Southwest Design Firms Expect Steady Rebound to Continue
The results are in for ENR Southwest's design firm survey, and according to both the collected data and industry executives, a slow, steady recovery continues to unfold in the marketplace.
"I'm seeing cautious optimism and steady momentum, although there is some concern about the slowdown in new and used home sales," says Doug Plasencia, vice president of Michael Baker Corp.'s Phoenix office. "However, we're still seeing a continuous stream of design-build opportunities coming from the federal sector."
Overall, the 75 firms that participated in the survey had a combined $799 million in total revenue for the 2013 calendar year, up nearly $18 million compared with the previous year—although only 63 firms participated in the year-ago survey.
Residential Construction Surge
The residential market is anticipated to drive much of the growth as 2014 progresses, according to Plasencia, even though sales have slowed.
"In the next year, we're anticipating some acceleration in the residential market with more single-family subdivisions and some limited multifamily activity as a result of the improving job market. The people who opted to walk away from underwater mortgages are becoming buyers, once again, thanks to the forgiveness of lenders," he says.
In the Southwest, water projects are always a driving force that municipalities must undertake, especially with residential construction on the rise. As resources become more hotly contested, new systems provide more supply, says Kevin Kammerzell, vice president of MWH Global's Tempe, Ariz., office.
"Municipal clients in the arid Southwest have always focused on responsible use of water, but have more recently increased intelligent management of wastewater effluent for aquifer recharge or restoration of valuable environmental habitats," he says.
Recharge and the use of treated effluent is also increasing for water intensive industries such as mining, a historical economic linchpin of the Southwest.
"Mining operations require a significant volume of water to process the ore materials and suppress dust emissions from their facilities," Kammerzell says. "These clients are pursuing ways to recycle process solutions but often need to pursue new water resources to support expanding activities."
Downturn Shadow Remains
But even optimism over water projects can't erase the memory that the combined revenue of all 75 firms in this year's survey is less than the $800 million that the top 10 firms alone posted in 2008.
"Everybody is still a little shell-shocked," says Phil Weddle, co-founder of Weddle Gilmore Black Rock Studio, Scottsdale, Ariz. "Everyone is still referencing where we've been. It still feels a little different."
However, Weddle says the balanced growth in both private and public sector projects is encouraging to the Southwest markets.
"I'm an optimist in that regard," he says.
In Las Vegas and Phoenix, optimism might be a rising a bit faster than in other areas.
"The Arizona market is really starting to show signs of a resurgence," says Bruce Risley, senior vice president and West region operations director with Highlands Ranch, Colo.-based ARCADIS.
While much of the Arizona activity is new construction, Las Vegas is finding momentum coming from formerly stalled megaprojects that are returning to life. Resorts World Las Vegas is springing from the abandoned Echelon site, and the Sahara Hotel & Casino is being reborn as the SLS Las Vegas.
"It's a very interesting time in Las Vegas. We are currently witnessing several projects that were stalled in the recession now coming back to life, but with refined purpose and focus," says Andy Cohen, co-CEO of Gensler, Las Vegas. "Our clients are cautiously aggressive, spending greater time on due diligence to fully understand the market drivers, Day 2 costs and the experience their developments will create, but then pushing forward in true Las Vegas style with bold new solutions."
Feats of Innovation
The Las Vegas market also boasts feats of engineering, notably the Lake Mead Intake No. 3 project that will allow the metropolitan area to access its share of Colorado River water at lake elevations as low as 1,000 ft above sea level. The intake project includes a 600-ft shaft and a 3-mile-long tunnel. The intake structure is 300 ft below the lake surface. Arup, Las Vegas, and subconsultant Brierley Associates, Littleton, Colo., collaborated with a joint venture of S.A. Healy and Impreglio for owner Southern Nevada Water Authority.
"The structure was built close to the shoreline and then floated out and positioned in the lake bed, thus allowing for the tunnel boring machine to break into and form a seal with the intake structure that connects the tunnel to the lake," says Jon Hurt, principal with Arup.
While much of the Lake Mead project will remain hidden from view, design and engineering that beget structures where people live, work and play in the Southwest have evolved, according to Risley.
This is especially true in regard to sustainability, he says. "We are seeing a lot more emphasis on green design and sustainable infrastructure. It is a trend that is here to stay."
The reason is not just that ecologically concerned structures are hailed by users, but that costs have leveled.
"There is not really as significant of a price premium to be sustainable when it comes to the design of the projects," he says.
