It is said that "No one can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other”. But during these trying economic times, I propose that you can have a split personality and actually serve as both the Architect and the Developer. Up until the 1970’s, the AIA did not allow its members to participate in both the design of a project and the development of a project because of conflict of interest concerns. The chasm between designing with integrity on the part of the Architect and design for profit on the part of the Developer is beginning to close. The “Architect in the ivory tower” concept put forth by previous Architects and professional organizations seems to have dissipated somewhat in this most recent economic environment. This, combined with the social and sustainability expectations of clients, have led some professionals to a new reality.
New, ever evolving business models are emerging in this post-bubble market. Architectural services are either being completely eliminated because the project has been cancelled or the scope of the Architectural services (and therefore fees) has been greatly reduced on projects that are being constructed. Firms that have been fortunate enough to weather this economic firestorm are making drastic adjustments to their present business models just to survive.
Architect as Developer in the traditional sense is fraught with liability, may create “conflict of interest” questions, and, unless the Architect has great deal of liquidity or has a bank that has suspended their latest “we aren’t in the business of lending money right now” policy, can be financially infeasible. However, there is a way around this conundrum; Development for a fee. In lieu of taking on the financial burden of developing the project, obtaining financing, and then either owning the project (possible with a hefty mortgage) or having a sale or lease-back arrangement with the Client at completion, the Architect can act as a development consultant on the project.
By letting the Client obtain all financing for the project the Architect avoids the financial liability associated with ownership. Also, since the Architect is being paid a fee for development he has no financial interest in the project and therefore avoids any conflict of interest claims.
The age-old concept of Architect as Master Builder has been abandon in recent times because of liability issues and more importantly, because Architects as a profession have relinquished their expertise and authority to construction managers and developers. In most cases, other than the financial side of development, the Architect is intimately involved in obtaining jurisdictional approvals, Architect coordinating the work of the civil engineer, the geotechnical engineer, the landscape architect, the MEP engineer, and the structural engineer, and in general, orchestrating the successful completion of the project amongst all parties involved.
In the scenario of Architect as Developer, the Architect provides all of the pre-development due diligence through the civil engineer, manages the development schedule, manages the civil engineer, the geotechnical engineer, the landscape architect, obtains all jurisdictional approvals and entitlements, submittal all documentation of the approvals, drawings, and reports to the lender, and may even manage the construction through to occupancy for the Client providing a “turn-key” service. One caveat to providing these additional services is that the Architect must have the expertise and ability in these areas in order to avoid any possible claim of malfeasance by the Client.
This value-added service can result in an increase in professional fees and a direct increase to the Firm’s bottom line if managed correctly. The Architect as Development Consultant model can be a successful and complementary form of architectural practice.
Harold “Sam” Baker, AIA is president of Baker & Associates, Architects, Inc., a Transforming Architecture affiliate located in Columbus, OH. He has been in private practice for over 30 year and has a Masters of Architecture Degree from The Ohio State University with a minor in Construction Management and Solar Energy / Energy Conservation . The firm presently offers Development for a fee service and has several client nationally that are presently utilizing the service.