006: Architect as Developer: Developing an Urban Lot in San Antonio into Two Units, with Hilary Scruggs

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How can a designer use her design talents to develop and build her own project? In this interview, find out how Hilary Scruggs, founder of Operative Ventures, bought an urban lot in a blighted area of San Antonio and developed it into two modern housing units that were featured in the August 2011 issue of Residential Architect magazine.

In this episode of Business of Architecture TV, Hilary Scruggs explains:

  • How she found the right piece of property.
  • How she assembled her team.
  • The strategy she uses to keep her business on track and heading upward.
  • The unique medium she uses to market her products and firm.
  • Hear her share what she learned about staying within a budget.
  • Her $700 mistake that involved bamboo and a concrete wall.
Biering Project at Day

The Biering Project – Design and Develop

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Audio:

Show Notes:

  1. To find out more about Hilary Scruggs’ other projects, visit OperativeVentures.com
  2. Watch the documentary on the Biering project at SouthtownGreenbound.com
  3. Sheerar Studios, the home of videographer and business consultant Geoff Sheerar.
  4. The architecture program at Cornell University.
  5. Firms mentioned: Atelier Bow-Wow and Sou Fujimoto Architects

Transcript (scroll past transcript to leave a comment):

Welcome Business of Architecture TV, where you can learn about Architect as Developer.

Enoch: So, hey there, architectos! Business of Architecture podcast. Welcome. I have the honor of having Hilary Scruggs with us today. She is the founder of Operative Ventures. We’re in for a real special treat today because Hilary is just one of those amazing people that you never forget. She and I went to school together. She didn’t know I was going to say this about her, by the way, but she is just rocking stuff. I’ve always looked up to her and everything she’s done. So, she is going to tell us about her story and what she’s been doing lately. She is actually developing projects right now. So, with that intro – Welcome, Hilary, and thanks for doing the interview.

Hilary: Thank you, Enoch. Thank you for the kind words. That’s really, really kind. I’m happy to be here in your podcast, and I’m excited to catch up with you after many years, and to talk a little bit about the Business of Architecture.

Enoch: That’s right. We talked a little bit. You’ve done a lot of work to get where you’re at, and you just busted your butt. First of all, I just want to tell them: Hilary developed a project called the Biering Project. But, let’s take it back before that. Let’s just jump in to it and talk about what you did after school, how you got to where are. Tell us a little about yourself so people can get to know you.

Hilary: Okay. Well, I did my bachelor’s with Enoch, of course, at Cornell University, and graduated in 2003. I knew I wanted to be in Architecture from an early age. It was a compelling experience just being there at Cornell. When I got out, I was a little burned out. I went home for a while and ended at home to Texas. I ended up in New York City later that year where I got a job in high end residential homes for a young, startup firm. I did a lot in townhouse projects and stuff in New York City. It was a great way to learn about construction, it was a great way to learn about design. I left that in around 2006, when I was twenty-six years old thinking I was going to do some freelancing. I’ve been working for myself ever since because I ended up working for some clients for a couple more years in New York City. Meanwhile, I was investing in some real estate in San Antonio, Texas because I happen to visit a few times over those years. I could see there is a down town that was really just on the verge of emerging. I wanted to be in Texas and do something for myself. So, in 2008 when the economy got tough, I was wrapping up some big projects. I thought it’s a great time to try something a little bit idealistic, explore sustainability which had not been a big part of projects in places like the Hampton, in of course Connecticut. So, I came down here and did that project. It’s a development project – it is two units on a single property, a duplex, and it was LEED Silver. I have had experience; I met some wonderful people, and started this firm in San Antonio Texas. So, that’s where the story is.

Enoch: That’s awesome. Okay, there’s a lot of meat there to dissect. That’s what I love about the profession of Architecture – the design and everything; that there’s so many paths that we can take.

Hilary: I think so. I think it’s really scary when you first get out on your own, but it is rewarding, and it makes you tough, and it’s a great way to really engage about whatever really interests you about the profession, and kind of personalize your path.

Enoch: Yeah. So, let’s go back a little bit to when you were in New York City. Of course, New York City is happening. If there’s a hot spot for Architecture design, it’s New York City. I’m interested when you said that you broke away and you decided to do some freelance things. Can you tell us, how you found the work to be able to go out and do this.

Hilary: I was referred to these people. In my main project had been a project – a really large, multi-million dollar custom home addition. It was a young, kind of, hip client. She had a great architect working that already did a fabulous job, but she really wanted to be involved in the process. She ended up bringing me on as the design consultant, which between the two of us, we worked to really develop the interiors. She developed a lot of things in tandem with the architect. So, I found this position that was a large acquisition and I could sustain myself. It was originally going to be six months that turned in to two years. Clients and projects just seemed to be coming my way. Mainly, I mean, out of the projects I’ve done with this firm, I just met a lot of people, and people wanted to continue working with me.

Enoch: Great. So basically, you established those connections from your working. The people knew you and that was your network that allowed you…

Hilary: Yes. The contractors, the vendors, the other consultants we used, and in some cases, the clients we had – just different people that made a network. New York is a great place where I feel because so many people are from somewhere else there, you can somehow find a niche, and people come in and embrace you. It’s very unique.

Enoch: Interesting. So, would you have any suggestions for architects that want to move out? Maybe new graduates that want to move out to New York City, or people that want to get involved in the scene out there?

Hilary: Yeah. I would say: just jump in.

Enoch: Knock on doors?

Hilary: Yeah, I would say: find the best job you can, and hook up with good people who you admire. My grandfather told me this good advice, “Keep your head down and your tail up.” Just get in to it, learn some skills, pretty much you’re like the Energizer bunny in life once you find your niche.

Enoch: That sound like a good Texas saying. Was your grandfather from Texas?

Hilary: Yes. He was full of Texas wisdom. Unfortunately, he passed away about two years ago, and I miss him. But, he was a character. He was a successful businessman. So, some of that has gone to me down home, Texas wisdom. It probably paid off.

Enoch: Yeah. Good. Carry on the legacy. So, you’re working, you’re freelancing, and then you decide to buy some property in San Antonio?

Hilary: Right. I mean, once I got out on my own, obviously, I was responsible for my own time and my own hours. So, I had time to take long weekends, or research trips, and kind of look in to these things. I have been to San Antonio actually with my grandparents on a Christmas, they wanted to get away, and I went with them. I was pretty amazed by the down town, and what was starting to happen there. It’s a charming place, it’s a very colorful place, there’s a lot of authenticity here. So, then I’ve been back for the AIA Convention here in 2006 or 2007.And that’s when I just bought my first property. Actually, I was a terrible convention go-er. I basically found a real estate agent and went to some parties. I’m kind of bad.

Enoch: Nice.

Hilary: No. But, I found that property. I started thinking about doing something there, and started watching the market. As things were dipping and getting slow, I found another property, and then another while I was still in New York. I was trying to figure out at first how I was going to do anything when I was in New York, and as you know land is not cheap.

Enoch: Nice. Obviously New York was great for the design, the experience, and the actual architectural products that happen up there. But in terms of doing your own thing, I mean, if you want to develop something, you’re competing with the likes of Donald Trump and Barbara Corcoran.

Hilary: Yeah. I was looking at a lot of like Atelier Bow-wow and [Sou Fugimoto]. I can’t remember his name, it’s terrible. Also, some of these small-scale Japanese projects, and I kind of have the heart for that anyway. Now, for me to buy buildable land in Manhattan would be pretty much out of reach. So, I kind of decided to trade that dynamic context for a place where I could zone in on my own thing.

Enoch: How instrumental was a real estate agent in finding the location? Because we always here, “Real Estate: Location, location, location.”

Hilary: I knew which area I wanted.

Enoch: How did you know that?

Hilary: Because I had driven around this area. There’s an area right immediately next to down town. I also thought that there had been some architects, some local architects who had done some cool things. I had a gut that this was a good buy because, it seemed pretty obvious from the areas. San Antonio is not that huge. It links the down town area, and you can drive it, and understand it relatively easily. I had been to Austin and I have seen… Once, actually, before I moved to New York thought about doing some stuff, in a word, what I’m doing now, in Austin. What’s happened in the south of Austin you probably heard about it. South of Austin has been explosive over the last two decades. To me, this area where I bought was exactly like what that was. So I just kind of impulsively was like, “This is where I’m going to do something.

Enoch: Excellent. So, I’ve noticed that the conversations we’ve been having or other people that I have talked to, seeing the future potential, trying to find the area that’s the next South Austin, places exploding right now with energy. You’ve found it and it’s worked out well for you. When I talked to you and you said that you’re seeing the growth that you had hoped you would see in that area.

Hilary: It’s incredible. When I bought, my first property, looking back, I can’t believe how I thought that was a good idea. There was a warehouse next door, it was industrial, it was completely vacant and distressed from years of delayed maintenance. There’s a parking lot with barbs around the fence, and there were windows that had been knocked out of houses and stuff. I knew that in the general area things were happening. But, I guess now about five years/six years later, that warehouse is like this wonderful… It’s been done now by a local architect. It looks great, a local business has taken it over, and it’s really nicely done. The parking lot has all been re-landscaped. There’s an amazing restaurant across the street where you go have very expensive dinner, and it was just written up in Texas Monthly. It’s completely changed over that time. I can’t take credit for anything. I feel like I was a little…I guess my gut was right, or maybe also that I was being young and that my appetite for risk was a little high.

Enoch: Well, and people can go, and they can see this neighborhood, and they can see this project. The address is on Biering Street. And the exact address is 110…

Hilary: 110 and 114 Biering.

Enoch: 110 and 114 Biering. I did go and look that up on Google Street View. You can see that it’s definitely what I would call a marginal neighborhood.

Hilary: Oh, yes. That property that was described before was not Biering. Biering is a little bit outside. The sort of people that have been there have been there for generations. It’s an interesting place; people who just literally stayed in the same place. Even around there, there are several warehouses that have been built by a developer from New Jersey. There are stuff that’s in the works too, that’s just a little bit further than the first property. It’s still a neighborhood in transition.

Enoch: Let’s take it step by step. That first property that you bought, Hilary, how much did that cost you?

Hilary: I think I paid $160,000.

Enoch: Was that a land loan, or did you pay that in cash?

Hilary: I paid it in cash.

Enoch: So, at twenty-six years old, if you don’t mind sharing, how’d you have a $160, 000?

Hilary: I had it. Just had it. My family has been generous and I made money. That was cash that I made actually myself, and that’s what I did.

Enoch: So, that’s a big road block for a lot of new starter kids that I’ve talked to. “I’d like to develop, but it’s the initial capital.” So, do you have any pointers? Some people say, “No, I won’t work with family at all” Did it work well for you to accept some family funds to help do that or how did that work out for you?

Hilary: Yeah. That came into play with Biering. Basically, when it came to the construction itself, I did not have the cash to do it. I was helped out by my mother and my grandmother. It worked out pretty well. I would say my family has been extraordinarily supportive, but I did give them a sort of guarantee for it, and they knew that I can handle a loan of this size. It was partly just the lending situation made it impossible to get money from a bank or from a conventional route. Definitely, now as I weigh out decisions look at the financing, in some ways, I’m a little bit leery. I’m glad that any kind of interest, loans that I have are relatively minimal and easy to keep on top of. I’m not sure, really, if it would have turned out so well if it had been a different time where money was super available specially at an age where I was naïve, and overeager to get started, and confident that there was this great thing I was doing. Looking back in hindsight the conservatism that I was forced to practice because of the possibility of going/getting a million dollars is not there was probably good for me.

Enoch: So, what was the name of your first project? The very first one. The first plot of land that you bought for a $160,000.

Hilary: Yeah. That’s actually The Mews on Divine .And it’s a five-unit live-work project that we are shooting to start this year actually. I was supposed to go back to the Historic and Design Review Committee, and again, hopefully, March 20th to kind of get our final approvals with that so we can put the permitting process in order. Very soon we’re going to have to think about how we can finance that one.

Enoch: Yeah. That’ll be a follow-up maybe. Do a little follow-up interview to see how that’s going.

Hilary: Yeah, exactly.

Enoch: So, the first parcel of land you bought was not the first parcel you developed?

Hilary: No, because it was an expensive piece of land. It’s a bigger project. At the time, originally I was thinking I was going to do that first. I decided that the other, the smaller one, was the better one to take because it was 2008, personally.

Enoch: What was the other one?

Hilary: The Biering Project.

Enoch: Okay. So, Biering was your first development project?

Hilary: Yes. It wasn’t the first property I bought. Yeah.

Enoch: Okay. I got you, I got you. I mean, the Biering Project is a beautiful project. I think you pulled out the design; you pulled out your education and your experience. You just created a gem.

Hilary: Thanks.

Enoch: So, I definitely encourage everyone to go and check out Hilary’s project. You can visit at OperativeVentures.com. Right, it’s the name of your firm. Then, there’s actually… This is really cool, too: I think a lot of architects may look at what you’re doing, because you incorporated video in a phenomenal way in the marketing and documentation of your project. So, where can they go to find these videos? Because I watched them, and they’re really cool.

Hilary: Well, thank you. It’s southtowngreenbound.com. That was a project with Geoff Sheerar of Sheerar Studios. It goes through the story of making it with some commentary from one of my tenants, and a local developer, and the architectural and sustainable consultant that we used, and a local real estate agent. So, it has some interesting things to say.

Enoch: It’s true. You actually have an interview that I love with one of the tenants in The Inhabitants. Vance, I think his name.

Hilary: Yes. Vance. Yeah, he’s great, and he is so colorful. Definitely check out the individual video with him. There’s a little, short clip that you can click on separately. It’s funny because it talks about running in to the building with his truck, and the fact that he doesn’t recycle – the real picture.

Enoch: If you haven’t seen Hilary’s Project, the Biering Project yet, you won’t understand about the truck part. But, if you go and look at it, the building is completely enveloped in a metal screen. They have a very metallic look, so it’s quite a visual image. Just think of this truck running in to this metal building. But, you said it stood to the abuse, right?

Hilary: I know. He really tried his best to take it down. But he lost the battle.

Enoch: So, here in California, we have earthquakes, in Houston I know they have hurricanes, I guess in San Antonio they have Vance’s truck.

Hilary: Yeah, Vance’s truck and the South Texas heat, I guess.

Enoch: Yeah, it’s true. So, these are both rental units, Hilary. Is that correct?

Hilary: Yes.

Enoch: So, rental units. There are two units. They’re actually duplexes, but they’re not connected.

Hilary: Right.

Enoch: Tell us a little bit about the program and the project, and how you came to all that.

Hilary: They’re 1500 sq. ft. each, two bedrooms, two and half baths, and they’re mirror images of each other. One faces a back row of parking courtyard and one faces the street. In between, there are two courtyards. So, the bottom floor is an open living space. It has a kitchen and it’s open to the main living. It has an alcove that’s sort of a flex room. It can be an office, or a workout room, a little den thing. Upstairs there’s a laundry room, and two bedrooms, and two walk-in closets, and two baths.

Enoch: Excellent. So, it is set up for, with the two baths, it is set up for, potentially, to have roommates share it. You can have two families that are two individuals.

Hilary: They’re evenly sized. So, I set it up originally thinking that maybe there would be a roommate situation.

Enoch: Has that turned out to be the case?

Hilary: No, actually, it hasn’t been the case. It turns out to be a couple lives in one and Vance in the other. There were no roommates. So, it’s useful for a guest room, I guess, or storage and stuff.

Enoch: Okay, nice. What was the zoning for this part of land? When you bought this piece of land, was it zoned to be able to support these two duplexes as rentals?

Hilary: I think it was an R zoning, I mean there was R-4, R-3, and R-2. So, it could accommodate a duplex. But, it was basically a single family.

Enoch: So, by right, you didn’t have to go through any special planning commission to go put those duplexes on there?

Hilary: No. It was innate. What they have in San Antonio’s is a Neighborhood Conservation District. It’s a district with certain design criteria that you have to follow. For example: the front porch was a requirement, there was a requirement about the proportions of the windows, the pitch of the roof, and some of these things. Actually, the screen was inspired by that because I was really not happy about having to do the windows the way they were making me do the windows, but, I was allowed to have the screened porch. So, I just said, well, let’s take the screen and just cover the whole thing with the stuff.

Enoch: That is awesome. I had to ask because you look at the building, you can’t even see the windows unless it’s night time and the lights are on, right?

Hilary: Yeah. I didn’t want to do those windows.

Enoch: That is so funny. Since you did it according to the code, I guess, they couldn’t say anything about the fact that you put that screen over it, right?

Hilary: Luckily, no. In other areas that are historic areas, and I do have some property in those, you have to go through a subjective review process with the board. I really far preferred the Conservation District’s concrete rules. You follow it, and you’re okay. But, yeah, like a lot of urban neighborhoods, there are a lot of limitations to what you can do and not do because so many people have come in and taken advantage, and built things that are way out of scale, or whatever. But, it backfires sometimes, because often, I find these guidelines at odds with what I think is right for the design.

Enoch: Oh, yeah, so much. So, you bought this piece of land for the Biering Project, you put down, and you buy that one cash as well?

Hilary: Yeah.

Enoch: Okay. So, then when you’re ready to bill, what’s the timeline? You start doing the designs; you get your plans drawn up? Tell me. Take me to the process of how you got the money to build that project.

Hilary: Okay. I think I bought it in like March of 2008. In the summer I had rented the house. For six months, I went back and forth between New York and San Antonio. I was able to do the preliminary design. Then, in January 2009, I came down and just started to live here and gave up my apartment in New York. I guess, it took me about three months to finish the design, and the construction details, and everything. I had it engineered, and I started bidding it, and did some value engineering and fixing stuff. I think it took me a good six months to get a permit. They have some pretty strict rules in San Antonio, so that was kind of frustrating.

Enoch: And what was paying your bills that time, the six months, when you’re doing this project? Credit cards?

Hilary: No. I still had some consulting work that I did, and had some income from some investments. That was how I did it.

Enoch: Yeah. Was it pretty tight or was it comfortable?

Hilary: It was, well, I wouldn’t say it was tight. I wouldn’t say that. I feel like I was okay.

Enoch: Sure. So, you have the plans, and you got the permit for those, and then, the next step was subcontractors, bidding out to subcontractors? You’re also a design and build firm, correct?

Hilary: Yes. So, I planned on, I’m going to do this myself, and I was going to send out a lot of it. I ended up finding some local laborer who are really smart and really good. They ended up doing a lot of it, including Wayland who’s on the Southtown Greenbound video. He was my project manager. He was extraordinary and has stayed with me. I started doing some fences and stuff like that on the lot, just little things. But, basically, through the summer, I was pretty much stalled. As far as financing goes, I mean, it was 2009, I basically had no job. Say, you’re trying to find several hundred thousand dollars to do it? What we ended up doing was doing a collateralized land credit. I basically went to the bank, and it was the bank that my family has used in Houston – a good bank. They were just like, “We’re not loaning on real estate. Period. You know, there’s no speculative lending at all.” They’re like, “We don’t care who you are, and you can’t have anything.” I was like, “Wow. You know, that’s really, really helpful to know. Thanks.” I’m just like, “Gosh, I’m learning so much in this great process.” What happened was, I had to collateralize it with some assets, and my mother helped me. That’s what we did to get it done.

Enoch: Fascinating. That speaks volumes about your determination, Hilary, to be able to take the personal risk on. This is something that you mentioned to me earlier, that you’ve done this the old-fashioned way. You had the skin in the game.

Hilary: Yeah, definitely.

Enoch: Were there any outside investors that you brought in to that project to make it work?

Hilary: No. There weren’t. That particular project was very personal. It was about some other things, learning about sustainability and things. In some ways, a business goal was not the only thing that I was focused on, which was okay. I’m glad, in hindsight that I decided to do the smaller of the two projects because it gave me the ability to do that. I learned a lot, like how important it that you don’t go in to these things like, “Oh, you know, it’s going to be this.” “We’ll just see what I feel like.” “Maybe I’ll stay.” “Maybe I’ll go.” “Maybe I’ll rent it.” “Maybe I’ll sell it.” It’s taught me a lot about, “Okay, next time I do this, I’m going to have specific goals, and I’m going to follow those things.” I’m not going to let my, “Oh, I’m learning,” tell me.”

Enoch: Well, what are some of the specific goals that you think are essential?

Hilary: Well, I think that you need to know, for example: Are you going to sell? Are you going to rent it? How long are you going to hold this piece of property? That’s not something you figure out as you go along, because there are things that you have to do in advance to start it and that you just have to have figured out. That is all the more true when there are multiple parties invested, because you just can’t have these things fall apart, and people are like, “Well, what I had in mind is this…” I also think that maybe it’s coming from somebody who’s in design and somebody who is interested in architecture, and really cares about what the product is at the end of the day and what that says, it’s important to know, well, “Maybe I don’t need to do this thing,” or “Maybe I don’t need to do that.” I think that, specially, when you’re doing a real estate venture. I try to hit, like 80% of it as a pretty conventional building, and the other 20% is something really special, not necessarily expensive, but maybe expensive in terms labor, or in terms of thought, or in terms of material. But, you still need to know the bread and butter conventional, how you build this for a reasonable amount – a cost.

Enoch: Yeah. Well, what were some mistakes that you made or maybe missteps that you want to warn other people about that are going to go down this path, that first project?

Hilary: In general, one thing I would say is: At the time that I was just eager to get started, maybe I pulled the trigger on things too fast because I just couldn’t hold myself back. I’d say one thing is being delivered. If something doesn’t feel completely right, and you’re not at peace with it, and you don’t know that you’re doing the right thing, and it doesn’t make sense from all the objective angles, it’s okay to just not do anything, away, or delay, or not start.

Enoch: Can you give us an example of that?

Hilary: Well, a small example I can remember was when I was waiting for my permit. I was like, “Okay, well, I’m going to make this bamboo, you know, section at the rear of the property.” At first I actually did buy like $700 worth of bamboo, which promptly died because there’s no irrigation on the property, I bought it with my sister, which is ridiculous. But, then not only that, after the bamboo died, I just said, “Well, you know what I’m going to do is I’m going to put this roof barrier, and there’s going to be this combined, dense area where this bamboo will really take off.” I didn’t really know what I was doing, so I copied the beam that was meant to support a whole wall because I read somewhere that you need a three foot beam to contain this bamboo. I did it with my own labor, and my own concrete truck, and everything. I was like, “Oh, my gosh. This is so great that I’m just doing this thing.” It was ridiculously expensive. At the end of the day when I figured out, oh, you can’t have bamboo on a LEED rated project – it’s an invasive species, and that’s one of the criteria that you can’t have in your landscaping, you’ll get your points or whatever. So, here’s this giant, several thousand dollars, piece of concrete in the ground with LED lights that do not work. That I’ve actually having fixed right now.

Enoch: So what is it now? A koi pond? A swimming pool? A planter?

Hilary: No. No, it’s just a flowerbed. It has this great, old…I decided it was all white flowers. It’s never really been ever what’s it’s supposed to be.

Enoch: Wow. But, I bet your foundations are amazing. I mean, after getting that trial run, I bet your concrete work is top notch.

Hilary: That concrete, that roof barrier is there for whoever…

Enoch: For posterity.

Hilary: They’ll be there right after we’re gone.

Enoch: Nice. So, it sounds like you’re talking about the pull between the design and the budget. Obviously, as architects or as designers, we’re always a little separated. If we’re not paying the bills, there’s always a little bit of detachment of how much does this really cost. So, how do you find that developing your own projects has influenced that teeter-totter?

Hilary: Well, being in design-build is great to get a hand on what things cost because we have the relationships, we have the infrastructure to find out, send things out. I did things internally as I’m doing things, to figure out if we’re on target. I think that it takes some experience with whatever building system that you’re using to understand. We’ve explored SIPS, for example, and really haven’t been able to use it in a way that makes sense.

Enoch: Is it cost effective or is just because the price points higher?

Hilary: Yeah. We priced out SIPS compared to conventional framing with spray-in insulation. It was still significantly more expensive to do the SIPS. I think that in certain types of buildings or forms… I will be interested in using SIPS for example as a roof or something like that, because I think that in a situation like that, it would save steps, and that actually would be cost-effective. But doing it, as much as I really wanted to do it, they don’t seem to make sense for the project that we tried it with, I guess.

Enoch: Yeah. You mentioned before how in your particular company, it’s not just about developments, it’s not just about the money. I mean, you’re trying to make better communities, and you have a very heavy focus, an idealistic focus almost on being sustainable.

Hilary: Yes, definitely. That’s why I’m glad that I did such a sustainable project in Beiring when we were first learning that it should be almost part of our culture. We have worked with clients that are for example: “That’s really not one of my priorities for my house.” “I mean, it’s just not high on my list.” “I’m comfortable with my energy bills.” “I just don’t want to do it.” But, there are ways where there are “Why nots?” Why not stay here? Why not stay there? Why not be conservative, you know, in one way or another? We also do some product development and some projects internally where it’s been fun.. Like for example, this warehouse or office that we’re in, we reused materials that we demoed off the job, or instead of putting things in the dumpster, we save them, and we’ve reused them. It has created material that we made things out of, and it is to me, that resourcefulness. That thinking about building and about design in something that’s pragmatic, that’s taking advantage at what’s in front of you every day. I think good things can come out of that.

Enoch: Excellent. Going back to the Biering project: During the construction process, was there anything about working with subcontractors that you think people need to know about that was a big lesson for you that you learned in the building process? Was there any big, like, “Got you” moments there?

Hilary: Gosh. Yeah, I can think of some. I can think of one particular contractor who turned out to be somebody I had to let go and part ways with. He was handling a number of trades. It was the first time I’ve ever been confronted with somebody over not a long period of time that I was aware that… I had paid him, but he hadn’t paid his own laborer, his own staff. Ultimately, I just told this people, “I’m so sorry. Thank you for your time. You have to go.” I cleared the site out so that they wouldn’t waste any more of their time. I called him over and I told him that that just wasn’t right.

Enoch: Yeah. So, you’ve got to make sure your contractor is paying their guys, basically.

Hilary: Definitely. You don’t want to be in this situation that you’re paying for somebody else’s project and somebody else is paying for yours. That was what I was getting the sense that was going on. That lack of professionalism, especially when you’re working for a client, you can expose people to all kinds of problems. It’s just not okay.

Enoch: Yeah, definitely. So, now you have that project built. You financed it with a collateralized line of credit. Did you take out a loan?

Hilary: No.

Enoch: Okay. This loan that you got, I’m just trying to get an idea of what’s the financial strategy now. So, are your ventures paying back the loan?

Hilary: Yeah, they are paying back.

Enoch: Okay. Interesting. Then the interest works on everything, so it works out for you. I have never heard of anyone doing that before – using a fully collateralized loan. That’s an interesting strategy.

Hilary: Yeah. The interest rate is basically tagged on whatever the minimum…

Enoch: The 10-year treasury note?

Hilary: Yeah, whatever that term is for that number. It’s a reasonable interest rate to pay, and it gives you some flexibility. It protects your own assets because you can’t spend them, which is good sometimes. I wouldn’t say it’s the ideal thing, especially when you have a good idea and you want to expand faster a bit. I would say for me, at the age and at the experience level that I was at, it turned out to be the right thing. If I could go back in time, and could have acquired a loan, I don’t know that I would have necessarily taken conventional financing.

Enoch: Okay. Interesting. Okay, I got you. Let’s see if we can switch up because we’re almost up against your time line here. There are two more questions I want to ask you, Hilary, if that’s alright?

Hilary: Yeah.

Enoch: Okay. So the first one is: We talked a little bit before about the fact that design… This is a quote from you; I’m just going to read it off here. You say, “Concerning residential design – Design has been highly popularized.” Then you started talking about how a lot of the people you work with, they’re watching Home and Garden TV, they’re watching these remodel programs, and they’re on House.com. They’re seeing the top design, and they’re no longer the people that grew up in suburbia, but they’re actually seeing. How is that changing the practice of architecture and the kind of people you work with in an overall sense I guess? What’s your thought on that?

Hilary: Well, I think especially when it comes to residential work, there was a day when unless you went on the grand tour of Europe or whatever, and saw this amazing architecture, and came back and built your palace or whatever, you wouldn’t have considered yourself somebody who is savvy about architecture. Now, it’s like everywhere. Design and architecture, everywhere people identify themselves with look books on Pinterest, and whatever if it’s about their style and about their lifestyle. I’ve worked with a lot of great clients who are very clear, who has a very specific idea of how they want their project to feel. But they just don’t have the ability to carry it through, and I think I act as somebody who can. I like the challenge of sitting in the house around the client. I look at it sitting in around their vision, like a portrait of how they think they want to live, and what their taste and values are. It’s kind of a different way of thinking about it. I guess that wasn’t very articulate, honestly, looking at how I thought about it.

Enoch: No. I totally understood what you said. The comment you made on the phone was that you were talking a little bit also about being a service oriented firm versus kind of the star-architect model that we hear a lot about. I don’t know. At least coming from a school like I did and you did, at Cornell, it’s very, very theoretical. I mean you’re looking at Rem Koolhas, Corbusier. It’s not nuts and bolts.

Hilary: Yeah. I think that, yeah, the star-architects get such an overwhelming amount of attention. People go to them to get a product. I think it’s important to distinguish yourself by doing products, by showing what you’re capable of, but also think about where we are in this economy, and where our generation is. A lot of these firms are established and they’re going to go on, and on, and on long after their founders, the original architects, die. How do you, as one person working out of your apartment trying to get somewhere, go from there? I think one way is to not look at the big picture sometimes and just look at the people you’re working with, and give them what they’re asking for, and not overcomplicate it. I guess.

Enoch: So, was that a big deciding factor in your first project, the Biering Project? Was to create a product where you can differentiate yourself where you can say in your stamp, “This is what I’m capable of?”

Hilary: Yeah. I look at some projects I do on stuff like that a little bit as something to explore ideas that you’re interested in. I think that when I do a house for somebody, I try to listen and to understand what their idea is before I start imposing my design objective. It’s a different way of working. Yeah, it’s nice to be able to do both. I wish I could do both all the time and have more volume and capability. But, we’re working slowly, little by little.

Enoch: That works out for you well. You found a nice balance there between your design education and what the clients come in wanting.

Hilary: Yes. I admire the architectural academia. I wish I understood what they’re talking about more.

Enoch: Wait a second. I thought you always understood, Hilary. So, it wasn’t just me that was confused by all the archi-speak?

Hilary: Oh, yeah. I was pretty confused. I do follow now a lot of the writing about pragmatic architecture, which I do think a little bit about. What’s our generation really about? I think it’s a little bit different, and I think that, compared to architects in the past, those whose careers that have elapsed over periods of time where our, you know, our economy was booming for decades, and decades, and decades… I see our generation not looking at that future. I think it’s going to be a different and unique path.

Enoch: And how do we deal with that? I mean, what is it for us?

Hilary: I think part of that is you have to also see it as a business person. I don’t know why exactly architectural education isn’t necessarily student to business education. But, it’s not. It’s a little bit more, but it’s less direct, it’s more of a process, you have to think about things two different ways. My experience, my strategy is very much on pleasing people and doing what people are asking for, not over thinking it, and being nice, and making people happy. I didn’t learn that at Cornell.

Enoch: Not New York City?

Hilary: No, I learned a little bit of that New York City.

Enoch: Nice. There is something, Hilary, just to close up here, there’s something you mentioned before. This is very interesting. You actually have an accountability coach.

Hilary: I do. Yeah.

Enoch: That is very fascinating.

Hilary: Two.

Enoch: You have two. You said that was a big part of your success. So, tell other architects, tell other designers out there about that and why we should do that.

Hilary: Yeah. Specifically, I’m working with Geoff Sheerar from Sheerar Studios who also did Southtown Greenbound. So, if you’re looking for someone specific he does counseling over the phone. He’s great.

Enoch: He’s taking more clients? He’s open to new relationships?

Hilary: Yeah.

Enoch: Okay. You guys heard that. Tell us what Geoff does for you so other architects who are maybe considering it can give him a call.

Hilary: Well, Geoff talks to me on a weekly basis. We keep track of my goals for the long term and short term, break goals up by a quarter, talk about the weekly, and map out strategies to get there. Those include my financial goals, my goals for bringing in new jobs, my goals for marketing, and for my website, and for my in-house projects like my development projects that tend to take the back seat sometimes to stuff that’s for private clients. It’s helpful because having that weekly routine helps me not lose the big picture, which is so easy to do in the hustle and bustle, everyday craziness. So, I highly recommend it. He has a great outsider’s perspective. He is a very creative person, but he is not from architecture. I think that can be helpful too, to have somebody who’s looking at what you’re doing just as a business just like any other.

Enoch: Okay. So, I’ll put that in the show notes and link to his website and who he is. Tell us how one of those phone calls would go. Like say for instance, you’re Geoff and we’re talking about how you’re going to bring in more clients. Is he, sort of, mapping out goals: Okay, you need to talk to fifty people this week. How does that sound? What’s that conversation like?

Hilary: Yeah, we’re keeping logs. We’re making sure that people who refer us, I say thank you to, and make sure I appreciate it. We’re keeping track of which referrals we’re getting, and we’re not getting. We’ve got financial projections that we try to break down by numbers of jobs that we need to go after, we need to bring in within such and such a time period. Something like that.

Enoch: Okay, cool.

Hilary: So, it really is helpful, and he’s very nice person.

Enoch: Is he a videographer?

Hilary: He is a videographer as well.

Enoch: Okay. What prompted you to do that amazing documentary for the Biering Project? How has that helped you?

Hilary: It’s been great. I ran in to him at a destination wedding. His wife, Alice, is a good friend of mine. We started talking. We just talked about how he loves to work with small businesses, he loves to work with creative professionals, and he was talking about his videography sources. I already had in mind a similar idea. I’ve always been interested in video, and of course I’m super low tech, so I have no actual skills to do it. So we worked out this concept of what to do. I guess we talked about it for a while before, I guess about four or five months went by, before he actually came to San Antonio to do it. It was great. He was a great collaborator. I did write a lot of the questions for the interviews that we were doing. But, I was so pleased with how he constructed the shots, and he had a method and had a great eye for moments where people’s personalities came out. It was really a marketing video, but it’s also a kind of little something that’s educational, something that you can watch that’s interesting and stuff. He has a view of marketing as something that’s more sharing and more learning. That, to me, is a little more appealing, and a little more interesting than magnets and business cards.

Enoch: Absolutely. Interesting. Great. I think so, Hilary. You’re doing a good example of showing how it’s done. So, I encourage everyone to check that out. Where do people go to see what you’re doing? Let’s just give them those websites again really quick.

Hilary: Yeah. Check out my website after Geoff gets done with it.

Enoch: Ooh. Ooh-la-la.

Hilary: My business website is operativeventures.com. That’s all lower case and only one word. And southtowngreenbound.com

Enoch: Alright.So, we’re going to go check that out. Hilary, it’s been an awesome conversation. Thank you for sharing your personal journey.

Hilary: Aww, thank you. Thank you so much, Enoch. Thank you for what you’re doing and for setting up this forum for people to learn. I’m going to keep following your videos as well. It’s an honor to participate.

Enoch: Alright. Thanks, Hilary. Talk to you later.

Hilary: Bye.

Enoch: Thanks. Bye-bye.

Voiceover: That’s a wrap for another podcast about the Business of Architecture. If you enjoyed this please rate us on iTunes, like us on Facebook, and most importantly, get exclusive access to our members-only, insider’s list for free at businessofarchitecture.com.

Enoch Sears
I am a licensed California architect who loves researching and sharing about running a great architecture business. I founded Business of Architecture to help solo architects and small firms run a better business so they can have the peace of mind to focus on creating great architecture.
Enoch Sears

@businessofarch

Solo architect? Get the work you want. Marketing and business info for architects. Author of 'Social Media for Architects, FREE download: http://t.co/tQnt6ENDxv
Pritzker Prize Laureate Shigeru Ban on Sustainability and What Makes a Building Truly Permanent via @inhabitat http://t.co/t0nvEIWY4D - 43 mins ago

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