Long downturn grinds away on architects
The prolonged construction downturn has forced northern Nevada architectural firms to become much leaner to survive, and a brighter future is nowhere on the horizon.
That’s a far cry from the days that architectural firms enjoyed the luxury of picking and choosing their projects, work was plentiful and many firms added dozens of new employees and opened offices in additional locations.
For many firms, simply keeping the lights on has been no easy task.
Max Hershenow, co-founder of H+K Architects with partner Jeff Klippenstein, says many architects in the region are simply being slowly worn down by the prolonged downturn and lack of work. Hershenow has been designing buildings in northern Nevada since 1985.
“It is starting to grind on people,” he says. “Most of us certainly didn’t see it stretching out to the length it has now, and we wonder how far it will go into the future. We are not seeing any indicators for significant change.”
H+K Architects has survived the downturn because the bulk of its work is in public and government projects, Hershenow says. Staffing at H+K Architects has remained fairly steady, although the company did reduce its payroll in 2011. The volume of projects still remains high, but the scope of projects has drastically declined and the amount of work from cash-strapped regional and state governments is expected to decrease even further, he says.
“It is tough, but we have been pretty fortunate our clients are the federal government, the state of Nevada and school districts. The big huge projects aren’t out there, but there is still some smaller work.”
H+K Architects has benefited from the Washoe Country School Districts revitalizing mechanical systems and IT infrastructure at many older elementary schools, as well as a great deal of renovation work at Veterans Affairs Medical Center on Kirman Avenue.
Unlike work from private firms or construction companies, which have been forced to lower their bids in order to win work, pricing has remained consistent because federal and government work typically is awarded on a qualification-based system, Hershenow says.
George Ghusn, president of BJG Architecture + Engineering since it was founded in 1992, considers himself and his employees fortunate to still be working.
BJG grew to 47 employees with offices in Las Vegas and Pleasanton, Calif. Currently, though, BJG + Architecture and Engineering employs just 10 people in Reno who work a 32-hour week. Partner Peter Blakely left the company in 2009.
“It has been a very difficult environment,” Ghusn says. “Financially it has been difficult, but fortunately we have managed to stay above water. We are not so interested in growing the company; we are more interested in stabilizing what we have. We are trying very hard to hold on to the people we have.”
BJG formerly enjoyed a great deal of work designing tilt-up industrial and distribution buildings, but the focus of the work has shifted, Ghusn says. A great deal of revenue today comes from designing solar panel installations, as well as building renovations and repairs. Projects take much longer to develop, Ghusn says, and there is an increased focus on client relationships.
Jeff Frame, principal with Jeff Frame Architecture, says developing strong relationships with builders and developers is one of the keys to survival for smaller architectural firms. Over the past few years, Frame says he’s nurtured working relationships with two longtime Reno builders that led to his involvement with several projects, such as the Fatburger restaurants in The Summit and on Northtowne Lane.
“I am kind of old school you have got to get out and meet people, join business groups and go to chamber events. You have to be visible,” he says. “The order-takers, guys who waited for the phone to ring, are gone. They guys who are able to keep it going are very visible.”
Frame revamped his Web site to help increase his company’s exposure, which directly led to a few projects in 2011, he says. He also has landed some work with the State of Nevada on a qualifications basis, but those projects are mainly small maintenance and enhancement work.
David J. Eckes, principal with David J. Eckes Architect Ltd., also counts on past relationships with the University of Nevada, Reno and Truckee Meadows Community College for some small projects. Eckes worked as a project administrator for both institutions before striking out on his own in 2004. His main avenue of work, though, has been re-purposing existing spaces for new businesses.
The future remains uncertain for both large and small firms.
“It is difficult to see very far out at this point,” Eckes says. “I do have some new things that have come up, but it won’t take me very far.”
The main concern for larger regional architectural firms, Hershenow adds, is that there are no clear signs of any significant regional economic recovery and the pipeline of local work is bone dry. State construction spending may lag for as much as eight years, he says.
“That’s tough the state not building is certainly problematic.”
“We have been through some downturns and recessions, but nothing where we saw the bottom drop out and we didn’t know which way to turn. Every market is severely depressed, and it really makes you wonder what you are going to do when you go to work some days.”
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