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Atlantic Yards/Pacific Park graphic: what's built/what's coming + FAQ (pinned post)

"Five Rules for Managing Large, Complex Projects" and some Atlantic Yards sobriety

The MITSloan Management Review brings us Five Rules for Managing Large, Complex Projects, published 8/31/17 and authored by UK- and Australia-based academics Andrew Davies, Mark Dodgson, David M. Gann, and Samuel C. MacAulay.

They note that megaprojects, "defined as projects with budgets exceeding $1 billion — are important contributors to numerous sectors, including health care, defense, mining, telecommunications, transport, energy and water infrastructure, sporting events, science, and manufacturing," but "have proved notoriously difficult to deliver on time and on budget."

The challenge:
Why are megaprojects so difficult to manage? The reasons include technical challenges, changes in design and operational requirements, increases in costs, disputes over responsibility, and new regulations. Complexity usually increases with project scale, and complexity can give rise to uncertainty and an inability to foresee the difficulties, changing conditions, and unanticipated opportunities that will be encountered once the project is underway. In this article, we argue that one way to manage the uncertainties is to innovate throughout the course of the project. What’s more, we believe our suggestions are applicable to all large-scale, long-term projects — not just projects with billon-dollar budgets.
Based on analyzing five projects in and around London--air terminals, railways, tunnel--they've distilled "five rules for innovation in large, high-risk projects."

The rules may be less applicable to a public-private real-estate megaproject like Atlantic Yards/Pacific Park, especially given the extra variable of real estate business cycles and the layer of politics--city and state--involved.

However, they're worth some sober reflection, which may lead to the conclusion that projections for Atlantic Yards/Pacific Park--ten years of "jobs, housing, and hoops"--were way overoptimistic.

1. Assess what’s worked before.

For Atlantic Yards/Pacific Park, I'm not sure what contemporary projects were comparable, given the need to build a platform over a working railyard adjacent to an extant residential neighborhood,

2. Organize for the unforeseen.

The authors recommend "more flexible contracts are required to deal with unexpected and rapidly changing circumstances." While the advice regards client-contractor relationships, with Atlantic Yards/Pacific Park, the contracts between developer and government (MTA, ESDC) have indeed proven flexible.

The problem in Brooklyn is that such flexibility means delays in delivering public benefits, which adds another wrinkle. So either the public needs firmer contractual promises of benefits, as I've suggested, or maybe highly conditional promises that spell out potential variables. But the latter would make it much tougher to "sell" a project.

3. Rehearse first.

Well, developers know how to build towers, and platform technology is not new either. But this lesson reminds me of the contention, from Skanska, that the "rehearsal" of the Forest City-developed modular technology solution was inadequate.

“If FC [Forest City] had not been so profit- and schedule-driven at this stage of the Project, if it had been willing to step back and consider seriously the implications of its own prototyping information, the possibility existed for catching at the outset an important problem in its design,” Skanska's Richard Kennedy wrote, in a document that's part of the legal battle between the two former partners.

4. Calibrate and apportion risks appropriately. 

This has to do with "different contracts and collaborative arrangements to address the varying challenges of individual projects within the program." That may have happened in terms of the developer's subcontracting, but it certainly didn't happen across the board between the developer and the government.

We'll see, though, whether the 2014 contract that imposes fines on affordable housing that's delayed past 2025 actually leads to fines (if delays), or if/how the city will be flexible regarding subsidies and/or affordability to allow that contract provision to be met, if not in spirit.

5. Harness innovation from start to finish.

Not sure about that one. Atlantic Yards/Pacific Park is a "never-say-never project," in my estimation, less because of innovation but because conditions change and the developers push the government for revised terms.