While a number of new rental towers have been announced in recent months, Crain’s has an informative article about a number of Chicago condominium developers who are beginning to build again, albeit at a very small scale and in tightly phased sequences. Even for projects as small as 14 units, banks are demanding projects be split into two phases, six units first, followed by eight in a second building. Some developers are also willing to accept lower offers from buyers for higher down payments up front. The thinking reflects new stricter lending standards and continuing economic uncertainty. But with Chicago’s condo market still over-saturated and the foreclosure crisis just beginning to wane, it also reflects a much needed correction from previous patterns of over building and over lending. And, pardon me Mr. Burnham, but isn’t incremental city-making and infill development often the best approach?
Just after 4:00p.m. Sunday afternoon, cryptic messages visible for miles around Manhattan were written in the sky, spelling out, among other things, “Last Chance.” Out of context to millions in the streets below, the messages were slightly unnerving and deliberately vague. Curious speculation as each giant letter was traced into the sky led many to wonder what the message actually meant: An ad? A terrorist’s warning? A persistent marriage proposal? It turns out the display was part of an art project by Kim Beck called The Sky Is the Limit/NYC and sponsored by the Friends of the High Line.
They’re back! Positive numbers for the Architecture Billings Index (ABI) jumped up in August to 51.4 from a dismal 45.1 in July where it had been stewing in negative land for months. (Anything over 50 indicates positive growth.) Together with a sharp rise as well in Project Inquiries to 56.9 (up from 53.7), the good news seems cautiously solid. “This turnaround in demand for design services is a surprise,” said AIA Chief Economist Kermit Baker. Regional averages, however, remained below the positive bar across the country indicating that firms generally are still struggling. These numbers predate the next injection of stimulus money—whatever shape it takes—which will be sure to give another jolt. Unless, of course, billings are tracking the roller-coaster antics of the stock market.
“The stock market is doing what the economy is doing which is not moving solidly in one direction, either way,” Baker said by phone. “The stop-start that we have seen over the past two years is going to stay with us. I would love to believe that these latest numbers are the start of a Grand Recovery. And maybe they are. The evidence is just not there yet to be sure.”
According to Crain’s New York, the city’s five biggest firms began rehiring last year. Kohn, Pederson Fox, Perkins Eastman, Gensler, HOK, and SOM all began staffing-up, though all five firms pointed to international work as driving much of the growth. “New York started coming out of the recession earlier than the rest of the country, and business is improving, but it’s still uneven,” Bradford Perkins, chairman and chief executive of Perkins Eastman, told the business journal. Perkins Eastman added around 30 architects last year. Nationally, billings have been back in positive territory for the last few months, though results vary substantially by region. And today the AP reported that new home construction is beginning to bounce back. Are you feeling a rebound?
The Architecture Billing Index (ABI) dropped nearly four points in January, but just managed to stay in positive territory with a score of an even 50 (any score below 50 indicates shrinking billings). The new projects enquiry index also fell significantly from 61.6 in December to 56.5 in January, but remained comfortably in positive territory. Even with the fall in the indexes, the AIA believes the overall trend is stable with mild growth.
While signs of economic recovery are beginning to show for architects, design publishers continue to struggle to adjust to the changing media landscape and the soft economy. The parent companies of The Architect’s Newspaper‘s two major competitors, Architectural Record‘s McGraw-Hill and Architect‘s Hanley Wood, both announced major restructurings this week. According to Folio, McGraw-Hill is folding New York Construction, Midwest Construction, and its other regional titles into Engineering News-Record and turning ENR into a regional publication while eliminating up to 2,000 jobs across the company. At Record, this also meant letting go of some senior editorial staff, AN learned yesterday. Meanwhile, Hanley Wood’s president, Peter Goldstone, has been let go and his position has been eliminated, Folio also reported.
UPDATE: A spokesperson for McGraw-Hill wrote to dispute that the company is eliminating 2,000 jobs. While she declined to give a number, she said that the 2,000 figure is, “completely inaccurate.” She also clarified that ENR will “continue to be a national publication, but now it also has regional supplements.”
Crain’s reports that prominent Chicago architect Lucien Lagrange is throwing in the towel at the barely ripe age of 69. Not only his he closing up shop–at an as yet undisclosed date–he’s filing for Chapter 11 bankruptcy. “Retiring, (there would be) a lot of liabilities are on my back. I can’t just walk away,” Lagrange told Crain’s. “Chapter 11 gives you a chance to plan ahead, organize and close in a decent way.”
While the AIA may be forcasting a brighter 2011, Lagrange, best known for designing high end condos, doesn’t see the market bouncing back for another five years. While he might be in a gloomy mood now, my hunch is that Chapter 11 won’t be the final chapter in his career.
As Kermit once declared, “It’s not easy being an architect.” From the 2-feet-too-tall M Cube to the near-destruction of old masters, there seem to be problems around every corner. The story of Clark Stevens is doubly tragic, which Architizer ran today. You see, like many a sad architectural story, Stevens was working on one of his many glorious prairie houses when the recession hit and the client canceled it, and not only that, but there was a considerable squabble over fees, which client did not realize would grow as the size of the project did. After months of struggle a settlement was reached, about the best Stevens could hope for. A little while later, Read More
New Las Vegas megaresort City Center, which we reviewed in January (it features buildings by Daniel Libeskind, Cesar Pelli, Rafael Viñoly, Helmut Jahn, and others) just reported its first quarter results. They weren’t good. The’s $8.5 billion project, owned by MGM Mirage and Dubai World (which has finally worked out a debt restructuring deal with its creditors), recorded an operating loss of $255 million, and has only been able to sell about 100 of its 2,400 luxury condominiums, according to the Wall Street Journal. MGM is also locked in a lawsuit with its contractor, Perini Building Co, for defective workmanship and overbilling. For what it’s worth the company claims that it will soon begin to turn a profit on the project. Now that’s a Vegas bet we’re interested in following.
Yesterday, we reported on the continued improvement of the AIA Billings Index, which has shown its best performance in two years. While things have not totally recovered yet, there is more to this story than just number. We’ve been hearing stories, too, of those so-called green shoots popping up here and there. Take for example a recent tweet by Gensler heralding the 63 spots that the firm is trying to fill across the globe. The simple missive—”Sign of the times: we’re hiring for 63 positions!”—ricocheted around Twitter, a sign of hope and promise among those wired architects. Clearly, this is the kind of good news people are looking for, so we want to hear more. Please leave your stories in the comment section below or send them to editor[at]archpaper.com. We’ll try and highlight them in a few days.