I. A seismic retrofit project often entails 3 cost categories:
1. Engineering fees
These generally run from $6,000 to $10,000 per completed and approved set of plans depending on the size of the property. Usually a senior engineer will be required for 15 to 30 hours and a junior engineer or designer for 40 to 60 hours of work. Senior engineers (a P.E. – Professional Engineer) charge around $150 to $200 per hour and a junior engineer from $90 to $130 per hour. Some engineering companies may offer a single blended rate to cover all engineering (typically $110 or more). Unless the building owner can provide an “as-built”, building elevations are required and will add about 20 hours of additional site measurement, engineering and drafting.
- The city of Los Angeles has an extensive checklist of documents and calculations including a requirement of certification from a P.E. (Professional Engineer).
- San Francisco requires two signed sets of plans prepared by a licensed architect, civil or structural engineer that includes structural calculations.
Some construction companies may offer “Design Build” for a retrofit project and offer low, fixed pricing for engineering. The building owner should beware that most companies will aim to recover any discount on the engineering by an additional mark up on the construction, so building owners will end up paying the same when the project is complete.
Value Engineering is a key component in finding affordable construction solutions for a property. Value Engineering is the process of evaluating all compliant construction solutions for a structure with the goal of finding the best value option. Often a $15,000 solution can be as compliant as a $50,000 solution depending on the property.
2. Permitting Fees
Permit fees are charged directly by the city. The range in fees is based on a combination of the property specifications and cost of the retrofit.
For the Los Angeles area, plan review and construction permitting fees can be estimated using this LADBS Permit Calculator
For the San Francisco area, the cost of Construction building permitting is a percentage of construction costs per the San Francisco Building Code Section 110A.
3. Construction Fees
In some cases, a property may have been incorrectly identified as an at-risk building. In these cases the owner needs to submit evidence to the city that the building should be excluded from the ordinance.
Common seismic retrofit solutions are:
a. Moment Frames
Moment frames can be delivered to the jobsite either as 2 columns and a connecting beam, or fully pre-assembled into a single unit. A full frame has 2 columns at the height of the soft story floor (roughly 8’) and the beam the width of the open bay (~8’ to 14’), although there are many permutations. Moment frames can be bolted or welded in fabrication or at the jobsite. Some units are termed ‘Special’ moment frames – these are distinguished by having a ductile plate or fuse at the connection between the beam and columns. This component is designed to deform under lateral loads from a seismic event and may save the columns and beams from permanent deformation. Costs vary on the exact size and complexity of installation, but roughly $20,000 to $25,000 per installed frame can be expected.
A rough rule is that a moment frame is required for every 2 parking bays. However, this can vary depending on the strength of existing shear walls and pre-existing steel structural supports.
b. Cantilevered Columns
Cantilevered columns are expected to be a popular solution. First new concrete footings are laid, often with a grade beam for support. The cantilevered columns are then fastened to existing structural members to transmit the load from the footings to the second floor. A report from Applied Technology Council (ATC) for the San Francisco Soft Story program found cantilevered columns to be an effective solution, but similar in cost and performance to moment frames. One potential advantage is that cantilevered columns may be more space efficient than a moment frame with a beam fixed at the top of the columns. A single bay cantilevered solution is expected to cost around $15,000 to $20,000 fully installed.
c. Shear Wall Strengthening
In a few cases shear wall strengthening can be accepted by the city of Los Angeles as a potential solution and is cheaper than other construction options such as cantilevered columns or moment frames. However, in most cases, this approach will not provide sufficient strength to meet the requirements – particularly when tuck-in parking and open bays are present. Adding shear wall strength is expected to cost around $5,000 to $10,000 for labor and materials. A good engineer will evaluate whether this lower cost solution will be permitted.
II. Information on How To Finance Your Retrofitting Project
1. Cost Recovery Programs
A percentage of seismic retrofit costs may be passed onto tenants for an allowable number of years.
|City||% of cost allowable to pass through to tenant||Maximumn increase limits for tenants||Amortization period allowed|
|Los Angeles||50%||$38.00 per month||10 years|
|San Francisco||100%||$30.00 or 10% of the tenant’s petition base rent annually, whichever is greater||20 years|
Within a limited time period after retrofit construction completion, an application must be submitted to the respective rent control/stabilization organization. Upon review of your application, the rent control/stabilization organization will determine the approved pass-through amount.
2. Financing Solutions
Common methods to financing seismic retrofit projects are
- PACE assessment financing
- Cash-out mortgage refinancing
a. PACE Assessment
- Repaid through property tax payments
- 20-30 year terms available
- Stays with property, fully transferable upon sale
- Low up-front cost
- Easy credit approval
b. Cash-out Refinancing
- Low rates
- Cash available to make any other building improvements
- Traditional mortgage
- More options for various financing structures