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Deal Spurs Gain at Otherwise Slowing Architecture Firms

Orange County’s largest architecture firms posted a 7.4% gain in local billings to $483 million, according to this week’s Business Journal list.

The gain largely was driven by No. 6 Jacobs Carter Burgess, which saw a 123% increase in billings for the 12 months through June,the largest increase by dollar value on the list.

Late last year, Pasadena-based Jacobs Engineering Group Inc. acquired Carter & Burgess Inc., No. 6 on our 2007 list, for an undisclosed amount to form Jacobs Carter Burgess.

Without that deal, the remaining architecture firms on the list posted a modest 3% gain to $447 million. Last year, the firms on our list saw a 5% gain in billings.

Of the 30 companies on the list, seven reported lower billings. Fifteen saw increases. Eight were Business Journal estimates.

Local employment declined 4% to 2,242 workers.

The number of licensed architects in OC essentially was flat at 525.

The sliding housing and commercial markets hit many firms, including No. 2 Irvine-based KTGY Group Inc., which does a large portion of its work in the housing market. It saw its five-year reign as the largest firm on the list end this year with its 26% decline in billings to $51 million.

The firm, which designed the retail, entertainment, office and housing sections of the pending Pacific City project in Huntington Beach, also lost 55% of its local workforce.

The economy’s overall decline, tougher financing and a saturated market have decreased the need for new projects, according to KTGY Chief Executive Tricia Esser.

“That definitely puts a damper on what we do in terms of single-family architecture,” she said.

KTGY’s retail and hospitality divisions have helped offset some of the slack, according to Esser. The firm also is concentrating on mixed-use and urban-infill projects, as well as apartments.

“There is still plenty of residential happening out there,” she said.

Irvine-based LPA Inc. took over the top spot with a 12% increase in billings to

$52 million.

The firm’s growth has been twofold: It has expanded in the education and government markets and has positioned itself as an expert in green architecture, according to Dan Heinfeld, president of LPA.

LPA’s experience in green architecture has helped it land several projects in the past nine months, Heinfeld said, as clients have started demanding eco-friendly buildings.

“It’s the best thing I’ve seen happen in the industry in the last 30 years. It makes us much more valuable to our clients,” he said.

LPA designed Newport Beach’s Environ-mental Nature Center,a 9,000-square-foot building that’s the county’s first platinum LEED project, the highest “green” grade a project can receive according to Leader-

ship in Energy and Environmental Design

standards.

Green principles drove the design and shape of the building, Heinfeld said. The structure is meant to capture natural light and breezes to decrease energy costs. The design and shape also were influenced by where its solar panels needed to be placed.

“The green quotient becomes part of the building’s DNA,” he said.

No. 5 Irvine-based WATG saw the second biggest increase in billings by dollar value, jumping 32% to $33 million.

The bulk of the firm’s work is for hotels, resorts, spas, casinos, timeshares and other resort and entertainment developers. WATG also recently expanded its work in planning and interior design. These factors helped them buck the overall real estate trend.

The firm also focuses on the international market, which has also helped them weather the U.S. economy.

“We really haven’t experienced the slowdown,” said Perry Brown, senior vice president and managing director of the firm’s Irvine office.

One of their biggest projects is Atlantis, the Palm in Dubai, which is set to open later this year.

“There are a lot of opportunities in Dubai for architectural innovation,” said Raj Chandnani, vice president and director of strategy. “The developers have an appetite for pushing the envelope.”

Domestically, WATG is working on Encore at Winn Las Vegas and designed the Mohegan Sun casino expansion in Connecticut.

Irvine-based McLarand Vasquez Emsiek & Partners is another firm that used its foothold in the international market to increase its billings during the past year. The No. 3 firm saw its billings jump 9% to $46 million.

The firm has mixed-use and housing projects in Cairo and cities near Moscow and Beijing, among other places, according to President Rick Emsiek.

The international boom, “is tied to the burgeoning middle class that we’re seeing really take place throughout the world,” he said.

McLarand Vasquez Emsiek also increased its billings by focusing on high-density housing projects, apartments and the education sector, mainly student housing.

They have such projects at Chapman University, Occidental College in Los Angeles, California Polytechnic State University, San Luis Obispo, the University of San Diego and the University of California, San Diego.

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