Crystal Ball Design Build AIA’s Metz: Leaner design firms see slide abating
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By Greg Metz
Director
American Institute of Architects, Michigan region
2011 will be better than last year — I hope. Seriously, last year was strained for our industries, and while it will stretch into 2011 a bit, I see light at the end of the tunnel. Things do seem to be picking up in the architecture profession for many firms and that will eventually trickle down to the construction industry.
All firms are leaner than they have ever been, and they run more efficiently. The year 2010 saw some of the medium to large firms become bigger so that they can expand to reach a larger geographic region. This trend will continue in 2011. Smaller firms will tend to be hyper local with larger firms casting a larger net and increasing their geographic range to stay competitive.
Renovations and healthcare will continue to dominate the industry. There are numerous reasons as to why renovations will still remain strong. Many renovations are in districts that allow owners to leverage many different types of tax incentives (historic, DDA, Smart Zone, BRIP, etc.) and that will continue to be a driving force in development. There is a still a movement into the city that draws many developers to existing building stock. Healthcare in West Michigan is getting a very strong footing thanks to Spectrum, Van Andel Institute and Michigan State University. There will continue to be projects in West Michigan that are a part of those institutions or indirectly related.
I predict the near west side, north Monroe, and the area just south of Wealthy from Madison to U.S. 131 will see activity, both new construction and renovations. While the mega projects that we have seen in our city over the past few years will take the year off, we will see a large amount of small to medium projects. I am confident the Fulton Street Farmers’ Market will draw national attention upon its completion, and it will reinforce the strong local commerce that exists in the region. The region will also see an increase in public transportation that will help attract and retain a younger professional demographic. Another key to retaining creative young people is that our local companies need to start hiring local business instead of hiring outside the region. I am still hopeful that this will increase in 2011.
In order for our industry to survive, we need to stop driving fees to the lowest common denominator. While it is advantageous to owners, it leaves many firms with a very slim margin of profit, which has many companies walking a fine tightrope between surviving and dying. The industry needs to get back to a middle ground that will keep firms in better shape, yet still be a good value for clients.
One of the largest impediments to the construction and architecture industry is still the banks. I hear it everywhere “the projects will happen if the banks will work with us.” They are not and as a result projects are often not happening. I am hopeful that 2011 will see banks moving more toward the center and start to lend to viable projects. This alone will spur a tremendous amount of growth and in turn will help elevate the economy.
As for legislation, some seem to take issue with tax incentives. I would argue a good many projects in West Michigan are happening because of those incentives. If they go away, you can ignore my optimism in everything I have said in this article — our industry and the construction industry will crash and burn. There is also talk of taxing architecture services. While it would not be positively embraced (are taxes ever embraced?), I don’t see that as having a terribly negative impact upon our industry. Last year, I was hopeful that the Statute of Limitations bill would pass, but it did not. However, I remain hopeful that it will be different in 2011 and that they will pass legislation that returns the statute of limitations from its current six years back to two years, where it was for as long as records have been kept. This simple passage will save every architecture and engineering firm a good deal of overhead as a result of lowered insurance costs.
As far as our new state government, I can only hope that they discover bipartisanship and engage in it. The hardcore partisan attitudes that each party engages in are killing our government and economy. So, if the new legislators decide to work together in 2011, then this state will begin to turn around. I would like to say I am hopeful, but I am unfortunately skeptical.
So, I shout loudly to every state legislator that reads this: Put aside your differences, work together for the benefit of this great state and help make us strong again. In-fighting will only hurt us more. We must be united in working for the betterment of the state and all its residents.
In conclusion, next year in West Michigan will be a pivotal year. Much has changed over the past few years, and 2011 will be an opportunity to put us on the right track and position Michigan and West Michigan as a strong economic region. We are a strong community, and we will realize that spending our money with each other first is better than spending it outside of our region first. We will continue to grow within the state, and people across the nation will start to think of Grand Rapids first — as opposed to Detroit — when Michigan is named, and that will be a positive for our state.
Greg Metz is a principal at Lott3Metz Architecture. He’s also past president of the American Institute of Architects Grand Valley Chapter.