Stalled economy may idle Seattle-area architects
Seattle-area architects are feeling the chill as the local and global economies cool. The development pipeline on which they depend is drying up.
Seattle Times business reporter
Seattle architecture firm Weber Thompson had 82 employees when it moved into its new headquarters building in South Lake Union this spring.
Seattle-area architects are feeling the chill as the local and global economies cool. The development pipeline on which they depend is drying up. Several firms have laid off employees because there simply is less work.
"When the development community itself is kind of holding still and waiting to see what happens next, it obviously affects our business," said Mitch Smith, senior partner and managing director of Mulvanny G2, one of the largest locally based firms.
Mulvanny's head count is down about 15 percent from nine months ago. Mithun, another large firm, cut about 10 percent of its work force last month. Pb Elemental Architecture laid off 15 of its 50 employees in early October.
From all indications, that's just the tip of iceberg. Blogs and online forums speak of layoffs at many more firms.
Several firms — including two of the region's largest, Callison and NBBJ — wouldn't talk.
Some managers say they are taking the downturn in stride, that architecture is a cyclic business.
"We've been through this before," said Weber Thompson principal Blaine Weber. "We're hoping to see a rebound in 2009 like everybody else."
But others say this down cycle could cut deeper and last longer than previous ones. The Architectural Billings Index, a national measure of industry health devised by the American Institute of Architects, declined more steeply in October than in any previous month in its 13-year history.
Part of the problem is many larger projects with plans and permits in hand are stalled, often because developers can't get financing. Weber Thompson's Web site, for instance, shows eight high-rise projects the firm has designed in downtown Seattle.
Two are built. One is almost finished.
The other five are on hold.
"When you look at financing and equity requirements, the landscape has changed completely," said Mark Woerman, a principal with Seattle firm CollinsWoerman. "People just truly don't know what to do."
His firm has about 110 employees, down from 125 earlier this year.
Some smaller firms that focus primarily on single-family residential architecture also are hurting.
John DeForest, of DeForest Architects in Fremont, who heads the local chapter of the Congress of Residential Architecture, said he conducted an informal survey of a dozen firms recently. About half said they may have to let employees go.
"Lots of clients are putting projects on hold," DeForest said. "Credit's tighter. They wonder about selling their existing house to finance a new one. There's more caution overall."
Larger Seattle-area firms that work in other markets say it's no better elsewhere. At Mulvanny G2, international work remained strong for a while after domestic jobs started to slip, Smith said, but that's no longer the case.
"Even the most robust markets have pulled back," he said.
Mulvanny has satellite offices in Portland, Southern California, Washington, D.C., Shanghai and Beijing.
Not all is grim.
At CollinsWoerman, for instance, Woerman said four of the firm's six lines of business — health care, science, interior design and urban planning — are expected to do well next year.
Two local firms that specialize in government offices, hospitals and other institutional buildings say they haven't laid anyone off.
"We still have a full plate," said Bob Zimmerman, a partner in the Seattle office of Zimmer Gunsul Frasca Architects. "We tend to be a little more insulated."
But he and Bassetti Architects principal Marilyn Brockman also say looming government budget cuts eventually could mean less work for them.
"We don't feel it until the taxes don't come in," Brockman said. "Call me next year."
Voter approval this fall of Sound Transit's expanded light-rail system and improvements for Pike Place Market could keep some architects employed, Brockman said.
Some firms see opportunity in the downturn.
At Mithun, principal David Goldberg said the slump has helped his firm focus on the future and how to position itself to succeed when the market revives. That probably means more emphasis on higher density, transit-oriented and sustainable development, he said.
"There are still large numbers of people who will be moving into this area," Goldberg said. "The future looks good. It's just the next few months or years that we're worried about."
Eric Pryne: 206-464-2231 or firstname.lastname@example.org
Copyright © 2008 The Seattle Times Company
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