Commercial, government projects easing economic worries

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Published: March 17,2008

It might be called the Katrina cushion, but even more is at work than that. Despite concerns about a possible recession in the national economic picture, Mississippi appears to be escaping a slowdown in commercial and government construction for now.

David Hardy, Guild Hardy Architects, P.A., Biloxi, who is past president of the American Institute of Architects (AIA) in Mississippi, says nearly every architect he speaks with continues to be busy. Architects from across the state are working on Katrina rebuilding projects, and employment at Guild Hardy has gone up from 32 pre-Katrina to 60 today with plans to add an additional ten employees by the end of the summer.

“I’d say 95% of our work is public sector work, and there is a tremendous amount of rebuilding taking place on the Coast,” Hardy says. “With public sector work, you have the advantage of knowing the project is going to happen and you are going to get paid. It may take longer times to get it to happen because of the public bidding process, but we are very familiar with that. And the public sector work has certainly insulated us from what everyone is saying is a recessionary market. In the architecture and engineering profession, you have projects that take two years to build. These long-scale projects help ride you through any dips in the market.”

A ripple effect?

Katrina has had a ripple effect throughout the entire state with a many architects from other parts of the state doing work to help the Coast rebuilding. A number of Jackson architectural firms have opened offices on the Coast to handle the amount of activity.

“Katrina has added to the load of architects throughout the state, and has kept us busy and helped many of us to grow,” Hardy says.

In addition to the public sector work, Hardy says the firm is starting to see some private projects come on. Currently, the firm is putting together a big project for downtown Gulfport, and is also working on a project for downtown Pass Christian.

“We are very interested in urban infill projects in all the downtowns on the Coast,” he says.

One concern both in Mississippi and across the country is that there aren’t enough architecture and engineering graduates to fill the demand. Guild Hardy recruits at Mississippi State and Auburn University and is starting to also recruit at the University of Tennessee. Hardy says when he went to Auburn Career Day this past year, there were 50 firms competing for 50 graduates.

Carl Franco, president of JH&H Architects, Jackson, also reports that business continues to be strong.

“Right now, our firm has not been affected by the slowing economy for a couple of reasons,” Franco says. “We don’t do residential work, and that is where the slowdown is being seen. We haven’t seen a slowdown in the areas we do work including churches, universities, public schools and commercial offices. Our firm is pretty diversified in the type work we do, so that helps. Most of the large firms I have talked to around Jackson have not seen a slowdown in work. Jackson is going well. The Coast is going well. And in Northwest Mississippi in Southaven, there is a lot of activity.”

He has seen some evidence of a slowdown for contractors in that a recent bid for a church job came in way under its estimates. That could indicate contractors are hungrier for work, and willing to accept a lower profit margin to keep their employees on the payroll.

Historic moment downtown?

Franco can never remember a time when more building was going on in the Jackson area. Large downtown project include a $100-million federal courthouse and a $65-million convention center in addition to the $70 million to $80 million King Edward Hotel project. Healthcare work is still expanding, and a lot of retail work and K-12 school construction is going on in Madison and Rankin counties.

While he reads the newspapers about big declines in residential real estate values in places like California, it is hard to see a current economic downturn in Mississippi.

“I’m questioning how bad the economy really is,” Franco says. “There is no doubt it may have slowed down nationally as far as growth goes. But from my standpoint, I haven’t seen it here. Maybe we have been blessed.”

David F. Dean, business development/PR administrator for Dean and Dean/Associates Architects in Jackson, agrees that Mississippi is ahead of the curve.

“Based on the information available to us, the effect has been much worse in other parts of the country than in our area,” Dean says. “ One of our clients on the East Coast has put a couple of projects on hold. Locally, two of our projects have been placed in a ‘slow down’ mode. Other than that, we have not been affected. Certainly residential has been hit — much more so than commercial. Our practice is commercial and institutional — a major reason why we have not been affected to any great extent so far.”

Dean and Dean has been working to eliminate any economic negatives by assisting some of its clients in obtaining low-interest loans and alternative sources of financing.

“Also, we are constantly seeking creative and innovative design solutions that will result in buildings of higher value at lower cost for our clients,” Dean says.

Contact MBJ contributing writer Becky Gillette at 4becky@cox.net.

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