Succession planning for construction companies
When it comes to the construction industry, where so many businesses are either family owned or closely held, formal plans for a successor are a must, but can be a major challenge for business owners who are busy with managing daily operations and planning for the next big project.
Succession planning, however, is becoming a significant issue for the construction industry and the great unknown of what may happen when the business's founder is no longer able or willing to be in charge can lead to much concern and uncertainty. Yet, currently 70 percent of businesses die with the founder. If the owner desires to keep the business going for years to come, a succession plan is essential. Many construction owners have similar challenges when they start the succession process such as:
• How to avoid selling to a third party and provide for the welfare of the owner's trusted managers and employees;
• Creating a buy-sell agreement under which the company purchases shares from the owner's heirs;
• Possible incentives that the owner can give key employees to remain with the company through an ownership and management transition.
All family owned and closely held businesses should have buy-sell agreements to plan for dealing with problems that arise upon the death or disability of the owner. These agreements provide for the purchase of an owner's interest in the business following his or her death or disability, and in some cases, following retirement.
The purchaser may be the deceased party's partner or co-shareholder, an employee of the business, or the business itself. Buy-sell agreements generally have two basic goals: (1) the conversion of a deceased owner's interest into liquid assets; and (2) the prevention of the transfer of the decedent's stock to outside interests. CLICK TITLE TO CONTINUE
Union guarantees still up in the air for Hartford's Downtown North Project
ne of the most important questions about the $350 million Hartford Downtown North project — how much of the construction work will be guaranteed for union labor — remains up in the air as the city council prepares to hand Mayor Pedro Segarra the power to sign a deal. This lapse seems odd considering all the scrutiny aimed at the project, especially the $56 million for a minor league ballpark funded by the city through a lease. The council, which on Tuesday night is expected to approve the DoNo project, is considered pro-union, with six Democrats and three members of the Working Families Party. But the final resolution will most likely only require the developer to "enter into a project labor agreement," meaning some form of legally binding pact to assure union work, with details yet to be worked out. Numbers bandying about are that 80 percent of the ballpark construction would be union, and the remaining $294 million worth of bricks and mortar would rise in the coming years with no assurance of union labor. Despite the lack of mandated assurance, the developer, DoNo Hartford LLC, is reaching agreements for some of the work, but not all of it, with skilled trades, including electricians and carpenters, said Shawn Wooden, the city council president.
CLICK TITLE TO CONTINUE
$8M for new Uconn soccer stadium on the way
TORRS — When Joe Morrone started coaching men's soccer at UConn in 1969, the team's field was little more than a forgotten stretch of land on campus. "I actually was the first to line it up and get the markings on it," Morrone said. "I was the groundskeeper, and everything else. There were no stands, no ropes, and no people — there was nothing." Morrone not only put UConn soccer on the map with that field, he built a powerhouse. On Monday, UConn confirmed plans to build a new soccer stadium after Tony Rizza, a former soccer player for the Huskies and a highly successful investment manager, made the largest gift in UConn athletics history. The $8 million gift will be used for a new stadium, which will be built on the current site of the Joseph J. Morrone Stadium and retain the same name. UConn hopes to start construction by December 2015. "This is a transformative gift," UConn athletic director Warde Manuel said. "This allows us to move forward exponentially." The facility will include the existing training grounds and practice field next to the stadium. It will be named the Rizza Family Soccer complex. CLICK TITLE TO CONTINUE
Unions to build baseball stadium
Hartford's city council will likely approve a deal to build a new minor league baseball stadium on Tuesday, and there’s one new change to the deal – union laborers will do the work. The developer has said that tweak could easily add 10 percent to the stadium's cost. But the council has also decided to put a hard cap on the cost of the stadium at $56 million. So, taken together, that means the council has fixed the cost of the project while potentially making it more expensive. Bob Landino is the developer, and he said that, once he gets real numbers back from the market, he'll have a better sense of the project's total cost. (Hard construction costs are estimated at around $38 million.) And then, if union labor really does add that extra ten percent, it could be time to make some choices.
"You might have a very expensive tile in certain places of the bathrooms or certain places of the public areas and we might replace it with medium quality tile. And, in a large building, that could save a half a million dollars,” Landino said. “We might use a different mechanical system, which might save $200,000 or $300,000. We might change the design to use less steel -- so, by doing that, you lose some of the sizzle of some of the aspects of the building. But, if people could live with that, then it might save another x number of dollars." Landino says there are other ways to save money -- like asking the building trades to contribute to the cost of construction. And there's also a last resort, if all else fails. CLICK TITLE TO CONTINUE