Project: The development phase between Real estate operations and the Real estate alliance; the City of Järvenpää and Mestaritoiminta
Demand: A comprehensive reform of the city’s real estate operations, in order to achieve savings and improve customer satisfaction
Offering by Boost Brothers: Construction management
The tight municipal finances, slow decision-making, indoor air quality problems and growing renovation debt are municipalities’ real estate operations’ typical grand problems in Finland.
The typical organization of municipalities’ real estate operations’ do not always encourage all partners to develop or change the practices.
The Real estate alliance is contract model developed between Mestaritoiminta and the City of Järvenpää that creates an efficient management and organization model to solve these problems.
A strict saving target behind reorganization of the real estate operations
In 2013 the city of Järvenpää decided to cut the annual real estate operation expenses by €800.000 by the end of 2016.
An entirely new kind of approach to the organization of the real estate operations was required, because the financial objective was tough, the users were dissatisfied with the real estate services and the amount of indoor air problems was growing.
Real estate alliance as the organization model between the service company and the city
The City reviewed a variety of options to reorganize the real estate operations during the spring of 2014. Boost Brothers’ services were used to find and to develop the models. As the result of the report, the new organization model would become to be an alliance between the city owned real estate service company and the city itself.
The Real Estate Alliance is a joint venture between Mestaritoiminta and the city of Järvenpää, in which both parts commit themselves to the city’s real estate objectives and to act in the city’s best interests. The Real Estate Alliance is led by the alliance board, chaired by the city director.
Transparency, active reporting and reviewing are key words
The transparency of the alliance is enforced by number of different tools. The most important tool is the formal alliance agreement between the city and Mestaritoiminta, which mandates a transparent cost structure, continuous reporting, as well as active operative leadership, assessment and target-setting from the city.
In the development phases in the autumn of 2014, the formal agreement was drafted and preliminary operation plans created. Boost Brothers served as an alliance advisor, who responded for the creating of decision-making materials and contract agreements.
The results of the alliance are encouraging
The model was created during the spring and autumn of 2014. The development of the model paved the way for a comprehensive reform of the city’s real estate operations and for achieving the set saving targets. The development of the operation models of the alliance have continued in 2015.
The CEO of Mestaritoiminta, Veikko Simunaniemi, describes the project as follows:
To achieve the set targets, it was important to investigate different options for the organization of real estate operations, both domestically and internationally.
“With this knowledge, it was possible to create a whole new model for organizing the real estate operations, as the Real Estate Alliance. By a thorough research and assessment of different options, we managed to make decisions considering the Real Estate Alliance on a relatively tight schedule. The first results of the alliance have been encouraging, but the development will be continued.”