Regional Designers Push for More Diverse Services and Help Clients With Project Funding
Design firms in the Mountain States share the same concerns about industry growth as their colleagues and competitors elsewhere in the U.S.: uncertain support for public infrastructure and shaky financing in the few private-sector markets showing signs of life. There is more optimism now than in the past few years but also ongoing angst—after another year of flat revenue—about the health of the global economy and political vagaries here at home.
"Our greatest concern is the international debt crisis, its potential impact on the U.S. economy and recovery from the recession," says Brad Buchanan, principal at Denver architectural firm RNL. "While many states, including Colorado, are performing well in the recovery, U.S. markets are fragile, and investors, debt and equity, private and institutional, are still tentative."
RNL and other architects are finding more work in the multifamily rental market and designs for smaller office projects, especially rehabilitation and re-use jobs, but many other sectors remain in limbo. "There is some upward movement in the private sector, principally relating to office space and multifamily housing in urban growth areas," says Brent Tippets, principal with Salt Lake City's VCBO Architecture. "But we are concerned about the ongoing hesitancy of the voting public to support development."
John Shoff, western states division manager for DOWL HKM, Billings, Mont., agrees: "We see growing uncertainty in the federal funding levels for public infrastructure. The lack of a long-term transportation bill from Congress has created stagnation in some areas."
Several firms say they have seen decreasing levels of new projects coming from the federal government. "Although there are pockets of activity, the federal market is considerably less active than in years past," says Brad Martin, vice president and Colorado department manager for HDR Inc. in Denver. "But we are seeing an increase in design-build and P3 (public-private partnerships) project delivery methods."
Christopher Sherry, a senior vice president with Aurora, Colo., engineering firm Merrick & Co., says his firm has benefited from growth in the energy and wet infrastructure sectors, including "a nexus with the growing demand for energy and natural resources," but he echoes industry complaints from years past about "capital that continues to sit on the sidelines."
To combat the financing malaise, many designers are becoming more creative in their approach to project financing and more involved in development. "We are constantly thinking about how future projects will get funded and how we can assist in this as a company and as an industry," says Bob Morrison, president/CEO of Morrison-Maierle Inc., Salt Lake City. "Our industry needs to get more educated on different avenues to help owners and more proactive in finding funding for the infrastructure our country needs."
Others, like Denver's OZ Architecture, are taking the funding push even further. "We've found that helping our clients advance their projects from early planning stages to actual construction is more critical than ever," says Rick Petersen, OZ principal in the firm's Denver studio. "We're producing detailed pricing packages and compelling renderings to help them gain buy-in from financing sources and constituents, and demonstrate that they've thought through all the issues."
Laurel Raines, a principal and landscape architect at AECOM's regional office in Denver, says firms need to do that on all levels of service. "One of our greatest challenges is the quantity of design-related work available in the marketplace due to the sluggish economy," she says. "Flexibility, creativity and the ability to work locally and globally at all scales while producing quality work and managing fees, plus client and consultant relationships are essential to success."
The firm that has clearly mastered the work procurement and complete client-service formula is Denver-based global consulting giant CH2M Hill, selected as ENR Mountain States' design firm of the year for 2012. It leads the design rankings in both Colorado and the Intermountain area this year, based on combined regional revenue of $498 million.
CH2M Hill's market strength is evident in its local project diversity, which includes transportation, wet infrastructure, energy and mining work, power, defense and consulting contracts. The firm has more than 4,000 employees in the five-state Mountain States region working on high-profile projects like Utah's Magna Reservoir, Aurora's recently completed Prairie Waters purification facility, the Provo Reservoir Canal Enclosure, Denver's $1-billion-plus Eagle P3 light rail, Idaho's GARVEE highway improvement program and hazardous waste cleanups in multiple states.
Its work as the lead consultant for this summer's Olympic Games in London punctuates a sweeping international portfolio that keeps its 30,000 employees busy and highlights a solid presence in 149 countries and all seven continents.