In the previous post we talked about the upfront costs of due diligence and property ownership. Now that we owned a building, the next step was to have drawings made to illustrate our plans for the space. What will our dream look like? How will we build it? Will the city allow it?
Procuring architectural & MEP (mechanical, electrical, plumbing) plans was another hefty upfront cost we had to be willing to spend on. This is also a soft cost–if you later go on to secure bank financing, the bank just wants you to have drawings completed. They don’t factor how much it cost you and won’t leverage it towards the loan. We got 4 quotes for architectural drawings ranging from $7,500 to $26,000. On top of this, some firms included a cost for an MEP plan set, to be completed by a sub-contracted engineer, which was fairly consistent around $7,500. Each firm also offered varying levels of service which made it somewhat difficult to truly compare. Do we just need the bare minimum to satisfy the city’s permit requirements and get accurate construction quotes? Or do we need someone to decide on the exact type and color of each item in the taproom? We have experience in design and we want to make the small detail choices, so we chose a firm we felt shared out overall vision and was willing to deliver the minimum required for permitting and thus remain affordable.
Our timing coincided with the City of Detroit announcing Motor City Match, a grant program. One of the program grants is for professional design services. We won that grant and were able to engage the architect we had chosen using those funds. Working through the grant program did prolong our process, however, it saved us from having to spend thousands out of pocket. We are so grateful that this was available to us and that the timing was perfect.
A year later we had a complete set of stamped drawings. This might be a good time to talk about that old adage: Good, fast, cheap… pick two. The idea being that by picking two, you ultimately sacrifice the third. We saved a lot of money here but it took a long time. We needed the drawings to engage contractors and also to begin the process with the City of Detroit for permitting.
Construction budget estimates:
We learned by talking to banks that we needed to work with a general contractor who could manage the project and ensure it gets built on time and at cost. When we starting planning, we honestly thought we could manage the project ourselves and bring in contractors for the big stuff. When we realized this wasn’t an option, we had to get comfortable with the idea of adding in contractor fees and salaries into our budget. The fee is usually about 10% of your construction costs (plus construction management staffing). With that dreadful news in mind, we solicited 10 contractors and got budget estimates from 5 of them. Interestingly, most contractor’s total budget estimates were very close and differentiated only on the details. One would estimate plumbing really high and electrical low. The next would show the opposite numbers. Likely, this is just the result of them estimating the total based on square footage and then filling in the smaller buckets with numbers to get there.
Choosing a contractor was something we had prepared to freak out about because in our minds it’s the biggest unknown and dictates the project’s success or failure. We chose to work with Honor Construction because they were the most impressive and honestly, they were the only ones who spoke our language. They’ve done breweries and they understand where we’re going and how to get there. We engaged them in a pre-construction contract designed to utilize our plans to get us as organized as possible prior to construction so that any unknowns could be eliminated early and our budget would be much more accurate. It is such a relief to have them on our team and we’re sleeping so much better at night.