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Recovery comes, but slowly for, for architects Blueprint for GROWTH

THE BALTIMORE SUN

Harold Adams thinks about Steve Ziger and sees someone who, under other circumstances, could build the seven-person shop of Ziger, Hoopes and Snead into an architecture firm rivaling the biggest and best.

"Ziger's kind of firm in the past would have been able to grow and prosper," says Mr. Adams, chairman of Baltimore-based RTKL Associates Inc., the nation's sixth-largest architecture firm. guy with his talent and communications skills would at another time have been well on his way to building another [RTKL]."

Not these days.

As the real estate depression begins to lift, the sector's most devastated profession -- an estimated 40 percent of Maryland architects lost their jobs between 1989 and 1991 -- is beginning ++ to recover from the shock.

But the recovery has been fitful, for large firms like RTKL and small fries like Ziger Hoopes.

The average Maryland firm has seven architects, up from 6.3 a year earlier, says the Maryland Society of the American Institute of Architects. The firms' average revenues still are falling, though, down about 3 percent from last year. And in February, 68 percent of firms across the nation expected revenues to rise this year; by October only 48 percent said revenues actually went up.

Still, the 38-year-old Mr. Ziger and other architects say signs of spring are emerging.

"We're considering hiring another employee, another architect, which is great," he says. "We've been fortunate to get our biggest project ever. It feels great."

"Some of the projects have fewer people going after them," he adds. "There's less desperation. It was 40 [firms competing for a project], then 20. Of course, it could be that everyone went out of business."

"It was scary there for a while," says the enthusiastic Mr. Ziger.

He's in love with his craft, describing every project as "really neat" or incredibly "cool." It was the business end that was scary.

In early 1992, Mr. Ziger and his partners made several moves to cut costs. They trimmed three people from an 11-person staff. They cut everyone else's work week to four days, and their own pay by 20 percent. And they put off buying new computers.

Today, $15,000 worth of computers are sitting, some still in boxes, around the firm's offices on a side street just west of Charles Street in Baltimore's Mount Vernon. The staff will soon be back up to eight (partner Craig Hoopes moved to New Mexico after the layoffs), the work week is back to normal, and partners' shares have been restored.

Best of all, Ziger Hoopes this fall landed its biggest-ever project, a 44,000-square-foot teaching and research building for the Johns Hopkins School of Hygiene and Public Health.

And the firm is beginning work on a proposal to convert the old Hippodrome Theater on Eutaw Street into a museum of vaudeville and live entertainment.

"We might even meet George Burns," Mr. Ziger says. "We think that if things keep going the way they are now, 1993 could be our best year yet."

One reason Ziger Hoopes has survived the recession is that it always got a lot of work from nonprofit groups such as schools, hospitals and churches. That business has fallen since 1990, but not nearly as sharply as office buildings and retail projects. The Maryland AIA says commercial work has fallen to 25 percent of the average firm's revenue, down from 33 percent in 1991, which was well into the real estate recession.

But there's a cloud on the firm's horizon: The evolving profession could squeeze small shops in favor of giants such as RTKL or midsized firms such as the 50-person Ayers Saint Gross of Baltimore.

"I think you'll see a lot of consolidation," says Ayers Saint Gross principal James A. Wheeler. "It's much harder to be a generalist these days. . . . The focus is changing so much that the big firms will do big stuff and little firms will do little stuff."

Mr. Ziger doesn't buy that. He points to the Hopkins job as proof that his firm can handle larger projects, noting that the bulk of creative work on major projects is handled by a team of two to five architects.

Ed Hord, whose Baltimore shop, Hord Coplan Macht, merged with a big West Coast firm last year, agrees.

Mr. Hord, a principal in San Francisco-based Anshen + Allen, says small firms often will have to settle for a piece of technology-intensive jobs such as health care buildings. Or, they'll have to team with bigger firms, as the premerger Hord Coplan did in joining A + A to bid for a contract from Sinai Hospital in Baltimore.

"There's still a place for small firms," he says. "There are a lot of things that aren't high-tech out there."

As the role of small firms evolves, Mr. Ziger is building his one step at a time. Not to become the next RTKL, perhaps, but to expand its institutional design practice outside the mid-Atlantic region.

Meanwhile, he looks at the future philosophically. "I don't think I'll be living significantly better, but I think we'll be doing good architecture. . . . Faith in the future is natural for an architect. The very act of building is an act of faith because you're building for the future."

Contrast in styles

If Mr. Ziger, with his mop of hair and gee-whiz air, is rock 'n' roll, Mr. Adams is classical. He wears formal suits and short hair, and has framed certificates in both English and Japanese on his Commerce Place office walls.

His firm is as big and powerful as Mr. Ziger's is small and vulnerable. But the recession forced many of the same choices on him as it did on Mr. Ziger.

RTKL cut 200 of its 670 employees, including six of about 30 partners. Revenue fell from $72 million in 1990 to $45 million last year -- it will be "a little over $50 million" this year, Mr. Adams said. In 1991, RTKL lost money for the first time in at least 15 years, and the firm cut partner pay and put off buying computer equipment.

Harold Adams says he saw the problems coming and moved to diversify. A big part of the solution was a helping hand from Uncle Sam.

RTKL, best known for malls around the country and office towers such as Commerce Place at home, is doing more government work these days. In fact, U.S. government work is about 20 percent of its business.

RTKL is designing the new $122 million Woodlawn headquarters of the U.S. Health Care Financing Administration. It's working on the new U.S. ambassador's residence in Bangkok. It's renovating the main dormitory at the U.S. Naval Academy and designing a $100 million Army laboratory in Adelphi.

The government work even extends abroad, part of an international portfolio that has grown to 30 percent of RTKL's revenue "from a standing start five years ago." In September, the firm landed a contract to help design a Japanese government office project as big as New York's World Trade Center.

RTKL also has survived by changing along with its clients.

Its traditional strength dried up as developers stopped building malls and big retail clients such as Federated Department Stores went in and out of bankruptcy court. But a boom in real estate investment trust financing has sparked the renovation and expansion of existing malls. So RTKL is pushing that way, most notably with a commission to design a prototype for Sears' store renovations.

Today, RTKL is hiring again. It has added 50 architects and engineers this year.

The revival among Maryland firms means paychecks for some of the estimated 1,000 laid-off architects. But the profession may never be the same.

Consider Kent Muirhead, who came back to RTKL in June.

His nine-month layoff began only weeks after the 36-year-old Federal Hill resident had won an award for redesigning his house. "It's ironic, but that's how things work sometimes. Of course, my wife got pregnant two months into it. Things are rough, but you can't stop living your life because things aren't as you planned them."

Mr. Muirhead, who had sent out well over 100 resumes, returned to RTKL when an executive in charge of government projects remembered him as government work began rolling in, even though Mr. Muirhead had worked for another group within RTKL before losing his job.

Settle for less work

But many architects must settle for work as contract employees, without long-term employment. Mr. Wheeler of RTKL says profit margins are still too tight for firms to carry architects during slow times.

Today, Ziger Hoopes has one temporary worker; RTKL has seven and has used about a dozen this year.

"It kind of scares me," Mr. Ziger says. "Architecture as a collaborative process benefits from people who work well together."

One architect who isn't looking to return is Bob Kutner. After being laid off at both RTKL and Hord Coplan Macht during the recession, he turned his Pikesville home addition into an ad for a new business as a one-man design-and-build home improvement contractor.

"One day you're doing a $50 million building and the next you don't have a job," says Mr. Kutner, 41. "It was time to get on with my life."

He had always liked watching designs be built more than the design process itself. And now he's getting a snootful of it -- building kitchens, home theaters and other "high-end stuff. . . . A lot of jobs are in six figures.

"There's a lot to be said for being an entrepreneur," he said. "I would be expecting to make as much as a principal in an architecture firm in town within a couple of years, and I could never do that working for someone else."

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