A reader fills us in on the toll the nationwide downturn has taken over the last year on EDI Architecture, once one of the largest architecture firms in Houston. EDI, which specialized in multifamily projects, had more than 120 people on its highrise team not too long ago — plus an additional 80 employees in New York, California, and Angola offices.
As of June, the reader reports, the firm was down to fewer than 30 employees, total.
A few sources report on some recent carnage in the architecture biz: 40 people were laid off from Gensler’s Houston office in the last 2 months, including 24 in January. Firmwide, Gensler has let go around 600 employees. Got any updates from other Houston firms you’d like to tell us about? [Swamplot inbox]
A source who may have spent a little too much time with a chainsaw after Hurricane Ike reports on industry conditions: “It is super bad out there right now. Lending has absolutely ground to a halt. Most of my peers have almost zero pipeline beyond existing signed contracts or institutional work (esp. schools). [The Houston office of architecture firm] Gensler had layoffs this past week, though I would call laying off 16 people ‘trimming the dead limbs off the tree.’” [Swamplot inbox]
What caused last week’s big implosion over at Royce Builders? And what’s happening now? A Swamplot informant tries to clue us in with this rich, extended view of the company’s problems:
Fact #1: Lavish spending by all of the Speers. At any given time one of two Bentley’s, Ferrari, Escalade or sports cars belonging to the family would be parked at the office. Shawn Speer and his wife Shonna were known for bragging about their lavish spending. Certainly, if you’re making money spend it, but when times are tight they were the only ones still spending money like water.
Fact #2: Example: Shonna told another employee about $30,000 shopping spree to New York and only a purse and few other items were on that steep tab.
Fact #3: As employees were crying and leaving Shonna and her best friend and manager Nicki K. were talking about moving forward with their new clothing line. This conversation opened up speculation that monies had been moved to accounts in Nikki’s name for this purpose.
Oh yes . . . there’s more!
How did that sales meeting go this morning at beleaguered Royce Builders? Just peachy, reports a reader:
John Speer was not in attendance, but Shawn and [Shonna Speer] were there. They will be running things. There are no project managers, only two construction managers, no VP of Sales, nothing. Corporate is down to 20 employees total. The sales staff was told not to listen to all the negative rumors, and most of the informaiton is all heresay and rumor. They were told they could sell from their assigned community and any other out there. Shawn assured them they would do their best to get the money form the banks when a home closed to pay the salesperson. (The HUD never shows commission due a salesperson, so I cannot imagine how they will get the salespeople paid.) He also addressed the question of Stewart [Title] not closing several deals in the past weeks due t new liens. Shawn again said that was rumor. He told them that was the case in only one closing, and it was for a $25.00 landscaper bill. That bill was also placed on the wrong home. (Yeah right!)
The salesperson I spoke with is currently looking for another job, as are everyone else I have either talked to or gotten word from. Why they would think that anoyone would give Royce a contract, and God forbid ernest money, is beyond me.
Meanwhile, over at the Houston Association of Realtors:
HAR discussed the Royce situation in their board meeting yesterday and decided to e-mail their Realtors. They basically informed the Realtors of the situation so they would not get caught in the middle of a huge problem.
Photo of Royce Builders offices at 7850 N. Sam Houston Pkwy. West: Stewart Title
Royce Builders now has “about 60″ employees — down from 220 earlier this year, reports the Chronicle’s Nancy Sarnoff, who managed to get company president John Speer on the phone:
Speer said Royce is working with its lenders to complete homes that already have been started. It is also negotiating with vendors who have liens against the company.
Royce has between 60 and 80 homes that are under construction and will be completed, Speer said. Another 70 or 80 that have been contracted but not yet started are unlikely to be built.
Meanwhile, a tipster tells us that Royce
fired ALL of the project managers and construciton managers yesterday. The corporate phones are not being answered. Hammersmith mortgage, their in-house lender, was closed for good yesterday. The Stewart Title office branch in their corporate office was also closed yesterday.
. . . and adds this colorful story:
One of the PM’s (project managers) was holding a meeting yesterday with his staff of sales people and construction. This was in one of the neighborhoods he manages. He was telling the staff NOT to listen to the rumors and keep slling as usual. He got a phone call on his company cell and left the meeting for several minutes. When he returned, he informed the staff he had been fired and they are on their own.
More Royce rubbernecking . . . after the jump!
At least a few of those swirling rumors about Royce Builders appear to have been on target. Yesterday, Fox 26 reporter Isiah Carey camped out in the parking lot of the company’s offices across Beltway 8 from the Sam Houston Race Park — as a stream of just-laid-off employees loped out of the building carrying boxes.
We’ve also learned Royce has had at least 70 [liens] placed on their properties and homes that have been sold.
Court records indicate the company has failed to pay a contractor for work done. Tax records also show Royce owes the tax assessors office at least $95,000.
How extensive were the layoffs?
From heightslife (The Heights Life): RT @swamplot: Going Attractions: Hollywood Video Gives Up on the Tower Theatre http://twurl.nl/ly5csn
From GTello (Gus Tello): @Lennar Houston Real Estate Market Doing Much, Much Better Than Last October http://twurl.nl/t6uo7b (RT @HoustonPress @swamplot)
From HoustonPress (Houston Press): RT @swamplot: Houston Real Estate Market Doing Much, Much Better Than Last October http://twurl.nl/t6uo7b
From isthishouston (isthishouston): RT @swamplot: How’s That Corner of Harrisburg and Wayside Looking? http://snipurl.com/tay31From isthishouston (isthishouston): isthishouston Harrisburg & Wayside - http://isthishouston.com/2009/11/19/harrisburg-wayside/ - #houston @swamplot #eastend
From jenxer (Jennifer Mathis): I can hear it now: "Obsess much, Jen?" RT @swamplot: Comment of the Day: Demo Addicts http://twurl.nl/yf4twm
From kniemeier (Karen Niemeier): Attention East Enders! RT @swamplot How’s That Corner of Harrisburg and Wayside Looking? http://snipurl.com/tay31From jenxer (Jennifer Mathis): I need to quit reading @Swamplot's demolition reports. Seriously. This one breaks my heart. http://is.gd/4YfUZ
From TheLoopScoop (TheLoopScoop): Wow! Hope this works out! RT @GunsandTacos: RT: @swamplot: The Block Party’s Over http://twurl.nl/nxk320
From GunsandTacos (Jay): RT: @swamplot: The Block Party’s Over http://twurl.nl/nxk320