Tishman forms new design/build division

Real Estate Weekly, Feb 9, 1994

Tishman Realty & Construction has launched a new unit called the Tishman Urban Development Corporation (TUDC), that will concentrate on design/build projects. John T. Livingston has been named its president and chief operating officer.

Design/build has become the new buzzword, noted Livingston, as traditional development has phased-out over the last five years. Design/build firms are not owners, he added. Design/build means that one entity, such as TUDC, would supply a user with a building, rather than the user hiring an architect, engineer, constructor and management team to provide those services. Often these are public/private projects.

Since it is no longer possible for a developer to construct a new project on spec, design/build enables end users such as institutions, corporations and government entities to receive what they want without the headaches.

"The idea is one stop shopping," Livingston said. "You hire a firm, or a partnership of firms, and then you own it. For 100 million you will get this building come hell and high water."

Livingston was a former partner in The Linpro Company, the developer of the Federal Office Building at Foley Square, that Tishman is building. The Foley Square project, he said, was essentially a design/build turnkey operation.

"The government had a tremendous amount of specifications," he said. "We drew them out and bid and guaranteed on-time delivery." In the past, he recalled, the government would simply design it, bid it, and then manage the project themselves.

Livingston expects more firms like Tishman coming into this area of construction because if there was a great demand for office space there would not be a need for design/build.

"The developers today are all hired guns," he noted. "The risks inherent in our industry. are not worth the rewards you can make in real estate today. The demand is so thin, the margins are so thin, and the financing is difficult to put together."

To discuss this growing trend and the restructuring of the industry, a conference called Design-Build America will be taking place in Washington D.C. on March 30th and 31st.

TUDC was a name chosen by Livingston. "I used to work for the Public Development Corporation and also worked with the Urban Development Corp.," he explained. "I picked the name because all I've done is public/private work."

Among his projects during his time at PDC as executive vice president of commercial development were the second phase of the South Street Seaport, the 42rid Street Redevelopment Project, MetroTech and Queens West.

While with Linpro, Livingston also worked on the master plan for the redevelopment of Penn Station and the adaptive re-use of the James A. Farley Post Office Building into AMTRAK's new terminal. He will continue to co-direct the latter project.

"It's going to be gorgeous," Livingston said. "It will be opened up with light and air." Initial funding is anticipated by the end of the year.

Livingston, who holds a BA in architecture from the, University of Pennsylvania and a Master's in City Planning from Harvard University, has also held jobs with New England Mutual Life Insurance Co., the Swiss owned Fidinam U.S.A., and VMS Realty Partners.

He is excited about his new job with Tishman, a firm that is responsible for the construction of over 220 million square feet of space worldwide, including the World Trade Center, Disney's EPCOT center, and the renovation of Carnegie Hall. Besides concentrating on the development of public/private projects and joint-venture opportunities on the East Coast, Livingston will also assist Chairman John L. Tishman in administrative operations and policy making for the parent company.

"This was a tremendous opportunity to come to a name brand with fabulous resources, and it's like going to the Yankees," he said. "It's a 95-year old company that is cruising."