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Experts: 'change needed for survival.' (members of design, construction and real estate industries)

Experts: |Change needed for survival'

Adaptation and change were the themes of a recent breakfast meeting aimed at giving members of the design, construction and real estate industries some advice on surviving the recession.

Sponsored by LePatner, Block, Pawa & Rivelis and the LePatner Management Group, Inc., the gathering at the Waldorf Astoria drew more than 250 professionals and featured panelists from both the public and private sectors.

While in the spring, the federal government said the recession was ending, said host and moderator Barry LePatner, it seems today that our economy's problems are "deeper, longer and far more serious than anyone anticipated."

Break with Tradition

Lieutenant Governor of New York Stan Lundine called for reforming governmental structures and suggested that the real estate and related industries consider changing some of their practices. "Not all traditions are worthy of unbroken preservation," he said. "Those that hang on to old traditions too long are not only out of date - they're out of luck."

According to Lundine, construction contracts are down 15 percent, residential building is down 30 percent and construction jobs are down by 23,000. But, Lundine said, New York is not the only state that has veered off. There is crisis, he said, form "Maine to Malibu." the country, he said, needs to put partisan differences aside.

"Let's work together to put America back to work," he said. "...New York needs to have in place a strategy so when the nation comes out New York will be strong."

How New York City survives this difficult time, Lundine said, is particularly important to the state. "When New York City suffers Albany feels the pain, he said.

"I think this city is more dynamic than any place in the whole world," he said. "If you want change, New York is the place to be."

The city and the state, he said, must reduce the cost of government. He reiterated the state's commitment to take over Medicaid costs over a period of time. They will assume, he said $345 million this year and $1 billion by the end of the century. They are working to repeal the Wicks law, requiring multiple contractors for any city project over $50,000, which, he said, is the reason for many time and cost over-runs. They are also introducing wrap up insurance for contractors.

Eventually, he said, the city will have to reduce jobs. One year ago, he said, the state pledged they would reduce 18,000 state positions and they have no far eliminated 15,000.

"The city cannot reduce the cost of providing services unless they reduce the size of its overall workforce," he said.

Major New York corporations have been helping the sate achieve quality through reduction. Corning, Kodak, IBM and MetLife are participating in "executive on loan" program where the major corporations lend quality employees to five designated state agencies.

Investing in the Future

Lundine said we need to invest in the state's survival and growth. Comptroller Ned Regan did so, he said. When the city's bonds were of some question he bought the bonds for the state pension fund.

The lieutenant governor also noted the capital the state is devoting to development and strengthening infrastructure, such as Kennedy International Airport, Queens West, Riverside South and the Science Industry and Business Library (SIBL) in the former B'Altman's building.

"New York has to follow some tradition and invest at a time we need rebuilding," said Lundine.

This crisis, he said, presents "unparralled possibilities."

"We will work very hard at the state level to rebuild not only this industry but all industries," he said.

City as Bridge

This is an important time that needs creativity and resourcefulness, "the spark that has make New York City the greatest city in the world," said Wallace L. Ford II, commissioner of the New York City Department of Business Service.

"The greatness of New York is not the great buildings, the great edifices not the land, it's the people, it's you," he said. "The ultimate aspect of success of failure of the business community is confidence."

Wallace was appointed commissioner of the New York City Department of Business Services in July 1991 by Mayor Dinkins. The department is responsible for all business and industry assistance services that New York City provides. It is supposed to be, he said, a "well traveled bridge" between the business community and the government. Among the agencies tasks is overseeing the 18 Business Improvement Districts in the city. For said 10 more are expected in the next calendar year.

Ninety-eight percent of the 200,000 businesses in the city, Ford said, are small - less than 500 employees. Eighty percent in the private sector employ 15 or less.

Four weeks, ago, he said, the mayor signed an executive order to create the Inter-Agency Task Force on Business in New York. Ford will head this entity, comprised of the 16 agencies that deal directly with business services such as the Department of Buildings, the NYPD, the EPA, the FDNY - "Those that truly make a difference in how you make a living," Ford said.

The efforts will include carrying out the city charter that mandates full and equitable participation of women and minorities, in business. Today 57 percent of the population of New York City is Afro American, Asian or Latino, Ford said. "This is not an Afro American, Latino, Asian or female agenda, "he said. "It's a New York City agenda. It's and American agenda."

Fragile Environment

Susan Maxman, FAIA, vice=president/president-elect, American Institute of Architects, principal, Susan Maxman Architects, said the 90's are a time for making adjustments.

"We must be given to change the very attitudes our clients and our selves," she said.

Today, Maxman said, we face a cash-strapped public sector and a glut of office buildings. The innate optimism and the problem solving abilities of the architect will be called on to design in the most efficient and resourceful way possible and to reduce the proliferation of new building. The key goals of future design will be, she said, "reduce, re-use and recycle.

In the coming decade, she said, architects will also have to closely evaluate the impact of all projects for their impact on the user and the surroundings.

"The 90's will be the decade we finally realize how fragile our environment is," she said.

Barry LePatner spoke of the Catch-22 principals of companies face today. Companies that have cut cost and overhead, he said, may find themselves unable to take on new business when the opportunity presents itself. "A business that downsized to survive may now be too small to attract new business at home or abroad," said LePatner.

Nevertheless, LePatner said, firms that maintain the status quo are destined to be dinosaurs. "Change is the common denominator," said LePatner. "The key to success will be your ability to change with the times and a changing marketplace."

LePatner offered a list of recommendations: * Avoid taking bad business on the assumption that bad business is better than none * Staying in business is more important than size - "lean and mean" * Aggressively pursue monies owed you - "Nice organizations really do finish last," he said. * The best talent is out on the street looking for a new home * Marketing is everything - "Marketing in bad times paves the way..." * Consider mergers or acquisitions so that you may position your firm for post-recession recovery. Joining forces with other firms, LePatner said, will allow you to change and adapt, expand your client base, and strengthen the leadership of your firm - one plus one can equal three, he said.
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Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Author:Fitzgerald, Therese
Publication:Real Estate Weekly
Date:Nov 20, 1991
Previous Article:Incentives to end: then what?
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