Restaurant Development & Design

WINTER 2014

restaurant development + design is a user-driven resource for restaurant professionals charged with building new locations and remodeling existing units.

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2 8 • R E S T A U R A N T D E V E L O P M E N T + D E S I G N • W I N T E R 2 0 1 4 and 2012, subs were able to be a lot more selective about the work they pursued," Taylor says. "Prices went up." On average, Taylor doesn't expect a huge jump in labor costs, but some regional markets do pose signifcantly higher costs than average. Study Regional Variations Clearly, expanding chains can expect to face regional varia- tions in the cost of new-unit construction, and the swings can be dramatic. For instance, though construction prices have escalated about 12 percent nationally over the past 12 months, in Boston, amid a building boom, they were up 37 percent last year and are expected to increase an additional 10 percent to 14 percent in 2014, according to Engineering News Record. Architect Judd Brown, president of Pawtucket, R.I.-based Judd Brown Designs Inc., suggests executives study the local construction materials and labor markets well before moving to new metro areas. He also notes materials prices can differ sig- nifcantly on a regional basis, particularly away from population centers. "Big-box suppliers play a large part in setting market- place pricing," Brown explains. Areas lacking those retailers may have higher prices, and in some locations, suppliers may have to ship items long distances, he adds. "You need to use regional cost adjustments when planning projects." While rural areas may face higher supply costs, large urban centers with strong union presences, such as Boston and New York, tend to have higher-than-average labor costs. "We recently entered the Manhattan market, and labor costs there were higher than we had anticipated — and we were already expect- ing much higher labor costs," Collins says. She adds, however, that most of Moe's growth this year will be outside of such costly big-city environments. For its part, Englewood Construction has had to cope with a regional labor shortage due to a scorching energy industry-fed construction boom in North Dakota. The contractor recently completed construction on Williston Brewing Co., an 11,900-square-foot brewpub in Williston, N.D., though they scrambled to line up subcontractors when they found that local tradesman had all the work they could handle. "I talked to a mason who said he was booked up for two years," says Taylor. "We had to bring in subs from out of state and make deals with hotels to house them." Consider Cutting Costs With overall construction costs rising slowly but steadily, build- ing team members need to sharpen their cost-cutting tactics. Close coordination among architects, contractors, development executives and suppliers helps the cause. Blaze Pizza's Vassos notes how input from architects and construction pros leads to continual refnement of the young chain's design standards. "We're applying what we've learned, such as lowering the ceiling heights in restrooms to reduce heating and air conditioning costs, and standardizing millwork to reduce costs and increase consistency of design," she says. Substituting cheaper materials for more expensive ones — as long as it's done without scrimping on vital branding elements — can also provide notable savings. "We recently worked on a hot new New York restaurant — three units — and substituted porcelain fooring for hardwood CONSTRUCTION OUTLOOK Activity Is Up — and So Are Costs With more than 500 existing units and 56 new restaurant projects on the docket for this year, Moe's Southwest Grill benefts from bulk buying, keeping construction pricing stable and even well below market. Elements of Siena restaurant in Smithfeld, R.I., allude to the authenticity of the design envi- ronment yet utilize cost-effective materials, such as porcelain wood plank which is du- rable and requires no feld fnish or upkeep. It emulates hardwood and is simple to install.

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