A conversation with the Larsens, litigation liaisons in Portland's

Kirk and Kimberlee Larsen are out to fill a niche that they feel needs to be filled in Portland - quickly.

The city is becoming an epicenter of smart, urban growth, as evidenced by the myriad multi-family condominium projects underway: the John Ross, the Meriwether, the Eliot Tower, Casey Condominiums and the like.

However, with all this positive growth, the couple says, the door is wide open for a rise in construction defect litigation.

The Larsens' new company, Dylan Development Group, is on a mission to mitigate that litigation by acting as a liaison among the several parties involved in creating these multifamily buildings across the city.

What Dylan Development Group proposes is that construction costs will decrease, insurance rates will decrease and construction lawsuits will decrease if the parties involved have the right tools to transfer projects from the hands of the developer to the architect, then to the construction company, and finally to the homeowner.

With what the Larsens have dubbed the Building Integrity Management tool, the couple hopes to provide training, consulting and resources to help the multifamily building process run more smoothly, from the time a developer breaks ground to the time a homeowner first moves in, and beyond.

DJC: Why do you feel construction defect litigation is such a problem in Oregon?

Kirk Larsen: Before we figure out what the solution is, we need to figure out how we got to this point, going back a couple years and trying to figure out where these problems started. We see that there are a number of paradigm shifts happening here. Contractors used to working with one developer are now having to work with multiple parties, including multiple homeowners. And there's this transition going from the lowest cost bid to providing more quality and smart construction.

Kimberlee Larsen: When you go from, I'm building you a warehouse, to I'm building a building that has 200-unit ownership, with different tastes, different ideas of what it is that they're purchasing, you kind of have to make these shifts.

So, what we want to do is elevate everyone's game and go through each point of the process with what we've termed Building Integrity Management, to make certain that those specific points are actually addressed so that the idea is that we build it right, we design it right and we maintain it right.

What we offer can actually put ourselves between the chasm of the developer, contractor, architect and homeowners, which are so polarized at the moment.

DJC: What concerns need to be addressed?

Kirk: It's all about managing expectations. And high-density is a cornerstone of our smart-growth policies that Portland has done so well over the last three decades. Portland is a leader that other cities not only in the United States but also abroad, they want to figure out what we're doing because it's working. It's controlled growth. It's not urban sprawl, with Wal-Marts and Targets running down the coast. It's preserving that quality of life, and high- density is part of the future.

Since 1970, Portland has invested over $3 billion along our mass transit routes. We're second in the nation. Now, that's pretty phenomenal, if you think about it. That helped create the Pearl District and South Waterfront. It's created a lot of jobs, a lot of economic activity. We feel that Portland is at the epicenter of an emerging construction defect market.

DJC: Explain how smart growth has led to this emerging construction defect market.

Kirk: Nationwide, over the last decade, there have been $10 billion worth of claims of construction defects. In Vancouver, (British Columbia), from 1990 to 2000, there was $1 billion worth of claims. In Portland, for 2001 and 2003, there were $125 million. You extrapolate that over a decade, and we're talking some serious numbers here.

Kimberlee: We feel there is an opportunity to learn from our neighbors up north and nationwide and learn from their mistakes immediately, so we don't end up going millions of dollars in the hole. What (more claims) will do is decrease the demand for smart growth and urban housing. The construction market may be adversely affected, which will affect the entire economic future of this wonderful city that we're building. We really feel that this is an opportunity for us to be progressive and aggressive in pursuing.

DJC: Do you feel the Oregon legislature should be working toward mitigating construction liability?

Kirk: We need to go and update our legislation laws that are so outdated. If you look at Vancouver, (British Columbia), over 700 buildings fell to problems associated with the quality of construction. But their government finally came in and said, We're going to put in checks and double checks and increase the overall quality of our buildings and provide warrantees for moisture damage and structural defects.

In 2003, California passed legislation that provided some standards: What are construction defects? and This is how we go through the process of repairing that work. And now, insurance companies and builders and developers are starting to go back into the community.

Kimberlee: But (before legislation), they freaked out and said, I'm not building anymore. And insurance companies said, I can't afford to insure you because these construction defect lawsuits are adversely affecting my ability to do business.

DJC: Go into a little more detail about what Building Integrity Management entails.

Kirk: It's the overall process that starts from pre-construction to post-construction, and there are fundamentals that I believe need to be put in the design in order for the entire process to be successful.

DJC: What are those fundamentals?

Kirk: Smart building technologies, risk mitigation principles and the right tools to turn over a project from one set of hands to the other.

DJC: How do you fit into that, taking sides and communicating to them that they should be working together and not be adversarial?

Kimberlee: In doing our research and going to homeowners and developers and contractors, we found that they are very polarized. The homeowners say, (Developers) build this and put their kid's name on it, but then they take this giant wheelbarrow of money and trot off to the bank and leave us here to deal with this building.

There's a symbiotic relationship between homeowners, developers, architects and contractors. They don't exist in a vacuum. What affects one definitely affects the other.

The developer/contractor/architect team feels like they've implemented things right in the design phase, they've built it properly and they have to go on, like other businesses, to other revenue-generating projects. They can't really have their fingers into that pot as much as they probably would like to.

And we feel that everybody wants to do right. There is nobody that's trying to cut corners or trying to make moisture be a problem or whatever these scenarios that come up are. Nobody wants that. I think what ends up happening is that both sides have such strong feelings about doing the right thing. The homeowners feel like, I made a big purchase here. I should get great quality. The contractor or architect feels like, I had union workers, I had the best products brought in, and I think I've done my job to the best of my ability.

DJC: By getting involved in a process of trying to reduce the amount of litigation, is your company putting itself in the line of fire for litigation against you?

Kirk: I think that nothing is being done, and I think that we're willing to stand in between to try to raise the overall teamwork between the parties to ensure that the homeowner and developers have a connection.

Copyright 2005 Dolan Media Newswires
Provided by ProQuest Information and Learning Company. All rights Reserved.