Cohousing-L Mailing List: Re: RE: Developer Compensation

[Berrins (Berrins]

In a message dated 8/14/2000 11:28:05 AM, lashbrook [at] ci.wilsonville.or.us 
writes:

<< We are in the process of negotiating with a developer on compensation for
supervising the design and construction of our site.  

For those of you who have used a developer, developer consultant or 
equivalent:

How were they compensated?  e.g. flat fee,  % (what?) of construction costs, 
% of site development costs,  % of design costs, %  of land purchase costs,  
% of marketing costs.>>

Our developer consultant was paid a flat fee.

<< Were they given incentives for keeping costs down?  e.g   a cap on fee, 
share of  profit at the end. >>

Nope, but he was initially given an incentive to keep us within budget.  He 
was to get a percentage of whatever extra money (contingency) we had left 
over at the end of the project.  When it was clear we could come in real 
close, we negociated a set amount that seemed fair, because we wanted to 
spend as close to all our money as we could.

<< Did they hire and/or supervise  the designer?  the architect?  the 
builder? the marketing consultant?   Did they do the  accounting and check 
writing? >>

- We hired the architects after a search and interview process.
- The contractor we ended up with was helping us look for land.  He found 
some, we liked it, and to buy it we had to use him to build on it.  
- We didn't hire a marketing consultant; we didn't need one.  Northampton is 
a hot market and we filled up over 1 1/2 years before the first house moved 
in.
- We had an accountant (the mother of a member) from the get-go.  However, 
the developer consultant kept a close eye on the budget and costs.  One of 
his most valuable skills was making sure we knew when costs could potentially 
rise above our budgeted amounts (not that we always listened, but that wasn't 
his fault!). 

<< What else did they do? >>

- The main thing is that he knew the steps we needed to take in building a 
large-scale project; from land search, costing, budgeting, getting the 
professionals on board,  permitting, to keeping the contractor moving along.  
- Another hugely valuable skill was negociating with the professionals.  I 
can't begin to tell you how helpful this was.  For example, we had a flat fee 
with our lawyers to bring us through several different phases.  The lawyers 
then figured out how many hours they would have to bill to get that flat fee 
and towards the end tried to bill us for what they figured were extra hours.  
Our development consultant told them nice try, but the contract was flat fee, 
not billable hours.  Can you imagine getting that bill and trying to figure 
out what to do next?  We didn't have to.
- Lastly, it was very helpful that he lives in a nearby cohousing community 
(Pioneer) and helped develop that one also.  He was able to keep us focused 
on cohousing goals and concepts.

In fact, he was so valuable overall that eventually we had to tell him to 
gradually back off before the project was finished, to let us be the ones to 
deal with the professionals and keep ourselves on track and within budget.  
We knew that we would have to be able to take of ourselves after he was gone, 
but still wanted him around to help us when necessary.  Now that we're almost 
done, he still comes to board/development committee meetings, but is 
gradually letting go.

In case you want to hire him or just ask him for advice, here's his name, 
address  and email address :    John Ryan
                        Pioneer Cohousing
                        120 Pulpit Hill Road
                        Amherst. MA  01002
                        john [at] devcycles.com


Oh, here's an extra bit of advice- Hire a landscape architect as well as an 
architect or house designer, not just for your site plan, but to also design 
the details of your landscape.  Most communities spend lots of money on 
buildings but ignore the interface, the grounds between the buildings and in 
the common areas.  Good landscape design will literally bring you together 
and help your community "grow".  


    Roger
    Pathways
    Northampton, MA