The phones are starting to ring in the offices of several northern Nevada architectural firms, and some hope this augurs the recovery for which they've been hoping.
"Six months ago, my phones were not ringing at all," says Ken Bartlett, owner of an architectural company that, during better times, did a lot of design and development work for clients seeking to build convenience stores, office structures, high-end residential and casinos. "I am starting to get phone calls from owner/developers who are testing the waters concerning some projects. But they are being very cautious."
Architects are the quarterbacks of the construction industry. They are usually the last sector to feel the depth of a recession, but they also are among the first to identify signs that clients are prepared to build once again. "We are probably in the forefront by some three to six months," says Bartlett. "We are the first to see any glimmer of recovery."
The U.S. Department of Labor estimated 225,000 architects were working nationwide a year ago. Today, estimates suggest more than 50,000 have been furloughed from their firms.
"Two years ago, I had six employees working for me," says Bartlett. He tried to hold on as the recession deepened, but in January of this year, he moved out of his leased office on Virginia Street. He now works out of his home. Two of his former employees still work with him, but they are doing so as independent contractors. "They have been pretty loyal to me and I appreciate that," he says.
Potential clients who contact Bartlett indicate they are considering either new construction or renovation projects, but say they want to make sure any economic recovery can be sustained given the uncertainty of federal legislative direction and bank credit policies. "The banks are still not lending," says Bartlett, "so the clients we are talking with are the ones who have cash reserves and might be willing to self-fund a project."
One Reno-based firm that has managed to survive without having to furlough its employees is Hershenow & Klippenstein, which has 16 people on staff. "We actually feel fortunate," says Jeff Klippenstein. "We haven't had to lay anyone off, and with our current workload, we have sufficient work for everybody through probably October or November. But after that, the work does begin to thin out."
Klippenstein, along with partner Max Hershenow, have escaped the fate of other architectural firms because 85 percent of the company's work is for public agencies.
"The Nevada Public Works Board is one of our clients," says Klippenstein, "What's keeping us afloat today is work we are doing in Reno at the VA hospital and the Air National Guard. It does seem like the federal government has money and that is a big part of our current workload. We are also doing a big readiness center in North Las Vegas which is a mix of both state and federal funds."
But those firms who have focused on private-sector work high-end residential and commercial are having the toughest times right now.
"That work has dried up," says Klippenstein, who notes that even some of the public agency projects are stalled due to funding constraints. One project is the Churchill County library, for which $10 million must still be raised; another is the Lombardi Recreation Center expansion at the University of Nevada, Reno. "I think that is a $35 million project, and the chances of those becoming true projects anytime soon are slim. But when they do, we are there."
The company has heard rumors that the state Public Works Board will likely have capital improvement projects totaling $100 million for the next biennium. While it sounds impressive, Klippenstein says there were years when such projects totaled $600 million. "If there are projects available, we will likely get one, but we don't yet know what is coming down the pike," he says. "I sense a good part of the nation is starting to turn positive, but I'm not sure Nevada is yet."
Matt Hansen is a partner with Licata Hansen Associates. His partner, Ric Licata, teaches architecture at Truckee Meadows Community College. Their client base has been primarily the private sector, although Hansen says the company is doing some work for the City of Sparks and will likely be doing some work at the VA Medical Center. "There seems to be a lot of hospital work out there right now," says Hansen.
Like Bartlett, Hansen says the company has been getting feelers from the private sector. "People are beginning to talk with us about this summer. They are trying to gauge what the market conditions may look like. But nothing has been committed. Those who have the ability to self-finance projects are being very frugal, and they are getting some very competitive bids," he says.
Asked if architectural firms from outside northern Nevada have been trying to pick off projects here, Hansen replies, "Yes, absolutely. We are seeing encroachment. We bid recently on a community center project in Truckee. There were competing bids from firms in Kansas City, Denver, several in Los Angeles, and San Francisco.
"I am leaving tomorrow for Washington, D.C. to bid on a project at the National Renewable Energy Lab, so I am encroaching right back," he quips.
At its peak, Licata Hansen employed eight professionals. Today, there are four remaining. Hansen says many architects and engineers today are working out of their home. "Our folks are still around, and when we need help they come in on an as-needed basis," he says. "We are fortunate that we own our own building, otherwise we would be at home too."
