AIA Launches Stalled Projects Database

Posted on by cguske
© 2006, The American Institute of Architects. All rights reserved.
© 2006, The American Institute of Architects. All rights reserved.

The American Institute of Architects has launched its Stalled Projects Database, where industry leaders can connect with investors and re-start projects nationwide that make solid economic sense but which lack the financing needed to be finished. Stalled Projects is an initiative of the AIA and is designed to help architects and their clients find a solution to the primary issue plaguing the design and construction industry – access to credit.

The site is intended be a tool to help bring the two sides together. The AIA announced its commitment to building this database earlier this year as a participating member at CGI America, the first conference of the Clinton Global Initiative solely dedicated to economic issues impacting the United States.

Industry leaders can fill out a form and post information about their project. More than one project can be submitted. Industry leaders can also read about investors and find and make contacts.

Investors can fill out a similar form that provides the basic details about their company and the kind of projects in which they are interested in investing. Investors are welcome to remain anonymous if they wish, though they must complete the form in order to peruse stalled projects listed in the database.

The AIA makes no assurance as to the accuracy or legitimacy of any of the information entered by either investors/lenders or project owners. That is up to both sides to evaluate. Neither does the AIA rank the projects listed as to viability or any other criteria. We are simply acting as a forum for investors and architects/project owners/developers to meet and exchange information.

The AIA commitment comes as the design and construction industry is plagued by a continuing dearth of credit for otherwise credit-worthy projects. Almost two-thirds of architects responding to a recent AIA survey reported at least one project that is stalled due to lack of financing, despite record low interest rates.

Register as an Investor
Tell project leaders about your firm and the types of projects you’re interested in.

Register Your Projects
Tell investors what your project is all about and why it’s a good investment.

View All Projects
Sign in and take a look at the registered projects and then make contacts.

See the List of Investors
Sign in and look over investor profiles. Decide which firms might be a fit for your project.

Purpose of the Database
Understand how the database is intended to work.

Solving the Credit Crunch: A Member’s Perspective

Posted on by cguske

As we survey the economic landscape in the summer of 2011, there is unfortunately nothing but bad news. As one business associate told me recently, “I can see the light at the end of the tunnel, but it keeps coming from further and further away.” The chance of a double-dip recession increases with every passing hour.

What’s even more depressing is that no action to either stimulate economic activity (though increased government spending) or encourage it (through tax cuts or credits) seems remotely possible from Congress or the Administration. As the struggle in Washington, D.C. over the debt ceiling and other issues continues to roil both sides of the political aisle, it’s clear that policy-makers are squandering the valuable time we need to fix the primary issue facing one of the biggest job-creating sectors of the economy – the design and construction industry.

That issue is the chronic credit crunch.

The design and construction industry currently accounts for $1 in $9 of U.S. Gross Domestic Product, according to the U.S. Census Bureau. Each $1 million in new construction spending supports 28.5 full-time, year-round-equivalent jobs, according to a study by George Mason University economist Stephen J. Fuller. Yet, despite record low interest rates, a financing crunch still persists in our sector.

The American Institute of Architects asked members about this continuing problem for the first time in a survey of April business activity taken as part of the AIA’s regular Architectural Billings Index (ABI), a leading monthly economic indicator of construction activity that provides a nine to 12-month glimpse into the future of nonresidential construction spending activity.

Almost two-thirds of the firms responding to the survey – 63% to be exact – reported they had at least one stalled project on the books; the average value of these stalled projects was almost $50 million per firm. To make matters worse, the ABI report for May business activity shows a continued deterioration in business conditions. The AIA’s May ABI score announced June 22 was 47.2, a decrease from a reading of 47.6 the previous month. (Any score above 50 indicates an increase in billings.) One factor cited is the chronic lack of financing.

There are solutions already introduced on Capitol Hill that will help solve this problem. One is the Capital Access for Main Street (CAMS) Act, introduced by Rep. Ed Perlmutter (D-CO), which would temporarily allow small community banks with under $10 billion in assets to spread out or amortize a portion of their commercial real estate loans over a seven-year period.  These banks, which provide many of the loans to our small businesses, would then have more liquid capital available to make responsible loans.

But with both political parties at loggerheads, bills like Rep. Perlmutter’s face an uphill battle. So with time of the essence, the AIA is seizing the initiative by committing to making available to potential investors in coming months a database of stalled building projects nationwide that make economic sense but which lack the financing to be completed. This unprecedented commitment by the AIA was announced in Chicago at CGI America, the first conference of the Clinton Global Initiative solely dedicated to economic issues impacting the United States.

In order to build and analyze the database of stalled projects, the AIA will establish a new survey that will begin to identify and analyze stalled projects from around the country that could be moved forward on almost any front but for the lack of financing. The commitment by the AIA involves soliciting information about stalled projects around the country from its members and allied professionals.

The AIA will analyze and categorize the identified projects by various factors, including building type location (including those locations with a strong, skilled workforce), new construction versus retrofit, and impact on sustainability and livability goals. The AIA will then work to identify opportunities for collaboration and financing to help move projects forward.

With banks reluctant or unwilling to lend, we must take the initiative on our own. We hope to share this idea and others at the CGI America conference. Our country has always depended on independent thinking to solve its problems. We think the development of databases such as this one is one idea that will catch on.

Joe Smith is President of AIA California.