TPI Inside Newsletter
Chief Investment Officer
Chris Flagg identifies how Plan A or Plan B may not always be the ideal outcome
“If Plan A doesn’t work, the alphabet has 25 more letters – 204 if you’re in Japan.” – Claire Cook, author of Seven Year Switch
After reflecting upon our project updates over the last six months, the word Plan B kept coming to mind. So, I started searching for Plan B quotes, and sure enough, the quote above caught my eye not only because it is amusing, but retrospectively insightful on a deeper level.
Not everything, including development projects, goes as originally planned. It doesn’t matter what you call it; adaptation, flexibility, evolution, pivoting, change of plans, course correction, Plan B is required because Plan A didn’t work. But when Plan A doesn’t work, it’s not the end of the world, nor the end of a given project. We adapt, we pivot, we figure out Plan B, C, D…X, Y, Z.
Fort Myers Beach Plan A was Grand Resorts, which was too big and too complicated to get the local support needed to secure entitlements. We pivoted to Plan B, which was on track to becoming a landmark Margaritaville Resort & Beach Club, opening in late 2020. We then learned that a local resident had sued the town of Fort Myers Beach over their approval of our project. This legal action has now delayed the project another 12 months. Plan C is now to align the Margaritaville Resort and its sister project, Beaches Gateway Village, to open around the same time. With this new plan, Beaches Gateway Village will be able to provide permanent housing to our future Margaritaville Resort associates immediately upon their hiring in mid to late 2021.
Hampton Inn Eden Prairie Plan A included an underground garage, which resulted in driving up the costs so high, that the project was no longer feasible. The project then evolved to Plan B by adding an addition floor, which reduced the size of the building footprint and allowed for the elimination of the underground garage and a more cost-effective, slab-on-grade foundation design. This change reduced construction costs by nearly $2M, making the project economically feasible again. We moved forward only to ultimately uncover soil conditions that were far worse than anyone, including our geotechnical consultant, had ever contemplated; a problem that would have also eventually impacted Plan A. The foundation plans needed to change again. Plan C is the same Plan B building, but now with a deep foundation system that will prevent the building from eroding into the adjacent Lake Idlewild over time, a likely scenario that would have unknowingly played out with Plan A had we moved forward with that design a couple years ago.
Even Residence Inn / SpringHill Suites Arbor Lakes is a project with a Plan C. Plan A was to build a single SpringHill Suites with a hope that the land across the street would change from a proposed second new hotel to some other use. Well, we learned that our hope was for not and we were faced with decision of either building this second hotel ourselves, or see the land be sold to and built on by a competitor. We decided to purchase the site, and we pivoted to Plan B, an operationally efficient, dual-branded Residence Inn / SpringHill Suites, with a single lobby, shared front desk, one set of guestroom elevators and shared guestroom floors. Basically, turn left for SpringHill Suites, turn right for Residence Inn. Well, following Marriott’s initial design review, they informed us that the blended dual-brand design with a shared lobby and front desk, was no longer an option for suburban locations. Now, we had to redesign the entire building to be a “linked”, dual-brand, whereby each brand has its own entrance, lobby, front desks, and separate guestroom tower elevators…a design that was far less efficient than the Plan B blended design. We still pushed forward, and Plan C was born.
I know you all agree, it would be so nice if a Plan A just worked the way it was supposed to, every time. But sometimes, many times, most of the time…life and development projects just don’t turn out that way. But we learn, adapt and ultimately create new plans that do eventually work. In many instances, like Hampton Inn Eden Prairie, Plan C ends up being a far better solution than Plan A.
I am very excited for the direction we are headed, even if we need to figure out a few more Plan Bs and Plan Cs to get there. Thank you all for your continued hard work. May each of you have a blessed and happy holiday season with your fellow associates and families. Cheers to a productive 2018, and a very exciting 2019 ahead of us.