When the Hard Rock Hotel under construction in New Orleans collapsed in October 2019, the headlines focused on the tragedy, the engineering flaws, and the human cost. But for those of us in reserve study and long-term property planning, this wasn’t just a construction failure. It was a failure in foresight, oversight, and contingency preparedness. While the project was commercial and still under development, the lessons it offers are directly relevant to anyone managing built environments, especially community associations responsible for aging infrastructure.
A Structural Collapse is Also a Planning Collapse
At its core, the collapse was a systems failure. Engineering shortcuts, inadequate inspections, and communication breakdowns all contributed to a disaster that could have been avoided. But what stands out to us as reserve study professionals is this: planning after the fact cannot undo what happens when risk isn’t addressed early.
In our field, we don’t build structures, but we assess them. And what we consistently see is that failures, whether financial or physical, happen without warning. They’re usually preceded by ignored reports, deferred maintenance, underfunded reserves, or unrealistic project budgets. The Hard Rock collapse is a sobering reminder that robust planning isn’t a luxury, it’s a responsibility.
How This Applies to Community Associations
While HOAs and condo boards aren’t overseeing 18-story hotels, they are managing the long-term stability of complex structures, often with aging components and increasing liability. Here’s what this incident highlights for associations:
- Overconfidence in Initial Construction: Many associations assume that new construction means less need for financial reserves. But building defects, like those seen at Hard Rock, often emerge within the first 10 years. Reserve funding should begin at inception, not wait until things start breaking.
- Accountability Gaps: When developers hand off communities to associations, the documentation can be incomplete or inaccurate. A reserve study performed early in the turnover process can reveal blind spots in asset inventory, construction quality, and realistic service lives.
- Underestimated Risk Exposure: Just like the hotel’s stakeholders underestimated how quickly small issues could escalate, many boards fail to plan for legal, structural, or safety costs that emerge suddenly. Strong reserves buy time and flexibility in an emergency.
Risk Management Isn’t Just for Developers
Risk management shouldn’t be seen as a one-off concern tied to the construction phase. For community associations, it’s a continual process that extends far beyond the building’s completion. Ongoing oversight and strategic planning are essential to manage the risks that surface over time, ensuring the long-term viability of the property and its finances.
What Boards and Managers Can Learn
- Don’t wait for damage to be visible. Schedule inspections and updates to your reserve study regularly.
- Use your reserve study as a planning document, not just a budget formality. It should guide decisions, funding, and risk priorities. As reserve study analysts, our job is to identify the critical factors that influence a property’s future, examining wear and tear, assessing potential risks, forecasting costs, and creating a realistic timeline for maintenance and repairs.
- Challenge assumptions about new construction. A new building is not the same as a risk-free building.
- Understand your responsibility. You may not be liable for past decisions, but you’re accountable for future planning.
Final Thoughts: Safety Starts with Planning
The Hard Rock Hotel collapse should never have happened—but it did, because too many professionals trusted that others were taking care of the details. In reserve planning, it’s our job to uncover the details: the wear, the risk, the cost, and the timeline. Our role is to ensure associations don’t find themselves in a financial collapse when faced with a physical one.
The lesson here isn’t just about construction failure. It’s about the cost of unpreparedness. Whether you’re managing a five-story condo or a high-rise development, the principle is the same: build with safety and plan with certainty.
