Intelligent design | By focusing on industry niches, experts say Portland architecture and engineering firm SMRT is playing it smart
Ellen Belknap, president of one of the oldest architecture firms in Maine, thinks a lot about the future.
In a small conference room off of the lobby at Portland-based SMRT, Belknap is surrounded by the clean lines and chrome befitting a thoroughly modern company, as though her hopes for the future were made material in the firm's track-lit interior design. She sits at a steel table, in a featherweight metal chair that rolls with the slightest movement, under a dormant metal light fixture that looks like an enormous, space-age throat lozenge, and talks about how far SMRT has come since 1883.
Founded more than a century ago by Portland's famed shingle-style architect John Calvin Stevens, SMRT has designed hundreds of homes, commercial structures and civic buildings around the Northeast. It is now the largest architecture firm in Maine, last year generating $16 million in revenue, and is working hard to establish a presence outside of Maine, lately focusing on the office it opened in Troy, N.Y., in 2003.
"The firm," Belknap says, "evolved."
But SMRT's evolution, like most, wasn't easy. In 1995, the firm filed for Chapter 11 bankruptcy after a major real estate deal soured. While Belknap says the firm never considered closing, it did take the opportunity to change tack. The company's five principals, which include John Calvin's great grandson Paul Stevens, decided that for SMRT to flourish they would need to share ownership with a wider swath of employees, including six new, young up-and-comers like Belknap, who one year after the Chapter 11 shakeup became a principal at SMRT at age 36. This new arrangement allowed SMRT to embark on a new path that the company now says is paying dividends even during an economic downturn. Between 1996 and 2000, in a process Belknap describes as more organic than intentional, SMRT's principals began to specialize in increasingly complex niche markets like health care, high-tech industrial and criminal justice.
By 2000, four of the company's now 14 co-owners were each responsible for a major market sector — science and technology, criminal justice, government, health care — allowing SMRT to nurture contacts and talent that helped it carve out a strong presence in the Northeast in areas like hospital and jail construction. The generalist days were over. Specializing, Paul Stevens says, appears to have helped the company better stabilize its revenue year to year. Belknap says the strategy contributed to the firm's record revenue last year.
"We are very much a future-focused company," Belknap says. "We understand this industry [does not involve] straight line growth. Architecture is dependent on the economy and it's dependent on other events that are happening in the world, so the company will flex as the work changes."
Growth plan
While residential and commercial builders fight for coveted projects, Belknap says SMRT's first quarter this year was relatively strong — the company is currently working on about 200 projects, from feasibility studies to major construction, with a total value of $22 million. Allowing principals to manage the company's seven market sectors and focusing on technical niche markets, Belknap says, has helped the company attract more big projects, like the $60 million-$70 million, 132,000-square-foot outpatient facility for Eastern Maine Medical Center currently under construction in Brewer. For this project, SMRT is providing traditional design services as well as helping the hospital with regulatory permitting and fundraising. Its fee is 6% of the roughly $40 million construction cost, or around $2.4 million. Belknap says the firm's fee depends on the nature of the project, but has lately ranged from 6% to 12% of construction costs.
As an architecture/engineering firm, SMRT is able to take projects like the EMMC center from start to finish, and also offer services independent of building, including mechanical testing, structural inspections, site selection and interior design.
The company's diversified strategy has helped it expand outside of Maine, which Belknap believes is critical.
"We know we can't exist on Maine work only," she says. "You can't keep an architecture-and-engineering firm of 80 people going without leaving the state."
Cultivating niche construction has been the cornerstone of SMRT's new era, and it's a strategy that's fairly common among architecture firms in Maine, according to Carol De Tine, president of the Maine chapter of the American Institute of Architects and owner of the Portland firm Carriage House Studio Architects. De Tine says most architects were generalists until the 1980s, when clients in sectors like health care and high-tech industrial began to expect a higher level of expertise for major projects. De Tine says developing sector specialists in-house, as SMRT has done, can be necessary to grow a firm's presence in challenging markets.
"It's very smart to focus," says De Tine. "It's an issue of credibility, that you're really a part of that industry. As an architect, if all I focus on is high-tech industrial, then I'm really a part of that industry — I'm going to go to industry events, read industry publications. You become a colleague."
The largest share of SMRT's revenue in 2007 — 31% — came from industrial jobs, many of which involve high-tech designs, like those required for a General Electric factory for digital imaging equipment SMRT recently completed in New York state. SMRT's second largest niche, at 23% of its revenue, is the health care sector, which Belknap oversees and which currently includes a $10 million emergency department addition and renovation at St. Mary's Regional Medical Center in Lewiston and work as associate architect for the 138,000-square-foot Mercy Hospital being built along Portland's Fore River. And its third largest niche, at 19% of last year's revenue, is perhaps its most unique and its most challenging — building correctional facilities.
Arthur Thompson, a partner at the firm for more than 20 years, leads SMRT's criminal justice division, which since its first correction facility project in 1984 has built 24 jails and prisons from Florida to New York. The firm focuses most of its criminal justice work in the Northeast, where there are a number of aging jails in need of repair or replacement and similar governmental hoops to jump through to get those contracts. In Maine, SMRT is responsible for renovating or building 12 prisons and jails, including the 886-bed Maine State Prison in Warren, completed in 2001 for $58 million. The company is currently building or renovating four penitentiaries — Somerset County Jail in Skowhegan, St. Lawrence County Jail in Canton, N.Y., Cheshire County Jail in Keene, N.H., and Grafton County Jail in North Haverhill, N.H. — at a total value of almost $118 million.
But Frank Greene, a principal at Ricci Greene Associates in New York City and a member of the American Institute of Architects' Committee of Architecture for Justice, says the opportunities to build correctional facilities into the future may be stagnant or even dwindle, making it critical for companies like SMRT to establish expertise in the market.
"There's not a tremendous volume of work," he says. "But there aren't that many people that are really good at it. It's not like schools, for instance, where just about any decent architect can do a good job on a school."
Major jurisdictional jail and prison projects happen on average once every 35 to 50 years, far fewer than new construction rates of other government buildings like schools, says Thompson. This means designers, engineers and government officials must plan the project to accommodate changes decades away, and at a price voters can stomach. In addition to the design and scale challenges, Thompson says it's equally important to be sensitive to misperceptions among the public and even some criminal justice officials about what the new jail needs. (For more on the challenges of building correctional facilities, see "Jail time," page 26.)
"Most of these people have never built a jail before, so they really have no idea what they're about to get involved in," says Thompson, who splits his time between a home office in Florida and SMRT's Maine headquarters. "So we do a lot of education then about the process."
Design for the future
Paul Stevens has SMRT in his blood. The great-grandson of founder John Calvin Stevens, Stevens has worked at the firm for 42 years and has seen it change from a small, local outfit to a regional player. Stevens, an architect by trade, is now one of the company's principals and the chair of its board. He believes changes to the company's internal and external goals in recent years will help SMRT avoid some of the revenue ups and downs that have rendered some years unprofitable.
"The years that the construction industry was off [nationally], we had a fairly serious downturn in the state," says Stevens. He sees those dips in construction in Maine happening about once every 10 years, and the newest one may be happening right now. While in the past those national dips have hit SMRT hard, Stevens thinks this time the firm will weather the storm better. "The difference between where we are as a firm is we have got ourselves covered in terms of being in other geographic areas and our market sectors."
SMRT's strategy includes doing more work outside of Maine (some 40% of the firm's average annual revenue is now made elsewhere), recruiting talent nationally, continuing to cultivate select markets like health care and criminal justice, and encouraging designers to collaborate and push for the kind of dramatic artistry that will bolster the firm's name in architecture/engineering circles. The future, Stevens and Belknap agree, relies on SMRT's continuing ingenuity.
"It's just a question of maturity of the firm and maturity of the people in the firm," explains Stevens.
Mainebiz web partners
Most Recent
Most Recent
Comments