Architects, engineers pinched by recession

By Buck Wargo

Fri, Jul 30, 2010 (3 a.m.)

COURTESY PHOTO

Lucchesi Galati Architects' employees discussed projects they have in the works.

The recession and subsequent downturn in construction have taken a toll on Las Vegas architectural and engineering firms.

Many have cut back sharply to deal with the slowdown, and some have declared bankruptcy and ceased operation. Many have turned to government work, finding jobs out of state and outside the country to help fill the void caused by the sharp loss of business in Southern Nevada.

“I think there is about 60 percent unemployment in our profession in Las Vegas,” said Craig Galati, president of Lucchesi Galati Architects. “It hasn’t been good for many people if their work revolved around the private-sector markets of retail, office and housing.”

Galati said his firm has been fortunate to have a greater emphasis on public-sector projects. It has designed projects such as the Skyview Multigenerational Center and Meadows School athletic complex and worked with museums and other culture-related projects. It is working on a project at Mount Charleston for the U.S. Forest Service and on a visitor center at Corn Creek for the U.S. Fish and Wildlife Department.

“We have never done a lot of private-developer work and that has helped us a lot,” Galati said. “We have stayed busy and are one of the few firms that has been able to keep its staff.”

The firm has kept a staff of 20 the past two years, Galati said.

Architectural firms started experiencing the slowdown before other industries because their work is completed ahead of construction.

Thomas Schoeman, president of JMA, which has designed projects such as the Vegas PBS building and the Veteran’s Administration Medical Center in North Las Vegas, said the design practice peaked in 2005 and started to slow down in 2006, prompting the firm to cut its workforce from about 150 to 55, he said.

Schoeman said the medical center and new Las Vegas city hall have helped soften the blow. The firm also has done some casino renovations and work for out-of-state Indian casinos.

“The commercial market has stopped, and the office, residential and mixed-use were a big segment of the work in 2005,” Schoeman said. “I think 2010 is a sustaining year, and as we see a recovery we will see more commercial work out there. Some of the larger projects start planning years before they start construction.”

At Aptus Architecture, President Brandon Sprague said expanding operations in the Southwest has helped his firm cope with the loss of construction projects in Las Vegas. It now has an office in Riverside, Calif., in the Inland Empire.

The firm has worked with Clark County and UNLV, but tight budgets have affected public agencies as well, Sprague said. Sometimes, it’s been about expanding the scope of work done with existing clients, he said.

“What we have found is that clients want help maybe ordering furniture or purchasing items, and do a lot more engineering and other aspects that we might not have normally done,” Sprague said.

Some architectural and engineering firms, however, haven’t been able to sustain themselves in the weak economy.

WPH Architecture in Las Vegas filed for Chapter 7 bankruptcy in June, listing nearly $2 million in liabilities. It has closed its doors.

Also, Lendall Mains Architect filed for Chapter 7 bankruptcy protection in March, claiming a debt of $431,000.

That’s also true of LEA Engineering, which also field for Chapter 7 bankruptcy, claiming up to $500,000 in liabilities.

“I think before it’s all over, we are going to see a thinning of (engineering firms) if they are entirely Vegas-centric,” said Dwayne Miller, president of JBA Consulting Engineers. “They are either going to shrink or have to find new ways to survive in the new normal.”

The firm, which does mechanical, electrical and plumbing system work, has done projects such as Wynn Las Vegas, Encore and Echelon. It has gone from 180 employees to 140 during the recession. JBA is among many local companies hurt by the bankruptcy of the Fontainebleau, where it worked on its design.

The firm has been able to overcome the slowdown in Las Vegas with out-of-state and out-of-country work, Miller said. It opened an office in Macau in 2004, the United Arab Emirates in 2008 and Vietnam in January. It landed a university project in the UAE in 2009, Miller said.

“What carried us are diversity and geography,” Miller said.

The firm has worked in sectors such as education, airports, medical and hospitals and variety of work ranging from mechanical, electrical, plumbing, audiovisual, telecommunications and fire and life safety, Miller said. The firm has even done electrical design for several solar power plants in the past 18 months to two years, he said.

Lochsa Engineering is another firm that is looking abroad for business. The civil and structural engineer has worked on Encore, CityCenter, Fontainebleau and the Grand Canyon skywalk.

The firm has seen its Las Vegas workforce decline from 150 in early 2008 to 50 today. The standard workweek for many employees has been reduced to 28 hours, Principal Mark Hedge said.

“One of the toughest things I have ever had to do was to lay off people because where do they go to find jobs?” Hedge said.

The firm has been searching for jobs across the country, but it’s competitive, he said. It has one person working in Dubai and recently started working in Vietnam as well.

“We had to reach out overseas and out of state to anywhere there are opportunities,” Hedge said. “It has been a pretty tough market out there. Since we opened in 1995, we have been riding the wave of the boom in Las Vegas.”

Hedge said some firms are barely surviving, but he said Lochsa is fortunate to have saved its profits from 2008 — money that has helped carry it though the past two years. That is not going to last forever, however, he said. He said the firm has an excellent chance of landing a road project in Vietnam and is going after some resort work there as well.

“We have had to reach out to places where we see potential growth,” Hedge said. “The problem is that we can’t employ all our people. We need to use local people there to help out. At least, we will be able to send money back. We are all keeping our fingers crossed that we come out of this stronger and more efficient. We have reduced cost, but we had to sacrifice employees to get there.”

Converse Consultants has had to cut its Las Vegas workforce from 110 people in 2008 to 61 today, and Kurt Goebel, a senior vice president, said getting work from the federal stimulus money has helped his firm get through the recession. Still, it’s a challenge, he said.

“In a down economy, you are fighting for every job,” Goebel said. “It is different from it was when work was falling out of the trees.”