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Stalled Projects Put Face on Stalled Economy

AIA Initiative Helping Connect Project Leaders, Investors

WASHINGTON (AIA) – Scroll down the list of postings on the AIA’s Stalled Projects Database and you’ll find a cross-section of works that span America. They map from the Florida coastline through the nation’s heartland and on to the Pacific coast. Some are large retrofits intended to take part in revitalizing a once vibrant downtown. Others are to be part of new business centers, designed with the hope of igniting a city’s struggling economy. One would provide support for veterans returning from combat, while another would create a home aimed at scaling the heights of green design. The common thread that unites them all is that work on them has come to a halt.

At issue are the construction and design projects stalled across the country by a lack of bank financing. According to a recent AIA report, since the end of 2008, construction spending in the U.S. has declined by almost $300 billion, with the loss in the construction sector alone accounting for a 2 percent decline in the size of the U.S. economy.

The AIA's Stalled Projects Database is intended as way to boost spending in the construction sector and get architects and others back to work on projects like those described above. It aims to match stalled projects with investors and lenders able to bring the financing needed to the table and move them forward again.

To date, 22 projects have been posted to the site worth more than $568 million. The postings come primarily from architects but also include developers, owners and other business leaders. More than 25 investors have public profiles on the site. Combined they have more than $7.1 billion in capital to invest. There are also more than 25 non-public investors who have created private accounts for the site.

(Editor’s Note: Click on the photos at right and you can see each project’s detail page on the AIA’s Stalled Projects Database. Log-in is required but can be obtained free-of-charge.)

Participating architects, like Clinton Brown, FAIA, say the AIA effort gets at the heart of the problems facing the nation’s economy.

‘’I am grateful for the AIA’s pioneering initiative, based on feedback from its members, to stimulate our profession’s businesses and our nation’s economy by creating a specialized marketplace for potential projects and investors,’’ said Brown, president and principal at Clinton Brown Company Architecture, Buffalo, N.Y.

‘’ No other profession that I am aware of has taken such an entrepreneurial approach to deal with the current reality that we all face. It will be successful as the word gets out.’’

Brown’s The Cooperage is among the stalled projects listed on the AIA’s website. It's a rehabilitation of the former E & B Holmes Machinery Co complex in Buffalo. It is where machines to automate barrel-making were invented. It’s now planned as a mixed-use facility in a 21st Century waterfront community in Buffalo’s downtown.

‘’We receive an inquiry a week for a loft,’’ said Brown. ‘’The missing piece is the last piece of financing.’’

Brown is not alone. In his November report, AIA Chief Economist Kermit Baker, PhD, Hon. AIA, said stalled construction projects of all sizes are a major contributor to the biggest issues facing the U.S. economy.

‘’Difficulties in securing financing are widespread across most building construction categories,’’ Baker writes in his report. ‘’Architecture firms report that residential, commercial and institutional construction projects all are subject to serious financing problems. And it is not only large, complex projects that are at risk. To the contrary, architecture firms recently reported that projects with estimated construction costs of under $5 million account for almost half of all projects stalled due to lack of financing.’’

Getting those projects back on track would not only be significant for architecture firms but for the U.S. employment rate. Each $1 million in new construction spending supports 28.5 full-time, year-round-equivalent jobs, according to a study by George Mason University economist Stephen J. Fuller.

Andrew Heid, founding principal of NOA, a New York-based firm dedicated to the radical exploration of nature, ecology, and urbanism through innovative architecture, has placed Aurora House, in Aurora, Oregon, among the stalled projects on the AIA site.

It's a new, innovative single-family house overlooking protected wetlands and countryside near Portland. The house sits on one of two new urban in-fill lot developments connected back to the main street by a newly constructed private street.

‘’The Aurora House is a new prototype for the single-family house post sprawl,’’ Heid said. ``By building on an urban in-fill site and by reducing the conventional house by one-half, sponsoring a more convivial and ecological living.’’

Heid says his posting in the Stalled Projects Database has already led to contacts, though he is still waiting for the right investor.

Baker writes that a lack of financing is the primary factor behind the delay in one out of every five stalled projects. ‘’ This share has essentially doubled since 2008 when lending standards began to tighten,’’ he said.

Alan Gaynor, AIA, and principal at Alan Gaynor & Company in New York, N.Y., has listed his Evergreen Crosssing in East Orange, New Jersey on the stalled projects site.

‘’ The site is directly across from NJ Transit Brick Church Station, which is an express line and gets you to midtown Manhattan in under half an hour,’’ he said. The project is five floors of parking with retail space in the base and a hotel and office building. It’s in a location where commuters often park to get to Manhattan.

Gaynor says his experience with the Stalled Projects Database so far has been a great one. He’s had four contacts from investors and two of those are still interested and could move forward. ”I am now a believer after filling out the form and expecting little,’’ he said.

Brian Lane, AIA, principal at KoningEizenberg, in Santa Monica, Calif., posted AMP Lofts, a 180-unit, live/work community project just south of downtown Los Angeles.

“What’s exciting about the AMP Lofts project is its relationship with the Los Angeles River Revitalization Plan and the burgeoning Green Tech movement in the area,’’ he said. ‘’The project is close to downtown which has seen its own re-emergence as a desirable place to live and work, but if the AMP Lofts could be built it would be part of a new, forward-thinking movement to develop old industrial space into sustainable live-work communities.”

Lane added that the project would also have ‘’one of the largest green spaces of any loft development in the area and would be LEED Silver.’’

So far the AIA site has brought interest from one investor. He says the AIA effort is a ‘’great opportunity to cast a wider net to connect people (investors) with worthwhile, well designed projects.’’

 

Amp Lofts. (Image: KoningEizenberg)

Evergreen Crossing. (Image: Alan Gaynor & Co.)

Aurora House. (Image: NOA)

The Cooperage. (Image: Clinton Brown Co. Architecture.)

 

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