Texas Design Firms Stay Competitive

Multiple services key to staying ahead in marketplace

By Debra Wood

While design professionals remain bullish about Texas opportunities, they are noting changes in the market related to economic conditions.

The Chasewood project in Houston incorporated more office, retail and a hotel into an existing office park, a development move aimed in part at reducing sprawl. Photo courtesy Zeigler Cooper Architects.

“We’re optimistic on Texas,” says Vincent Provenza, senior vice president and general manager of URS in New Orleans, responsible for the Texas region. “We think the natural resources there, including the people, represent a tremendous opportunity to grow our business.”

URS employs more than 4,400 people in Texas and had revenues of about $250 million in the state last year. The firm ranked No. 2 in Texas’ Top Design Firms ranking and No. 1 in two subcategories: energy and manufacturing/industrial. Much of the growth has occurred through acquisitions and the ability to offer more clients more services, Provenza says. He envisions continued opportunities in the power, water resources, transportation and facilities sectors, which includes health care and higher education work.

Over the summer, URS announced Denton County Transportation Authority selected it to provide final design services for a $310 million, 21-mi regional passenger rail line connecting Denton and Lewisville with the Dallas Area Rapid Transit Light Rail system. It also will design and build two medical instructional facilities at Fort Sam Houston in San Antonio, a task order under a previously awarded “heavy engineering, repair and construction” contract with the Air Force Center for Environmental Excellence.

William Raba, president of Raba-Kistner Consultants of San Antonio, expresses similar optimism, with a hint of caution. The company has served Texas for 40 years. It operates seven offices in Texas and one in Mexico.

“Texas continues to be a good place to do business,” Raba says. “We think it will continue to provide great opportunities for companies such as ours and others.”

The state’s resilient economy is bringing an influx of national construction companies to Texas, resulting in a softening of fees, Raba adds. The firm ranked No. 23 in the Top Design Firm rankings and places among the top five in several subcategories.

“Some of our national competitors are starting to price projects in a way that doesn’t make a lot of sense, and in our opinion, it doesn’t do our economy or profession any justice,” Raba says. “The firms that are succeeding right now are the firms offering multiple services, with multiple tools in the toolkit.” He adds that those who are hurting are the firms that “only provide one or two services, and are not cross-disciplined.”

Raba says his firm has observed a slowing down in the private sector market, particularly residential.

On the other hand, Rick del Monte, managing director and principal-in-charge of design for The Beck Group in Dallas, which ranked No. 45 on the Top Design Firms list, says the firm primarily works for private interests, such as institutional clients, universities and health care. Del Monte says the company is busier this year than last, and has continued to hire. Beck is finishing construction documents on the $65 million Gateway Church in Southlake.

However, there are some dark clouds.

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“One of the biggest threats out there now is inflation,” del Monte says. “Clients are struggling to get buildings built for the budgets they have put aside.”

James Susman, a principal with Susman Tisdale Gayle, or STG, in Austin, says he is seeing a gradual shift from corporate and speculative office work to health-care projects, which he attributes to lending limitations. STG, ranked No. 47, is designing a 120,000-sq-ft Mueller Medical Plaza near the Dell Children’s Medical Center of Central Texas in Austin and a 70,000-sq-ft Live Oak Medical Office Building near the North Austin Medical Clinic.

STG began in 1982 and focuses on the commercial market, primarily office, higher education, health care, resorts and mixed-use projects such as the Seaholm power plant redevelopment in Austin.

Kurt Hull, a partner with Ziegler Cooper Architects in Houston, reports an increase in mixed-use projects, many high-density, urban complexes, but also some expansions of existing entities such as adding office and residential to a retail center or, in the case of Chasewood in Houston, incorporating more office, retail and a hotel into an existing office park.

“Clients, developers and, particularly, the financial community are realizing the multiple synergies with mixed use,” Hull says. “Trip reduction is key. And development incentives are limitless.”

Hull says an example is shared parking to reduce parking ratio. He adds that developers with long relationships with financial partners are more successful in moving projects forward than those trying to solicit funding sources.

“There is a paradigm shift in the development mindset,” adds Scott Ziegler, founding principal of Ziegler Cooper Architects, which ranked No. 39 in the Top Design list. “Developers are trying to understand what is happening with the cost of transportation, fuel and gridlock in the city and how to solve that. It’s a difficult transition, because financial institutions are not willing to finance mixed-use as freely.”

Even so, Ziegler expects more mixed-use developments in desirable locations to proceed, perhaps slowly.

“We need to bring people back to neighborhoods,” Ziegler says. “We cannot afford to keep sprawling.”

Public work “The federal market remains strong as well as the recession-proof markets, anything backed by bonds, whether it is city, county or state,” Raba says.

The U.S. Army Corps of Engineers and Department of Homeland Security have multiple projects under way. Raba-Kistner performed geotechnical engineering services and is now providing construction materials engineering and testing services at the new Medical Emergency Training Center, Phase One and Two structures, at Fort Sam Houston.

The company has performed geotechnical engineering studies and construction materials testing services for training and office facilities, electrical substations and related improvements for the Department of Homeland Security to help secure the Texas-Mexico border.

For the U.S. Section of the International Boundary and Water Commission, Raba-Kistner has evaluated earthen levees, floodwalls and dam structures, and in some cases made recommendations for remedial repairs.

Halff Associates of Richardson has been working on map upgrades for the Federal Emergency Management Agency, developing up-to-date flood hazard data for all flood-prone areas.

The employee-owned Halff, in business since 1950, also is working on a $90 million Middle Peaks Branch and Mill Creek drainage improvement project in Dallas and an $83 million U.S. Route 7783 widening project in Brownsville. The firm ranked No. 11 on the list of top design firms and is among the top ten in five subcategories.

Raba reports a decline in transportation engineering projects related to decreases in Texas Department of Transportation funding. However, he says, “People willing to think outside the box continue to do well.”

For instance, Alamo Regional Mobility Authority Board of Directors selected the Cibolo Creek Infrastructure team, of which Raba-Kistner is a member, to design and build the 7.9-mi, $330 million U.S. 281 North Toll project, an added-capacity tolled lane project in Bexar County.

Raba-Kistner is serving as one of five firms providing independent oversight engineering for TxDOT, monitoring and auditing the work of SH 130 Concession Co., a partnership between Cintra of Spain and Zachry American Infrastructure of San Antonio, the concessionaire designing, building and operating State Highway 130 segments five and six, a $1.35 billion, 40-mi project in Travis, Caldwell and Guadalupe counties.

Halff has reassigned some of its highway employees to other service areas, such as municipal roadwork and utility and drainage projects. Greg Kuhn, vice president of Halff, says he expects it will be at least a year before the TxDOT market returns. He also notes the increase in design-build and working with contractors as trends.

“I might not like it or fully buy into it, but that’s the way it is going,” says Kuhn, adding that owners are looking for one-stop shopping.

Provenza voices little concern about transportation, saying that the need is there, and the state just needs to figure out the “best way to finance growth,” which may include tolling and public-private partnerships.

“We don’t see that as a long-term trend, but a sorting out issues,” URS’ Provenza says. He also cites an increased interest in public transit. In addition to the Denton County project, URS is developing an Environmental Impact Statement and conducting initial engineering design for a proposed commuter rail line in Tarrant County, which will link with Dallas Area Rapid Transit.

Design trends Minimizing cost continues as a priority, Susman says, with some owners opting for a higher-grade steel to decrease amounts needed in a project.

LEED and sustainability have become the norm, he adds, with owners recognizing the return on investment and some developers feeling their project will be at a marketing disadvantage without LEED certification.

Kuhn says more owners, such as the DOD and the Army Corps, require sustainable features.

“We are just scratching the surface about how efficient we can be in making new buildings,” del Monte says. “We’re getting new tools and technologies with BIM [building information modeling] that enable energy analysis of buildings and figuring out which orientation is optimal, things we haven’t been easily able to do in the past. We are thinking about buildings differently.”

Like Beck, design firms are increasing their use of BIM. Susman considers its adoption in the design community “inevitable.” It’s such a remarkable tool in terms of organizing infrastructure and avoiding potential conflicts as well as communicating with contractors.”

Hull adds that with BIM, the firm tries to bring as many people to the table as possible. When the company solicits consultants, it considers only firms that are LEED and BIM software compatible.

“Like all trends, you either get on the train or get run over,” Hull says. “There are a lot of tools and factors guiding the industry toward what we should have been doing for a long time, which is teaming and coming closer together.”