed up to lease a unit.

Chad Suitonu is a development manager with MedCore Partners in Dallas. MedCore focuses exclusively on senior living and medical real estate developments. 

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