Moving into a new location to operate your business?
Take a sneak peak at what might come if you move into a property without doing your due diligence on existing building violations or if the building is constructed according to code for your needs.
A little background info
New York City Department of Buildings (NYC DOB), Fire Department of New York (FDNY), and other regulatory authorities regularly do inspections on commercial buildings and make sure that they are operating under full code and safety compliance.
This is very important - remember the explosion that took out Pommes Frites and left many injured and dead down in the east village? This was a result of a serious fire code violation - the owner attempted to make an illegal gas split, which leaked and exploded. The city and fire department are very serious about preventing such tragedies, and this is why compliance is extremely important and violations are extremely expensive.
We recently got in touch with a moving company which had moved into a warehouse and started their operations, without understanding the implications of "just move and operate" without doing due diligence to be sure their operation was allowable by code.
A sample FDNY summons
What happened next?
The moving company got 4 summonses from FDNY over 90 days. The most serious one was due to their improper storage of propane for their forklifts- the summons was for storing and handling explosive gases, a violation of a very important safety regulation under New York City Fire Code (Fire Code/FC 2301). Although our client unknowingly or unwillingly started operating in violation, it doesn't matter, FDNY will still shut your operation down either way.
The moving company had no choice but to stop operating their forklifts and other equipment at the location for 90 days, resulting in a huge loss of revenue. During this time, they approached us to help them through the complex process of updating a commercial building - in this case, a warehouse - up to code.
How did we help?
We helped them every step of the way. First, we made a site visit and LiDAR scan in order to develop a model of existing building conditions. This allowed us to assess if there were any additional code violations that they might have to contend with later on down the road. Better to do it now and only pay once, than to have to assess later on and pay again! Luckily for them, they had no further code violations in the building.
The next step was creating a design for the correct storage of the propane tanks. Using our knowledge of NYC codes, we designed the correct storage system with the minimum amount of changes they'll need to make in order to comply with city requirements. After the client approved the minimum design (aka concept design), we add more details that the city needs in order to approve (permit design). We gave the design to our architect to do all the code calculations and put their stamp to show that the plans are correct and safe.
As we waited for the city to approve the design, we searched for a good contractor on behalf of the client. While contractors can give quotes based on what they see in the permit set, many contractors require a construction set - which shows all the minute details of exactly how to construct the project and the accompanying material list.
Making a construction set might seem overkill to you.... But which would you prefer- a contractor guessing about how your project should be constructed, maybe getting it wrong, and failing the city inspection - leading to even more opportunity costs? Or your contractor confidently moving forward, constructing exactly as the architect intends, and the city approving the project on the first inspection?
We studied the impact of the way the client handled moving into the new space, and concluded that they took losses of more than 300k dollars. All this could have been easily handled if the moving company had just approached a designer and did the necessary changes according to code before moving into the building. All that could have cost under 50k.
A simple yet powerful lesson for business owners in NYC.
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