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Making project development manageable (in bite-sized chunks)

March 13, 2012
by Randy Bremhorst
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Prescribing a path to feasibility
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We’ve all heard the question, “How do you eat an elephant?” and the corresponding answer, “One bite at a time.” Tackling a large-scale development project can be a similarly daunting task, but it doesn’t have to be if broken into the rightseries of smaller projects.

We should first accept the basic premise that project development is not a core competency for the majority of owners or sponsors of long-term care communities. Owners and sponsors are in the “care business,” not the business of development. It is important to engage the right experts to ensure that a project accomplishes what it is intended to achieve.

DEVELOPMENT: A ‘STATE OF MIND’

Although long-term care is a service business, owners are heavily invested in bricks and mortar. Facilities, often financed with long-term debt, can challenge ones’ ability to be flexible and adapt quickly to market changes. For many LTC facilities, this is likely to demand changing a brand's status in comparison to that of the competing brands. This is known as repositioning. Typically, one of the biggest challenges to the thought of repositioning a business is a lack of resources, namely available land and funding.

To have longstanding success, organizations need to view repositioning as a “state of mind,” not an event. Repositioning should take a holistic approach that focuses on the entire organization and its future, resulting in the examination of the organization’s strategic direction and goals.

Phase 2 of the Wittenberg Village project focused on the construction of Greenview Terrace Suites, a three-story, 57-apartment structure that includes underground parking, a wellness center, main dining room and more. Photo: FOTO-GRAPHIX; courtesy of Hoffman LLC
The whole as the sum of its parts

Hoffman LLC, worked closely with Illinois-based Lutheran Life Communities on phased approaches to its regional campuses. In particular, the master planning effort for its Crown Point, Ind., location Wittenberg Village was geared toward repositioning the campus, whose lifestyle continuum included independent living, assisted living and skilled care.

An implementation plan was conceived to break the overall project down into manageable, financeable phases, giving Lutheran Life Communities the flexibility to adjust to the needs of the marketplace. The first two phases of the master plan focused on the repositioning of the campus’ independent living amenities, including the addition of 20 new duplex villas and 57 apartments. A new village square was created to integrate the independent living amenities for dining, wellness and other resident services with the existing amenities and services on the campus.

With one phase of the master plan now implemented, the effort begins anew to reevaluate the next phases of the plan to ensure the long-term viability and sustainability of the campus.

It is reasonable to assume that firms will need to reposition their campuses several times during their expected useful lives just to maintain—not necessarily grow—market share and occupancy. Waiting until market, financial and operational pressures force us to rebrand is too late.

When faced with the challenges and opportunity to develop or reposition, initial questions include: What resources do I have? What additional services do I need? How do I fill the voids?

‘WHAT IF’ THINKING

The “What if ___?” stage of a project allows senior leaders to consider how new or renovated facilities can strengthen their vision for the future, providing new opportunities and addressing concerns with current operational issues.

A development team should be assembled that includes planning, design and construction experts; financial consultants; and other specialists. This team should engage with focus groups, administrators, staff, and others who should have input and insight. A spirit of cooperation becomes evident early on in projects that embrace a heightened level of communication, taking diverse ideas and melding them into a successful building project.

Strategic decisions that will have an impact for the life of the building start instantly. For example, properly siting the building on the land is vital to the project and can reduce impact to the site and costs later on. By the same token, placement of the building will impact many future decisions such as access, lighting and landscaping. These are all critical decisions that influence important issues such as comfort, resident safety and energy usage.

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