Client interview - Time Warner

John Robbins

Managing Director, USA and North America Head of Real Estate

North America

Bringing the media conglomerate’s flagship Hudson Yards headquarters to life has been as much a cultural undertaking as a construction exercise, explains the man steering the vision, Joel Brenner, Time Warner’s VP of Project Management, Global Real Estate.

If there is one thing that Time Warner knows how to do, it’s how to stimulate the imagination.

The multimedia and entertainment giant whose assets include HBO, TNT, TBS, CNN, Warner Bros and the Cartoon Network is an unrivalled force that has shaped our cultural landscape.

But when you talk to Joel Brenner it becomes clear that this multinational’s vision extends far beyond our screens to the skyline itself.

With a characteristic appetite for epic productions, its new headquarters at Hudson Yards in New York’s West Side form the centrepiece of the biggest private real estate development in US history – and to make this dream come true, Brenner has battled challenges worthy of the HBO blockbuster Game of Thrones.

“Every day there is another challenge to deal with – whether it’s actual onsite logistics, getting answers internally, understanding our own needs and the costs – from every perspective the hiccups are enormous,” he said.

He has prevailed, he says, thanks to a “nimble team” and a nuanced approach to problem-solving that blends perfectly with Time Warner’s cinematic colour chart.

“Nothing is ever black and white, and we have to be able to successfully work within the grey. That’s what I stress on my team: how do we deal with the grey areas to keep the project moving forward.”

In order to deal with such “grey areas” on a large project of this kind, it’s important to create a delivery strategy based on robust planning and good governance founded on project controls.

A flagship project

Time Warner’s relocation from seven buildings around Manhattan, including its iconic Columbus Circle location, to the Hudson Yards development will consolidate its divisions in one building for the first time. When completed in 2019, the result will be a LEED Gold 90-storey tower- the third -tallest office building in New York sporting the city’s highest outdoor observation deck.

Bringing such a flagship project to fruition is no small achievement in New York’s overheated market, where soaring demand for space has pushed prices to queasy highs.

Brenner says: “The biggest issue for us at the start of the project was finding a development that could accommodate the quantity of space that we needed – nearly a million and a half rentable square feet. That was one of the main challenges: do we take a former building and retrofit it, or build something new? We chose the latter.”

As an architect who trained at the prestigious Rhode Island school of Design, with unsurpassed experience in real estate development, he says this decision offered the diverse Time Warner group advantages.

“One is that we are not dealing with existing conditions that limit our ability to use the space according to our needs – ranging from typical office space to high-end technical broadcast studios with double height spaces, double height screening rooms with tiered floors and a capacity for 300 people. To fit those programme requirements into an existing building and retrofit posed many challenges. With a new site, we are simply able to build them in.”

Market conditions

But market conditions as well as the complexity of this project has made it a constant challenge.

Overheating can raise the risk of typical cost escalations and complicate labour issues. Brenner says that, alongside managing tangible risks – cost, budget and schedule, which has implications for standing leases, for example – many other factors have to line up.

“We don’t control the weather or any other factors outside our power that can impact the project, from cost schedule to quality. Then, of course, getting it right, and making sure we have successfully met the needs of our businesses to support growth, is a risk. Did we design the space right? That’s something that haunts us every day.”

It goes without saying that a key requirement of such a large scheme is to have a robust system of financial tracking

He points out that while overrun risks are often determined by market realities, especially for commoditised core and shell materials such as steel, other costs such as furniture, fittings and equipment (FFE) can be sourced locally to better control costs.

Project controls help mitigate these risks, and it goes without saying that a key requirement of such a large scheme is to have a robust system of financial tracking.

“It’s very easy to lose sight of where you are, so that’s why we have established a schedule that layers in points of time where we do cost checks, understand the market and engage those who are actually going to build the project,” he says. “At the same time, tracking, monitoring and reporting those costs is just as important so that everyone understands where we are headed.”

A cultural challenge

But bringing 5,000 employees from diverse brands under one roof is far more than just a logistical and financial trial – for Brenner, it’s also a cultural challenge.

“It’s truly a cultural change for us as a company to be all under one roof and we are delicately handling that in terms of how we communicate about the project to alleviate fears that come with changing workplace concepts. Each business in the group has its own separate identity and it’s important to us that each maintain its own brand.”

It’s truly a cultural change for us as a company to be all under one roof and we are delicately handling that in terms of how we communicate about the project

Cultural risks are often less well understood by stakeholders, but Brenner and his team have created committees at different levels of the group to ensure staff are kept in the loop.

“To mitigate risks around budget and schedule we build safety valves into our contracts, contingency funds and those types of things, but we are managing different levels and types of risks. Culturally, you’ve got to bring as many people as possible along for the ride by keeping them informed all the way.”

His principal task, he says, is managing collaboration across a multitude of disciplines – and he praises the team effort involved.

“It’s not about one person, it never is – it takes thousands and I am one of those thousands, although I do have a lot of responsibility and accountability. At the same time, I try my best to make sure that my team’s stress level and that of my own is workable.”

So, how does Brenner deal with the grey areas to keep the team on track and the project moving forward?

”You have got to remember to keep your pace and maintain it in your leadership. It’s very easy to be overwhelmed by a project like this.”

Hudson Yards

Hudson Yards is New York City’s largest development since the Rockefeller Center built in the 1930s.

Hudson Yards will include more than 17 million square feet of commercial and residential space, state-of-the-art office towers, over 100 shops, restaurants, about 5,000 residences, a unique cultural space, 14 acres of public open space, a school and a luxury hotel with 200 rooms.

The development broke ground in 2012 and the final construction phases will be completed in 2019. By then, it’s likely to have created more than 23,000 construction jobs and, once it’s finished, an estimated 24 million people are likely to visit it every year. It’s being built on 28 acres on the West Side of Manhattan over a working rail yard. Two platforms will be constructed to bridge 30 active railway tracks, three subsurface rail tunnels, and a fourth passageway, the Gateway Tunnel, now under construction. The finished buildings will extend through the platform and rise above into the skyline. Hudson Yards is the epicentre of Manhattan’s New West Side, a booming neighbourhood whose growth is attributed to the success of the High Line – the linear park built on an elevated section of a disused railway which opened in 2009 and is still being extended – and to major investments in local mass transit, parks and cultural and recreational facilities by city and state authorities.

Time Warner appointed Turner & Townsend as comprehensive project and cost managers on the construction of its new corporate headquarters at 30 Hudson Yards to work with its in-house real estate team coordinating delivery of the project.

Proactively manage risk through effective controls

Project execution planning 

Planning begins with an analysis of business requirements, risks, constraints and stakeholder interests. Then all those contributing to building or infrastructure design should be brought together to maximise coordination. A Project Execution Plan (PEP) can outline the details of how it will be delivered, including the roles and responsibilities of key participants.

With good use of market intelligence, costs can be planned and then procurement strategies mapped out to ensure value for money. A range of such strategies exist to save money through, for example, agreeing advance prices for core construction commodities such as steel, or sourcing directly from manufacturers to sidestep intermediary dealerships.

Good governance means identifying the best method of controlling a project, establishing delivery policies, and being crystal clear about accountability and responsibilities. Putting the right controls in place will help a project meet time, cost and quality targets. These controls include the monitoring of all construction site activity, costs and the quality of work, which can be assessed in progress and financial reports.