In for a Penny

In for a Penny

It wasn’t long ago that the 82-unit Turk/Eddy project in San Francisco was just another affordable housing development with a moving target for a completion date due to a weak economy and limited financing. Now the Tenderloin Neighborhood Development Corporation’s two-building preservation scheme is scheduled to start construction in January, partly thanks to federal dollars made available by the American Recovery and Reinvestment Act (ARRA). The project is a recipient of some of the more than $576 million in federal stimulus funds being distributed by the California Tax Credit Allocation Committee to pump life into affordable housing projects across the state.


Paulett Taggart, principal of San Francisco–based Paulett Taggart Architects, is the architect of Turk/Eddy. The eight-person firm has a second stimulus project on its books: two blocks of the Hunters View revitalization project that was awarded $6 million in U.S. Department of Housing and Urban Development ARRA funds through the San Francisco Housing Authority. The project, whose master architect is WRT/Solomon E.T.C., will start on abatement and demolition this month. “We’re lucky right now,” Taggart said. “I’m talking to other architects who are not so lucky.”

Taggart might be right to chalk up her firm’s stimulus success to luck. Though California leads the nation in ARRA funds—as of November 22, $18.5 billion had been awarded to, and more than $8 billion received by, the Golden State—the impact on architectural billings has been modest. National Architecture Billings Index data released by the American Institute of Architects in August found 15.7 percent of ABI panelists reported receiving billable work from the stimulus plan. Twenty-four percent reported having inquiries for future projects from stimulus funds.

Riccardo Mascia, managing principal of the Los Angeles office of HOK, said that although the firm is assisting a couple of clients with stimulus-project pursuits, it is not actively tracking ARRA work. “In most cases, it’s brought up by our clients,” Mascia said. “It’s not like we said, ‘The government is going to dump a lot of money into public housing, for example, so let’s chase that.’” He concluded, “We focus on the things we know how to do and know how to do well.”

For those interested in stimulus work, tracking ARRA projects requires navigating a complex network of federal and state websites listing contract and grants opportunities. Because ARRA provides state and local governments with several new financing mechanisms, including new categories of tax-exempt and tax-credit bonds, communication with local municipalities is key. It also may necessitate a willingness to be flexible about the project type and delivery method. Another AIA finding showed that stimulus projects are more likely to include renovations/rehabilitations of existing facilities and to have design/build requirements.

Still, for those with the inclination and means to track it, the stimulus can be a prime business development opportunity, as well as another way to serve existing clients. William Tippin in the Government Services Group at AECOM said his firm has taken a proactive approach to ARRA projects, focusing on stimulus work available through the General Services Administration. “We looked at the ARRA budget and broke it down by agency, focus area, and client,” he said. “There was an effort on our part to establish a program management office in the U.S. and abroad to be prepared to respond to opportunities.”

Margaret Campbell, a project manager with the John Stewart Co., which is part of the Hunters View Community Partners development team, said even when architects aren’t the prime player in a stimulus fund application, they have opportunities to assist in the pursuit.

“Some stimulus funds include a green component, particularly competitive grants. In these cases, we’ve coordinated with architects to figure out what we could commit to,” Campbell said. “For example, when we did our storm water provisions, we did assessments to see what we could feasibly incorporate without backtracking on the project. We had to be creative.”

In total, the state estimates that ARRA will provide $85 billion in benefit to California. More than $30 billion of that amount is designated for tax-relief initiatives, including several that could spur design and construction projects. For example, ARRA authorized $10 billion in Recovery Zone economic development bonds and $15 billion in Recovery Zone facility bonds that can be issued in 2009 and 2010. According to the state’s economic recovery portal, California housing initiatives, transportation, and energy are designated at an estimated $2.1 billion, $4.7 billion, and $3 billion respectively.

In addition to increased billings, it was hoped that the stimulus would stave off rising unemployment. But despite leading the nation in created/saved jobs, California also boasts one of the country’s highest unemployment rates at 12.5 percent.

Still, architects hoping to land stimulus-funded projects can take comfort from a report on California’s recovery website that stresses the majority of the money designated for federal stimulus projects is still available and will be distributed over the next two years. Likewise, an analysis done by the Los Angeles Economic Development Corporation as part of its July 2009 Economic Forecast concluded that federal stimulus dollars will have a relatively small impact on California by 2009, but statewide public works construction activity is expected to improve in 2010 and 2011.