06 Nov 2018

Project Could be a Dream — Sh Boom

2 Comments

Remember a time when music, people and life was light-hearted and pleasant. Ah, Life Could be a Dream, Sweetheart, but how about architectural projects?

The dream project is the project that compensates the provider, in my case the architect, after design and construction completion and continues to pay dividends. Why would you need a project that pays and continues to pay? Because, architecture is a labor-task profession. A design firm exerts an amount of time/labor to finish tasks and receives compensation for design or consulting task completion. It’s a laborious trade similar to other Architecture, Engineering and Construction (AEC) trades. Effort exerted = money received, but what if the initial architectural effort paid in perpetuity?

I’ll set the stage for this pipe dream, Sh Boom.

The dream project is:

  • –a mixed-use community project (commercial, residential, retail, entertainment)
  • –one that generates year-round revenue immune to seasonal fluctuations
  • –one that receives a green building rating based on projected performance with financial incentives for better-than-modeled performance
  • –one with a long-term vision and repeat client opportunities
  • –the management/investment team includes owner, architect, financier, realtor, contractor, manager & investor (AKA stakeholders)

All stakeholders maintain an equity interest in the project. The architect either contributes capital for construction or accepts a reduced design fee to share in operational revenue splits. Other stakeholders make similar capital contributions and revenue-split agreements.

  • –this mixed-use campus provides entertainment, hotel, residential, & retail.
  • –the stakeholders promote events and all work and/or live in the development. One stakeholder incentive is a reduced rental rate.
  • –continued development means follow-up & new work opportunities for the original service providers (architect, contractor, realtor)

The project includes a financial waterfall that distributes revenue to all expense accounts in priority order such as loans, utilities, expenses, capital improvement and all excess (profit) fills a bonus account. The bonus account distributes dividends to each stakeholder annually based on the stakeholder’s equity interest i.e. more equity = higher dividend percentage. Items that increase the bonus account include:

  • –better energy-performance than modeled
  • –stakeholder marketing efforts that generate revenue
  • –venue revenue
  • –retail profits

In a traditional project 1 hour in = 1 hour of pay, but when stakeholders accept the calculated risk of an equity interest, the profit creates a revenue stream that keeps on giving.

Ah, projects can be a dream, sweetheart. Read these articles to learn about other architects’ dream projects, Sh Boom.

Architalks Entries

Lee Calisti, AIA – Think Architect (@LeeCalisti)
dream until your dreams come true

Eric T. Faulkner – Rock Talk (@wishingrockhome)
Project Could be a Dream – Sh Boom

Michele Grace Hottel – Michele Grace Hottel, Architect (@mghottel)
“dream project…”

Keith Palma – Architect’s Trace (@cogitatedesign)
Lawn Chair

Mark Stephens – Mark Stephens Architects (@architectmark)
The Dream Project

Architalks Credits

This is another entry in Bob Borson’s blogging brain-child titled, “ArchiTalks”.

The #ArchiTalks goal is to inspire blogging architects with similar educational and professional requirements to opine on the same topic and simulpost their response so other architects and a broader audience can enjoy the rampant thought-diversity within the architecture profession

Select the links in “Architalks Entries” above to read how architects responded to the “Dream Project” topic.

image/video credits:

 

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About the Author


Your Architect is Eric Faulkner -- an architect licensed in Texas & Oklahoma with 28 years experience in design, construction observation and life.

2 Responses to Project Could be a Dream — Sh Boom
  1. […] Eric T. Faulkner – Rock Talk (@wishingrockhome)Project Could be a Dream – Sh Boom […]

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