Project Overview: 

A hotel construction project in Orlando, Florida, intended to boost the local economy and create 20-30 permanent jobs, faced significant setbacks due to poor budget management and ignored risk assessments. The original budget was set at $16 million, with expectations for timely completion to capitalize on the area's thriving tourism sector. 

Challenges: 

Budget Overruns

Early site visits revealed the contractor was significantly overdrawn on general conditions and other minor fees. 

Mismanagement of Funds

Funds were disbursed for incomplete work, causing a rapid depletion of the budget.    

Lack of Manpower

Inadequate staffing slowed progress, contributing to ever increasing delays. 

Ignored Expert Advice

Despite CBC’s repeated warnings to the lender about financial and project risks, recommendations were dismissed. 

CBC’s Role: 

CBC conducted regular site visits, identified discrepancies in budget allocation, and communicated concerns through detailed reports, emails, and calls. CBC consistently advised the lender to withhold full funding due to the project’s financial instability and lack of progress. 

Outcome: 

The project was halted with only 80-90% completion. The hotel has remained inactive for over five years, surrounded by a perimeter fence, with deteriorating materials and significantly deferred maintenance. The total expenditure exceeded the original budget by over 50% before construction stopped. 

Key Takeaways: 

The Importance of Listening to Expert Assessments:

Ignoring CBC’s recommendations led to financial loss, project delays, and an incomplete asset. 

Proactive Risk Mitigation:

Early intervention and strict funding controls could have preserved the project’s budget and timeline. 

Long-Term Impact:

The abandoned hotel represents lost economic opportunities, including job creation and tourism revenue. 

Conclusion:

This case underscores CBC’s value in asset management. Proactive oversight and adherence to expert guidance are crucial for project success. Had the lender engaged with CBC’s insights, the project could have been a thriving, revenue-generating asset rather than an unfinished liability. 

CBC's diligent monitoring highlighted critical issues early in the project lifecycle, but the client's disregard for these recommendations ultimately contributed to the project's prolonged stagnation and financial failure.