Architecture and engineering firms in Orange County have grown nimbler and more open to change after the financial downturn and housing-market pullback put a dent in their business.
Local firms have seen improving prospects of late, with signs of healthy growth as they appear to be shedding some burdens left by the economic crisis. The modest recovery follows creative strategic moves by companies here to identify new business opportunities.
Stantec Inc. boosted its books by mining the transportation niche, a shift in the firm’s primary focus.
“Historically we have been deeply involved in the land-development arena,” said Dean Palumbo, vice president at the Edmonton, Canada-based firm, who oversees its Southern California business from the Irvine office.
“We were successful, especially in OC, as one of the major development consulting services,” Palumbo said. “But we had an invigorated focus on transportation. I believe successful businesses have to be nimble whether it’s in a good economy or a bad economy. That’s a way to ensure long-term growth.”
Stantec noted a need for consulting in the transportation sector and made some hires in 2010 to boost the group.
Palumbo said the renewal of the Measure M ballot initiative in 2006 could produce highway and mass transit projects sufficient to steer “billions of dollars” to the firm. So far, the firm’s work with the Orange County Transit Authority includes projects in the Orangethorpe railroad corridor in Placentia and work on the San Diego (405) Freeway carpool lane restriping.
Stantec is among the largest engineering companies in OC. Its consulting business in Irvine brought in $13.3 million in billings during a 12-month span through June in a 14% increase over a year earlier (see related story, page 32).
The Irvine location, which serves as the main office for the Western U.S. region, houses more than 120 employees. The firm has 12,000 employees across 180 offices globally.
“We’re also moving to a bigger space in Irvine, right up Technology Drive,” Palumbo said. “Talking about the domino effect of our growth, we’re spending well more than $1 million to build that.”
RBF Consulting in Irvine has embraced changes that required “the ultimate adaptability and flexibility,” spokesperson Barbara Eljenholm said.
RBF was acquired in October by Moon Township, Pa.-based Michael Baker Corp. in a $50 million cash-and-stock deal. The move has allowed RBF to broaden some of its particular specialties to a nationwide footing.
“Being a part of Baker is allowing us to take our unique water and wastewater engineering expertise—which began in Orange County—across the country,” Eljenholm said. “We now have that strong national and international presence.”
The Irvine office of RBF operates as RBF Consulting, a Baker Company. It’s seen a 14% growth in business over the year through June, reaching nearly $50 million in local billings.
RBF’s masterplanned development work also is being requested nationally and internationally “as a result of us being larger and stronger with Baker,” Eljenholm said.
The firm’s planning work is reflected in local projects such as the Talega housing project and Marblehead development project in San Clemente.
Eljenholm said she expects the integration of RBF into Baker will demand continued adjustments in operations while offering additional business opportunities.
“RBF’s agility in [adjusting with changes in an acquisition] has served our company and our clients very well through these economic times,” she said.
Some local firms have seen investments and strategic changes made prior to the recession pay off in recent years.
“One reason we’ve been flexible and able to ride out what’s been a difficult time is the fact that we do engineering in-house,” said Dan Heinfeld, president of Irvine-based architecture and design firm LPA Inc. “It isn’t the norm for architectural practices to have this discipline in-house. They would typically hire consultants to do that work. We made that decision five years ago because we have found out that it would make us better sustainable architects. It makes engineering a part of the business from the beginning.”
Biggest Firm
LPA is the largest architecture firm in OC, with about $44.6 million in billings for the year through June, according to the Business Journal list. It has 152 employees here, including 41 architects.
Current projects for LPA include the Newport Beach Learning Center, which Heinfeld says is about a month short of completion.
“We’re fortunate to have the opportunities that we have,” he said. “You have to be a very different firm from what you might have been four, five years ago to make headway. … I don’t think anyone has not been affected by the recession, especially as it relates to the building industry. Budgets are less; projects are fewer; competition is much more intense. When you have an opportunity, you have to make the most out of it.”
Costa Mesa-based Dougherty + Dough-erty Architects LLP also is reaping benefits from an investment made several years back.
“More than five years ago, Dougherty made a commitment to migrate to three-dimensional building information modeling, which required a significant investment in hardware, software and training,” said Partner Betsey Olenick Dougherty. “That move, made when time and resources were available, has positioned us to be more highly developed than many other firms in the area of technology and skill sets.”
Publicly funded projects have also been helping the Dougherty firm and others gain new business.
The firm focuses on public and educational facilities that “continue to be funded through bond measures and budget set-asides,” Dougherty said.
“The availability of publicly funded projects to firms such as ours is a real positive,” Stantec’s Palumbo said. “If it weren’t for that part of our economy today, I think things would be a bit different.”
