The tri-state area’s designers were on the front lines of a construction market choking on its excesses in 2008. Today, even if temporarily, most of the rampage seems to be over, but there is little cause for excessive optimism: colleagues across the three states remain unemployed, projects are stalled, and there are few indicators that the federal or state governments will come to the rescue to the extent they did in previous downturns. Among those still standing, there’s a growing consensus that business as usual is over, and the industry as a whole will need to reinvent itself to stay relevant.
“We as architects seem to be the canaries of the economy, because we’re the first ones hit when projects stop,” said Jason Kliwinski, president of the AIA New Jersey chapter.
Rick Bell, head of the New York AIA chapter, estimates that 25 percent of regular staff and interns at architectural firms across New York have been let go during the economic downturn. In New Jersey, according to Kliwinski, the design industry’s unemployment rate is at a whopping 40 percent, compared to the 10-percent average in the economy overall. “Four- hundred-person firms closed,” he said.
James LaPosta, Jr., head of the Connecticut chapter of AIA, said that since 2008 designers there “went through the seven stages of grief.”
“I finally started to understand the generation that grew up during the Great Depression.” Even firms that were geographically diversified experienced shocks.
“I think like others we were expecting a downturn in the local markets,” said Aaron Schwarz, a principal at Perkins Eastman, which had 15-20 percent of its portfolio abroad prior to the recession. “What everyone was caught by was the global ramifications—that it really hit worldwide.”
In New York, according to Bell, the sectors suffering the largest declines were corporate offices and the ubiquitous luxury residential.
“Some of those extras being spent on construction work at the height of the market, that over-the-top catering to only the super-luxurious—we’ll see less of that,” said Schwarz.
“The last gasps of extravagance are being finished today,” Bell said. “Will we see another Goldman Sachs or Beekman [towers] any time soon? I don’t know.”
LaPosta, who in addition to heading the Connecticut AIA chapter is chief architectural officer at the Hartford-based 75-year-old JCJ Architecture, said that Connecticut companies have cut their staffs and the entire design sector saw a number of mergers and acquisitions. Among the smaller firms, particularly those doing design work for the corporate office, residential (except for the very high-end) and retail sectors, were hit hard; some went out of business entirely.
More often than not, the ones able to survive were the ones that had the foresight to diversify, according to Kliwinski and Bell.
Projects in education, health care, institutional buildings, infrastructure work, particularly projects benefiting from the stimulus act, are getting funded or proceeding, according to Bell. “Even during the Depression,” he noted, “public facilities took the country out of unemployment.”
In upstate New York, the stimulus money meant more infrastructure work.
“We set up a little war room to attack that program and have been very successful, getting 60 projects in 12 states for $30 million,” said Raymond Kinley, president of the Albany-based Clough Harbor & Associates Engineers. “The stimulus had a big effect on sustaining us. It’s been a very difficult time for vertical construction, but the infrastructure stuff kept our numbers up—we’re a bit up over last year.”