Architects and engineers are, oftentimes, the middle man for cities and developers. This central position brings with it a host of benefits as well as it’s share of challenges. Recently, executives representing architects and engineers in Nevada sat down at the Las Vegas offices of City National Bank to discuss their position in commercial real estate development and the future of their industries.
Connie Brennan, publisher and CEO of Nevada Business Magazine, served as moderator for the event. The magazine’s monthly roundtables bring together leaders to discuss issues relevant to their industries. Those discussions are recorded and a condensed version is included in the following pages.
what ripple effect did the recession have on your industries?
James Lord: The time frame between 2008 and 2011 really decimated the architectural profession. So the career set that would now have 10 years of experience is pretty much non-existent.
Laura Jane Spina: Our focus changes as the markets change. We were previously more of a municipality firm and then, when the recession hit, we got into a lot of federal work. We’ve got five IDIQs (Indefinite Delivery, Indefinite Quantity Contracts) currently. And, luckily, just before the last election, our federal work slowed down a little bit so we got into hospitality. We’re also doing three convenience stores, Green Valley Grocers.
How big of an issue is staffing right now?
Greg DeSart: Our biggest challenge is by far recruitment and retention. In the last six months, we’ve shifted from really searching for work and having enough work at the end of last year. Now we have more work than we can handle and we’re figuring out how to keep our staff and hire new ones. Part of our long-term strategy has been to be the best place to work. We have a lot of retention and we do have some people who have been with us for 20 years. [In fact],15 to 20 years is not uncommon within our firm of about 45 people.
Brent Wright: We just began in earnest recruiting at colleges. It used to be, when we recruited before the recession, we’d show up in March and find April graduates. We’d make a few offers and hire a few people. We showed up in March this year and all of the April graduates already had offers and accepted jobs. They’re accepting jobs a lot sooner. Many said they accepted offers before the holidays.
Mark Hedge: We’re in need of project managers. We’ve been using recruiters a lot and we spend a lot of money on recruiters. We’ve really been lucky as they’ve been able to find people who used to live here and moved back. We didn’t have to pay relocations costs and ultimately we’ve only gotten rid of one of those employees and hired six in the past year.
Are public projects becoming more common post-recession?
Tom Wucherer: We do zero public [projects]. We never have and I don’t anticipate we will. What we end up doing when there’s a shift in the economy is going to other places. That is why we’ve gone global in the past. We don’t shift back and forth between Las Vegas, we shift back and forth in or out of the country.
Spina: I don’t know that there’s a lot of municipality work out there right now. I don’t think the cities have recovered to do capital improvements much. If they are, they’re doing mostly infrastructure from what I’m seeing. For us, we’ve kept a mix between a little bit of private and a little bit of public works.
Windom Kimsey: I think public works is pretty healthy. Maybe not municipality but county work, there’s UNLV work, there’s College of Southern Nevada, Nevada State. There’s a lot out there. The school district in particular is driving a lot on the public side. Our firm’s primarily in that realm; it’s at least 80 percent of what we do.
Have Client Expectations changed?
Wucherer: A lot of clients still think that 50 percent of the effort is in producing construction documents. That’s not necessarily the case. When you’re drawing this stuff in [building information modeling software], a lot of the thought and energy goes way in front of that. The challenge is not getting behind financially. You’ve got expensive people thinking about this who are putting it into a 3D model. But, clients still have the old mindset, thinking we’ve got an army of draftsman putting lines on so the fees must be shifted towards the tail end.
Michael Pancirov: I had a conversation with a client who has a client outside of our local, regional area. They’re failing to help [their client] understand that plans must be submitted. We just don’t have a permit and there’s an additional four weeks beyond what would be normally expected. From their perspective, there’s perhaps a level of incompetence and asking, “Why is it taking so long?”
Tim McCoy: Unfortunately, you have to schedule a meeting to review the comments and sort out which ones have to be addressed and that takes time. Right now everybody wants to move because it’s a hot market. That puts a lot of pressure on architects to get the plans submitted because we’re taking four to five months for review out of your schedule to get your plans approved. That’s hard to explain to your client, who asks, “What’s wrong with your plan? Why didn’t you get approval?” Well, we got them in line. We’ve got to get them down there to get them in the process.
Wucherer: You get behind schedule because there’s a “Wait for it … okay, now go!” We are in that “wait for it” moment on a lot of these projects. The hard part is getting the first domino to fall. As soon as the first domino falls, then it becomes go, go, go. [The client’s] biggest concern, and it was said to me yesterday in a meeting, is, “Once I get committed to this capital, it’s got to get working for me. Because if it’s not working for me, I’m losing money.”
Is the entitlement process improving?
Wright: I think they’re trying. I mentioned this morning to one of my engineers about how technology, software and everything has made it so that we can work so much more quickly and efficiently, yet the approval process is still lagging behind.
McCoy: They had early retirement for a lot of people and it’s hard to get those people back in there. In the next five years, I don’t know what the number is, but a large percentage of those guys are going to go. It makes the whole process even slower.
Pancirov: I know they’re seriously understaffed. They’re trying to hire just as we are. I know one of the aspects of [the city’s new system] is electronic submission of documents so we’ve actually submitted a couple of projects, not having to go in. You can spend half a day there just submitting documents so that is one step forward. I think they are looking at things to try to progress themselves but, that being said, the new system does have some user complications. I’m sure time will heal those but they are apparent at the moment. The city’s also looking at how they outsource their reviews so that’s perhaps a move in the right direction.
Dan Campbell: I’ve observed that they’ve got some really fine technicians but engineers are people that make decisions. They make decisions about designs. Architects as well, they make decisions. And the folks at the different building departments are not quite there yet.
Wucherer: The difference between then and now is, you do have to set appointments. You have to start the process. It’s much less collaborative. You can’t go down there and say, “Well look, this is what we’re envisioning. Help guide us through the issues that are going to occur because of this.” What they want you do do is submit it and [they will] review it. I’m here so I’m not submitting a bunch of junk. I’m here so I can get your initial feedback and then I can make a much better submittal and we can have a real conversation. So, you end up going down with a few sketches and stuff that is going to get kicked back out because you’re looking for feedback. They just want to check boxes.
Hedge: The City of Las Vegas’ express plans checks through the civil and the building department is the most efficient in the Valley and it seems to work quite well. Henderson’s not bad. You can predict and that’s the way it is so, scheduling-wise, they end up pretty good about hitting that.
Do you feel you’re getting enough public recognition?
DeSart: Oftentimes, what we’re doing is considered confidential at the time we’re doing it. The developers, or even the public entities in some cases, don’t want the public to know we’re working on it yet. So, by the time we’re done, that’s about the time they hit the press with what’s going on.
Hedge: A lot depends on who puts a press release out and how many words they’re paying for in their ad. When the City National ice skating rink was built, we were part of that and Gillett had a nice ad and they list just about every consultant. So we do get noticed every now and then.
Kimsey: We’re often credited with “rendering by artist.”
Wucherer: Or it’s your rendering without your logo. It certainly didn’t leave the office that way.
Wright: When I was a younger engineer, I used to feel bad when I’d go to grand openings that would recognize the banker, the architect, the builder and then it’d be a row full of engineers with no mention. But, the reality is, for us, we work for architects. If we did a good job, no one’s even going to notice it. We could certainly do a better job [promoting], but who cares if there’s a beam right there that’s holding up this roof?
Campbell: We’re not real good at [promoting ourselves]. That’s the bottom line.
Is having a transition plan a priority for your firm?
Wright: I have a transition plan. I have people in line who would probably do an awesome job if I wasn’t around. They do when I’m gone. Firms that don’t plan for their succession will ride off into the sunset and their employees will start a new firm with the relationships they’ve developed. I think that’s the way it’s always been and probably will continue to be.
Lord: That’s what’s going to go on the back burner. Somebody who’s smarter than us and not in this room has said, “You have to work at the job and you have to work on the job.” What happens is, all of our personality types in here means we’re going to go work and forget the job. The second generation owners in this office know the transition plan is easier when it isn’t your initial on the letterhead. The challenge that we all need to have is, while we’re making hay and we’re doing all this stuff, we can’t forget what it is we’re riding and we have to plan for that transition. You can either ride off into the sunset or let it support you when you’re gone.
What is on the horizon for architects & Engineers?
Pancirov: Technology is changing the industry. I grew up in a day where I learned to draw by hand. You could start out, and not know a whole lot, and through the mentorship process learn. With technology the way it is, you have to have a certain amount of knowledge already in play in order to even be of real value. With 3D modeling, you can’t just put a line there and expect people to know what it is. You could have done that 10 years ago.
McCoy: Infrastructure funding is there so I think the public side is going to keep going strong. On the private side, and something we didn’t talk about, is land. I know every one of my homebuilders are concerned about where the next piece of land [will come from]. Sales are hot right now and they’re eating through their inventory at a lot faster pace than we thought.
Campbell: I think the market is really robust. Just before I came over here I looked over my jobs list for the last three years. Two years ago, it jumped almost 10 percent. Last year it jumped 11 percent. This year it’s going to jump again. It’s almost more than I can keep up with.
Lord: What I can tell you is everybody’s busy. And when we’re all busiest, the first thing we forget to do is take care of our cash cows or our money machines or our daily livelihoods. So I think that’s going to be the biggest challenge in this coming year and a half. We’re going to have to take time to actually take care of our business.