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Perkowitz & Ruth returns to its roots in the wake of the Edwards bankruptcy

When Marios Savopoulos came to architectural firm Perkowitz & Ruth in 1993, he led the Long Beach-based firm’s entr & #233;e into entertainment center design work by landing the contract for the Edwards theater at the Irvine Entertainment Center in the Irvine Spectrum. By 1998, entertainment centers accounted for about 25% of the firm’s work.

Some of that,including screens at the Howard Hughes retail and entertainment development in Los Angeles,came to a crashing halt this summer when Newport Beach-based Edwards Theatres Circuit Inc. joined a parade of theater operators that have filed for bankruptcy protection.

According to documents filed with the U.S. Bankruptcy Court’s Central District, the company owed Perkowitz & Ruth more than $1.2 million,about a quarter of the architectural billings the company has reported in each of the past three years. (P & R; this year ranks No. 20 on the Business Journal’s list of OC architects, with architectural billings of $4 million for the 12 months ended June 30. See related story, page 37.)

Firm Saw Storm Coming

Savopoulos, principal of the firm’s Newport Beach office, said P & R; has experienced a slowdown due to the Edwards filing, but said they had warnings about storm clouds on the theater horizon as far back as March.

By the time Edwards filed its Chapter 11 petition, Savopoulos said, P & R; already was looking at other mixed-use and entertainment projects to fill the void. Still, the firm transferred about 15 employees to its Long Beach office from Newport Beach to avoid layoffs.

“It’s been a time of transition for us,” Savopoulos said.

Savopoulos, a specialist in entertainment and hospitality projects, was recruited by P & R; during the recession to help it expand to new markets, including the then-burgeoning retail-entertainment sector. Until then, the firm was known primarily as a designer of retail and power centers, which helped it land work on projects such as the mixed-use Long Beach Town Center on the former site of the Long Beach Naval Hospital.

Now, P & R; is returning to its roots in mixed-use developments and continuing to pursue other hospitality projects. A redesign of the 360-acre Fort Ord in Del Rey Oaks near Monterey that the firm began two years ago is nearing reality, with the former military property due to be transferred to the city of Monterey by spring. That project, for Monterey-based DBO Development, will create a resort that will include an entertainment center, a vineyard and wine-tasting center, and a golf course.

In addition, Savopoulos said firm members have been going to hospitality meetings to solicit additional hotel and resort work, and the firm has teamed with out-of-state companies he declined to name to work on mixed-use urban projects.

‘Little Hiccup’

A downtown redevelopment project in Oklahoma City called Bricktown,at one time scheduled to include Edwards screens,is still going forward, he said.

“There still will be a theater there,” he said. Calling the suspension of Edwards’ involvement a “little hiccup” in the process, Savopoulos said P & R; has now teamed with companies from New York and Memphis on the Oklahoma City endeavor.

“In the next few years, there will be fewer theaters,” he said. “They’ll be high quality, but the cost of the theater will be spread among other projects so the theater companies will be operators but not owners,” he said.

Rick Grandy, senior vice president of Nadel Architects Inc. in Costa Mesa, said retail projects,in which his firm specializes,are less susceptible to economic cycles than theaters or hotels, which require economic growth to assure a continuing client base. In retail, he said, the tenants become the clients.

“Tenants are almost like slot machines,they just keep paying,” he said.

Savopoulos said P & R; has tried to “diversify, work hard and turn things around” since work for Edwards was suspended. And he said the firm is beginning to see the light at the end of the tunnel. The transferred employees are all expected to be back in Newport Beach by the end of the year, and an office in Reston, Va. is scheduled for expansion. The most important thing to them, he said, is that they haven’t lost any key people through this year’s difficulties. And he’s confident that the general strength of the economy is a good sign for the future.

“We’re not all getting wealthy,” he said, “because this is one of the toughest professions around. But we’re doing exciting things and that’s why we do it.” n

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