From May 20, 2010 Angle
Baltimore architect Jim Determan, AIA, told the House Financial Services Committee May 18 that the lack of financing for design and construction projects should be Congress’ top priority as it addresses the economic crisis.
“If you ask architects across the country today why conditions are so bad, you will inevitably hear the same two responses: one, firms are unable to secure credit to keep operations going; and two, clients are unable to secure the financing needed to get construction and renovation projects started,” Determan told the Committee at a hearing to review the Obama Administration’s proposal to devote $30 billion for community banks to lend to small businesses.
Determan, an architect at Hord Coplan Macht, told the Committee about how his previous firm had to shut its doors in 2009 due to economic conditions.
“A significant contributing factor causing the demise of our business was the lack of credit available to our clients to finance their projects,” he explained. “Projects stopped dead in the water. We could not move fast enough to shed employees or office space. And near the end, the bank called in our credit line. One hundred twenty good people lost their jobs, some of whom had been with the firm more than 30 years.”
Determan offered support for two bills designed to help improve access to credit: theCapital Access for Main Street Act of 2010 (H.R. 5249), which would help lenders and borrowers of commercial real estate loans as they attempt to work out their loans under terms that are mutually acceptable; and the United States Covered Bond Act of 2010 (H.R. 4884), which would promote the use of covered bonds, a type of bond that is far less risky than other kinds of investments and has been successfully employed in other countries for decades.
For additional information, please contact Andrew Goldberg, Assoc. AIA, senior director, Federal Relations.