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The ugly scaffold industry is about to be disrupted

Urban Umbrella founder Andrés Cortés (l.) with co-founder Benjamin Krall (r.). [Photo credit: Grahm Barnard]

A sleek white sidewalk shed went up in front of a 16-story building in the Flatiron District of New York City this week.

The structure, a recreation of the ubiquitous and unsightly blue or green sidewalk sheds that accompany construction sites across the city, is the brainchild of Urban Umbrella. And up until now, with the exception of a brief appearance at a site in lower Manhattan in New York five years ago, it has only been used in Toronto. But soon, two more buildings in New York, and projects in Boston, Quebec and Vancouver are expected to be graced by these “umbrellas.”

“The demand is there, it’s more about how to execute it,” said Andrés Cortés, founder of Urban Umbrella.

Walk down a New York street or any other major city undergoing a healthy amount of construction and you’re bound to see sidewalk sheds. The unsightly structures are a necessary evil — they are there to protect pedestrians from falling debris.

“The law mandating sheds is meant to keep us safe,” said Collin Yip, CEO of Rafi Properties, a real estate investment, development and asset management firm which hopes to install umbrellas at two of its projects in Boston.  “The implementation of that law has been an aesthetic disaster for anyone living under or around one.”

Seven years ago, Urban Umbrella reimagined the sidewalk shed and won a design competition sponsored by the mayor of New York City at the time, Michael Bloomberg. The city hired Danish planner Jahn Gehl to recommend ways to improve the quality of public city life and sidewalk aesthetics. Bloomberg called it “the sidewalk shed of the 21st century.” But beyond a prototype that was visible for two months at a lower Manhattan building and a Samsung Galaxy TV commercial spot,  the umbrella was never adopted, at least in the United States, mainly because of its cost.

Toronto testing ground

Urban Umbrella has had better luck in Canada. Despite the expense, umbrellas were installed at two sites in Toronto in 2012: one at Ryerson University’s new student learning center and another at developer Great Gulf’s 75-story residential tower at One Bloor.

“Great Gulf saw a tremendous opportunity to use the system as a marketing platform for the project,” said Cortés. “Instead of being an eye sore, they used our system to herald the project as it was under construction.”

Urban Umbrella’s scaffolding sheds, made of recycled steel, translucent plastic panels and LED light, live up to its name. It looks like an umbrella unfolding and allows natural light to hit sidewalks that would normally be darkened and narrowed by traditional sheds.

Urban Umbrella shed at One Bloor, a 75-story residential tower that was constructed on the corner of Yonge and Bloor in Toronto. [Photo credit: Grahm Barnard]

Similar to Great Gulf, developer Westbank recently tapped Urban Umbrella to deploy a shed at its project in Toronto, the redevelopment of Mirvish Village. There the umbrella will also be a part of the project’s marketing program, according to Cortés.

Price of pretty sheds

There’s no argument that Urban Umbrella is a stylish alternative to traditional sheds, but it wasn’t until recently that it became a financially viable option for landlords and Urban Umbrella to build. The umbrellas, now in its fifth design, is cost effective to manufacture and install, Cortés said.

“There were a lot of lessons learned from the installations in Toronto,” he said. Today, umbrellas are fabricated in Canada and preinstalled in a factory so they can be deployed easily on site.

Additionally, in January Urban Umbrella raised a $1.5 million seed round of funding from family offices, private equity and real estate investors including the Acker family (former owners of Sleepy’s, now known as the Mattress Firm), Red Bear Angels, New York-based Chasella Ventures and Los Angeles-based Legion Capital. The funding gives Urban Umbrella the ability to bid out materials and components of the shed. Prior to the seed money, the firm founded in 2009 was self-funded.

Despite coming a long way, umbrellas are still a premium product and cost about 20%-30% more than traditional sheds. But it’s benefits outweigh its costs.

“When you have a shed in front of you, you see a decline in sales volume, everyone will agree on that,” said Cortés. “It’s bad for business as a retailer and as a landlord it costs you when you have turnover in your retail space.”

An 140-linear-foot Urban Umbrella installation at 20 W. 22nd St. in the Flatiron District of Manhattan. [Photo credit: Grahm Barnard]

“The cost is relative to tenant experiences,” said Robert Finkelstein, executive managing director at ABS Partners, owner of 20 W. 22nd St. in the Flatiron District, where the umbrella was just installed. “We want our retail and office tenants to feel good about the building,”

ABS Partners is close to rolling out the umbrella at a second of its New York City properties and is in discussions about others.

In the spring, an umbrella will also go up at 19 Murray St. in the Tribeca neighborhood of New York as its owner re-stuccos the five-story building. “I chose Urban Umbrella for its feel, for its look, and for the enjoyment it will give the neighborhood while we repair our building,” said Raphael Santore, owner of 19 Murray St., which is also home to his dental practice.

Safety is one of Urban Umbrella’s selling points

Scaffolds are a very small percentage of construction costs when a builder is putting up a new building. “If you look at the grand scheme of things, scaffolding is not a big cost,” said Yip. “It is important to have street appeal and safety.”

Street safety has been top of mind. On Nov. 19, scaffolding collapsed in the SoHo area of New York  due to a strong gust of wind, which sent wooden planks flying to the streets injuring several people. The latest incident has local New York officials calling for enhanced scaffolding safety measures. Cortes said Urban Umbrella’s sheds are a safer alternative because they have been heavily vetted and scrutinized by Building Departments in the U.S. and Canada.

“We’ve been under the magnifying glass for a long time,” said Cortés, adding that it has even gone through missile testing.

“It just seems more sturdy and safe than what is out there currently in the market,” said Yip. “It is the perfect time for Urban Umbrella. We are putting up beautiful buildings and all these old and terrible scaffolding. [Umbrellas] should be used more broadly.”

Amanda Fung is an editor at Yahoo Finance.