Developer project specific corporations 3

[glass99]

How does everyone feel about the practice of developers setting up special purpose project corporations when they buy or develop a big building? It is to avoid liability, which has the effect of passing it onto everyone else, including engineers and contractors. I am about to sign a contract with a name brand NYC developer for the design of a feature element in a tall office building in LA, but nominally with the XYZ Holdings LP, the wholly owned subsidiary of the developer. Personally I think it's gross and dishonest.

 

[geotechguy1]

In Alberta where I used to work this was the case for the majority of projects. Even for an apartment building development with say, 8 20 unit buildings built in 4 stages, the development would be a 'numbered company', and then each apartment building would be a 'numbered company'. Have likewise seen this arrangement for infill developments consisting of a single duplex. All profits vacuumed out of the small numbered companies so that future lawsuits are all against an empty husk of a corporation + the engineers insurance policies.

 

[Settingsun]

Developers in NSW (Australia) took a bit too much of the piss over the years. Eventually, even the political party that's most friendly to them had to step in.

https://www.fairtrading.nsw.gov.au/...the-nsw-planning-portal-from-1-september-2020

A lot of provisions around disputing the appointment of the building inspector. Pretty obvious that developers would try to appoint a less observant one.

 

[glass99]

@steveh49: That's a brilliant law and should definitely be replicated elsewhere. I'm Australian but live and work in NYC for ~20 years, and this kind of thing makes me homesick. In the early 2000's there was a law requiring general contractors to pay subs or document a reason for not paying within ~30 days. The dodger mentality of the developers and GC's needs to die.

 

[Settingsun]

glass99, that's the Security of Payment Act. It applies to just about any contract related to construction, eg architects and engineers are included. It also applies to the design phase, so an end client (including government) who engages architect/engineer is bound by it.

Originally, the payment claim had to state it was made under the SOPA act but clients/contractors put pressure for this not to be done (of course) which negated the legislation. So the legislation was revised that SOPA applies regardless and can't be excluded by contract provisions (any such contract provision is automatically void).

In summary, payment-dodging is only cured by big sticks in this industry.

 

[NorthCivil]

glass99, why the heck would an ozzie want to live in NYC? The quality of life is so much better in OZ than america IMO.

Opportunities in facade consulting is just booming in OZ and especially in NZ

 

[glass99]

Opportunities in facade consulting is just booming in OZ and especially in NZ

Good question. I know Australia is doing well in general, but last I checked in with my Australian colleagues the facade world is dominated by cheap Chinese imports. We have done a couple of projects in Sydney in the last couple of years for iFly and Sydney University, so maybe there is something. Here in NYC my niche is aging billionaires who have a hankering to build something in unobtainium. You are right about the cafes and weather though.

 

[NorthCivil]

yes, the facade world in oz has a lot of "direct procurement" which means the developer sources the curtainwall direct from chinese manufacturers. This though has created huge demand for technical review of these systems. by removal of the local skilled fabricators and local responsible parties, there has been created a huge demand for skilled review and design assist of the pre manufactured systems provided. which is why a lot of the big ozzie facade engineering firms will have offices in china as well, to keep an eye on the factories and fabricators.

its not glamour engineering by any means, more rolling up your sleaves and getting into the mess type engineering.

 

[glass99]

the developer sources the curtainwall direct from chinese manufacturers. This though has created huge demand for technical review of these systems.

Yes it's the same in the US on the whole. Big firms like Vidaris here in NYC are geared around reviewing imported curtain wall, including earning most of their fee in the construction phase. One of my clients is a Chinese glass fabricator and we calculate thermal stresses and other things for them for US projects.

But last I heard, a lot of Australian consultants were giving up this form of facade consulting, and instead focusing on forensics and expert witness work.

 

[NorthCivil]

In design work, the developers grind you on your fee and pressure you to accept shoddy designs and construction, of which you carry the liability.

Forensic and witness work pays double or triple what design work pays, with none of the liability. The forensic work often leads you to a re-furb project where doing it right is a high priority!

To boot, there so many buildings that are complete disasters, that there is so much forensic and expert witness work out there!

Unfortunately this is the state of the industry, it will take some time to recover from.

No wonder your mates are trying to get out of new builds and into restorations!