Kia Motors America: Lessons in Value Engineering a Build-to-Suit

[ By George Loynd ]

Kia Motors’ main lobby expands vertically through a light well to a skylight.

Constructing a highly visible corporate headquarters on a piece of prime Southern California real estate can present many challenges. But it’s not often that the construction process reads like an adventure novel with the question, “Will the building be completed on time?” hanging in the balance.

The new 22-acre, 226,000-square-foot Kia Motors America headquarters is located in Irvine, east of Jamboree Road and Interstate 5, in one of the most visible spots on a major transportation artery. Millions of commuters travel this corridor between Orange County and Los Angeles annually. Tustin Marketplace, a one-million-square-foot retail center, lies on the opposite side of the freeway surrounded by upscale housing.

Snyder Langston was the general contractor in charge of all building construction and site work for Kia Motors’ $50 million, campus-style landmark headquarters facility. The site work included landscaping features such as palm trees, native grasses and a 1.2-acre pond. Key lessons learned from the project are:

• Use value engineering opportunities to create new choices, as well as save money;
• Engage the city in the construction process and ensure you understand and are following its mandates; and
• Establish positive relationships with the architect, owner and construction manager so you can address the challenges openly and in a collaborative manner.

The Kia headquarters had to be ready for move-in on January 2, 2007. The date was non-negotiable since Kia Motors America had given up its lease on its current office space. The job of completing construction by January 2007 was complicated by three primary challenges:

• Construction was delayed four months at the beginning of the job;
• The cost of materials rose as much as 40 percent during the major construction phase; and
• The building, designed by a major American architectural firm, had many unique and high-end features.

Designed by Skidmore, Owings & Merrill LLP, Kia’s 22-acre, 227,000-square-foot North American headquarters facility is a modern configuration of three buildings joined at the lobby by an all-glass, third-floor “floating” bridge.

SOM’s vision was to create a contemporary facility using the typical construction vernacular for buildings of this type in Southern California - tilt-up construction. The construction typology includes a steel frame, concrete tilt panel facility featuring three interconnected buildings; two, two-story buildings flanking a double-height lobby; and a third building acting as a bridge spanning the other two and capping the lobby. The lobby expands vertically through a light well to a skylight. A third floor is surrounded by skylight space and is composed of executive offices, cubicles and an office suite used by the chairman of Hyundai, the parent company. The building contains 94 concrete tilt panels with an average size of 30 feet by 32 feet, and an average weight of 70 tons each. The interior of the bridge building is essentially a hybrid of tilt panels and structural steel to accommodate the long spans across the building.

Value Engineering Opportunities During Preconstruction
Development began with a preconstruction phase that preceded the groundbreaking by approximately 10 months. Snyder Langston has significant experience with value engineering during preconstruction, often providing clients with significant savings by suggesting alternative materials and finishes or proposing innovative construction methods. The preconstruction process for Kia Motors’ headquarters was a good example of this skill. While the overall square footage and size of the buildings remained unchanged, almost everything else came into play. Snyder Langston did a full cost analysis of alternate materials throughout the buildings from the exterior façade through all the interior and exterior finishes.

Kia Motors’ main lobby includes a display of its vehicles under overhead skylights.

One of the most notable successes during preconstruction was Snyder Langston’s ability to work with a prominent local glazing subcontractor, who fabricated six, 23-foot pivot doors for the west side of the bridge building. The doors are part of a strikingly attractive structural glass curtain wall that allows automobiles to be displayed in the lobby. Although doors of this type had not been seen previously, Snyder Langston worked with the subcontractor during value engineering, enabling Kia to retain the doors as part of the building design. Snyder Langston also studied the bridge building’s use of exterior glass and discovered a solution that maintained the building’s aesthetic profile with a more cost- effective structural glass curtain wall.

Groundbreaking—And Then, Delay and Rising Prices
In July 2005, Snyder Langston had the site graded, and then faced a four-month delay while the design was completed and permits for the foundation and superstructure were obtained. By unfortunate coincidence, 2005 was the busiest year for new construction in the city’s history, extending review times by several weeks.

The design delay pushed the pricing and purchasing of building materials into the early months of 2006, which set the scene for another major challenge: skyrocketing price increases. During late 2005 through mid-2006, prices rose monthly on most building materials, including petroleum-based products, plastics, PVC, lumber and any product using gypsum. To demonstrate the pervasiveness of this national phenomenon -- as well as establish that price increases were not the fault of Studley, SOM, Snyder Langston or its subcontractor -- Studley compiled a report for Kia Motors showing examples of other current projects where owners were facing similar issues. In this period of escalating prices, Snyder Langston had to make up four months of construction time to meet Kia’s move-in date. Accelerating the job meant additional costs for overtime and weekend work and the cost of expediting materials. Kia Motors was committed to managing to its budget, which created a need for a second value engineering effort—even more intensive than the one undertaken during preconstruction—in an effort to hold down costs. As Kia made further design changes that impacted construction, collaboration and cooperation became even more critical. When Kia proposed a change, it was priced quickly and Snyder Langston helped Kia reach a timely decision, thereby avoiding further price increases. In many cases, the commitment had to be made within 30 days; in some, it had to be done on the spot, illustrating the extreme price volatility that occurred during this period.

In this second value engineering effort, Snyder Langston suggested ways that Kia Motors could save money without sacrificing the look or functionality it desired. For example, the design called for a granite floor in the lobby. Colored concrete in a rich charcoal tone achieved the same effect at a lower cost, which was acceptable to Kia. Even as construction moved forward, delays continued. A month was lost on the west building in July 2006, when additional fireproofing requirements necessitated the removal and replacement of significant amounts of materials already installed. In September, the third floor of the bridge building went through a major redesign. During these delays Snyder Langston worked on areas of the buildings that were not impacted and continued to make progress.

Unique 30-foot pivoting glass entry doors allow for easy access of showroom vehicles.

Cliff-Hanger to the End
In the last months of the job, the project caught a break. Additional manpower was available in some of the key trades, particularly in the finish trades. Snyder Langston was able to tap into these resources because of its good relationships spanning nearly 50 years with the county’s subcontractor community. This enabled the company to secure the manpower it needed, when it was one of many companies asking.

In spite of the judicious use of additional manpower, the completion date still hung in the balance. September signaled the most challenging time of the year to complete projects – the beginning of the holiday season. With less than four months remaining, relationships were again the key to success. Kia brought the city to the table early and explained its need to move into the new building on the first working day of 2007. The city provided information on the requirements for a temporary Certificate of Occupancy and how those requirements could be met. This prevented last-minute misunderstandings. Snyder Langston also borrowed on its relationship legacy with the City of Irvine, as its general superintendent had worked with the city for 20 years. Additionally, Snyder Langston’s relationships with its subcontractors were of primary importance. Trades people worked through the holidays, maintaining focus and providing their best efforts.

On December 22, 2006, the City of Irvine granted Kia Motors America a temporary Certificate of Occupancy, assuring that employees could move in on January 2, 2007. Kia Motors America’s headquarters crowns a major Southern California freeway, a testimonial to lessons learned on the job.

By George Loynd, project manager, Snyder Langston.

For more information
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