With sprawling shopping centers and oceans of neon lights, it’s almost impossible to imagine Las Vegas and Reno as the dusty one-horse towns they used to be. Nevada has long been experiencing unparalleled growth and a booming economy. That’s good news for businesses like architecture firms that are on the ground floor of that growth.
Las Vegas was the site of the American Institute of Architects national convention in May. More than 20,000 architects converged to discuss issues related to the profession. During the conference, architects also used Las Vegas as a learning experience, touring its schools, hospitals, casinos and the Las Vegas Monorail, which are among the newest developments in the country. Many of the issues on the agenda were the same concerns facing Nevada’s architects.
Steve Carpenter, principal of Carpenter Sellars Associates, found value in a seminar at the conference aimed at teaching architects how to manage their companies and increase profits. “They don’t teach business in architecture school,” he explained. “Good firms grow quickly, as we have, and when they do, the organization needs to be structured properly. When there were just the two of us in the firm, we could afford to be free-wheeling designers, and even when we added a few more people, we could still take the whole group to lunch or to tour a project. But we recently added our 32nd person, and we’d like to hire five more, so that requires a lot more administration, more meetings, more planning. The more you grow, the hungrier the administrative machine becomes.”
Architecture firms are in high demand in Nevada, as well as around the country. Nevada firms are keeping busy with all of the building projects continuously being proposed. Being an important commodity comes with its own unique set of challenges. Architecture executives say there’s plenty of work to go around – so much so, that competition for projects is the least of their worries.
However, what they do compete for are quality employees. “All the firms are faced with bringing good quality people to work here in Nevada,” said Windom Kimsey of Tate, Snyder and Kimsey, which is based in Las Vegas and also has an office in Reno. “Architects are busy all over the country. To get people to come here, you have to offer them strong incentives.” Incentives, Kimsey said, include signing bonuses and other perks. He reported that Nevada is an attractive place to relocate because of the good economy and professional opportunities. “We get a lot of people from other cities that aren’t doing so well. We benefit from others’ misfortune,” he said.
Another issue is that the universities in the state aren’t turning out enough architecture graduates to keep up with the growing demand. This concern not only plagues architecture, but also a number of other professions, said Ron Hall, CEO of Las Vegas-based Swisher and Hall. “Having enough manpower to staff a job site and to man the firm is an industry-wide issue,” he said. “The challenge is finding experienced help in both professional and contracting fields. We saw it first with doctors and nurses. It’s hard with so much growth. The economy has always been strong in Las Vegas. People have been saying for years it can’t keep up like this, but it just keeps getting stronger.”
Will Lewis, project manager for C & B Nevada, said the shortage of affordable housing in Nevada often hinders recruiting efforts. “We conduct nationwide searches, and when we get someone interested in coming here, he or she may decide against it after seeing how much houses cost,” he explained. “In order to afford the cost of living here, people have to ask a salary that’s more than we can afford to pay on our present fee schedule.”
Another challenge affecting architecture firms is the rising cost of construction, real estate and insurance in Nevada. Although business shows no signs of slowing down, there is cause for concern, said Jeff Frame, with Rose Frame Romero in Reno.
“It costs more to get something built,” he said. “Material prices have escalated as fast as real estate. The going rate for an office building is $200 per square foot, whereas about five years ago it was about $100 per square foot.”
Good planning is the key to combating the problem of high construction costs, said Jim Mickey, regional vice president of Worth Group Architects, which is based in Reno with offices in Las Vegas and Denver. “Right now, there’s so much activity and growth. On the one hand, it’s a great thing for our state, but on the other hand, there’s a shortage of labor, and costs are so high.”
He added, “What we estimate as a probable cost can escalate within three months. Unfortunately, many clients are in a position where they establish a budget a year ahead of time and then the prices escalate 10 percent, and they have to reduce their programs or the size of the building. It’s hard to find a balance between cost and size of the project.”
The high cost of insurance is also an issue for architecture firms. Premiums are at an all-time high due to frivolous lawsuits, mainly for condominiums, Frame said. “Insurance rates are sky-high. That will mean the end for many design professionals,” Frame predicted. “Somebody’s got to get control of this.”
Frame says part of the problem is attorneys approaching owners with the idea that there could be defects in the property, and then encouraging them to file suit. “The only person who wins is the attorney,” he said. “It’s much more beneficial to work with the builders to try to correct the problem than to file a lawsuit. Realistically, you can’t build a building to last forever – not with occupants using it.”
Finding a way to prevent lawsuits and lower insurance premiums is especially important with more high-rise condominiums on the horizon. Las Vegas’ famed neon skyline will soon be flanked by upwardly mobile housing. More than 100 high-rise condo towers have been proposed for Las Vegas alone. Reno is expecting to see a number of high-rises in its downtown, as well. Architects seem to see these new buildings as a positive thing for Nevada.
“It’s smart planning,” Mickey said. “In Las Vegas and Reno there is only so much land that can be developed. In looking to the future, creating a higher density of people living in an area is better. These areas are going to continue to grow, and it’s going to be more and more difficult to commute from around the city.”
Frame says he is certain Las Vegas is ready for the advent of high-rises, but worries that Reno’s infrastructure isn’t quite ready to handle such an undertaking. ” I think the outlook is good for Reno, and this will increase our downtown development,” he said. “It does pose some challenges for the infrastructure. We’re going to have to pay more attention to mass transit, especially. The infrastructure is there, but we’re going to have to invest in increasing our capacity. The Las Vegas Monorail is a model that everyone could follow.”
Another trend making headlines in recent years is the move toward “green buildings” or sustainable architecture, but according to Don Clark, principal at Cathexes Inc., there has been more talk than action on this front. “Although our firm designs a lot of ‘green buildings,’ we’re the exception, not the rule,” he said. “It’s not difficult to do, but it requires a different thought process and a different mindset. For example, ‘green’ architecture starts with the building site. You want to make as little impact on the land as possible during the building process. Then, when choosing materials, you should also consider the energy it costs to produce those materials and to transport them to the site. If a really great building product has to be shipped all the way from China, think how much fuel it took to get here.”
Clark said this year’s rise in gasoline prices may cause increased demand for sustainable buildings, because people are reminded that natural resources are in short supply. Meanwhile, clients are asking for green buildings, but not many architects are designing them.
With Nevada’s changing face, the architecture profession has to be prepared to keep up and continue to change in its own way. “Architecture firms have to stay on top of changes in industries, code changes and entitlement changes,” Hall said. “We have to understand issues such as the environment, energy and longevity.”
Swisher pointed out, “As architects, we do the toughest part of the project – taking the client’s idea, and turning it into something that can be built. The amount of liability we have from lawsuits is disproportionate to the amount of money we earn, and we give away the easy part of the project to others, who make a good profit from it.” One solution suggested by a speaker at the recent AIA conference was for architects to develop their own projects. “Architects should do more to develop projects,” Swisher agreed. “We often design interesting and unique features into buildings, but they get taken out during the ‘value engineering’ process, leaving us with bland, ‘vanilla’ buildings instead of the ‘tutti-frutti’ that the clients deserve and the community needs. We also have the vision to see how an older building can be redesigned or rehabbed instead of being torn down. We can have a lot to say about how our community will look in the future, if we take things into our own hands.”
Because Nevada’s massive growth rate makes it unique, in-state architects have a better understanding of local needs than outside firms, Hall said. “Our primary work remains here in Las Vegas,” he said of Swisher Hall. “The competition hasn’t affected us. Las Vegas is a unique place with its own unique set of challenges. Everything here moves so quickly. To someone coming in from outside, it’s something new, but to those of us who’ve been here, it’s just how business is.”
Still, there’s the mindset that bigger and out-of-state must somehow be better, said Frame. “I’ve seen some architects team up with bigger firms or firms out-of-state just to get the project, although they were more than qualified to handle the job on their own,” he stated. “There’s nothing being built in Southern Nevada that a local firm can’t handle, and the same for Northern Nevada.”
Despite the recent trend of bringing in nationally recognized firms to design big-ticket developments like MGM Mirage’s Project CityCenter, Lewis said, “There are many sophisticated architects in Nevada who are designing quality buildings. We are well-qualified to handle the challenge of building large new projects.”