Testifies That Most Architectural Firms Are Also Small Businesses
Contact: John Schneidawind
For immediate release:
Washington, D.C. – May 5, 2010 – A Colorado member of the American Institute of Architects told the House Small Business Committee today that Congress can take several simple steps to help small businesses – many of which are architectural firms – get back on their feet as the economy emerges from the Great Recession.
“Architects are, by and large, small business people,” said Christopher Green, President and CEO of AGO Studios, a two-person architectural firm based in Avon, Co. “Architects are also job catalysts – they are the first workers to be involved in the construction process when they develop designs.”
Green listed the obstacles currently facing small businesses such as AGO Studios, where billings are down significantly from a year ago:
- Inability to get the necessary credit to help finance new construction or remodels. This is due to a series of conflicting banking policies that require higher levels of loan to value ratios, significantly higher levels of capital investment in a project, and revised pro forma statements that are affected by current levels of foreclosures, short sales, and other factors.
- Facing falling property values, along with new construction values that are being significantly affected by appraisals compared to short-sale real estate transactions.
- Municipalities that have cut back so heavily on budgets, personnel and services that capital projects are not being considered unless absolutely necessary.
“In one instance in my home state, a municipal improvement project that was scheduled for last year was shelved because the company that had committed to provide financing for the project pulled out because of market conditions,” said Green. “That project has not been re-scheduled, affecting a number of small businesses that were counting on it to increase the vibrancy of the town center this project would have fostered.”
Among the fixes Green recommended Congress can make:
- Extend and expand clean energy tax incentives. The AIA, along with a broad coalition of environmental , business, real estate and design and construction groups, strongly supports H.R. 4226, the Expanding Building Efficiency Incentives Act of 2009, introduced by Reps. David Reichert (R-WA), Ron Kind (D-WA), Geoff Davis (R-KY), Earl Blumenauer (D-OR), Christopher Lee (R-NY) and Tom Periello (D-VA). This bipartisan legislation would extend and expand several important energy efficiency tax incentives for homes and commercial buildings.
- Extend and Expand Tax Incentives for Small Business. H.R. 4841, the Small Business Tax Relief and Job Growth Act of 2010, would help small businesses gain access to capital and create jobs. “As an architect, I am particularly pleased that the legislation would expand the scope of Section 179 to make deductible structural improvements and improvements to real property,” Green said. “This not only will help small businesses invest and grow, but will lead to the hiring of design and construction professionals.”
- Oppose Tax Increases That Unduly Affect Small Businesses. Specifically, the Ways and Means Committee is seriously considering a proposal to significantly increase payroll taxes paid by S corporation shareholders. The proposal reportedly would expand the application of payroll taxes to active shareholders of S corporations “primarily” engaged in “the performance of services.” “My fear is that the proposal will entrap millions of small business owners who are legitimately and correctly classifying salary and earnings distributions, with limited public policy benefit,” Green testified.
About The American Institute of Architects
For over 150 years, members of the American Institute of Architects have worked with each other and their communities to create more valuable, healthy, secure, and sustainable buildings and cityscapes. By using sustainable design practices, materials, and techniques, AIA architects are uniquely poised to provide the leadership and guidance needed to provide solutions to address climate change. AIA architects walk the walk on sustainable design. Visit www.aia.org