Q: What changed between the original construction estimate and the current estimate?
A: There is a bit of a chicken-and-egg issue when trying to get accurate construction estimates. A General Contractor can’t provide final pricing without Construction Documents from the architects and engineers. Yet once Construction Documents are complete, it can be expensive to make significant changes to the design, layout and scope of the project. Thus, the typical process iterates by providing more-and-more detailed designs/engineering, resulting in more-and-more detailed cost estimates from the General Contractor.
In our discussions with our original architecture/engineering teams and general contractor, we were advised that$1M for General Contractor-related construction (“hard”) costs plus $500K for additional construction (“soft”) costs would be sufficient to convert 1990 S Broadway into a functional church with a sanctuary, classrooms, lobby, multi-purpose room, kitchenette, restrooms, and office space. It was this $1.5M estimate we presented to our church earlier this year as part of the HOME At Last initiative. And our church body responded in full, raising the entire $1.5M.
As we progressed into detailed designs, our estimates were driven up by three primary cost drivers:
1. The cost to meet city codes for mechanical (heating, cooling, plumbing, etc.) exceeded expectations, coming in at 42% ($423K) of the original hard construction budget of $1M.
2. Additionally, we learned we needed to replace more of the electrical guts of the building. By leaving the current service in place, we risk (a) not passing Denver inspection and (b) ultimately having to re-do the electrical room at a later date at a significant expense.
3. Meanwhile, from last year into this year, Denver’s commercial construction costs have risen significantly.
Q: How confident are we that the additional $650K needed is an accurate estimate?
A: Our General Contractor has provided us with a total project cost of $2.2M, which is $650K over what we have available today in either cash or future pledges. This number includes a 10% contingency and allows us to “grow into” our building by using some of the HOME fund to pay for the increased cost of building over the first few years. All of this has been modeled in both a 5-yr and 10-yr financial model, using what we believe are prudent, conservative inputs.
Q: How will FDC share progress toward the 650K goal?
A: Commitments need to be in by December 31. On January 8 we will announce the results. To the extent we raise the targeted $650K before the end of the year, we’ll let everyone know!
Q: If more than 650K is raised, what would be done with the additional funds?
A: There are still a number of items not included in the targeted $650K that, while not essential to occupying the building, would significantly add to its usefulness and help fulfill the overall vision, such as:
- Add cry room connected to sanctuary space.
- Finish out the “teen space” behind the sanctuary such that it could be used during Sunday morning (the wall does not currently go to the ceiling, which avoids increased HVAC costs).
- Fully fund the audio/visual build out for the sanctuary.
- Furnish office space for staff with combination of used cubicles and/or built out offices.
- Add counters and cabinetry in kid’s classrooms.
- Separate the nursery check-in area from the remainder of the kids check-in.
- Add entrance through the rear of the building.
- Something else we’re missing? Let us know at firstname.lastname@example.org.
Q: What options do we have to raise the additional $650K required?
1) Make either a first-time or additional cash or stock gift.
2) Make a first-time 3-yr pledge or add to an existing 3-yr pledge.
3) Lengthen your current 3-yr pledge to 4 or 5 years.
a. Example: If everyone extended their current pledges by 1 year, this would raise 350K – more than half of our goal!
4) Contact friends and family that may have a heart for FDC’s vision to reach Denver.
5) Reach out to us if you have additional ideas (email@example.com).
Q: Does it help to pay off my existing pledge more quickly?
A: Paying off your existing pledge does not lower the $650K goal we need to hit. We are working with a local bank that has offered us a line of credit against a percentage of our outstanding pledges. We expect the interest rate will be in the 4.5-5% range. Paying off an existing pledge more quickly would, though, save on that interest payment.
Q: Do we need the entire $650K in cash up front?
A: No. The additional $650K can come in the form of cash or 3-4 year pledges. A local bank has agreed to provide us a line of credit against a percentage of outstanding pledges. This means we can access the cash needed to complete construction if we have suitable pledges lined up.
Q: What is a realistic move-in date?
A: Assuming we raise sufficient funds by the end of the year, we’re targeting a construction start on or before March 1. This allows for some time to (1) finalize our line of credit against open pledges, (2) navigate any unexpected delays as we finalize our construction plans with City of Denver (which have already been submitted and are in various stages of review now), and (3) coordinate a construction start date with our General Contractor.
The construction timeline is then estimated at 16 weeks, which then takes us to the end of June.
Lastly, if we allow for a month following construction to get the building ready to occupy (as well as any unforeseen construction delays), we expect to be ready to go by Sun, July 30.
Q: Are there options that would cost less than the proposed $650K?
A: The elders have explored a number of alternate build-out options. Currently, no other options have surfaced that would fulfill the vision of the overall project. Also note that further exploring these would also require spending additional HOME funds (e.g., additional design and engineering fees) that then would not be available for construction. So we have decided not to spend funds this way at this time.
Q: What does our situation at 1770 Sherman St. look like between now and our move-in date?
A: We are in discussions with the landlord at 1770 Sherman Street. They have indicated that they will need to end our tenancy relationship as soon as possible because of issues related to insuring our use of the building. Attorneys representing the church’s interests have reviewed the lease and our current situation. We are not under an immediate threat of vacating the building, but the elder team and staff are exploring alternatives to 1770 Sherman Street that would: (a) address the time period between the end of our lease on May 31 and the anticipated conclusion of construction of July 30 and (b) if necessary, provide another place to gather on Sunday sooner than the end of our May 31 lease.
Additional questions or ideas?
Our staff and elders are collecting questions, feedback and ideas and will respond as quickly as possible. Send them to firstname.lastname@example.org.