 Think Tech Hawaii. Civil engagement lives here. Welcome again to Kondo Insider, Hawaii's show about Kondo's stuff for lack of a better word. Hopefully it's helpful to board members and homeowners alike. Over the past 105 sessions we've had, it's hard to believe we've done 105 shows. We've talked about a lot of issues and a lot of them have been expensive issues of association faces like wastewater pipes, you know, sprinkler systems. I started to think about it and I realized that one of the elephants in the room is what I'm going to call elevator modernization. A lot of misunderstandings about that. It's certainly depending on your project a major expense in your reserve study and a major expense for associations. So I invited a really good friend of mine, Jim Hutchinson, from Precision Elevator Inc. to come down today and talk to us about elevator modernization. Doesn't sound like a really exciting topic, but we've both been getting an elevator since we were three years old, so we've had a lot of experience with elevators, I guess. So introduce yourself. Tell our audience a little bit about you and then we'll ask about your company. Thank you, Richard. Pleasure to be here. Well, a little bit about me. I first came to Hawaii back in 89, moved out here from the Philadelphia area. And back on the East Coast, actually when I left, I was a design engineer for a robotics company. So when I first got out to Hawaii, there wasn't a whole lot of that kind of work out here, so I soon found myself in the elevator business and initially was an account manager for a few years, but I naturally gravitated towards elevator modernization just because of the technical aspects of that segment of the business. So I got into always focused on elevator modernization, have been in the business now for over 25 years. The first 10 years I spent working for a couple of the large OEM companies, but about 15 years ago I went out on my own and have been working in different capacities of the elevator business, always with a focus on elevator modernization. And today I am the majority owner and president of Precision Elevator. Now, an important thing to understand about Precision Elevator is we're not just another elevator company, we have a very unique business model. At Precision Elevator, we focus at being the best at one thing, and that's elevator modernization. And we do that by with our focus and our commitment to develop our expertise in this specialized niche segment of the elevator business, and that's what enables us to be the best and provide superior product. So Precision Elevator, in simple terms, might be an independent consultant, so you're not selling a particular brand of elevator or specific company's elevator modernization. It would be safe to say your job is to look at the actual condition of the building and what they're dealing with as far as the issues to determine a scope so they can get bids and evaluate upgrades and that kind of thing, or are you actually selling elevators? Well, we're not a consultant. What we are is a design-build contractor. So what that means is we will provide assessments on elevators and we will write specifications for elevators. Specification is a detailed scope of work. We will do that and we'll provide those services as a courtesy to our potential clients. But we are a licensed elevator contractor, so we would also provide a bid for that scope of work. And if selected to do the work, we would purchase the material and do the actual installation and, of course, provide the service after the modernization was completed, too. So we really provide a turnkey or a term that's used a lot today as an integrated solution as a popular term. So that's what we do. Being in the kind of management business, I used to always tell boards, I would say to them, I'd say, think of an airplane and you have engines on an airplane. Are you going to wait until the last second, the last time that elevator will go up and down before you replace the elevator? In the sense, once you have an elevator that's past its useful life, I'm going to assume it takes a long time to replace it. I mean, from beginning to end, how long would something like this take from designing, through ordering, through construction? Typically, what kind of timeframe are we looking at? Yeah, that's exactly right, Richard. Modernizing your elevators is not a question of if, it's a question of when. And many of the elevators in Hawaii are old. The typical life span of an elevator, intended life span of an elevator, is about 25 to 30 years. So if your building is 30 plus years old, your elevators are overdue for modernization. And as you said, the timeframe to modernize is long. It's a long cycle. Typically, from the time that a board decides that they want to modernize their elevators to they actually have equipment and workers on site, it could be up to a year. And you were giving me a statistic earlier. We were talking about buildings that have only one elevator versus more than one elevator. What percent was that, the only one elevator? Yeah, I was looking at a database of buildings that have elevators, and I noticed that 50% of buildings in Hawaii that have elevators have only one elevator. So there's a lot of single elevator buildings out there. So in theory, if you want to modernize your elevator and you have one elevator, depending on whether you choose an accelerated schedule or not, you could be down for a year. Yeah, that's correct. And with a single elevator building, it's even more important to be proactive because the last thing you want is to not be proactive and have the elevator break down and go out of service and not have that planned. Well, I think what we were saying, and correct me if I'm wrong, you know more about this than I do, we said a year or so, year plus, from beginning to end, if in fact your elevator is working, a lot of that work is being done while your elevator is working, the design, the building, the bidding, and how much time is it typically for, I know there's different floors, different heights, different issues, take one elevator in an average-sized building, if you had everything ready to go in place, about how long would the elevator be down? Down while it's being modernized. Right. Typical elevator modernization, let's say take the case of a typical building, might be a 10 to 15-story building with two elevators. A project like that could take up to six months. So you're looking at modernizing one elevator at a time, of course, so you always have one elevator in service. So it's up to three, maybe two and a half to three months per elevator, you're down to one elevator. And I had the point I was making is back to my engine story. If you wait until the thing fails, they're not going to have an elevator for a year or more. Yeah. If they proactively plan this, you're talking about for one elevator three months or so, that they're going to have to make exceptions, and of course that has an impact on seniors and people living in the building. But by waiting, I guess I'm saying they put themselves more at risk than lesser risk to do this. That's true. It's very risky, particularly in the scenario with the one elevator buildings, because you can't just have the elevator go down and not have an elevator at all, but at some point you're going to modernize. The elevator is going to be down for a period of time. There are ways to reduce that downtime by accelerating the schedule, as you said. But even with accelerating the schedule, you might go from 10 to 12 weeks to maybe six to seven weeks, or maybe five weeks, but you still have several weeks in there that you absolutely have no elevator at all. So it's very important to plan ahead. So for someone like a board, are there signs that kind of tell you that we should start thinking about this? Certainly, if you're in a 30-year-old building, that in itself should tell you you should start thinking about this. Are there things you start to see with your elevator that says, hey, maybe we should think about this? Is this getting ready to have bigger problems? Yeah, absolutely. I mean, obviously, as you said, the age is an easy one, but besides age, as you're riding the elevator every day, you know that the ride quality is poor. The stops and starts can be abrupt. The door operation is clunky and loud. If it's breaking down frequently, if people are getting stuck in the elevator, if maintenance costs are going up, there's indicators like that that can be resolved with an elevator modernization. And I guess my question is that, why are people modernized? Are there benefits to modernizing? I mean, this is not cheap. This is a major component expense, and we can't give them estimates, but I'm saying for a typical building one elevator, like you described 12, 14 stories, you're talking about a quarter million to $400,000. Yeah, it's quite a bit of money. And there are definite benefits to modernizing. Again, I touched on maintenance costs, and that's probably one of the biggest reasons people will look to modernize is to lower their maintenance costs. It's never one reason. Because just lowering maintenance costs is not the cost difference. It's not going to pay for the modernization. It's usually several reasons. Other reasons or other benefits to modernizing would be simply to improve the performance and reliability of the elevator. Another reason would be to improve the safety and accessibility of the elevators and your building in general. Reducing energy consumption is another, which of course leads to reduced cost. Yeah, I think the energy consumption has to do with the motors and I don't know the correct engineering term or electrical term. It's like on-demand motor versus, you want to explain that to people. So I understand what it is, but give them a better answer than I would. Yeah, I mean typically the elevators that were installed back in the 60s and 70s were all DC based. Because back then we couldn't control AC motors like we can today because we didn't have microprocessors yet in elevators. But today all the new elevators and all the newly modernized elevators are all AC based. So using alternating current as opposed to direct current. When modernizing you're getting rid of the DC equipment and all AC equipment. Typically you're also getting rid of the old geared machines and putting in gearless machines. So those two factors alone can reduce energy consumption up to 60%. Yeah, because I think the old elevators right, the electricity is running all the time whether someone's using the elevator or not. That's right. We're under this new AC gearless microprocessor system. They only draw electricity when someone's using the elevator. That's right. So there's some significant cost savings and it helps in a way pay for the elevator because there will be a savings and I'm going to assume there's some savings on the monthly elevator maintenance contract because I'm sure elevator companies are smart enough to charge more for old elevators than a new elevator. Yeah, that's right. There typically can be a substantial reduction in maintenance costs simply because you're getting rid of the equipment that's in there. The old equipment is very maintenance intensive. It has a lot of mechanical moving parts that require a lot of time and maintenance to keep them adjusted properly so the elevator runs properly. You're getting rid of all that with a modernization. Everything's microprocessor based. There's very few moving parts now so the requirements for maintenance are less so the cost goes down. So whenever I've talked to a board about modernization, the first thing they say to me is good, we can make our elevator faster now. And I know the answer to this as well, but explain that in real terms because I'm not sure they can make it faster but they can make it more efficient. Yeah, that's always the question that comes up because people are tired of waiting for their old elevators so they think, can we speed this elevator up? And the easy answer is no. You typically don't increase the speed if the elevator is engineered to run at 350 feet per minute. After the modernization, it's running at 300 feet per minute. But what you can do is you can reduce the wait times. And the way you do that is by making, the modernization will make your elevator run more efficiently. So the doors will open and close more efficiently on each floor which will enable the elevator to get to where it needs to go more efficiently thereby reducing your wait times. So you have some quote engineering architectural considerations because when the building was built, it's kind of built around the elevator. That's correct. And so you have an elevator shaft and certain heights and certain sizes which by and itself prevents you from making it quote faster, although I guess with enough money and enough wherewithal and desire at any price you could do something, but probably most boards couldn't afford it. Yeah, with enough money you can do just about anything. And yeah, you probably could increase the speed, but it's usually cost-prohibitive for most AOAOs. And there's been a lot of confusion and after this question we'll take a short break. There's been a lot of confusion too because of the Marco Polo Fire about fire or smoke detectors in elevators. About whether that's mandated and if you put the modernization in, that means you have to at the same time modernize the whole rest of your fire suppressant systems. Comment on that? Yeah, that's a good question. And that refers to what we call related work which is work that has to be done when you're doing an elevator modernization that's not considered elevator work but it has to be done in order to meet code for the new elevator modernization. And basically one of the biggest misperceptions is when installing smoke detectors on every landing which is required that you have to then tie that system into your building's fire alarm system or maybe people think you have to first modernize or install a fire detection system before you can modernize your elevators. And the answer is you do not. You can actually modernize your elevator, put in a standalone smoke detector system and it does not have to be interfaced or tie into your other system in any way. Okay, well what we're going to do is we're going to take a short break. We're going to be back in one minute. Continue talking about modernization. I have some more questions for my good friend and expert, Jim Hutchinson. Thank you. Aloha. I'm Marcia Joyner and I'm Beatriz Cantojo. And we have come in this series young and old alike to take a look at our past, and the past that's not seen in history books. History books are his story and what we refer to as mirrors of the past. But we as colonized people, indigenous peoples and people of Kola look into the mirror and do not see ourselves there. On the Ties that Bind, we will examine those underlying causes. Please join us with the Ties that Bind on Wednesdays at noon twice a month. We look for you there. Aloha. Aloha. I'm Jay Fiedel, ThinkTech. ThinkTech loves energy. I'm the host of Mina, Marco and Me, which is Mina Morita, former chair of the PUC, former legislator, and Energy Dynamics, a consulting organization in energy. Marco Mangelsdorf is the CEO of Provision Solar in Hilo. Every two weeks, we talk about energy, everything about energy. Come around and watch us. We're on at noon on Mondays, every two weeks on ThinkTech. Aloha. Welcome back to Condo Insider. We're sitting here with Jim Hutchinson, President, Precision Elevator, talking about the challenges of elevator modernization, something whether you believe it or not, every building will ultimately face, and if your building is 30 years old, it's something you should be planning for, thinking about putting your reserve money in. And when we left with Jim, we were talking about logistical consideration. So when you start to plan a modernization, it's not just, let's replace this elevator, there's probably peripheral and related work to ask to be considered. So what are the things you look at when you're looking at a modernization? Well, obviously the obvious thing is the elevators themselves and the upgrades that are needed in order to remedy the symptoms that we talked about earlier. But aside from that, is what we call related work. And related work, again, is work that has to be done as a result of the modernization, which isn't traditionally considered elevator work. It's more building work but related to the elevator modernization. The biggest item is the smoke detectors that we talked about. That's really the big item. And so, are there new safety requirements for new elevators versus the old code, the old elevators? Are there new safety things that are available versus the old days? I mean, Hawaii's actually was under the 1996 code all the way up until 2015, if you can believe that. And we only recently, in 2015, updated to the 2010 code. And so with that came a lot of additional safety requirements for the elevators. Most of that was seismic type features and things like that. How about a person stuck in elevators? Are there any different? Is it still the little the phone and push the button kind of a thing? Well, you do still have that requirement but there is another requirement, which is for a three-way communication. For elevators that are more than 60 feet tall, require a three-way communication device between the elevator car, the lobby, and the elevator machine room. And how about, you know, the issue of fire? I think that, you know, if I'm not mistaken, if it's a fire now or under modern systems anyway, if it's a fire, it takes the elevator to the first floor, or is that like code or is that just how it works now? No, that is code, and it's been code even when we're under the 96 code. It's changed a little bit as far as how it operates, but basically when a fire is detected, the elevator will stop what it's doing, a buzzer will sound, and the elevators will immediately return to the lobby and park with the doors open. That's called Phase One Fire Service. And so when that happens, owners should know to head to the exit stairwells and go down the exit stairwell because their elevators don't go push the elevator button because it's not going to come. And that's probably the most important thing is to get out of the building as safely and as fast as possible. It is. And the reason the elevators park at the lobby is they're waiting for the firemen to get there, and when the firemen get there, they can then put the elevators into what's called Phase Two Fire Service, which allows them to manually move the elevators to go up and fight the fire. So they can use the elevator to fight the firemen. The firemen can use it because they have a special key. They have a special key. Wow, I didn't know that. So, if you look at this, one of the things I found that when boards look at this issue, they always say two things to me. Number one, oh no, we're going to have to get 67% of the owner's approval and no one's going to approve it. And to be candid with you from my experience, because you're replacing an existing component of the building, they don't need owner's approval. The board has the ability to make a business decision, and frankly they have a legal obligation to maintain the building, that they have the ability, for everybody's reference, to do a modernization elevator without the approval of the homeowners. The problem is how they're going to pay for it. And the problem typically is they may or may not have enough money in their reserves to do a modernization. They may not have accurately projected the costs, or maybe the elevator hasn't lasted quite as long as they think it was going to last. But from my experience, they do have the ability to go to the bank and get a long amortization loan, I'm going to say 15 to 20 years, depending on the bank, and pay for that on a monthly basis. And when you think about that logically, let's just say you're going to go for the money on a 15-year loan, and so you have a principal interest payment to make. Well, you've now maybe saved some money in electrical costs to help pay for that bank loan, and you may have saved some money in the elevator maintenance costs because a newer elevator, so it may not have the full impact that everybody thinks with respect to a modernizing elevator, when you start looking at the trade-offs to help pay for that loan, and they may have some money in the reserve, so it actually is a wash, you never know. But more times than not, I have found that condos are very conservative and it's probably some increased cost to them to do that. Not even to mention the fact that if they do wait to do the modernization five years from now or whatever, the cost of the modernization is then going to go up. So you've got to factor that in as well. In elevator costs, I can tell you from experience I have a higher inflation rate than the normal inflation because the elevator unions, they have these built-in escalations so it's quite expensive if I remember correctly. There's a lot of money in the elevator business for sure. There's a lot of cost there. So what do you do when you look at the specs and you put this whole process together? What are some of your considerations? Well, specifications are really a necessity when doing a modernization. And a specification for those that don't know, it's a detailed written scope of work. It encompasses, again, not just the elevator work but all the related work. So everything's included in this one document, this one scope of work. One of the reasons that a spec is necessary is that you would use that to get competitive bids for elevator contractors and having a single scope of work that everyone's bidding on you're ensured to get an apples to apples bid. What you wouldn't want to do is call the individual elevator companies and simply ask them for a price to modernize your elevators. That would be like contacting builders and say, can you give me a price to build me a house? And of course their questions would be two bedroom, three bedroom, two bath, you need some type of common plans and specs that everyone is bidding to. So that's why specs are a necessity. I remember in the old days, maybe it's not true anymore, that there was some talk about when you get bids for elevators, some elevators have proprietary systems and others don't. So that it's almost if you buy an elevator with a proprietary system, you've painted yourself in a corner in a certain way for future maintenance of work. Is that still true or how does that all sort out today? One of the benefits of a spec as well is a spec could and should have language in it to prevent any bidder or contractor from putting in proprietary equipment. But for those that don't know what proprietary equipment means, it basically is equipment that is not universally serviceable or maintainable or has restrictions on accessing the levels of adjustment in the elevators. So the reason that's important is because after the modernization, you want to be able to have anyone service the elevator later on. You want to be able to put it out the bid and get fair bids from everyone. So if a company puts a proprietary system in your building, you're kind of married to them at least for a while, because they're the only ones who can service it. We're getting close to the end of this show. I want to talk about your workshop in a second. So the benefit of having a non-proprietary system that allows you to make sure that the most time goes on, they get bids and maintain your elevator and not have to use a specific vendor. You know, by thinking this through in the beginning, you have a system that gives you the absolute flexibility for controlling costs down the road. Is that a simple way to say it? Absolutely, that's a good way to say it. Yeah, it's about controlling costs. Well I know your company is about to offer a workshop on I mean I love it, six. The six steps to a highly successful elevator modernization. And we actually introduced the workshop the first of this year. We've already conducted a few, and we've got a few scheduled. The workshop really came about. It was really an idea I've had for many years, and finally pulled it together in the form of a workshop. And it's a workshop that is designed to give to boards or their appointed committees who are at the inception stage of their elevator modernization project. And what's great about the workshop is it's not a generic workshop. We tailor the workshop to the specific participants in the workshop. So you're much more efficient than I am, because I was going to do one on the eight steps to successful modernization. The step one was drink a lot. And then the last step was to be drink more. Right a lot. You know, because that's a complicated thing. It is. I've seen a lot of people focus simply on money and not looking at all these variables that can either have a short time or a long term effect on it. So when is your workshop? Well, that's another good question. Our workshop is whenever the board is available. That's the thing. We customize the workshop for each board. So before the workshop, we survey their elevator, and we tailor the workshop to their elevator project. So in the workshop, they're getting an assessment of their elevators, a discussion about the needed upgrades, the cost, the time frame. So the idea is board members come away equipped to make intelligent decisions about their elevators. Does this workshop cost them any money? It's a free workshop. And we hold the workshop normally where the boards have the regular meetings at a time that's convenient for them. And if they want more, and they want to go to your website, that is. Our website is www.precisionmod.com. Is it scrolling on the bottom right now? Can we do that? Well, last minute, we should have prepared better for this. But I would say, after having been in this business over 25 years, Jim is a very knowledgeable person and certainly a great opportunity for boards who are considering this to get another perspective on their elevator modernization because it's very complicated and it's not just a short term effect of the cost. There's a lot of long term issues. So I want to thank Jim Hutchinson for being here today on our show, Kondo Insider. We've known each other about 25 years. Yeah, about 25 years, Richard. No wonder I drink a lot. But anyway, boy, kidding. He's a very good friend and a very knowledgeable guy. So I want to thank you all for watching Kondo Insider this week. Next week, we're going to talk about protecting your association money and the threats of cybersecurity. And we have a national expert coming into town just to talk to you. Aloha.