K 1 Lodge Construction

[Big Bob]

Construction will not resume till next winter

https://mountaintimes.info/k-1-construc ... 0RmYi2YAfg

[DrJeff]

Construction will not resume till next winter

https://mountaintimes.info/k-1-construc ... 0RmYi2YAfg

The new lodge will be ready for its 1st stylistic remodeling job before it opens at this rate

F-Covid! And appreciation to all of the construction workers doing their jobs, when the politicians and other officials let them, through all of this!

[throbster]

WTF?

[newpylong1]

4 other base lodges to use when we're able to. It'll get done...

[jimmywilson69]

that seems odd... especially since this was a CAPEX that was already in progress. Its not good to keep a building half built for that long.

[hillbangin]

What's the real story....

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[KingsFourMan]

Interesting, I thought it had already resumed. Major construction projects are progressing all over the tri-state area largely without Covid issues, many of them never stopped. I wonder why the K1 lodge is different especially in a state with a very low infection rate? Must be more to the story. Either way it's going to cost someone a lot of money and it won't be the contractor. Construction contracts on major projects like this protect the contractor from things beyond their control including extreme weather events and other "acts of God". A global pandemic is certainly beyond the control of the contractor. Things like labor and material escalation costs, demobilization & remobilization costs, temporary weather protection, temporary fire alarm and fire protection, added insurance costs, additional rental costs on things like temporary trailers, lost operating revenue, etc., all add up quick and will be significant on a project like this, probably at least in the low hundreds of thousands of dollars.

[fdskier56]

So no work will be done in the next 9 or so months ???

Something doesn’t add up

[PinnacleJim]

My guess? POWDR pulled the plug on all capital projects due to cash flow problems.

[spanky]

My guess? POWDR pulled the plug on all capital projects due to cash flow problems.

Ding ding ding! We have a winner! And not an unreasonable event.

P.S. I deleted your double post.

[newpylong1]

“We look forward to unveiling it when it’s complete. We realize there are other priorities we have to tend to.”

Like meeting payroll and paying vendors.

Not hard to deduce nor unexpected after this season.

[hillbangin]

“We look forward to unveiling it when it’s complete. We realize there are other priorities we have to tend to.”

Like meeting payroll and paying vendors.

Not hard to deduce nor unexpected after this season.

So that means they are paying cash? No loan.

I'd think they'd want it done for next fall but completely understand they are in cash flow survival mode.

Maybe the construction company is working with them on the delay if they already had projects scheduled that have hard dates for completion.



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[jimmywilson69]

that's a possibility too. They could've come to some sort of agreement where Powder floated them some "retainer" fee and said we're in but just can't do it this year.

[Bubba]

It could be something as simple as the complications of supply chain delays.

[KingsFourMan]

Hard to imagine an Owner making a decision like that given the financial ramifications. I've lived in that world for over 30 years and have fought construction delays claims from both the Owners side and the contractor's side many times. Mothballing a project like that for a year is going to cost someone a lot of money. This building is probably costing around $325-$350/SF x 58,000SF equals somewhere around $19 or $20M not including soft costs like design fees, permits, etc., just pure construction costs. It's about 45% complete right now so that's about $10 or $11M remaining of construction value that will be subjected to labor and material escalation costs which are for the most part unavoidable. Escalation is typically calculated at 3% per year therefore $10.5M x 3% is $315,000 and all we are talking about is labor and material escalation. There are also all the other costs I mentioned before like added insurance costs, added temporary weather protection costs, added temporary fire alarm and fire protection costs, etc., etc., etc., that could easily add another 1-2% or another $100-$200,000 so we could be talking well over a half a million dollars to make a decision like that. At the very least, it's at least a $250,000 decision and I think that is way low. Either way, you would have to be seriously desperate to flush that kind of money. From a contractors perspective, this is what is known as blood in the water. On the other hand, they have to worry about getting stiffed by an owner in financial trouble that might make them an offer and tell them to take it or leave it. If it's any kind of a reasonable offer, like splitting it, most take it given the cost, uncertainty, and hard feelings associated with litigation.