Understanding the Role of an Owner’s Representative for Nonprofit Facilities Projects June 26, 2024

ORs are construction experts that serve as a liaison between the project team (e.g., architect, general contractor) and the owner or leaseholder of the facility being developed to ensure that the tenant/owner’s interests are protected as the project is planned and executed. With specialized construction expertise, an understanding of the owner or leaseholder’s goals for the facility project, and experience coordinating the work of project teams, ORs help mitigate risks by providing the owner or leaseholder with impartial information and advice that can be used to make informed choices about how the project should proceed.  

Examples of an OR’s work includes, but is not limited to: 

• Identifying and selecting members of the project team in collaboration with the owner or leaseholder via Requests for Proposals (RFPs) 
• Managing the design process 
• Developing a project plan/schedule that mitigates risks to the owner or leaseholder before construction begins 
• Building out development and operating budgets  
• Supporting the application process for securing zoning approvals and permits needed to proceed with construction 
• Coordinating the day-to-day work of the project team to execute the client’s vision 
• Managing project timelines to ensure the efficient completion of the work required to open the new or renovated facility
• Conducting site visits and analyses to monitor the work of the project team 
• Coordinating change orders needed during construction that impact budget and timeline 
• Project accounting and reporting 
• Facilitating the owner or leaseholder’s move into the facility (e.g., securing a certificate of occupancy)

ORs can be engaged for any period of time desired by the owner or leaseholder of the facility being developed, but typically offer the greatest value to a project when engaged early in project planning. Enlisting the services of an OR before any plans are finalized ensures that the nonprofit completing the project benefits from the ORs expertise during each phase of the project. If a project has already started, however, there’s often still value in engaging an OR to help execute the organization’s vision – particularly if the project has encountered challenges that are draining staff resources and time.  

Selecting an OR can be challenging, as there are a broad range of tasks that the OR will be responsible for that may not be totally clear at the outset of a project. Also challenging is the fact that someone who markets their services as an OR may not have actual experience with the full spectrum of work required for an organization’s project. For these reasons, it’s crucial for nonprofits to thoroughly vet potential ORs before committing to work with one for the duration of the organization’s facility project.  

The process to vet OR candidates should be driven by the unique goals of the project and the organization’s specific needs, but there are several steps nonprofits can take to gain a baseline understanding of the value a potential OR can bring to a project. We recommend focusing on three initial items as part of the vetting process:  

• Process to develop Requests for Proposals (RFPs): Efficiency is good, but not every client is the same, and RFPs to select members of the project team like the architect and general contractor are a crucial step in successful projects. If an OR candidate uses a plug-and-play template for every project, it’s worth digging deeper to determine whether they’re capable and willing to tailor their work to support the organization’s priorities and goals vs. providing generic support that may not always align with the organization’s needs.
   
• Explanation of anticipated work: It may not be possible for an OR candidate to provide a precise scope of work before a development project begins because of the fluid nature of construction, but a potential OR should be able to talk in detail about the tasks they anticipate completing on the organization’s behalf – like budgeting, selecting members of the project team, securing necessary permits, coordinating day-to-day work during construction, and facilitating the organization’s move into the new or renovated space, among many other examples. This is also a good opportunity to gain an understanding of each OR candidate’s overall philosophy about their work. For example, how conservative or aggressive is the OR candidate about budgeting? How much customization does the OR candidate envision during the procurement process? How will the OR candidate structure engagement with the project team and the owner/lessee? This is also a good opportunity to hear about how they’ve handled challenges during each phase of past projects with other clients. If a potential OR isn’t able to explain in detail how they anticipate supporting the owner or lessee before the project begins, it’s worth considering whether they’re the right candidate for the role.  

• Reference checks: Gaining an understanding of how a potential OR has supported clients previously is an important step in determining whether the candidate is equipped for the organization’s facility project. And while technical expertise is vital, reference checks also shine a light on the way in which the OR approaches their work. Given the amount of time members of the organization will spend working with the OR, personality fit and alignment on a client-centered approach is important. As the primary liaison between the organization and the many parties involved in a construction project, it’s important to know that the OR will professionally represent the organization’s interests at all times and is capable of successfully working through challenging situations in a calm and strategic way. 

Since 1971, The Ark has provided essential human services to members of Chicago’s Jewish community — growing from a free medical clinic into a multifaceted service provider that today offers wraparound support to help clients facing adversity navigate toward self-reliance. The nonprofit accomplishes this with a robust mix of programs that includes case management, financial counseling and assistance, intensive job coaching, health services, emergency food assistance, housing solutions, and spiritual enrichment. 

Having outgrown its facility in the West Rogers Park neighborhood on Chicago’s North Side, The Ark began planning in 2017 to create additional space to support the continued growth of the organization. IFF’s Real Estate Solutions team conducted a feasibility study, provided predevelopment support, and served as the OR for the facility renovation and expansion project, which broke ground in June 2022.   

A complex project that required both the renovation of a facility that hadn’t been substantially updated since 1967 and the construction of a new addition, The Ark encountered a wide range of challenges that IFF helped the nonprofit navigate successfully as the OR. This included permitting issues that delayed the start of construction, which had a trickle-down effect on schedule and budget; the discovery of a number of hidden issues in the aging facility that weren’t identifiable during project planning; updates to the design of the facility to comply with local building code after a difference of opinion about what was required between the architect and municipal authorities; a flood in the basement of the facility that required clean up, restoration, and preventative measures to avoid future flooding; a fire in an adjacent property prior to its demolition to accommodate The Ark’s addition; environmental remediation after a previously undiscovered underground storage tank was accidently pierced, leaking its contents into the soil; and a key vendor going into receivership several weeks before the ribbon cutting ceremony, which required negotiations to secure building signage that had already been fabricated that was tied up in the receivership.  

At each step along the way, IFF’s Real Estate Solutions team helped manage expectations and mitigate risk, bringing the appropriate members of the project team together to solve problems and keep construction moving forward while keeping The Ark’s leadership informed about important issues but otherwise insulated from the day-to-day “noise” of the project. These efforts were successful, and the nonprofit celebrated the reopening of its expanded facility last month. Learn more about the project here. 

Since 1986, Corktown Health has evolved from a grassroots nonprofit to a leading service provider for Southeast Michigan’s LGBTQ+ community, providing primary care, behavioral health services, comprehensive HIV care and treatment, cancer screening, health insurance navigation, and more – ensuring that members of the community can access a full suite of health and health-related services designed specifically for their needs in one place. 

In 2017, an IFF loan helped Corktown Health increase its capacity by purchasing and renovating its previously rented facility. Last year, after a financial feasibility study completed by IFF determined adequate demand to move forward with the construction of a second health center in the Detroit area, Corktown Health engaged IFF to serve as the owner’s representative for the project. Expected to open in 2025, Corktown Health’s second location will build on a proven model and, with IFF’s OR consulting, incorporate all that the organization has learned about adapting to the needs of its clients in the past four decades. 

Among the challenges that IFF has helped the nonprofit navigate as OR thus far was the selection of a vendor for the installation of an elevator in the new facility. After an initial vendor was proposed by the Construction Manager (CM), a review of the specs for the elevator component of the project revealed that the power required for the elevator differed from the power supply planned for the building. As OR, IFF was able to work with the CM and design team to revisit the elevator bids after identifying the issue, ultimately selecting a different vendor who could install an elevator better suited for the facility. By identifying the issue early and finding a workable solution before construction began, Corktown Health was able to save time and money that would have been required to course correct later in the buildout of the facility.   

Learn more about IFF’s work with Corktown Health here and here.   

For more than 50 years, Swope Health, a Federally Qualified Health Center, has provided high-quality health care to Kansas Citians – growing from a single clinic in a church basement to a network of 19 locations that provide comprehensive primary care and behavioral health services to more than 44,000 patients per year. In October 2023, the organization opened a new, 32,000-square-foot facility in Kansas City’s Mount Cleveland neighborhood – the PACE KC Adult Wellness Center. Designed to provide comprehensive health care for patients ages 55 and older, the purpose of the PACE KC Adult Wellness Center is for older adults to be able to age gracefully in their home communities by holistically addressing their physical, emotional, and psychological needs.  

IFF served as OR for the development of the facility, which was Swope Health’s largest capital project in nearly 30 years. Among the challenges IFF helped the organization address during construction was a complex issue related to the second floor of the building extending over a small portion of the facility’s parking lot. A late code interpretation from state officials determined that the small section of parking was a storage occupancy, requiring the entirety of the second-floor overhang to be fully sprinklered. This additional requirement greatly influenced the project, creating substantial costs and causing several technical constructability issues.  

While the simplest solution would have been to landscape over the three parking spots underneath the overhang to eliminate the area’s classification as storage, this wasn’t feasible because the building was already at the minimum number of parking spots required by local building code. IFF led the team through several potential concepts to resolve the issue, including a parking lot redesign and creative fire suppression options. Ultimately, the team from IFF that supported the project as the OR worked with the client and engineering teams to comb through regulations and found that Swope Health/PACE KC could lease three parking spaces from a neighbor on an adjacent lot to satisfy the parking requirements, allowing the three parking spaces under the overhang to be eliminated and negating the need for a six figure change order to the project that would have required work on the walls, pipes, and wiring.   

Learn more about the project and hear from PACE KC Executive Director Heath Rath about how engaging an OR helped bring the new facility to fruition.