A Midwestern state university budgeted about $12 million for a major addition to its library several years ago. At the time, there was not a tightly controlled project planning process at the institution and the library’s plaza—already a major central gathering space on campus—was not included in the project budget.
Officials thought they would raise $2.5 million in private donations for the plaza, says Phil Waite, associate professor of landscape architecture at Utah State University, who formerly worked at the university in question and has since written The Non-Architect’s Guide to Major Capital Projects (SCUP, 2005). When the donations didn’t materialize and unexpected infrastructure was required for the addition, the university had only $125,000 to spend on the plaza.
As a result, “the only part of the site development and landscaping master plan that was installed was a set of stairs and some planter walls, and all of the paving was done in asphalt,” says Waite, adding that he felt “it was hideously ugly and made the new addition to the library look unfinished and incomplete.”
Nearly a decade later, the plaza was finally finished correctly—in several stages—but “not before everyone from the financial VP all the way down the chain to the physical plant director and the campus landscape architect took tremendous heat from dissatisfied students, faculty, staff and visitors,” Waite says.
Lesson learned: “A project isn’t complete until it looks complete, and it won’t look complete until the landscaping and site development are complete,” he says.
It’s common for colleges and universities to “rob” the site development portion of the budget to spend more money on the building, Waite says. He recommends having at least 15 percent of a construction budget reserved for site development— which includes landscaping, driveways, parking spaces and other final touches.
“From the exterior, the site work is what people—students and donors—see,” says Ron Antevy, president and CEO of e-Builder, a construction budgeting software company.
Carefully considering site development costs, down to the last flowerbed or parking lot stripe, makes for a completed project that all parties—architect, university, builder, donors and students—can be proud of. Here’s how to make it happen.
Site development funding shortfalls are usually the result of poor budget planning in the predesign stage, Waite says. “Quite simply, whomever does the original budget planning doesn’t take into consideration ALL of the costs the project must bear and what those costs might be.”
Site development: Budgeting takeaways
- Establish a comprehensive project budget—including all building elements and all total project costs—in the planning stage. Have detailed discussions about how important landscaping and other elements are to the success of the project.
- Divide site development further into line items for areas such as pedestrian and vehicular circulation, parking, landscaping and utility production and distribution.
- Commit to managing the budget and project scope throughout construction to ensure funds are preserved for their intended purpose.
- To help keep costs in check, use construction management software that can flag items that have gone over or are at risk of going over budget and not allow approvals until budget changes are entered.
Project leaders who aren’t architects tend to focus on the building itself and forget what has to go outside the building.
In addition, at state-run public institutions, state public works agencies often tightly proscribe what they will pay for and what they won’t. Costs such as site development and furniture, fixtures and equipment (FF&E) may well not be included in capital budgets.
Instead, it’s “left up to the institution to foot the bill for these items,” Waite says. For example, in many cases state budgets don’t pay for utility infrastructure, site lighting, sidewalks, landscaping or signage and those funds must be raised.
Besides appearing unfinished, buildings without adequate site development may not be able to obtain certificates of occupancy or other local regulatory authority approvals.
Some site development items, such as landscaping, are “always at risk of being cut or deferred,” says Scott Morton, vice president of project development at Boldt Construction. He advises that construction project teams discuss early on the importance of landscaping or any other element that’s considered critical to the success of the project.
For instance, landscaping might be used to enhance security for those approaching the building or to keep visitors on walkways and away from unsafe terrain.
Funding should be allocated based on the importance of these items and be preserved for their completion.
“If the project scope and budget are managed diligently, the risk of leaving the project unfinished, or having to scramble for additional funding to complete the project, is minimized,” Morton says.
Budgeting for site development
During the planning stage, “there needs to be a comprehensive project budget established to determine a reasonable expectation of project cost that includes all building elements and all project costs,” Morton says. “This is the time to be honest with yourselves, not to squeeze the budget in hopes of being able to pull off a project miracle.”
What if there’s an imbalance between desired scope and the ability to fund the project? That’s when project expectations need to be moderated, he says.
For Boldt Construction projects, the budgeting process clearly identifies site development costs, including any necessary demolition and preparation; site improvements, paving, hardscape, and landscaping; site utilities; and anything else that might be specific to the project, Morton says.
When developing budgets for a construction project, many institutions lump their costs into three broad categories: land, buildings and FF&E, Antevy says. While some owners include the site development costs in the “land,” others lump it into the “building costs” category. In either case, Antevy says most of his clients break out the site development costs as a separate line item.
Every college and university has a different way of determining from which budget various costs will come, and site development is often an area that derives funds from various locations.
At St. Olaf College in Northfield, Minn., having well-defined project costs helps campus planners develop and maintain comparison data to evaluate their budget performance over time, says Peter Sandberg, assistant vice president for facilities.
But site development, while always a separate line item, is often divided up into various types of work.
“We handle all of the pedestrian and vehicular circulation to and from the site, parking, expansion of utility production and distribution, distribution tunnels, and so on, as separate capital projects,” Sandberg says. “We have kept landscape as a defined line in the actual project, along with any hardscape within the finished site.”
Planners reason that “there are costs to placing a building in a specific location that have little to do with the cost of the actual facility,” Sandberg says. “They simply create the opportunity to site at a specific location. We treat site development work as an integral part of the overall plan.”
Sticking to the budget
Still, simply establishing a separate line item for site development isn’t enough, Morton says. Institutions must also be committed to managing the budget and the scope of the project throughout the construction process to ensure that funds in the budget are preserved for their intended purpose.
When site development costs spiral out of control, or owners hope for site development extras outside the scope of the budget, there are other solutions.
In some cases, “portions of the site development might be isolated and earmarked as parallel fundraising opportunities,” Morton says. “This is especially true for project elements that might have a significant impact on the overall campus, but are not essential.”
For instance, a land bridge constructed for the new Warch Campus Center at Lawrence University in Wisconsin was presented to the board of trustees as an important unifying element for the campus, even though it was outside of the project scope and budget. “The case was compelling enough that a single donor emerged from the board to make it happen,” Morton says.
While most construction companies will use construction management software to organize a client’s project, some colleges and universities also use it to help keep projects on track.
Southern Methodist University in Dallas, for example, uses e-Builder cloud-based software that includes a cost management module. During its e-Builder configuration process, SMU made the decision “to control budgets at the line-item level,” says Susan Moore, director of finance and administration services in the Office of Planning, Design and Construction. “If a commitment exceeds the budgeted line item, it cannot be approved until a budget change has been entered and approved.”
That budget change could be a line reallocation, a contingency use or the addition of funds. “Since the cost management module tracks all commitments and costs in real time, this control makes it impossible for the budget to be exceeded,” Moore says. “As a project progresses, its team members have visibility into available funds remaining.”
Using construction budgeting software allows an institution to maintain a digital, historical record of projects—helpful in the development of new project budgets. Such software will offer templates with categories so that important items aren’t left out. For instance, SMU officials created a budget template with the typical divisions, such as hard costs, soft costs, FF&E and line items.
“This budget template acts as a reminder to the project manager to include all line items when developing project budgets,” Moore says. “Line items such as permits and contingency include default formulas that automatically calculate amounts.” In addition, the budget template creates reporting continuity with various users across campus.
By working to ensure that a project will have the funding to finish every necessary site development item, Morton says, officials can ensure construction projects will meet regulatory and LEED requirements or donor commitments—as well as project that all-important “curb appeal” and be a sense of pride for the institution.
Nancy Mann Jackson is an Alabama-based freelance writer.