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United States News Title: Looney Ricks Kiss files for Chapter 11 Looney Ricks Kiss files for Chapter 11 Memphis Business Journal - by Michael Sheffield * Burt Hill seeks to sublease some of its Downtown Pittsburgh office space * Architects chase $77M Marin project * Northern Group slices the sale price of Lafayette Building * Retro feel, modern outlook * Architect index drops sharply in January Looney Ricks Kiss Architects Inc. has filed for Chapter 11 bankruptcy reorganization. According to a statement released by the Memphis-based firm, the filing “is in direct response to the recession and the prolonged two-year decline in the residential and commercial real estate markets.” Since 2008, Looney Ricks Kiss has laid off nearly 64 percent of its local work force and shut down five of its nine offices around the country. The firm plans to keep its Memphis, Princeton, N.J., Orlando, Fla., and Baton Rouge, La., offices open. Those offices will be restructured, according to a company statement. Earlier this month, LRK’s Nashville office spun off from its parent to form Smith Gee Studio. The firm has a total of 40 Memphis employees, according to Memphis Business Journal research published Feb. 19. That count is a steep decline from the firm’s 97 local employees in February 2009 and 111 in February 2008. The company’s private sector work has been hit hard by the contracting marketplace and lack of financing for new projects, said Frank Ricks, managing principal of LRK, in a statement. “Over the past two years, we have seen many large projects placed on hold or abandoned altogether,” Ricks said. LRK isn’t alone in its struggles during the economic downturn. The American Institute of Architects’ Architecture Billings Index, which is used to provide insight into the growth of nonresidential construction activity, dropped to 42.5 in January, a sharp decline from a revised reading of 45.4 in December. A score above 50 indicates an increase in billings and inquiries for new projects. Because the survey depicts a lag of nine-12 months between architecture billings and construction spending, it is considered a leading economic indicator of construction activity. Regionally, the South scored 41.32 on the index. “Projects are being delayed or canceled because lending institutions are placing unusually stringent equity requirements on new developments. This is even happening to financially sound companies with strong credit ratings,” said AIA chief economist Kermit Baker in a statement released Wednesday. Baker pointed to a “skittish bond market,” lower tax revenues for publicly financed projects and declining property values as additional deterrents to the industry. “Until these factors are resolved, the design and construction industry — which accounts for roughly 10 percent of GDP and is facing unemployment figures in excess of 20 percent — will continue to face deteriorating market conditions,” Baker said. Ricks said even though the downturn has changed the marketplace, LRK will continue to serve its clients. “Throughout the recession, our clients have encouraged us to maintain our expertise and be ready for them as the market returns,” Ricks said. “We are doing just that.”
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