While Arkansas architects and engineers say they expect continued growth in 2021, others across the country don’t share that outlook.
A forecast last month from the American Institute of Architects projected a 5.7% decline in construction spending for 2021.
The AIA Consensus Construction Forecast Panel expects “steep declines” this year in spending on office buildings, hotels, and amusement and recreation centers, a news release said. Health care and public safety are the big sectors expected to produce gains in 2021.
“Since the national economic recovery appears to have stalled, architecture firms are entering 2021 facing a continued sluggish design market,” AIA Chief Economist Kermit Baker said.
But he said the recently passed $900 billion federal stimulus funding package should help. “And hopefully by later this year there should be relief as COVID vaccinations become more widespread,” Baker said. “Recent project inquiries from prospective and former clients have been positive, suggesting that new work may begin picking up as we move into the spring and summer months.”
Meanwhile, groups are lobbying for more money for incentives. Preserve Arkansas of North Little Rock and the Quapaw Quarter Association of Little Rock are seeking to raise the state’s historic tax credit for eligible projects. The annual allocation is $4 million. On July 1, the first day of the fiscal year, all the funds were allocated, said Rachel Patton, executive director of Preserve Arkansas.
“This is obviously a problem for people who are trying to take advantage of this important preservation incentive,” she said. Preserve Arkansas and the Quapaw Quarter Association will ask state legislators in session now to boost the allocation to $10 million a year.
Patton said last week that a draft bill is ready, but it hasn’t been introduced in the General Assembly. She said the lead sponsors are Rep. Joe Jett, R-Success, and Sen. Jonathan Dismang, R-Beebe. “We are currently working on gathering additional co-sponsors,” Patton said.
She said the historic tax credits are usually the only financial incentives available to rehabilitate historic places.
“If you’re an architect or engineer, that [tax credit] would be a potential selling point, if you’re consulting with the client on a project that would qualify,” she said.
Health Care
Doug Hurley, president and owner of PB2 Architecture + Engineering of Rogers, said his firm expects to see more work this year and into 2022 from the health care industry, convenience or grocery stores, and distribution centers.
It has completed work for pharmacies, vision centers and dental clinics, he said.
The firm’s grocery store clients have adjusted their designs to incorporate curbside pickup, Hurley said.
“The pandemic has changed the way everybody does business and conducts their personal business,” he said. “Curbside pickup is for all retailers, not just grocery stores. That is something a lot of retailers are looking at.”
Founded in 1963, PB2 practices nationwide and sees business growth in Texas, Florida and Tennessee. “Employers are looking for, in our opinion, areas that have lower state taxes,” Hurley said.
Hurley declined to say what the company’s revenue was, but the firm is “doing well and didn’t take any severe hits during the pandemic,” he said.
He said the firm has a positive outlook for 2021. “We’re seeing a good carryover from the last quarter of ’20 into the first quarter of ’21,” he said. One of the firm’s clients is NWA Space of Bentonville, which is raising funds to build a science center that will feature a 150-seat planetarium, permanent science exhibits and robotics lab. Hurley said that project is in the early phases and didn’t have a projected cost.
Cromwell Architects Engineers Inc. of Little Rock is also optimistic for 2021, especially after a rocky 2020, said CEO Greg Cockmon. The firm, which does work nationwide and has an office in Germany, had a good start to 2020.
Then March hit. “We had several large projects that got put on hold, and some of those are still on hold,” Cockmon said.
Even though the firm reduced its projected revenue for 2020 after projects were suspended, by the beginning of the third quarter the revised budget “was still probably not going to be attainable,” he said. “And so we were really a little bit worried about how things were going to play out by the end of the year.”
But by the end of the third quarter, revenue started to increase, allowing the firm, whose clients include the U.S. Department of Defense, to finish the year with about the same amount of revenue as 2019. “We surprisingly did a lot better than we had expected,” he said.
“The beginning of this year has started out very well, especially in the medical sector,” Cockmon said. “There is a lot of medical work out there on the horizon.”
Cromwell is working on the UAMS Surgical Annex in Little Rock, which has an estimated cost of $64 million. The 150,000-SF building will be a center for multidisciplinary musculoskeletal care. The contractor is Nabholz Corp. of Conway and the project is expected to be completed in March 2023.
Holding Steady
The workload at WER Architects/Planners of Little Rock is expected to remain steady during the next year to 18 months, said Russell Fason, a principal and vice president.
“A good portion of our work is for state and federal agencies, and governments tend to spend money in slow economic times in hope to provide some stimulus for the economy,” Fason said.
One of its projects is the 100,000-SF $45 million Windgate Center for Fine & Performing Arts at the University of Central Arkansas. It is expected to open in the fall of 2022. Pfeiffer Partners of New York is also an architect on the project. Baldwin & Shell Construction of Little Rock is the general contractor.
COVID and economic uncertainty have reduced demand for private-sector projects, Fason said. But he said with vaccines coming and low interest rates, “we are optimistic about the commercial work rebounding quickly.”
