Written by Peter Strauss of Iconic Investments
Most owners of Los Angeles apartment buildings with “soft-story construction” (either podium or tuck-under parking) are already well aware that they are on the City’s Earthquake Retrofit Watch List.
The list is prioritized by risk and number of units; however, at some point the clock will start ticking for you.
The seismic upgrades ordinance, passed in October of 2015, targets pre-1979 wood apartment complexes built over carports and pre-1978 non-ductile concrete apartment buildings. Owners of wooden buildings—13,500 have been notified--will have seven years to retrofit their buildings. Owners of non-ductile concrete buildings--1,500 of them have been identified so far--will have 25 years.
Most owners seem to think seven years is a long time, but they fail to realize the work needs to be done in stages:
- Years 1-2: Obtain structural plans
- Years 2-3.5: Pull permits
- By year 7: Complete the work
Some owners wanted to be ahead of the curve and have already started the process of consulting with a structural engineer or an all-in-one construction company that will design the structural plans, formulate the tenant habitability plan and perform the construction.
Although an all-in-one company may seem easier, it could end up costing you more money.
Act Quickly, But Carefully
When you hire an all-in-one company, you sign a contract for one price that includes all of their services. The first step (all-in-one) is to submit the plans to the City of Los Angeles for approval. Most likely the City will not approve the first round of plans and require changes/modifications that will lead to more work, i.e. more money. The all-in-one will most likely come back and modify the contract. At this point, you are already committed to the all-in-one and have no choice but to move forward at the higher price.
Further, comparing two all-in-one company bids is extremely difficult. One of the engineers might design plans that meet the minimum standards of the City, while the other structural engineer might “over-engineer” the retrofit work, creating more labor and materials, thereby, increasing the cost of the bid. Also, there is no telling whether either of the two plans will be approved by the City, so the company's bid could very well be just an estimate.
Steps for Finding the Right Professional
Here are our suggestions for owners with properties on the Earthquake Retrofit Watch List:
1) First hire a structural engineer to only do the plans and nothing else. Make sure the engineer has already done similar projects, understands the City’s requirements and can design the plans so the construction work is cost effective.
2) Submit the plans to the City. Get plans approved and stamped with ready-to-pull permit.
3) Once plans are approved, then bid the plans to a number of contractors. With one set of approved plans, you are able to compare multiple bids “apples-to-apples” as the contractors are bidding to do the exact same work required by the plans. This will eliminate the opportunity for all-in-one companies to come back after the plans have been submitted and renegotiate the contract.
For more information on the Earthquake Retrofit Law, consult Iconic’s guide to the mandate.
Iconic Investments
16530 Ventura Blvd
Suite #409
Encino, CA 91436
T: 747-444-3303
E: info@iconicinv.com
W: www.iconicinv.com