The Architect as Developer
TEXT Graham Livesey
The concept that an architect can be a developer has not been extensively explored in North American practice. The barriers to architects acting as developers that were in place in the past are now relatively few beyond the pragmatic issues of incurring additional financial risk and gaining relevant expertise; however, becoming actively involved in development requires a solid knowledge of financing, real estate and marketing. Furthermore, architects heavily involved in development must often overcome a negative stigma associated with this form of practice. What are the strengths and weaknesses of the architect-as-developer model? Who are some of the architectural firms actively involved in this process in Canada?
A brief survey of the four largest provinces and their provincial architectural associations–British Columbia (AIBC), Alberta (AAA), Ontario (OAA), and Quebec (OAQ)–indicates that each licensing body accepts professional architects who are interested in entering the development arena. As an example, the AIBC has specific bylaws addressing the concept of an architect as a project owner, and in such cases there is a requirement that architects who act as developers must fully disclose this to all parties involved to ensure that no conflict of interest or misunderstanding occurs. The AIBC bylaws include wording that states that the architect who is also a project owner (or contractor) must render architectural services “fully and impartially,” and “financial interests must not override professional responsibility and impartiality.” This concept of full disclosure is shared by other associations. The common recommended practice across all four jurisdictions is for the development entity to be separate from the professional architectural firm. In Quebec, it is also required that site visits be conducted by a separate party other than the architect-developer. However, there are situations where a potential conflict of interest may arise that would cause difficulties for an architect who acts as the owner or client; in particular, how architects deal with building contractors. This also relates to professional liability insurance where an architect acting as a developer will have some limits placed on his ability to recover monies in a claim, as obviously, the architect and developer (owner) in these cases cannot act against one another.
Probably the most famous architect as developer is Atlanta, Georgia-based John Portman. His book The Architect as Developer (published in 1976) laid out an argument for the active involvement of architects in development. As Portman’s co-author Jonathan Barnett notes, Portman found that the typical role of the architect was “too passive and too uncertain.” Operating against conventional practice at the time, Portman sought to “think of real estate architecturally, and architecture entrepreneurially.” The architect-as-developer model does mean that the architect must engage in levels of entrepreneurship outside of standard North American architectural practice. Acting with his own development company (currently called Portman Holdings), Portman often partnered with other large development interests to develop and design projects. Famous examples of Portman’s architect-as-developer approach include Peachtree Center in Atlanta, and the Embarcadero Center in San Francisco. Known for his big and showy projects, Portman continues to direct an office in Atlanta. However, he remains largely an anomaly in the architecture profession because of the large size of the projects he has spearheaded.
Writing in the late 1980s about Portman’s effect on Atlanta, Rem Koolhaas argued that Portman’s union of developer and architect has been both powerful and highly destructive, creating a series of buildings in downtown Atlanta largely devoid of vitality. Koolhaas suggests that Portman’s work is megalomaniacal, and by eliminating the opposition between architect and the client, he has lost an essential creative element. There is no doubt that Portman’s best-known projects are from the 1970s, and they reflect an approach to architecture that has been discredited. Nevertheless, Portman’s argument that direct involvement in development will allow architects to have a greater influence on the end result still holds true. That architects can be involved in the real estate and marketability of buildings (including site selection and program), preparation of feasibility studies, the projection of complete development costs, the “pro forma” incomes and expenses, financing, and renting of buildings is not unreasonable. Despite his focus on the real estate, Barnett suggests that Portman did not lose sight of his role as an architect, and that his gained knowledge of real estate marketing, finance, and management deepened his skills as an architect.
Over the last several decades, some Canadian architects have experimented with various forms of development. More recently, a number of younger firms across the country have been willing to actively get involved in development work. Many of these firms are prepared to take on a wider scope of practice by getting involved in the development of small-scale projects, usually commercial and/or residential. As an example of an architectural practice offering a wide range of services, Calgary’s housebrand brings together architectural design, construction, real estate services, development, retail, and interior design together under one roof. By expanding its range of services, an architectural practice can secure a greater overall fee from a particular project. Under the right circumstances, architects can have greater control over the end results. As developers, housebrand have undertaken the construction of several projects, and as “development consultants” they have also put together projects for clients. However, John Brown, a principal of housebrand, prefers the second model, as it reduces the financial risk. More importantly, it does not reduce “the client to merely being a customer.” Brown believes that working with a client is vital to his practice, rather than acting as developer himself, which he suggests tends to reduce the enterprise to one of selling. However, there are firms willing to act as developers, or to be their own clients, in effect. The following firms represent a range of approaches to development, although each sees development as a way to undertake commercial projects that others will not: Lang Wilson Practice in Architecture Culture (LWPAC) in Vancouver, Dub Architects Inc. in Edmonton, and Kobayashi Zedda Architects Ltd. in Whitehorse.
Oliver Lang and Cynthia Wilson of LWPAC have recently produced their first project with their development firm Intelligent City Developments. The MONAD project is an example of their efforts to build leading-edge sustainable projects in response to Vancouver’s EcoDensity challenge and various green building programs, including a grant program from BC Hydro. MONAD is located on a restricted infill site in Kitsilano, and employs pre-fab construction and several innovations including mechanical parking and geothermal heating/cooling. As Lang says, they entered the development arena after many years of research, and because they felt that conventional developers were not prepared to take on innovative urban housing projects. In order to secure the financing for the MONAD project, they had to put in cash themselves and also raise funds from a number of investors. The new project is an evolution of their very successful Roar_One housing project in Vancouver, designed and built with a local developer in 2006. Beyond acting as designers and developers for MONAD, LWPAC also entered into a joint venture partnership to develop and execute the pre-fab system for the project. The risks are high, but the project has proven to be a rewarding learning experience, and sales have been strong. They have gained knowledge about construction, and the process has led them to a greater understanding of what potential
purchasers of their units require. Ultimately, they see their development work as a “product,” like an automobile, that will be continually refined as they undertake further projects. Nevertheless, development projects such as MONAD will remain only one aspect of the firm’s work.
One of the most experienced Canadian architects when it comes to development is Gene Dub, whose firm has developed about 15 buildings over the last 25 years, ranging from $1 million to $25 million in construction costs. They have produced a significant portfolio of work. Most are residential projects involving renovations and additions to existing or historic buildings, often buildings on the Edmonton Historic Registry. Dub believes that the process allows for “greater control over the design process, and more freedom to design to your own program, tastes and schedule.” On the down side, “the time required to deal with the program and financial matters leaves less time to devote to design matters.” By taking on development work, Dub has undertaken projects that more conventional developers would not likely have pursued. He notes that profit was not his primary motivation, but rather the opportunity to take on interesting projects and preserve heritage structures in Edmonton. He acknowledges that there is potential for a conflict of interest, but no more so than in conventional client-architect relationships if the architect discloses their interest. He does not see it as a general model for practice, but acknowledges that his development projects have helped keep the practice busy. He also suggests that it works for firms who have the required set of skills. Dub states that the “financial risks of building development are far greater than those found in architecture. I know of many architects who have jeopardized a good architectural practice by getting involved in development.” Dub has his own development company called Five Oaks Inc., and handles his own marketing, leasing and sales. He concludes that the architect as developer can produce rewards in terms of accomplishments and design recognition (the practice has received 18 awards for their architect-developer projects), and when a project goes well, there is additional financial reward.
Kobayashi + Zedda Architects Ltd. have undertaken five development projects over the last 10 years in Whitehorse, and they also are directly involved as building contractors in many of their buildings; their development and construction company is called 360 Design Build. They got into development work in order to demonstrate that good architecture could be vital, and to kickstart the revitalization of downtown Whitehorse. They concentrated on residential projects, which have been generally very successful, although not necessarily producing enormous financial rewards. Jack Kobayashi has given this topic some thought, recalling the historic “master builder” where architect and builder were united in one figure. Kobayashi argues that the general skills that architects typically possess make them well-suited to taking on an expanded range of roles when it come to project development and delivery. By acting as the owner, or by being involved in a project from the beginning allows for better decision-making and a stronger vision for the project. Kobayashi believes most architects can grasp the knowledge required for financing and marketing a project. He writes that the architect as developer (and builder) produces “a process that involves the creative mind and broad knowledge base of the architect throughout the total life of a building project, and could lead to improved building performance evaluation, and in turn, better and more sustainable and significant buildings.” Furthermore, in 2008 as part of rejuvenating downtown Whitehorse, they opened a café called Baked that has proven to be very successful. In 2006, Jack Kobayashi and Antonio Zedda were named “Northerners of the Year” by Up Here magazine for their unique contributions to northern culture.
It is vital in today’s market that architects expand their range of expertise in design, technical execution, and project delivery. Of the many architectural firms in Canada, we can identify those who work a lot with developers, those who act as developers themselves, or those who act as development consultants; each is a different mode of practice. For architects willing to assume risk and finance their own work, this can be a rewarding approach. Like Portman, the firms above have identified a local need that conventional developers were not willing to meet. They were also willing to fulfill the role of the client, in all its complexity, and to maintain the necessary vitality that that implies. Dean Syverson of Syverson Monteyne Architecture Inc. in Winnipeg–a firm that has begun to explore development–states with respect to the client: “If architecture is perceived to be a service performed for whomever and in whatever scenarios a need or opportunity arises, and as a result is performed indirectly for others, then I don’t think [by acting as the client] any essential aspect has been removed.” The fusion of good architecture and entrepreneurship has often been seen as vulgar, and yet all successful architects, however measured, are good at business. And so, the architect-as-developer model can be a successful and complementary form of architectural practice, as demonstrated by the firms and practices profiled here. CA
Graham Livesey is an Associate Professor in the Master of Architecture program at the University of Calgary.