Facility Solutions: Going Local

Is there still an argument for going local over national consultants and contractors, when we must deliver a world-class experience to compete? As credit unions began expanding their fields of membership into regional and state-wide markets, their needs became more sophisticated, and the meaning of “local” grew to include a number of remote communities outside their headquarters’ immediate neighborhoods. Growing credit unions became aware of the need for a high level of specialized planning, design, market strategy and branding expertise unavailable in their local markets.

But credit union boards and members still ask: Why didn’t you use one of our local architects or contractors and support our local economy? For CUs like $82 billion Navy Federal Credit Union, Vienna, Va., and others with national and international networks, the answer is easy: Our home towns are everywhere. But the answer is not so easy for smaller regional and local credit unions—particularly when “going local” is a growing trend among consumers and small business entrepreneurs and is one of the fastest growing business sectors across the nation.

How important is working with local contractors to a small credit union? I recently talked with Doug Wadsworth, CEO of $38 million Tri-Cities Community FCU in Kennewick, Wash., about the issue. Wadsworth is developing a new headquarters solution meant to last the next 20 years. He was approached by seven national design/build firms but decided to use local resources.

“As a small community credit union that is very connected to our membership of only 5,000, I couldn't think of any way to stay more true to our founding values and members than by using local builders and architects to design and construct our new headquarters,” says Wadsworth. “When I talk to others about the benefits of using a credit union over a ‘big bank,’ I always explain how their money can stay within their community and doesn't go to distant cities or overseas foreign investors. Our solution was to hire a highly experienced and nationally recognized independent planning, design and project management consultant who is providing the expertise we need and guides the selection and oversight of our local architect and contractor. Our consultant’s experience in all aspects of designing and building financial institutions allowed us to select truly local architects and construction companies. My employees and I can now confidently look our members right in the eye and say ‘Yes, we are using local companies to design and build our new office!’"

Credit unions are presented with a number of choices when selecting their method of planning, designing and building new headquarters and branches. They can hire a national firm that provides all services or select individual consultants for each phase. Collecting all the services required to build a headquarters under one firm provides the advantages of one point of contact throughout the project and a single source for planning, construction and products. The downsides can be increased cost—on average, design/build firms charge 20 percent for design and construction management services plus mark-up on products (while local consulting and contracting typically charge about 15 percent). Using a national group also means repetitive travel cost, less availability than local firms, no check and balance system between the architect and the contractor, and the inability to say the work was done locally. To the last point, building a new headquarters is a huge marketing opportunity; it’s an ongoing story that represents your success and commitment to the community. The more you go local, the more your story will connect with and influence existing and potential members.

In reality, most project money (70 to 85 percent) stays in the local market, as design/build contractors may employ local architects and use local contractors. However, most local general contractors do not appreciate an outsider telling them how to do their business and taking part of the potential profit.

The rationale for going local has been well stated by the Institute for Local Self-Reliance. Here are the organization’s top 10 reasons. (Read the full article for their explanation of each benefit.)

1. local character and prosperity
2. community well-being
3. local decision-making
4. keeping dollars in the local economy
5. job and wages
6. entrepreneurship
7. public benefits and costs
8. environmental sustainability
9. competition
10. product diversity

A number of credit unions have asked me to define the pros and cons of each planning, design and construction solution. I try to be unbiased. The right solution is different for every credit union. Choosing the right firm and individuals is key to success, and that’s the true story you tell your staff, members and community throughout the life of your new headquarters.

Paul Seibert, CMC, is an independent facilities and real estate consultant under Paul Seibert Consulting, Seattle.