Making sense of the ENR Threshold isn't easy ...

Making sense of the ENR Threshold 20% additional requirement isn’t easy for many people including some building officials here in California.Unlike the Federal ADAS, which requires a flat 20% additional be spent on accessibility based on the adjusted construction costs with no cap, California has created a “Minimum & Maximum” 20% based on an ever-increasing construction valuation number. With the Federal ADA the DOJ enforces the law where as California leaves enforcement up to the local building department.California is the only state that has this type of system that sets a cap on construction costs that will allow a maximum of 20%. But what happens when your projects costs exceed the cap threshold amount?An even better question is what happens when multiple smaller cost permits are pulled on the same property within a three-year period?What impact to the landlord is triggered when multiple tenants engage in tenant improvement projects?Per 2013 California Building Code Section 11B-202.4 Exception 8, the 2015 valuation threshold is $147,863.00 and will be updated again in January 2016.The annual valuation threshold is based on the January 1981 threshold of $50,000.00 as adjusted using the ENR 20 Cities Construction Cost Index, and as published by Engineering News-Record, McGraw-Hill Publishing Company, for January of each year. 

Year

ENR Construction Cost Index (Jan.):

Valuation Threshold

2015 9971.96 $ 147,863.00 2014 9664.45 $ 143,303.00 2013 9437.27 $ 139,934.00 2012 9175.94 $ 136,060.00 2011 8938.30 $ 132,536.28 2010 8660.08 $ 128,410.86 2009 8549.06 $ 126,764.66 2008 8090.06 $ 119,958.65 2007 7879.58 $ 116,837.68 2006 7660.29 $ 113,586.07 2005 7297.24 $ 108,202.79 2004 6824.90 $ 101,198.98 2003 6580.54 $ 97,575.63 2002 6461.81 $ 95,815.11 2001 6280.85 $ 93,131.86 2000 6130.36 $ 90,900.40

 So a retail tenant pulls a permit for a tenant improvement inside their space. The project consists of removing non-load bearing walls, removing carpet tiles and completely remodeling the restrooms, drinking fountains, shelving racks and check out counters. New fixtures will be installed including a new accessible sales counter and point of sale device. The tenant has an adjusted construction valuation of $100,000 not including permit fees, architectural fees etc. Based on the ENR Threshold, this tenant must spend an additional $20,000 up and beyond the $100,000 on accessibility improvements. A portion of the interior costs can be applied to the 20% such as a percentage of the restroom and drinking fountain cost because of the required ADA elements. The one ADA check stand or sales counter can be applied as well. In most cases it’s not a lot but every little bit helps. Now the remaining 20% still needs to be met.Well, this is when the landlord gets involved whether they want to or not. Here is what the codes require when these types of improvements are taking place. The area of alteration inside the tenants space must be brought up to the current California Building Code but also, the “Path of Travel” that serves the altered area must be made compliant up to the point that the costs don’t exceed the 20%.Let’s say that a major anchor space in the same shopping center is sitting vacant. The landlord wants to split this space into two smaller spaces to lure in some clothing or shoe outlet tenant. The landlord pulls a permit to install a demising wall, split power, utilities, install new store front doors and re-work the glass panels, rip out the flooring and re-install tile and install all new drop ceiling with light fixtures. The “adjusted construction valuation is $400,000 just to get ready for new tenants to look at the spaces. The landlord now has to spend $80,000 minimum on additional accessibility improvements. Since these are two empty shell spaces there is not very much to add up towards the 20% except for the restrooms and the front entry doors.So the landlord now needs to start with the “Off Site” arrival point which connects to the public right of way and work there way towards the two vacant spaces. The on site path of travel must be brought into compliance as well as the closest set of disabled parking stalls, curb ramp, striping and signage. The door landings at both of these new spaces must be level 2% maximum and the doors must provide 32” clear when the door is open at 90 degrees as well as accessible hardware, 10” solid surface kick plate along the bottom of door with a 5 pounds of pressure to operate.If the $80,000 in additional improvements is completed but the path of travel to the altered areas is still non-compliant in areas, then the building official can instruct the landlord to make more improvements as long as they feel that it does not impose an unreasonable hardship. Landlord is required to provide compliance by equivalent facilitation or to the maximum extend feasible. But in no case shall the landlord spend less than 20% of the adjusted construction costs.One of the key components that I mentioned above is the path of travel to the altered area. Here is the code section word for word.11B-202 Existing buildings and facilities11B-202.4 Path of travel requirements in alterations, additions and structural repairs.When the adjusted construction cost is less than or equal to the current valuation threshold, as defined in Chapter 2, Section 202, the cost of compliance with Section 11B-202.4 shall be limited to 20 percent of the adjusted construction cost of alterations, structural repairs or additions. When the cost of full compliance with Section 11B-202.4 would exceed 20 percent, compliance shall be provided to the greatest extent possible without exceeding 20 percent.When the adjusted construction cost exceeds the current valuation threshold, as defined in Chapter 2, Section 202, and the enforcing agency determines the cost of compliance with Section 11B-202.4 is an unreasonable hardship, as defined in Chapter 2, Section 202, full compliance with Section 11B-202.4 shall not be required. Compliance shall be provided by equivalent facilitation or to the greatest extent possible without creating an unreasonable hardship; but in no case shall the cost of compliance be less than 20 percent of the adjusted construction cost of alterations, structural repairs or additions. The details of the finding of unreasonable hardship shall be recorded and entered into the files of the enforcing agency and shall be subject to Chapter 1, Section 1.9.1.5, Special Conditions for Persons with Disabilities Requiring Appeals Action Ratification.For the purposes of this exception, the adjusted construction cost of alterations, structural repairs or additions shall not include the cost of alterations to path of travel elements required to comply with section 11B-202.4.In choosing which accessible elements to provide, priority should be given to those elements that will provide the greatest access in the following order:1)    An accessible entrance;2)    An accessible route to the altered area;3)    At least one accessible restroom for each sex;4)    Accessible telephones;5)    Accessible drinking fountains;6)    Accessible parking, storage and alarms.Here is the section that caught way too many people by surprise!“If an area has been altered without providing an accessible path of travel to the area, and subsequent alterations of that area or a different area on the same path of travel are undertaken within three years of the original alteration, the total cost of alterations to the areas on that path of travel during the preceding three-year period shall be considered in determining whether the cost of making that path of travel accessible is disproportionate.”So basically, if alterations, T,I’s or additions have been under the ENR threshold and the path of travel serving these areas was not brought into full compliance, the costs of all of the projects in that three-year period are added together to establish a new adjusted construction valuation to determine the required 20%. Yikes! This can be a real kick in the pocket book if your not paying attention to this.Valuable Take Aways!1)    If your valuation is under the current threshold then you spend a max 20% additional on ADA.2)    If your valuation is at or above the current threshold then you will spend at least 20% or whatever percentage is deemed reasonable by the building department3)    If multiple “under valuation” projects are completed without providing a compliant path of travel to those areas within a three-year period, the building department will add all of them up and come up with a new valuation number and percentage required for additional accessibility.This is serious stuff and the local building agencies are cracking down on commercial owners and tenants.Be prepared to answer any building official or inspector when it comes to how much you can reasonably spend up and over the 20%.