Articles

Understanding a Synagogue Construction Budget

The importance of numbers in black and white so they won’t go the red.

ACQUISITION

Phase 1 Environmental Consultant

Phase 2 Environmental Consultant

HARD COST

Construction cost
The projected cost to construct the project as estimated by an architect, engineer or general contractor. Typically expressed as either a cost per square foot of building or cost per task.

Construction Contingency
This is a set-aside for cost overruns. No project is ever designed with every single issue accounted for, there will always be unforeseen conditions or mistakes in your drawings that will require a construction “change order”. A contingency budgets for these unknown additions to your project. It is wise to allocate an additional 10-15% of the total budget for the project budget.

Permits Fees, Tap Fees, Utility Charges
Contact for local building department and utility companies to inquire about these charges. Some municipalities waive permit fees for nonprofits.

PROFESSIONAL FEES

Architecture and Engineering
This cost covers the design of the building, preparation of construction, documents and construction oversight, and may be based on a percentage of the construction costs. You should negotiate a fee with your architect.

Architecture and Engineering Reimbursables
An estimate for direct, non-
personnel costs incurred by the architects and engineers during the project for expenses such as travel and printing. Set a limit on these costs with your architect.

Geotechnical Exploration
Geotechnical work is conducted by engineers to examine the foundation and soil conditions of your site. This helps determine if your site can support the design and construction of your project. Fees for such services depend on the number of soil borings performed.

Testing and Inspection Services
These are services employed during construction by specialized engineering firms to test materials that support the overall structure of the buildings. Fees for such services depend on the type and number of tests called for by your architect.

Legal Fees
Legal fees may include review of loan documents, an escrow agreement and contracts between your organization and a project manager, architect and contractor.

Project Management Services
The cost of an individual or firm that assumes responsibility on behalf of the Synagogue for the coordination, management and oversight of the construction project.

PROJECT FINANCING FEES AND COSTS

Property Survey
A document provided by a surveying company with the legal description of a property, actual dimensions of a building or vacant land, topographical information, and utility and easement information. Lenders and title companies require surveys. Fees vary depending on the size of the land or building and the level of detail of the survey.

Appraisal
An opinion of a property’s value provided by an appraisal company. Appraisals are usually required by lenders before financing is approved. Fees usually range from $2,000 to $5,000.

Title and Recording Costs
Services provided by a title company to record mortgages and provide title insurance to your and your lender, which protects you from liens. Fees vary depending on the number of documents that must be recorded and the number of title endorsements required by your attorney and your lender.

Construction Escrow Fees
Services provided by a title company for overseeing your construction escrow account, which manages payments to contractors and subcontractors, and maintains title insurance during construction. Fees vary based on the size of the construction budget and number of construction payments. You can call a title company directly to inquire about costs for this service.

Application Fees
Fees that a lending institution charges for submitting a loan application.

Financing Fees
A mortgage fee that covers the lending institution’s expenses. This fee is sometimes stated in points, with each point being equal to one percent of the loan amount.

Construction Interest
The amount of current interest due on your construction loan. For each loan disbursement that is made during your project, interest will become due. The amount you should budget depends on the loan amount, the interest rate and the number of months of construction.

Lender Inspecting Architect Fees
A separate inspector other than your architect may be required by the lender to review all work completed during the course of construction. Check with your lender for an estimate of these fees.

Lender Legal Fees
The lender’s legal costs associated with preparation and review of loan transaction documents. Check with your lender for an estimate of these fees.

MISCELLANEOUS EXPENSES

Insurance
Insurance should be carried during the course of construction. Lenders also require insurance. The cost of insurance depends on the size of your project. Call your insurance carrier for a quote.

General Liability
Covers your organization for general insurance claims

Property Insurance
Covers your organization for property loss

Builder’s Risk
covers the replacement value of improvements to your
property as they are being made.

FURNISHINGS AND EQUIPMENT

Sanctuary furnishings
Seating, Chancel Furnishings

Office furnishings
administrative and office furnishings

Classroom furnishings
classroom furnishings

Dinning hall equipment
tables, chairs and other dinning hall furnishings

Kitchen equipment
Most jurisdictions require Synagogue kitchens to be build to restaurant standards, expect to pay $10K to $100K for a Kitchen.

Sound system
sound systems

Video system
video equipment and screens

Phone system
phone equipment

Office equipment
Consider leasing office equipment if you do high volume printing.

Security Equipment
The costs of equipment and cabling for security system for your facility.