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Chapter twenty six: Facility Development Planning

Owning your own space can provide stability by helping you to avoid getting priced out of a desirable area. But it can also completely bankrupt you or your organization.

Extensive facility development planning is essential for a successful project. Many people get carried away when they see an empty building that seems "just right"; they forget that the building will take years to renovate, or that they are ill-equipped to deal with all of the headaches involved with construction.

This chapter discusses important issues to consider when planning your facility project, such as:

  • Organizational readiness;
  • Assessing your organization;
  • Stumbling blocks to avoid;
  • Aspects of successful facilities;
  • Feasibility studies;
  • Funding your project; and
  • Tips for a smoother development project

This chapter is not a comprehensive guide to developing a facility, but is meant to provide insight into how complicated a facility project can be. By facility, we refer to a building for more than one artist, group of artists or cultural organization, not a studio or home for one artist or family.

If used properly, this chapter should raise more questions than provide answers.


Aspects of Successful Facilities

We asked a few well-known Seattlites who are involved in the arts to tell us what they think are essential factors in maintaining quality and sustainability for arts facilities. Their answers focused on four key points:

  • Good Design
  • Location
  • Closely relating programming to finances
  • Community relations

Good Design

Some popular cultural facilities are shoehorned into buildings that barely work for them. Bad design can adversely affect your audiences, image, and way of doing business - in short, your success. Good design -- particularly in new buildings or renovations -- can help your organization grow and operate more smoothly. Design issues to consider:

  • Where are the windows? Are there any on the street?
  • Is the entry visible?
  • Is the space interesting and inviting?
  • Does the space offer informal gathering spaces?
  • Are their specialty spaces?
  • Are there multi-purpose spaces?
  • What are the building's important amenities?
  • Can you easily phase in new construction and renovations into the space?

Location

Location issues to consider when considering a facility:

  • Cost
  • Foot traffic
  • Public transportation
  • Restaurants
  • Other cultural institutions nearby
  • Audience proximity
  • Visibility
  • Perception of safety
  • Image of area
  • Parking
  • Neighborhood attitude toward arts activities

Some organizations have flourished without having the above work to their advantage.

Programs and Finances

Programming success is dependent on many factors, including the organization's overall financial stability and success. Consider:

  • The need to produce programming that turns a profit through sales
  • Careful budgeting and good financial management
  • Your audience. What do they want, and can you deliver these services in a financially sound manner?
  • Facility. Can it be used for multiple uses? What other ways can it generate funding?

Community Relations

Cultural facilities are important institutional assets to their communities. The best cultural facilities understand what it takes to play this role successfully, and do it on a continuous basis. Consider:

  • Partnerships
  • Meeting community needs
  • Outreach
  • Membership in community groups

Assessing Your Organization

To better assess your organization's readiness to take on a development project, one of your first undertakings should be to clearly define your purpose. Being able to clearly describe your mission, identity, goals and needs will help you to define your projects, create a prospectus (a fundraising tool), and to possibly obtain funding.

Forcing yourself to document reasons for undertaking a development project might lead to important realizations about your work. At any rate, you will be ready to answer potential funders' toughest questions.

If multiple people, organizations and businesses are participating in the project, have all parties answer the same questions in order to synthesize and unify everyone's motivations, visions and goals.

Assessment Questions

Consider the following when assessing your organization:

  1. What is your organization's philosophy regarding:
    • Arts programming?
    • Artistic direction?
  2. Describe your organization's:
    • Audience composition and attendance
    • Community image and support
    • Strength of management/governing structure
    • Current activities
  3. Describe your organization's economic assets and liabilities, currently and for the past three years.
    • Expenses
      • Personnel
      • Administrative (other)
      • Facility rental/utilities
      • Debt service/taxes
    • Revenues (include sources)
      • Earned (ticket sales, membership, etc.)
      • Grants from public sources
      • Private grants
      • Other
      • Possible futures sources of income
  4. Describe other arts facilities in the community, and their locations. Why are these facilities not acceptable for your use?
  5. What other building fund drives are currently under way?
  6. Describe the current facility your organization is using in terms of:
    • Overall condition
    • Level of technical equipment for your needs
    • Physical location
    • Community image
    • Biggest asset
    • Budget deficits
    • Suitability for your needs

Now clarify the kinds of changes you have in mind, and the assistance you can draw upon in making these changes.

  1. Do you want to change your organization's:
    • Programming (level or kind of change)?
    • Management?
    • Community image/support?
    • Funding base?
  2. What facility changes do you want and/or need to make?
    • New facility?
    • Major renovation (be specific)?
    • Minor addition(s) or interior alterations?
    • Technical improvements?
    • Correction of a previous "improvement"?
  3. What are the space needs of your organization, and any other organizations involved?
  4. Do any local arts or community organizations in need of space seem like potential users/renters? What are their needs and use requirements?
  5. Will the facility changes require alterations in your:
    • Programming?
    • Management structure?
    • Community support?
    • Financing?
    • Operating costs?
  6. Who will benefit from the new facility, and how?
    • Art lovers (the already-committed)?
    • The local community in general?
    • People located in a 100-mile radius?
    • Business - retail, hotels, restaurants?
    • Industry (by attracting new employees)?
  7. What kind and degree of support (broken down into capital construction funds, operating funds and political assistance) can you expect from:
    • City/county departments (building/school/planning) and local officials?
    • Community organizations/neighborhood groups?
    • Other arts groups?
    • Corporate and financial leaders in the community, including local merchants?
  8. Why do you believe this support is forthcoming?

Evaluating Your Answers

Now that you've pulled together your answers, evaluate what they mean ... and ask yourself some additional questions!

  • Will your organization (board, staff and project-planning committee) be able to handle the task ahead?
  • Who are your supporters? Include background information on board and planning committee members, as well as key community people who are enthusiastic about your project -- and who can offer concrete assistance.
  • Does your committee have sufficient resources -- the professional background, community connections, etc. -- to deal with the arts facility issue?
  • Do the audiences, artistic resources and community needs justify the changes you are advocating? What evidence substantiates this?
  • Do you need to commission a feasibility study to better answer these questions? (Feasibilities studies examine a specific and/or major issue associated with a development project, and are discussed in greater detail later in this chapter.)
  • Do you feel ready to establish yourselves as a public group, publicize your plan in a formal way, and incorporate yourselves into an ongoing committee? In order to do this, you must know exactly what you are advocating. For example, don't just say that you want to build a museum -- be prepared to discuss exactly what kind of museum it will be.

You must be able to articulate what you want, and justify it to consultants, potential funders, people in control of local politics and community leaders.

Feasibility Studies

Refining and realizing your facility concept might require one or more feasibility studies. The remainder of this section highlights different types of feasibility studies and their components.


Arts Program Feasibility Study

Also known as a Market Demand Study, an Arts Program Feasibility Study is a market survey that takes into account:

  • Intended programming
  • Needs of organization in community
  • Use of existing facilities
  • Community audience survey
  • Audience attendance patterns
  • Audience spending

Building Feasibility Study

A Building Feasibility Study helps organizations to determine the type of space ideal for their needs. This type of study can:

  • Help you assess the feasibility of relocating to a new space or renovating existing space.
  • Determine if your current space maximizes your operational and artistic effectiveness, and help you to evaluate your options.
  • Help lay the groundwork for a capital campaign by pointing to specific space requirements, which you can use to help project your capital and operational funding goals.
  • Help you to organize your search for space by highlighting absolutely necessary features (i.e. loading docks, elevators, etc.).
  • Determine which space elements are desirable but not "deal breakers

Financial Feasibility Study

This study includes an analysis of all facility operations costs, planning and construction:

  • The operating budget includes projections for:
    • Earned income (admissions, sales, rentals, memberships, etc.)
    • Contributed income (private and public)
    • Operating expenses (salaries, overhead, maintenance, etc.)
    • Special programming costs
  • Capital construction estimates for facility planning construction include:
    • Consultant fees
    • Site acquisition and development
    • Construction costs
    • Equipment and furnishings
    • Project financing
  • The Capital Financing Study includes
    • Capital dollars available for construction
    • Financing strategies
    • Cash flow projections
    • Economic impact of facility on the community.

To help you determine the financial feasibility of your project, we have included a series of financial feasibility worksheets for performing and visuals arts. These worksheets are meant to be guides, not blueprints. As you complete the worksheets, adjust them to fit your particular situation.

Fundraising Feasibility Study

Fundraising Feasibility Studies are common for large development projects, and are typically conducted by an independent consultant. The process entails meetings with key stakeholders and potential big donors to test ideas and determine the likely level of support for specific projects.

The independent and confidential nature of the conversation means that potential supporters can be more frank about their concerns regarding a project, without directly offending an organization and/or jeopardizing relationships with leadership or board members.

A fundraising feasibility study can help gauge if the timing is right for the project in terms of competing for the same donors, and will determine the likely range of total dollars the project can attract.

The project concept has to be fairly far along for this to be accurate because donors are reacting to the site, the size, and their judgment of the organization's capacity to carry out the project and run the new facility.

When complete, the study presents a realistic sense of what kind of facility is affordable. For example, if your plans are for a $20 million facility, and your study determines you can raise $5 million, go back to the drawing board!

Site Feasibility Study

This type of study involves determining whether potential sites and buildings can accommodate desired programming within the available budget. Alternative sites are analyzed in terms of:

  • Fulfilling artistic programming needs
  • Location
  • Support available from the surrounding area to meet needs of patrons, productions and touring companies
  • Accessibility
  • Image
  • Operations and management implications
  • Land costs, availability and financing
  • Project phasing and implementation

Funding Your Project

Developing a facility requires thinking about capital funding, described in this chapter. Depending on your project or development partners, you might qualify for funding from a many disparate sources. Explore all avenues.

Three types of funding are usually needed to finance the planning, design, construction/rehabilitation and maintenance of a facility:

  • Seed money
  • Capital support
  • Operational funding

Seed Money

This type of funding gets you through the planning and feasibility stages of your process -- and can be the most difficult to find. Seed money is dedicated to the development project, not the organization's regular operations. It is helpful to hire professionals to evaluate readiness, fund feasibility studies, support capital fundraising, manage a capital campaign, and prepare for the construction phase. These funds may also pay for design work on a fundraising prospectus.

During the seed money phase, your group is looking for relatively small sums of money, not the "big bucks" required for design and construction. Your success in attracting seed money, and your growing knowledge of other funding sources, will help you to decide whether or when to go ahead with the project, and how large of a project you can afford.

Sources for seed money include:

  • Government Agencies: City, state and federal agencies offer grants for different types of projects.
  • Private Sources: These include foundations, private community organizations such as the Rotary Club, and local corporations interested in your project and/or the arts. Check out the Foundation Partnership for Corporate Responsibility and Social Funds.com.
  • Redevelopment Agencies: These organizations provide assistance during the development stage of a construction project.
  • In-Kind Services: These include donation of pro bono professional services, volunteer and staff time, office space, equipment and supplies, and business services. These are reduced-rate and free services (accountant, attorney, receptionist, etc.) and supplies that you need to run your organization.

Capital Support

This funding is used for design, land acquisition, "bricks and mortar" construction, permanent equipment, and furnishing. Sources for capital funding for construction include:

  • Government Agencies: City, state and federal agencies offer grants for different types of projects.
  • Tax Increment Financing (TIF): This funding tool promotes investment and redevelopment in blighted areas. City funds are used to build and repair roads and infrastructure, clean polluted land, and rejuvenate vacant properties, usually in conjunction with private development projects.
  • Categorical Grants: These make public monies available for specific purposes, such as affordable housing. You might be able to access funding or receive certain tax breaks if you locate your project in a certain communities
  • Individuals: Research individuals who donate funds to specific causes. Many capital campaigns begin with a large lead gift from an individual. This phase is referred to as the "silent phase" after a major donor is identified and funding level as been determined oftentimes "naming" gift is used to leverage additional major gifts before the capital campaign goes public. If a large portion of the dollars are already accounted for it is easier to leverage government, grant, and smaller individual donors.
  • Corporations and Foundations: research grants and other types of funding for nonprofits, housing and small businesses from corporations and foundations. Also check out the Foundation Partnership for Corporate Responsibility and Social Funds.com.

Operational Funding

No form of support is easy to come by, but funds to keep a facility running after it is built are unquestionably the most difficult to raise. For that reason, during a capital campaign you must devote some of your energies to securing the money that will permit the new building to keep its doors open. The momentum generated by the capital drive provides a needed boost for the operating fund campaign.

Sources for operation support to run the facility may include:

  • Earned Income: This is money raised by the facility/organization through \activities such as facility rental, ticket sales (performances, lectures, concerts, etc.), sale of artwork and souvenirs, festival profits, etc.
  • Contributed Income: Funding in this category includes money made from annual giving campaigns, membership drives, the endowment fund, etc.
  • Public Support: This type of support might come from various city departments (including City Arts grants) reserved for general operating expenses.
  • In-kind Donations: This type of support may come from a variety of individuals, organizations and businesses and may include professional services such as legal counseling or accounting.

Organizational Readiness

Assessing the organization's readiness to undertake a facility project is a crucial first step in the planning process. Any weaknesses, minor or major, can become huge stumbling blocks in achieving long-term success, carrying out the project, or simply operating the completed facility. The process of evaluating your organization to assess strengths and weaknesses can be a valuable tool for growth. Professionals and arts organizations can assist you with this effort.

All facility projects involve risks. The key is to identify and weigh those risks, overcome or circumvent them, or agree that they are worth taking. Before committing to a development project, your organization must be honest about its abilities and be prepared to make hard decisions.

Don't expect every area of your organization to be in perfect order. Some areas will be in good shape. Others will need work, or not even be on your radar screen yet. Your ability to capitalize on your strengths while improving on your weaknesses will help you to develop the tools and infrastructure you need to be able to deal with the risks of the project.

This section focuses on four key aspects of an organization that should be evaluated before tackling any type of a facility project:

  • Purpose, Mission, Leadership and Management
  • Financial Systems and Readiness
  • Market Demand
  • Fundraising and Community Support

Financial

To become financially strong, organizations should have good budgeting and reporting systems in place. Both the board and staff should understand what drives the organization's finances (i.e. ,how does the organization make money?).

Key things to consider when assessing your organization's financial readiness:

  • Do you have solid budgeting practices? Do you consistently end the year close to your projections?
  • How is your financial structure set up (i.e. paying bills, receiving funds, etc.)? Is it effective, does it work, or are there problems?
  • Forecast what your budget needs will be for the first 2-3 years in the new building.
  • Increased general operating and capital funds are needed once the new facility opens. Can you handle it?
  • What trends can you identify in your finances? Have you consistently seen an increase in your income sources? Do your finances dip and spike, or have they remained static? Do you know the reasons for these trends?
  • Have you ended every year in the black? What has caused deficits? Do you have any control over these?
  • Who understands your budget, balance sheets, audits, and financial structure? Is it more than one person?

A financially strong organization should have:

  1. Organizational debt that is no more than 20%-25% of its assets;
  2. An unrestricted fund balance that is more than zero and that has kept pace with operating expenses (the percentage of unrestricted fund balance to operating expenses has remained the same, or increased);
  3. There is enough reserve for cash flow needs in addition to the "safety net" reserve to cover 1-2 months of operations;
  4. Current assets divided by current liabilities are more than 1:1; i.e., you don't owe more than you have;
  5. You have three or more primary sources of revenue;
  6. At least 35% of your income is earned; and
  7. You have not had a consistent history of cash flow problems or deficits.

If your organization does not meet these standards in two or more areas, it is unlikely you will be able to carry out a successful facility project until these issues are adequately addressed. Working with your board or other professionals who can objectively evaluate your finances and put into place effective fiscal systems might be an essential planning step to take.

Other issues to consider when examining your financial readiness:

  • Forecast what your budget needs will be for the first 2-3 years in the new building.
  • Since increased general operating and reserve funds are needed once the new facility is opened, be sure that your earned income stream can be built up enough to handle it.

Fundraising and Community Support

Facility projects provide opportunities to undergo capital campaigns, which can help you to build ongoing support and strengthen your organization. The keys to a successful capital campaign are:

  • A diverse donor base;
  • A broad base of volunteers; and
  • A compelling case for support. The key word is "compelling": There must be a real need -- a reason and a purpose.

Market

Arts organizations' facility projects are most successful when undertaken in response to a growing demand for programming or in some cases a need for a multi-purpose facility that can host a variety of arts related activities. Organizations in touch with their audiences/clients and trends are better prepared to quantify potential demand, allowing them to set realistic benchmarks in support of a facility project. It is also important for the organization to understand their competition and the economic climate within which they work. Key things to consider:

  • Program Demand: Can growth be documented? Does it merit a new facility?
  • Audience/Client Demographics: Who is your audience? Are you looking to bring new membership to your facility? How will you expand your audience/client base to attract more people?
  • Competition and Economic Climate, Public Relations, Brand, Messages: Are there other organizations providing services/programming similar to your own? If so, would both organizations be competing for the same resources and/or audience? Is your organization recognized in the community?
  • Need for Available Space: If you are willing to share ownership or rent portions or all of your facility access if the type of space you are considering creating is in demand in the Seattle arts market.

Purpose, Mission, Leadership and Management

The organization's purpose and mission should be clear and understood by the staff, board, audience/clients and stakeholders. The leadership and management must be strong and effective. Both the board and staff should be fully committed to the vision of the organization's future, and the role a new facility plays in that vision.

Facility projects are time-consuming, and force organizations to undertake certain efforts necessary for the project's success. Board development is one such component crucial for an organization that is preparing for a capital campaign or space development project.

A facility project will take up at least 50% of the director's time for several years. In the meantime, staff is pressured to perform at higher levels as programs, fundraising and administration prepare for the move and the "new" organization. It is not uncommon to see heavy staff turnover during or immediately after a facility project. Lack of preparedness for the demands of capital campaign is an issue as well. Staff burn-out from a project's demands is common. Wise organizations often cut back on programs during development project in order to reduce the strain on staff.

If sole use of a facility is not feasible, consider developing partnerships with compatible arts organization to develop a multi-faceted space. While facility development is difficult a multi-use, multi - owner space is considerable more complex, however there are several successful examples in the Seattle area such as DNDA's Youngstown Cultural Center, and the potential Central District Forum partnership with Historic Seattle to develop Washington Hall.

Stumbling Blocks to Avoid

Learning from others' mistakes is one of most important parts of planning your facility. This section highlights lessons learned from facility projects recently developed by Chicago arts organizations.

Building Design

Examples of stumbling blocks:

  • The building design made sense to the architect, board and executive director, but no one had asked the organization's audience or the surrounding community for input. In one case, this led to the lack of a women's room on a convenient floor. In another, only the administrative offices faced the street; in the evenings, when 500 children practiced singing in the back of the building, the place looked deserted.
  • The design says something unintentional about the organization. In one case, the door wasn't visible. Although this design was originally chosen because the facility was in an unsafe neighborhood, it later became a liability.

Community

  • There is a general, rather than specific, understanding of the program demand, and the project ends up being too big, or too small.
  • Some fundamental aspect of the audience's behavior is overlooked. For example: An organization's prospective audience members drive to the performance, and because the site was chosen based on its proximity to public transportation, there are no parking lots nearby. The audience and neighbors begin a long and painful series of complaints about the increased need for street parking.
  • Competition is too great, the economic climate is too difficult, and/or the organization's public image is not high enough. In this situation, the project never gets off the ground, or just sputters along.
  • The facility gives the wrong image of the organization. Many problems ensue from this, often requiring expensive retrofitting or larger, more complicated marketing plans.

Construction Period

Myriad problems can ensue during the construction period, most of which -- such as the weather, or late delivery of materials -- are difficult to control. Develop contingency plans, patience and flexibility.

Most construction period nightmares postpone completion, increasing costs. Common stumbling blocks:

  • To save money, organizations choose not to hire a construction manager, eventually costing themselves both time and money.
  • Decisions on design elements are made too late, and accommodating them requires redoing or adding to the construction plans. This happens when:
    • Ideas about the design change,
    • The project has been rushed through,
    • Too many people are making decisions, and are taking too long to reach a consensus, or
    • The decision-maker is overextended.
  • The organization or contractor has cash flow problems during the construction. For some time, more money flows out than comes in. Contractors must to wait to be paid, which can cause problems.
  • An organization wrongly relies upon its architects to know and understand all city, state and federal regulations, which cost time and money.

Financial

  • The organization was not financially ready to undertake a facility project. In many cases, this was because the organization's finances were limited. They had skated by prior to the facility project, and upkeep of the new facility intensified their weaknesses despite increases in audience/clients and fundraising. Or, staff and the board organized financial reporting studies around foundations and grant applications without also using them as a cost-benefit or other analysis tool. Sometimes, programs assumed to be cash cows are not carefully or fully tracked. They turn out to be far more expensive than thought, with lower profit margins than expected. Sometimes, normal fluctuations are misconstrued as signs of growth.
  • The organization is not financially strong enough to operate the new facility. Organizations that were financially healthy otherwise conducted no thorough forecast, based on real numbers, of the first 2-3 years in the new building. As such, the organizations assumed they could reach their new budget goals without preparing for start-up losses. Some organizations believed they'd be able to cover the costs of a new building because funders said they'd fund some part of the program. But owning a building usually requires increased general operating -- not programming -- funds, and those proved hard to obtain.
  • Cash flow needs weren't worked out as part of the financial package. Even if the funding goals were met, the cash didn't come in time to pay the bills. In a few cases, the organization never fully recovered from this challenge and became chronically cash-starved, even if successful in all other ways. These circumstances threatened their very existence.
  • The true project costs were not fully understood. Usually, the full cost must include:
    • Hard costs (bricks and mortar)
    • Soft costs (fees, licenses, feasibility studies, mitigation work)
    • Administrative ramp-up costs (investment in new staff, and what they must operate)
    • Income loss costs (regular income loss due to the project)
    • Program ramp-up costs
    • Facility "tweaking" costs
    • Debt service
    • Cash flow needs
  • Many groups thought only in terms of the hard costs. Also, people often rely on the architect's cost estimates and are surprised when all contracting bids come in substantially higher, as they usually do.
  • It was assumed that property taxes would be waived starting in the first year. It usually takes 5-7 years to get a property tax exemption. Until the exemption is given, the organization is responsible for paying the taxes, which may be quite hefty. See Chapter 15: Property Taxes for more information.
  • There is no Plan B. Lacking a back-up plan can be devastating.

Fundraising

  • The capital campaign doesn't reach its goal. Perhaps the goal was too ambitious, the lead gift wasn't set high enough, or the true project cost wasn't worked out at the beginning. For whatever reason, the goal is not reached, and there is no Plan B. Usually, the organization is forced to take out a loan and try to continue the campaign after the facility is built to pay off the mortgage. This is rarely successful.
  • The capital campaign goal was too low. Perhaps the campaign goal was set too early before the scope and cost of the project were fully understood, or the project changed in some expensive way. In these circumstances, the campaign goal is never reached, and the organization has to cut costs in the building design, programming or administration -- either during construction or after the opening. Each cut produces consequences that might prove costly.
  • The organization didn't have the resources for a successful capital campaign. In these cases, their only alternative was to take out a loan -- which they couldn't afford -- to fill the gap between what they were able to raise, and what they needed.
  • The full financial package needed for the project was only partially worked out. Knowing the true cost of the project is only the first step. Groups must analyze the source and uses of funds, their timing, and their cost. This might involve a combination of a capital campaign, a construction loan, and a line of credit. The loans assist with cash flow needs, as the capital campaign money flows in over two or three years.

Organizational

  • Lack of consensus regarding the need for the project. The executive director began the search for a new facility, only to find that the board was unwilling to undertake the work needed, believed that the organization wouldn't be successful in a capital campaign, or didn't see the need.
  • The desire for a facility was not tied to a strategic need. The idea for a new facility was based more on what the staff and/or board wanted than on what the organization needed. A strategic plan linking the organization's future to the need didn't exist. For one organization, this meant that decisions about the kind of facility were always up in the air. For another, program expansion was haphazard and created to fit the facility space rather than the audience's needs and wants.

    In yet another, it meant that the type of programming done in the past was merely expanded; no market research took place, and opportunities were lost. Ultimately, the organization had to retrofit the brand-new facility to meet the needs of the organization after it reconceived its programming, driving up costs beyond what was originally planned for in the capital campaign.
  • New board members brought a new sense of ownership, vision and expectation. To meet the capital campaign needs, a fund-raising board was created. More people laid claim to "ownership" of the organization, due to their financial contributions to the building. This became hard for original staffers who had shaped the organization's vision.
  • Staff burned out. Lack of time to manage the organization and direct the facility project led to exhaustion. Also, as changes required by the facility became more fully understood, the staff showed dissatisfaction with the new direction (another example of a lack of consensus).

    A new facility is rarely the answer to all of an organization's problems, as it usually produces a whole new set of pressures and difficulties -- including the need to become more "institutional." This might be an issue for some staff members. It is not uncommon to find a nearly complete turn-over of staff pre- and post-project.
  • The organization was understaffed before the building project, and/or remained understaffed after it. A facility project can take 50% or more of the executive director's time, and nearly that much of many other staff members. It is difficult to run your typical programming schedule and activities under these conditions. To solve this, some organizations cut back on programming, while others struggled through. Some organizations let administrative positions necessary to operating and/or planning for the new facility remain unfilled, making it more difficult to address program expansions and weakening the organization's infrastructure.
  • Current staff's skills did not adequately meet the needs of the organization in the new facility. This was particularly true in three areas: development, marketing, and financial. The new skills needed to manage a building were neither appreciated nor understood.

Project Planning

  • The equivalent of a business plan wasn't prepared. At minimum, the plan should:
    • Define how the organization will absorb the impact of the facility,
    • Identify expected expense changes (increased staff, administrative costs, facility maintenance costs, fundraising costs),
    • Establish new revenue goals, and how they will be met, and
    • Determine cash flow needs.
  • The immediate and long-term building needs were not thoroughly planned for. This involves either changes or additions to the building design, from simple changes to additional signage to complex modifications to the room configuration.
  • The size of building needed was a moving target. No thorough thinking-through of the amount of square feet needed for each function area too place, so the total square footage needed was never fully understood.
  • Building rehab needs weren't thoroughly explored, and costly surprises ensued: environmental studies, mitigation studies, parts replacements, etc.
  • Not enough decisions were made prior to construction. Decisions were still being made requiring change orders to the construction, which cost time and money.
  • No one understood what was required to manage the building. The scrambling that went on when the building opened and staff wasn't prepared didn't leave a good image in the eyes of customers, staff or board members. This continued as building management needs fell through the cracks

Tips for a More Painless Development Project

Seven ways to make your building development or rehab project run more smoothly:

  • Get organized. Space development is a complex process that usually takes several years. Your files, financial information, resources, etc. must be in order for you to effectively manage this process.
  • Get your alderman's support : This will help you to better navigate the process of gaining permits, zoning changes, planning approval, etc.
  • Check your zoning status: You don't want to commit to a building and start the planning process, only to learn that you can't use the space for your intended purposes.
  • Get your finances in order: Understanding how your finances work will better prepare you for a development project. Work with an accountant from the beginning, and conduct a financial feasibility study.
  • Get your board in order: As we previously discussed, having a board of directors with depth and a range of skills can help the project succeed. Well-connected and knowledgeable board members can bring new resources and support to the project, and help you to avoid costly mistakes.
  • Get your staff behind the project: All parties involved with the project must understand and support the goals. A disinterested or unsupportive staff can derail the project.
  • Be patient. A development project is a major undertaking.


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