Press > The Post Hurricane Construction Market in BVI

The Post Hurricane Construction Market in BVI

Employee Perspective, Projects, Tourism


Bringing in 2020, several buildings around and near the main round-a-bout in Road Town were finalizing major renovations. Some building owners added floors, replaced roofs and windows, changed wall cladding finishes and colors. Others were still trying to finish what was started prior to Hurricane Irma, which was over two years ago. Up until recently, I considered this area of Tortola, ground zero for construction projects.

To sufficiently give an account of the current status of the BVI construction market, it must begin at the pre-2017 hurricane season and extend 26 months past it. As architects, we have a good sense of where the construction market is by the number of proposals being asked of us and what is actively under construction. At the time, the active construction projects were a major resort renovation and the continuation of the North Sound of Virgin Gorda and private island developments. RFP’s being tendered were for midrise office buildings on Wickhams Cay. The bulk of BVI construction is traditionally single-family homes, vacation villas and docks which at that time, where not being built. The market was considered slow and stagnant, at best.

Fast forward to November 2019 and for most of us in the design and construction industry, it’s safe to say that we have been on what feels like a rollercoaster. The months between October 2017 thru March of 2019 were chaotic and this was widely accepted as a BVI construction market boom. In my opinion, the “boom” tapered off earlier this year and company staff levels reflect that but there are several opportunities on the horizon and the phase we are entering is one of sustained reconstruction, driven by the resorts and the Government of The Virgin Islands (GOVI).

Every category of built structures experienced either destruction or some level of damage from the hurricanes of September 2017. Reports stating that 80% of all homes were damaged ranging between $2.6 billion to $3 billion in damages. The Territory has made great strides in the last 26 months. From a simple replacement of metal roof cladding to full-scale repairs from catastrophic structural failures, the BVI construction market was wild and mostly unchecked. Where tourism numbers understandably fell, the construction market picked up the slack. However, this was not immediate. Several islands in the Caribbean also fell victim to either or both Hurricanes Irma and Maria. South Florida and parts of Texas were also impacted. That leads to delays from U.S.-based suppliers of essential materials, such as doors, windows, and metal roofing.

These are the same U.S. suppliers that most islands in the Caribbean, including the BVI, looked to for materials; however, they were serving their US-based clients first. Additional challenges that slowed down both recovery and reconstruction were:

1. Slow and Disputed Insurance Payouts;
2. Storage Deficiencies Due to Destroyed Warehouse at the Main Port; 
3. Curfews;
4. Material Shortages;
5. Damaged Electrical, Cellular, and Telecommunication Lines;
6. Labour Pool Impacted By Evacuations; and
7. Increased Demand for Fuel.

The GOVI made a few decisions to alleviate some of the issues listed above, which had a significant impact on the pace of the recovery, including expedited approval times from the Town and Country Planning and Public Works Building Authority Departments, the waiving of import duty taxes, and an increase in construction workers driven by a relaxed labour policy. These policy amendments encouraged foreign relief workers arriving in the Territory on short term work permits that could easily be renewed, and better still applied for once on island. This policy was a major driver for skilled construction labour to take up employment with contractors. An estimate of a 140% increase in construction-related work permits issued in 2018 reflected the labour needs at that time.

Another major influence on the pace of construction was that insurance companies required their customers who were filing claims to acquire multiple quotes for the repair and replacement of the hurricane-damaged areas of their home or commercial property. This direct interaction with property owners led to many contractors who provided the insurance repair estimates being employed to do the repair work once the owner received their insurance settlement.

Before the storm, the average contractor got by with a staff of 1 to 5 steady tradespersons. The general practice was that if a contractor needed a specific tradesperson, such as a tiler for a particular project, the contractor would enter into a freelance agreement with the tiler to lay the tiles for that project. This sharing of tradespeople meant most contractors did not have to regularly hire a tradesperson as a permanent member of staff. This practice still exists today.

After the storm, most construction companies had no choice but to increase their staff, and in some instances by 500%. The large amount of work also presented an opportunity for many contractors to change how they operated. Some of the more established firms with higher than average staff hired marketing professionals, quantity surveyors, project managers, and procurement and logistics experts. The larger companies also hired human resource managers to assist with the work permit process for the new employees. Individually skilled sub-contractors, like audio-video installers, marine-based contractors, electricians, plumbers, and roofers also benefitted from the post-hurricane reconstruction flurry and they too had to increase staff to accommodate the demand.

Earlier I compared the market to a rollercoaster. At present, the rollercoaster has slowed down and companies that increased staff levels are now reducing them as the demand has fallen off. Damage assessments, insurance claims, and roof replacements are mostly complete so the next phase will be driven by the resorts and the GOVI where it is expected that construction company staff levels will increase again.

The resorts and GOVI building sectors experienced massive amounts of damage and to date, most properties have yet to be fully repaired. In some instances, some buildings in both sectors are still in their post-disaster state. The majority of the resorts were decades old and the damage and destruction presented an opportunity for the owners to either dust off the plans that they always wanted to implement or hire architects to completely start over. Owners are looking at more resilient and cost-effective ways of delivering 4 and 5-star products and will all require experienced construction companies to deliver them. The reality is that most of the resort work will be tendered and won by the larger firms but there will be opportunities for sub-contractors to enter into sub-agreements with the parties.

As Q1 of 2020 begins, the GOVI of the day is expected to greenlight many projects in their portfolio of damaged building assets. The multitude of GOVI projects that range from schools to infrastructural repairs and upgrades are all expected to be tendered by both architects, specialist consultants, and contractors. Other GOVI related projects such as the airport expansion and the development of Prospect Reef are also on the horizon. As I write this article, design firms are about to respond to multiple requests for proposals from statutory bodies and the GOVI.

No discussion about the current state of construction in the BVI is complete without mentioning the role of the Recovery and Development Agency (the “RDA”). According to their website, “The Virgin Islands Recovery and Development Agency (RDA) was established in 2018 by the Government of the Virgin Islands as a transparent and accountable specialist project implementation agency to respond to the unique challenges faced by the Territory following the extreme weather events of 2017.”  To date, nineteen tenders have been issued with multiple successfully being awarded to local contractors. The RDA mandate includes capacity building, which means part of their role is to educate and train. Several seminars and workshops on procurement, risk management, life safety, just to name a few, are all geared to strengthen the knowledge base of local contractors. For many new and established construction companies, the RDA presents a viable opportunity to work on several Caribbean Development Bank (CDB)  and GOVI funded projects.

Local and foreign developers still see opportunities two years post-disaster and are looking to capitalize on the increased labour market and general positive economic outlook. Cities and developers understand that effectively using land to create multi-use destinations brings deep value to communities. There is significant diversification in the BVI development and construction market and, if you are looking for a contractor, there is no shortage of experienced and savvy ones for all project types and sizes.

With the increase of labour in the territory, one would have expected the average contractors’ daily rates to drop. That did happen for a brief spell, but once newly arriving workers got wind of what the traditional going rates are, then they went back up. What is hard to say is how much of the $764 million dollars related to property specific insurance payouts went back into reconstruction work, but it’s safe to say it was the primary driver of the construction market for all of 2018 and up to the end of Q1 of 2019.  

One unforeseen benefit coming out of this disaster cycle is a general increase in construction knowledge and know-how. Prior to the storm, what may have seemed like a difficult concept to grasp was how a roof is assembled, for example is now a widely held skill that many homeowners can quickly recite the assembly and material sequencing. Homeowners are also more intelligent as it relates to impact resistance requirements for door and window glazing and minimizing potential risks from overhangs, cantilevers and site excavations.

An area of construction that is severely lacking in the BVI is good quality interior finishes. The island has many quality tradespeople who are good at the basics and core components of construction but very few who are conscientious with the finished “move-in-ready” product. This presents a huge opportunity for small contractors to carve out a niche for themselves by offering high-quality interior finish work with a turnkey service which, at a minimum, includes carpentry, tiling, sheet-rock installation, carpet laying, electrical, plumbing, and air conditioning.

Finally, the economic substance legislation is another opportunity that some in the BVI sees as a possible benefit to the overall economy and to us in the design and construction industry. Partly because many companies will need office space and housing for this new labour pool. When talking about economic substance most are taking a wait and see approach.

The BVI will continue to ride the wave of a post-disaster construction tide but moving ahead with a steady and deliberate pace.


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Press > Hospitality Wellness Expert Panel

Hospitality Wellness Expert Panel

Homepage, Design, People, Tourism, Investment, Luxury


Leaders In Hospitality & Design Share Unique Insights & Outline Key Performance Drivers For Successful Wellness Developments





On October 9, 2019, leading global architecture firm, OBM International (OBMI), hosted a Hospitality Wellness Expert Panel and art exhibition. Rika Lisslö, Hyatt Vice President of Development, Vivianne Garcia-Tunon, Wonder Flower Principal and Founder, Marianne Canero, Alma Community Founder & Executive Director, and Giovanni Medina Marenco, OBMI Associate Senior Designer, participated in the conversation at the Sacred Space Miami. Together, with moderator, K. Denaye Hinds, OBMI Director of Corporate Sustainability, who led the panel, the four experts discussed their insider outlook on health and wellness in the hospitality and real-estate industry, the trends impacting its direction and the crucial elements to consider for successfully designing wellness developments.

The sold-out event gathered over 175 professionals across the hospitality, real estate, design, development and wellness industries to hear diverse perspectives and to be inspired by illustrations of wellness concepts in the elegant venue, The Sacred Space Miami. In line with the panel’s theme, experts advised the audience on the challenges and opportunities to successfully execute wellness offerings in developments, designing for wellness beyond the spa, and the importance of investing in human capital for wellness programs.

Referencing reports from the Global Wellness Institute, the experts relayed the international wellness market grew to $4.2 trillion in 2018, and that wellness-focused tourism is fast outpacing overall tourism growth. The panel also remarked how the hospitality sector has been highly motivated to keep up with today's wellness guest by evolving the scope of programs and developing key partnerships for membership models to deliver elevated and catered wellness activities as an opportunity for the hospitality industry to ensure a return on investment. An example shared was Hyatt’s clever acquisition of the Exhale spa chain.

Vivianne Garcia-Tunon and Giovanni Medina Marenco both remarked on the importance of weaving wellness into the design of the entire property, as well as factoring in space planning and offerings for various demographics of consumers and future generations. Both panelists agreed this all-inclusive approach would help in achieving a socially equitable and viable development.

Rika Lisslö and Marianne Canero remarked on the importance of cultivating the local labor pool and integrating the community into the wellness space when delivering a positive experience for end-users and ensuring a return on investment to stakeholders. Focusing on the wellbeing of your corporation’s employees resounded equally essential as training and educating in the wellness industry, according to panelists.

“When looking for revenue drivers, we must talk about the value proposition and take time to educate the room on how wellness will benefit the end user and the investor,”  noted Rika Lisslö, Hyatt Vice President of Development. “We see wellness the way we look at internet. Without it you’re obsolete. It’s where we are now and we’re baking it into proforma. The client is everyone, and wellness is in the overall experience.”

For more information, contact Marissa Howe: mhowe@obmi.com or (+1) 305-537-7100.


Press > Invest St. Lucia to Develop Master Plan for Anse de Sable, Vieux-Fort

Invest St. Lucia to Develop Master Plan for Anse de Sable, Vieux-Fort

Design, Projects, Tourism

Castries, Saint Lucia – January 28th 2019 – Invest Saint Lucia (ISL) is in the process of developing a master plan for the Anse de Sable area in Vieux-Fort, as part of the overall redevelopment plan for the southern town.

Chief Executive Officer (CEO) Roderick Cherry remarked, “Invest Saint Lucia owns a large portion of land in Vieux-Fort and it has always been the Corporation’s goal to enhance the area. From as far back as 2001, we had envisioned a mixed-use development for Anse de Sable."

Mr. Cherry continued, "Thus, the proposed redevelopment for Vieux-Fort, featuring the Hewanorra International Airport redesign and plans for homeporting at the Seaport, made this opportune for a renewal of the Corporation’s plans."

Following an international bidding process, Invest Saint Lucia approached the team of experts at renowned architectural firm OBM International (OBMI), to discuss the scope of the proposed master plan for Anse de Sable.

“OBMI’s expertise in designing successful destinations across the Caribbean, Europe, and the Middle East gives us complete confidence in the firm’s ability to execute a vision for Anse de Sable that promotes sustainable tourism enterprise and increases the opportunities for investment activities,” remarked Chief Executive Officer, Douglas Kulig.

OBMI representatives were on island in December 2018, holding consultations with ISL and other key stakeholders such as the Saint Lucia National Trust (SLNT) and the Air and Seaports Authority (SLASPA). Cherry confirmed that OBMI was indeed the right firm for the project based on extensive research conducted by the Corporation. He stated that Anse de Sable and the surrounding communities in Vieux-Fort will stand to benefit substantially from the proposed mixed-use development plan. Thus, as this project progresses, ISL will ensure transparency, hosting consultations with residents and interested parties.

“We envision an enhanced community that will encompass schools, health care facilities, retail, entertainment centers, as well as a host of other community-benefiting amenities. The idea is to have this master plan designed and use this proposal to seek out investors – both local and foreign – to capitalize on the available opportunities presented by this master plan.”

Cherry said that the architectural design for the master plan for Anse de Sable may be available as early as the first half of 2019, at which time investors will be invited to participate in the implementation of the physical structures for the area.

According to OBMI, it has managed to overcome challenges by ‘developing a proactive, nimble approach to problem-solving and is now leveraging those acquired skills to their clients’ advantage, presenting inspired solutions with flexible adaptability.’

-ends-

About INVEST SAINT LUCIA

INVEST SAINT LUCIA (formally the National Development Corporation) is charged with the responsibility to stimulate, facilitate, and promote the development of business and investment activities in selected sectors of the Saint Lucian economy. We offer a comprehensive knowledge of the processes to set up a business and information on available incentives to foster growth and to expand your business. INVEST SAINT LUCIA is a member of the Caribbean Association of Investment Promotion Agencies (CAIPA).

About OBMI
OBMI is a global architecture firm widely celebrated for creating distinctive designs for high-end hotels, luxury private residences, and engaging communities. Since 1936, our mission has been to collaborate with clients to transform their visions into three-dimensional forms that are authentic and incomparably marketable. Through global design studios, we offer an integrated approach that combines responsive design strategies, the latest innovations, and technical expertise to create experientially memorable, environmentally responsible, and financially successful destinations.

Press > OBM International COO Mike Wilson to Discuss Sustainable Tourism at Caribbean & Latam Conference

OBM International COO Mike Wilson to Discuss Sustainable Tourism at Caribbean & Latam Conference

People, Tourism

OBM International COO Mike Wilson joined a leading group of Hospitality and Lifestyle experts at the 2017 Bisnow Caribbean & LATAM Forum in Miami. Wilson spoke to the audience about what it takes to have a successful sustainable tourism product in tropical and island nation locations throughout the region. Topics addressed during the panel included what makes hospitality and asset investment in the Caribbean and LATAM markets appealing and how to differentiate hospitality products through design and what are the factors driving growth.

Wilson shared insights garnered from OBM International’s work throughout the Caribbean including recent work developing the Sustainable Tourism Development Plan for Antigua and Barbuda. Wilson shared key metrics from the Plan’s success: tourism expenditure increases 102% and over $1.1 billion in new and redevelopment tourism projects have begun since the plan’s adaptation, including the much-anticipated Half Moon Bay, also being designed by OBM International.

Speaking to an audience looking to invest in the region and evidenced by keynote presenter Governor Ricardo Rossello, remarking that Puerto Rico “is open for business,” the inaugural Caribbean & Latam focused event attracted nearly 100 developers, real estate, and construction industry professionals.

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Press > Expert tips for buying a private island – and upgrading its amenities

Expert tips for buying a private island – and upgrading its amenities

Tourism, Luxury

You Just Bought a Private Island. Now what?

The immediate benefit of buying your own private island is the opportunity to custom design your own paradise. However, the path to creating the ultimate tropical fantasy isn’t easy. There are the pleasant aspects of course, such as the planning process which includes determining how you will use and decorate the space; but deciphering local regulations and estimating a budget to get an island up and running often require expert advisement.

Bloomberg called on OBMI CEO Doug Kulig for his years of experience designing developments on remote islands such as Oil Nut Bay and Scrub Island, to help guide buyers through the typically challenging process. In chronological order, Kulig maps out how he as an architect advises his clients on how to successfully develop private islands.

Kulig suggests completing the myriad approvals for regulations, restrictions, and processes be done prior to purchase. “The island can have environmental concerns, usage concerns, you also have to understand if you’re getting a clear title to the land,” says Kulig. “Only then do you figure out what the development rights are.”

Figuring out what you want to do with the island is the more fun part of the development process. Do you want the house designed as an informal bungalow, with indoor/outdoor spaces, or do you want something more formal? “We talk about lifestyle,” Kulig says. “When are people going to use the island and how are they going to use it? It’s more than just whimsy. If you’re considering a wooden beach-house type of structure, you want to consider storm impacts in the area,” says Kulig.

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Press > Photographer: Ben Popick PURSUITS You Just Bought a Private Island. Now What?

Photographer: Ben Popick PURSUITS You Just Bought a Private Island. Now What?

Tourism, Luxury

You see it listed online: a seven-acre island off the coast of Belize, surrounded by clear blue water and striking distance from an untouched barrier reef. Price: 492,000 pounds, or around $760,000. “You couldn’t buy a 1 bedroom in Williamsburg for that price,” you say to yourself and after a few clicks and a phone call, you’re the proud owner of a tropical haven 12 miles from the resort town of San Pedro (immortalized by Madonna's La Isla Bonita).

So… what next?

There’s probably no plumbing on your new island. There may not even be a house. Or structures at all. You need help.

This is when you call someone like Doug Kulig, the chief executive officer of Miami-based architecture firm and developer OBMI. He has designed and built a 23,500-square-foot estate on a secluded tip of the British Virgin Islands, a hillside area on the southwest coast of Antigua and other houses and resorts throughout the Caribbean. Kulig has years of experience building on remote islands and he helpfully laid out your next moves (in chronological order, no less) for Bloomberg.

1. Figure out the regulations

So glamorous already: “The island can have environmental concerns, usage concerns, you have to understand if you’re getting a clear title to the land,” says Kulig. “Only then do you figure out what the development rights are.” Hopefully you will have done this before purchase, but even so, the myriad approvals for regulations, restrictions, and processes, Kulig says, can easily take three to six months.

2. Figure out what you want to do with the island

This part is more fun, because it involves the least tough choices of all time: Will you want a main house and a few guest houses? Staff quarters? Do you want the house designed as an informal bungalow, with indoor/outdoor spaces, or do you want something more formal? “We talk about lifestyle,” Kulig says. “When are people going to use the island and how are they going to use it? It’s more than just whimsy. If you’re considering a wooden, beach-house type of structure, you want to consider storm impacts in the area,” says Kulig. “Do you want to design for a 25-year storm, or a 50-year storm, or even a 100-year storm?” The latter would involve a house made from concrete, which presents its own set of logistical hurdles.

You'll also need to figure out how you want to get to the island. If you're planning to fly into a nearby airport and take a shallow boat to the island, great. If you're planning to glide in on your 200-foot mega-yacht, you're going to have to build a different kind of infrastructure entirely. Same goes for laying down an airstrip. Kulig recommends proceeding with caution: "Come in with the notion that you're going to respect the land as much as possible," he says. "Of course, you can't expect not to touch anything. Development by its very nature has an impact."

3. Figure out how you’re going to stay alive on the island

Once you have a rough idea of how often you’ll be using the island and how many people will be with you, you'll have to determine how you’re going to get water and electricity. Most of the time, Kulig says, maintaining a water supply entails a combination of water collection and reverse-osmosis facilities. “Water collection’s not a big deal,” he says. “You’re going to collect whatever’s available, and then let’s say you’ve got a small osmosis plant that’s slowly producing water all the time. Let’s say it makes 5,000 gallons a month and you visit only three times a year; you’ll have all the water you’d ever need.”

To power that energy-intensive reverse-osmosis facility, you’ll need solar panels and equipment to store that power (or run an underwater cable from the nearest power source) and to deal with water once you’ve used it, you’ll need some sort of waste water treatment/recycling facility (you presumably want your crystal-clear ocean to stay that way), which in turn requires even more energy.

Unsurprisingly, these facilities represent a significant upfront cost, although Kulig is hesitant to say how much (he estimates “low hundreds of thousands of dollars” for the water treatment and collection and because solar panels are getting so cheap, so fast, he doesn’t want to guess what it would cost a year down the line).

4. Figure out how you’re going to get everything out there

Luckily, this isn’t really up to you. It’s up to whichever local contractor you’ve hired to help organize construction. "We can't just parachute in and know all the answers," Kulig says. "We pair with local groups." But if you’re trying to budget it out (see #5), you should try to get a general sense whether or not materials will be getting to the island via barge and if there’s isn’t an existent dock, a channel needs to be dredged before boats can reach the island. Another alternative is by plane. “We did huge projects in Haiti where there were no docks,” says Kulig. “We just landed planes on the beach and dragged the supplies off with a tractor.”

5. Make a budget

Kulig can’t give an estimate for how much it would cost to get an island up and running, he says. “It could be around $250 to $350 per square foot for a house in Belize,” he says. “But that’s just raw construction. It doesn’t include solar, or water, or docks, or landscape, or whether or not you’d want to pay for a five-ton air conditioning unit.” Could you build a reasonably comfortable, self-sustainable house for less than $1 million? “Absolutely not,” Kulig says.

6. Figure out how to make it pleasant

Back to the fun stuff: You've already got a rough sense of what your aesthetic is going to be (see #2), but you actually have to furnish it. In the city, a decorator is a luxury, but for a remote island, where you'll have to determine which furniture weathers best, which fabrics are more prone to rot, and which finishes deal better with humidity, an interior architect or decorator is closer to a necessity. "People might bring in their design architect from New York to do the house and she might then call a local architect for help," Kulig says.

6. Wait (and wait)

Because this is, after all, a remote island, everything takes longer. “Figure two to three years,” Kulig says. “People might promise you a shorter period, but that’s not taking into account that after you hire a contractor, they have to mobilize people and get their materials in order.”

7. Move in

It’s that simple. (After the years of logistics and millions of dollars, that’s is.)

 

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