September, 2021 - Sachse Construction

New Research Shows Design-Build Growth Continues Despite Market Challenges

When researchers at FMI Corporation first looked at design-build utilization in 2018, the news confirmed what many in the industry knew first-hand, design-build wasn’t an “alternative delivery process” anymore. New market analysis forecasting the next five years, 2021-2025, shows that is especially true today as impressive design-build growth will continue, despite unprecedented COVID-19 challenges.

The data on the design-build industry’s growth is impressive. Design-build has seen increased usage in all sectors and regions of the United States, and the industry has also witnessed extraordinary project outcomes and innovation across all sectors. The FMI Design-Build Market research provides detailed geographic and sector data, including market analysis and projections. The full report is available online here, and highlights are below.

Market Growth – Now and Into the Future   

  • Overall, design-build is anticipated to account for as much as 47% of construction spending in the assessed segments (nonresidential, highway/street, transportation and water/wastewater) by 2025.
  • While national construction put in place spending for 2020 and 2021 saw a decline, design-build construction spending for these COVID years saw slight upticks of 1.3% in 2020 and an estimated .5% increase in 2021. It’s projected that design-build will also outperform national growth rates by 1.6% over the 2021-2025 window delivering $1.7 trillion in construction in the assessed segments during the same time frame.
  • Design-build spending in Highway/Street, Education and Manufacturing represents the greatest percentage of design-build construction spending by segment over the 2021-2025 period.
  • The West South Central (8.8%), South Atlantic (8.6%) and Middle Atlantic (8.2%) census divisions are anticipated to yield the highest annual growth rates.
  • Design-build spending is anticipated to grow 34% overall, with the water/wastewater sector showing the highest annual growth (11.1%).

Design-build Earns Highest Satisfaction Rankings

  • Experience with design-build was rated highest across all project delivery methods, with 77% reporting very good and excellent experiences.
  • The ability to fast track, innovate and increase project collaboration/communication were identified as top benefits of design-build.

Additional Insights: Owner Advisors, MWDBE and Progressive Design-Build

  • More than 60% of Owners employ an Owner Advisor across each project phase.
  • Respondents say design-build encourages greater Minority/Women/Disadvantaged Business Enterprise(MWDBE) participation.
  • Interest in Progressive Design-Build (PDB) is growing, with the Pacific region (40%) showing the highest percentage of PDB procurements.

Downtown Detroit Synagogue to get $4.5 Million Renovation

The synagogue with colorful windows in Detroit’s Capitol Park neighborhood is expected to get a big renovation.

The Isaac Agree Downtown Synagogue at 1445-1457 Griswold St. is targeted for an overhaul to every floor, including opening up the first-floor facade, a new elevator, rooftop deck, stair extensions to the roof and other improvements, according to documents submitted to the Historic District Commission, which has to sign off on the changes because the building is in the Capitol Park historic district.

Commission documents say the 1930 building received its “exuberant rainbow of colored acrylic windows” in the mid-1960s after the synagogue purchased it but before its designation as part of the district in 2012.

“This expression, as much as the pre-war historic building itself, has become a local landmark,” the document says.

Vadim Avshalumov, president of the synagogue’s board, said the windows will remain

“It’s a comprehensive renovation with improvements from the basement to the rooftop,” Avshalumov said. “We are going from this fortress-like brick on the ground floor that in many ways is uninviting, to glass.”

The building is about 10,500 square feet, according to CoStar Group Inc., a Washington, D.C.-based real estate information service. It was originally occupied in 1930 by William Apel & Son Coal Inc., the company run by the son-in-law of its developer, Joseph Lucking. Among its other tenants over the years were a women’s clothing store, beauty salon, a medical office and a finishing school before the Isaac Agree Downtown Synagogue bought it.

The synagogue’s website says it has nearly met a $4.5 million fundraising goal for the project.

According to Avshalumov, lead funders were the William Davidson Foundation; the Jewish Fund; the D. Dan and Betty Kahn Foundation; the Gilbert Family Foundation; and the Max M. & Marjorie S. Fisher Foundation.

Construction is expected to begin in December and take a year to complete, Avshalumov said.

“We are the last free-standing synagogue in the city of Detroit,” Rabbi Ariana Silverman said in a video posted to the synagogue’s website. “It’s a building that needs a lot of work. Judaism has been evolving for thousands of years and we are at a point in Jewish history in which we recognize that people want to connect of Judaism in a myriad of ways, including the tremendous Jewish organizations that are doing important work in our community and are going to have a presence in our building.”

The third and fourth floors would also serve as space for various Jewish organizations. Those floors are currently unused, Avshalumov said.

Detroit-based Neumann/Smith Architecture and Detroit-based Sachse Construction are working on the project, as are Laavu and Proxy, both based in Detroit.

Automotive ‘Country Club’ in the Works for Howell Site

A racecar-loving father-and-son business duo are moving forward with an ambitious plan to bring a multimillion-dollar automotive country club and garage development to a 270-acre site owned by the city of Howell.

The project, Motorsports Gateway, calls for 67 private garage suite units along a 2.2-mile, European-inspired road course geared toward local car enthusiasts, said Jordan Dick, who is leading the development effort with his father, Mark.

The pair opened JD Racing Indoor Karting in Novi in 2012 and sold the go-kart business in January for an unspecified seven-figure sum, Dick said. An avid racer who competed in the Trans Am Series TA2 at the Detroit Grand Prix this past summer, Dick said he was ready to level up his business pursuits.

“That was kind of a stepping stone to the master plan of having a larger automotive/motorsports development,” Dick said of JD Racing, now operating under new ownership as Full Throttle Adrenaline Park.

Phase one of the Motorsports Gateway, including the track, garage suites, a pit lane clubhouse and amenities, is budgeted at $65 million with a groundbreaking expected by next summer and completion pegged for the end of 2025, though the circuit could be drivable by 2023. If that goes smoothly, phase two calls for an auto innovation park and mixed-use construction to the tune of another $35 million.

The project is still a ways from the finish line, but it has the support of the city and several investors. Dick said around 20 percent of the units have been sold to “founding owners,” who pay $390,000 per 1,200-square-foot unit. He declined to name those buying in early as they “prefer discretion.”

In addition, Dick said he and his father are putting in more than $1 million into the project, using proceeds from their sale of JD Racing. They need at least $6 million to get the project off the ground. Dick said he is confident that will happen.

The concept of the automotive country club — a play place for the well-to-do who are more amused by driving cars than golf balls — has been around for years but seems to be growing in popularity. Monticello Motor Club, which opened in New York in 2008, is the model for many that have come after it. The Thermal Club opened in California in 2017 with recently announced plans to expand. The Concours Club opened in Miami in 2019.

Michigan has the M1 Concourse in Pontiac, which opened in 2015 and has a “private garage community” with flexible storage and entertainment space. But Dick thinks there’s plenty more market share to be had, especially with his hopeful twist on the concept: residential condos. His plan is to make the garages livable spaces for owners who would rather not leave at night. Most auto clubs do not offer the option of residences.

“It seems that there’s a pretty big demand nationally,” Dick said. “You have quite a bit of these automotive country clubs coming online. There’s been a pretty heavy push for the real estate to be habitable, or residential. Our intentions are to explore the opportunity.”

Making the units livable residences would require additional approvals from the city, which already is shaping up to be a tricky process. The city recently gave the Motorsports Gateway project a preliminary go-ahead over other proposals because of its unique plan for the empty site near I-96 about one mile away from downtown Howell, said Erv Suida, public service director for the city.

“We have been working with JD Racing during the inspection period to overcome various roadblocks as this property is unique with its location, wetlands and natural gas wells,” Suida said in an email. “If all stays on track we should be moving onto the approval portion late fall or early winter.”

The city approved a lease-to-own agreement that would require the developers to invest $2.5 million into the property before giving them the option to acquire it for an additional $3 million.

Dick said he hired Detroit-based Sachse Construction as the general contractor for the project.

The garage units will include balconies and be set up as a “secure, gated community” for an “upscale motorsport experience,” according to a news release. Membership options for those who do not own a garage will also be available for a to-be-determined yearly fee.

“The circuit will follow the contours and elevation changes of the land as it carves through the surrounding woods of the property,” the release added. “A state-of-the-art automated digital marshaling system including electronic flag displays, CCTV, and numerous timing sectors will increase safety and timing data analysis capabilities.”

The developers are planning an advance registration event early next month with details forthcoming.

“As a born and raised Detroiter, I am absolutely thrilled to be taking on this assignment and we can’t wait to work with buyers to help them fulfil their dream of owning a piece of real estate at a track that they can count on utilizing for generations to come,” Jeff Glover, owner of Jeff Glover & Associates and listing agent for the garage units, said in a news release.

How Fashion Brand Faherty Tapped Into Resort Towns for its Retail Expansion

Fashion brand Faherty is taking its physical retail business on vacation.

Prior to 2020 the company, which was founded back in 2012, had 14 stores concentrated in major cities such as Boston, San Francisco, Chicago, along with multiple New York City locations. However, the brand — whose merchandise features outdoor and beach-friendly styles — is now prioritizing locations that aren’t traditionally targeted by retailers. It follows a playbook of other brands increasingly trying out new store strategies to acquire customers, whether it be via popups or traveling showrooms.

For the past year, Faherty’s strategy has been to open storefronts in vacation destinations across the U.S., such as Rosemary Beach, Fla., Big Sky, Mont., Nantucket island and Sag Harbor, Long Island. The company expects to open 13 new stores in 2021, bringing its total store count to roughly 36 by year’s end. There are five more openings being planned for 2022.

“With so many people relocating and continuing to work remotely, we’re seeing major growth from these markets,” said founder and CEO Alex Faherty. He went on to say that with many young urban consumers moving to cities like Austin, Nashville and Seattle, there is a ripe opportunity to cater to them.

This is an excerpt from Modern Retail, authored by Gabriela Barkho.

Read the full article here.

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