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Running a CrossFit Facility Tips and guidance on how to open and operate a CrossFit gym.

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Old 07-16-2014, 08:12 PM   #1
Mark R Johnson
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Can't afford to bring to code

Almost done with putting together the new box; equipment, affiliation, insurance, prospective clients, the whole che-bang. It was all coming together.

So I thought. The city inspector came by to check out if the building was up to code. Bad news: an additional restroom needs to be installed and needs to be handicap accessible. The existing restroom needs to be made handicap accessible as well. In order for another restroom to be put up, there needs to be an extensive build out. Plumbing, electrical, material, and labor all add up to a whopping $14,000. There also might be additional work that would cost up to $2,000. To make it worse, we received those quotes from a contractor friend.

There is no way I can finance a $14-16,000 renovation, at this point. So, for now, the new box has been stone walled.

I'm not sure what to do. I'm open to ALL ideas, experiences, suggestions, etc.

Big thank you in advance!!!
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Old 07-16-2014, 10:03 PM   #2
Sean Smith
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Re: Can't afford to bring to code

Do you own the building or are you renting it? 14K seems pretty high. Even though your contractor is your "friend", he's still probably making money off of you. I would get 3 quotes per job. 3 electricians, 3 plumbers, 3 framers, 3 drywallers. Once you see how much things cost, you'll teach yourself how to do it. I had no idea how to frame walls or drywall - now I know how. I had to do a bunch of buildout on my space, nothing requiring an inspector though. If you love your space, you might just want to suck it up and spend the money.
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Old 07-17-2014, 03:15 AM   #3
Steven Wingo
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Re: Can't afford to bring to code

Some ideas:

1. Look for new space which meets code without so much in the way of expense;

2. Talk to the code department and/or municipal planning department regarding whether there is a process to obtain waivers for these requirements. In some instances exceptions can be made if a certain process is followed (although I don't know whether this is one of them).
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Old 07-17-2014, 06:28 AM   #4
Brendan McNamar
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Re: Can't afford to bring to code

If you don't own the building then the landlord needs to do it and pay for it. There is the danger the landlord will look for a new tenant who has lower occupancy requirements.

If you own the building you get to decide.

Everything is negotiable with the landlord. As a brand new business I worked out a deal for my landlord to install A/C. I agreed to pay half the bill over 2 years. I had options for several more years so I would get the benefit of the A/C while paying rent at a rate of a non climate controlled warehouse.

Never loose sight of the fact the land lord wants a tenant and you want a building. Look for a win/win solution.
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Old 07-17-2014, 06:48 AM   #5
Steven Wingo
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Re: Can't afford to bring to code

Here are some other ideas:

If you will be a tenant, approach the landlord and explain the problem. You can't lease the space if you can't get an occupancy permit for your intended use. The landlord therefore won't get any rent, not a good deal for the landlord. Ask the landlord to make an allowance for the renovations--you can pay for it, but your rent is reduced by a certain number of dollars over a certain number of months until you are reimbursement for renovations you paid to have completed. When you leave, the landlord is left with improved space. You could also go 50/50 with the landlord--he or she pays half, and you pay half. There are all kinds of scenarios to work it out. The key question is what works financially for you and for the landlord.

Do you have a realtor you worked with? Realtors often deal with these issues for you and are experienced in proposing different ways to make deals work.

If you own the building, well you are probably just stuck in making the renovations.
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Old 07-17-2014, 06:57 AM   #6
Steven Wingo
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Re: Can't afford to bring to code

Some further things to consider:

Is this industrial space that meets code for that use, and you as a tenant would be using it for a different purpose with different code requirements? If so, that would make it less likely the landlord would pay for the renovations--particularly if you are paying industrial use lease rates for warehouse type space verses something closer to retail. If this is more like retail space, and you are paying more than industrial use rates, then that would lead me to believe the landlord should pay for the necessary renovations.

Along with some business partners, I just bought a large building (17,0000 square feet) which will house a bike shop and the CrossFit box where I am a member and coach. In order to prepare the building, as landlords we are paying to construct a firewall (required by code) and the necessary additional bathrooms to split the space for more than one tenant. These are expensive renovations. We are also paying to split the air and electric. These are things we, as building owners and landlords, need to do to make the space leasable. The box owner is paying for all his interior renovations--putting in showers, tearing out false ceilings, moving duct work around for better organization of ropes and rigs, and so on. All the things specific to a CrossFit box, he is paying for and performing (he gets a long term lease and a long term renewal period so he is assured he is making a good investment). All the things that would be necessary for us to have any tenant, after splitting the building into multiple different spaces, we are paying for as landlord.
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Old 07-17-2014, 10:43 AM   #7
Mark R Johnson
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Re: Can't afford to bring to code

Wow, awesome response volume! Again, a big thank you for the advice.

I'm renting the property and it originally was a warehouse used for storage.

I'll present my landlord with my request, explaining to him that the upgrades are essential to my business and would benefit him in the long run. Ideally, he'll pay 100% but, if not, I'm hoping to negotiate that I pay 1/3 of the total costs.

With that being said, keep the responses coming!!
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Old 07-17-2014, 01:07 PM   #8
Mike Doehla
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Re: Can't afford to bring to code

Can't you look for a new place?
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Old 07-18-2014, 03:20 PM   #9
Sean Smith
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Re: Can't afford to bring to code

Another suggestion - Ask for a few months of free rent if he doesn't want to front the money for buildout. With my lease, I simply asked for the first month free and the landlord agreed. Looking back, I probably could have gotten 2 or 3 months free. Ask for much more than you think you'll get. Both of you (you and the landlord) are in the exact same position - you both want to extract maximum value from each other. Remember, a penny saved is a penny earned.
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Old 08-07-2014, 03:13 AM   #10
Monika Scott
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Re: Can't afford to bring to code

Howdy,

I've run into this problem a few times. The landlord is not responsible for any type of build out. If they are nice, they may chip in for a portion of it, or perhaps you can ask that they pay upfront and you repay over a period of time.

Based on code (per county), you may only NEED one handicap restroom, so the other can stay as is. I'd check with a different inspector and have the drawing plans handy. If the engineer or architect is available, he would be a great person to have during these meetings/inspections. They can negate a lot of unnecessary crap. The inspectors are going by the book, but I've come across several who really don't know what they are talking about.

I have one bathroom in my box and it's handicap accessible (however I live in VA).

Also, review the type of occupancy permit you are applying for. School of special instruction, fitness, etc. These have different requirements for the space too.

Good luck!!
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