Wednesday, May 24, 2006

A Position on the Phenomenon of Off-shoring and Outsourcing of Architectural Services in regards to International Policy Entities


The Asian and Pacific Economic Cooperation is quite aware of the reality of off-shoring and outsourcing as it exists now in an international perspective and it’s transformational trending. We define these business arrangements as those in which architectural firms in developed nations contract with architectural firms in lower-wage nations to prepare their construction drawings, for projects that will be built in the developed nation. This trend has been duly noted. 22% of the gross fees of Australian architects are earned offshore[1]. I will briefly review our understanding of the causes of this business practice, its effects on developing and developed countries and our recommendations for international practice in light of this phenomenon.
We are in the midst of a transformation, both in terms of the ideology of capitalism in a shrinking, integrated world as well as actual business systems pinned to the need for economic viability. In developed countries, ‘symbolic analysts[2] “as architects have been described, are faced with a competition for architectural projects that require, during the bidding process, ensuring quality at a competitive cost (which can be realized through lower wages or expedited work from underdeveloped nations). Furthermore, the near future may present an educated client that requires off-shoring to leverage desired amenities with architectural fees.
The architecture firm in the developed country may use this business process as a way to stabilize their personnel numbers and raise the level of firm professionalism. For many years architects have contracted work locally, but always the wage margins were based on prevailing local conditions. Usually, only the desire to build facilities overseas necessitated collaboration with a foreign architect. Practitioners of architectural services in less developed countries may look upon this work as lucrative income, higher social status, valuable practical experience and possibly an opportunity to build a standard database. Regardless, the social and economic impact can be enormous.
In developed countries within APEC, it can act as a stabilizing medium for the design firm. The average turnover among architecture firms in the last 15 years has been “between 15% and 20%”[3] Savvy partners in the firm can use currency fluctuations as a way to increase the profit ratio. This may even serve to extend the mission of a firm that strives to de-centralize the design process, especially if they have an emphasis on providing value and they set to differentiate themselves in the market for promoting that quality. Off-shoring can also provide an opportunity for firms in the developed countries to set ethically social parameters through discussions with personnel , guidelines to protect the privacy of their documents for the client and structures to ensure copyright protection.
Off-shoring likely to affect architectural practice in the developing nations within APEC in a multitude of ways. Personally, it can be a lucrative source of income in depressed economies. Farsighted managers can use peripheral work, project teaming and other balancing mechanisms to stabilize the workflow. Moreover, the self-esteem attained by providing an essential product cannot be undervalued. Socially, off-shoring provides an opportunity for local leaders (within the framework of their environment) to set cultural and legal standards for the wage and working conditions for these workers. This might be an avenue to redress eras of discrimination or lack of access. Nationally, an underdeveloped country, with an able administration, can explore what the ‘value’ is that their participation in the design process adds. They might initially set out to differentiate themselves in the marketplace of underdeveloped countries as the one knowledgeable and able to add an unique ability in either time or expense and they might use this foundation to raise their expertise to improve the countries overall quality of professionalism. Further, on the national level, they could regulate the ‘professional wealth’ in the country by providing incentives for quality architects to remain. Educational training, apprenticeship and registration are important in this process of ‘raising the bar’.
Therefore, I offer the following recommendations to ensure that off-shoring does not threaten the public health, safety and welfare. Firstly, as a position of APEC, I would strongly endorse the UAI standards [4] and extend our position from their foundation. Within the Principles of Professionalism, we further recommend that the architect “thoroughly consider the social and impact of their professional activities in relationship to basic human rights.” This is true of the architect in the developed country as well as any registered architect that is involved in the procurement of architectural services in the developing country. Secondly, while we acknowledge that developing countries may contain a less adequate mechanisms for training, providing experience and testing of new architects, and the incentive may be there to emphasize architecture as a trade, rather than a profession, we strongly support the UIA Accord in principle, acknowledging the sovereignty of each nation to set priorities within a plan for excellence that gives the full range of knowledge and ability as stated in the Educational policies of the UAI. Thirdly, we look to all nations to develop the proper social structures to allow humane working environments, locally acceptable work hours, benefits, redress, and verify the eligibility of individual to perform the work. Fourthly, we look to the business collaboration to set the privacy requirements for each project and each member country to ensure that international copyright and trademark rights are followed and violations are vigorously litigated. Finally, the position of APEC is that off-shoring and outsourcing provides a great opportunity to both the developed and underdeveloped countries. Use of this business process in a way that ensures public health, safety and the welfare of people are both expected and required. --Mikael Powell


[1] Royal Australian Institute of Architects, (1999) submission to the Productivity Commission Inquiry, Review of Legislation regulating the Architectural Profession, Melbourne, December.

[2] Robert Reich (1991),the Work of Nations, “The Three Jobs of the Future”, Alfred A. Knopf, New York.
[3] Dalal,P. (2000a) “ Staff turnover eases slightly in 1999”, AIA Architect, April.

[4] Union Internationale des Architectes , UIA Accord on Recommended International Standards of Professionalism in Architectural Practice, Adopted by the XXI UIA Assembly in Beijing, China, June 28, 1999.

Saturday, May 20, 2006

Xintiandi- Adaptive Mixed Reuse Success?


Xintiandi: An Adaptive Mixed Reuse Retail Development: Shanghai, China
Phase 1 -North and South Block
by Jack Nyman & Mikael Powell

Our case study is Xintiandi, a 230,000 sf adaptive mixed reuse retail and entertainment project in the heart of Shanghai’s Luwan district in mainland China (See Fig. 1). The development of the 1st phase was completed in 2002 and it consists of two complete historic city blocks.
Client
The Client was Shui On Properties from Hong Kong, but the local government was a key player in this project. In post reform decentralized China, the local government became the main catalyst in the formation of pro growth coalitions between themselved and developers such as the Shui On Group. At the epicenter of Xintiandi’s first phase is a national historic shrine, the former school building where a young Mao held the first Congress of the Chinese Communist party. City planning required Shui On to preserve the buildings around the school and limit the height of new construction near it, so this set important zoning parameters from the start. Despite the role of the private sector as a capital provider and implementer of vision, the government controlled the direction and pace of urban redevelopment through policy intervention, financial advantages and governance of land leasing. Shui On Properties was granted rights to the site and began planning the project in 1997.
Program
‘Xintiandi’, which literally means “new earth and sky”, is an adaptive mixed reuse retail, residential, hotel, and entertainment development. Its first phase, constructed from 1997 to 2002 (3.6 acres) is identified as the North Block and the South Block. This $58 million US project represents the first stage of a 72 ac. mixed–use community called Taipingqiao (pronounced tai-ping-chow) that, when fully completed, will include two five star luxury hotels, a 68 –storey office tower (Corporate Avenue international business district), 6,000 apartments nestled around a man-made lake, a refurbished antique street, two museums and five live theaters( See Fig. 8). The original program was a collaboration between its American architect, Benjamin Wood and the Hong Kong based developer, Vincent Hong Sui Lo, chair of the Shui On Group. The program was based on Ben’s experience working with Benjamin Thompson, creator of the Rouse Company’s Festival Marketplace concept (See Fig. 18) and Lo’s vision of a cultural entertainment district derived from his travels to such places as Sienna, Santa Barbara and Miami. The North Block (1999-2001) consists of adaptively reused stone-gated facades of original homes of the site. This section is retail, office, bars and restaurants specializing in multi national cuisine. The South Block (2000-2002) is more contemporary in its design. In mid 2002 the South Block officially opened with its shopping, entertainment and leisure/lifestyle tenants. Their combined gross floor area is 229,755 square feet. The contemporary architecture of the South Block houses boutiques and accessory shops, a food court, movie cinema, fitness center and 88 Xintiandi executive residences which offer luxurious serviced apartments for business travelers, tourists and expatriates. There is also an underground compound with 220 parking spaces (See Fig. 9).
Selection Process
The site was offered to the developer, Shui On Group, by the local government. Mr. Lo had, through his extensive world travels, made several visits to the United States. In one trip to Miami he experienced the Lincoln Mall development designed by Boston based architect, Benjamin Wood. Mr. Lo was convinced that a similar pedestrian oriented retail, entertainment theme would work in Shanghai. He became committed to this idea and wanted an architect whose work he had seen and who he could trust. Initially Nikken Sekkei International out of Singapore was hired as the architects but that changed early in the project.
Ben Wood was invited by Vincent Lo to Hong Kong and Shanghai along with four other architects for interviews. The other firms included SOM San Francisco, the old Ben Thompson firm in Cambridge, Massachusetts and two other international firms. Wood was the only architect interviewed who championed the idea of saving most of the old buildings. Lo was sympathetic and this idea fit into his own vision as well as the leanings of local government. Lo made the decision the same day he met Wood (which was the first time they had met).
Vincent Hong Sui Lo wanted to incorporate a sense of the romance into the project. This coupled with a striving for perfection, guided him throughout the project development. The idea from the beginning was not to do a traditional residential or commercial development as there was an oversupply of those asset types at that time (See Figures 13, 14).
Economic and political conditions
Shanghai achieved new prominence in the 1990s as economic reforms and new national leadership (headed by Jiang Zemin and Zhu Rongji, both former mayors of Shanghai) gave it freer rein and more autonomy, unleashing the entrepreneurial spirit that Shanghai had so cultivated during the colonial years. In the early 1990s, the newly rising Chinese urbanites began craving a new lifestyle for their leisure time - the pursuit of a certain type of lifestyle through shopping and entertainment emerged.
Contractual relationships
The designer, Ben Wood, was originally associated with Wood + Zapata in Boston, Massachusetts, USA. On this project he was responsible for the design of all exterior public spaces, renovation plans for all existing buildings (See Figures 16, 17), all new structures, lighting, most of the landscaping, signage special feature design ( including entry fountain) conceptual plans for different uses/types of tenant, and development of tenant design criteria for all interior spaces. He was under contract to the executive architect at the beginning, then directly to Shui On Properties after a design compromise on an earlier design.
The Executive Architect was Nikken Seikkei International, Singapore. This practice was founded in 1900, and is Japan's largest independent planning/architectural/engineering consulting firm. The developer was Shui On Land, led by Vincent Lo, with Henry Cheung and Albert Chan. These were the very early days of Shui On as a property development company. Their core business at the time was construction and building material in Hong Kong- not China. Mr. Lo and his small team were the entirety of his office. There was no big bureaucracy (It is very different today). The client was Shui On Properties from Hong Kong and the construction supervision was also carried out by their office. Various local Shanghai companies served as contractors. The San Francisco office of SOM- USA established the original entitlement for gross floor area, building heights, and setbacks in an overall Master Plan for the entire area (which included Xintiandi). Other consultants included Maunsell Engineering and Meinhardt Company for structural work. The local design group, Tongji Institute provided the construction documentation.
Luwan, one of the busiest and oldest inner city districts in Shanghai, signed a cooperative agreement with Shui On Group on the Taipingqiao area of which Xintiandi is included.
Construction Process
Chain of communication was informal, but ultimately all decisions, big and small were made by Vincent Lo after consultation with the players involved. Ben Wood relocated to Shanghai during the final design and construction phase and founded Ben Wood StudioShanghai. He worked very closely with the Executive architect and the local design Institute in a “joint venture” type relationship- even sharing the same physical workspace oftentimes. I could not discern from our correspondence, the degree to which Ben’s interpretation of the importance of local history or culture affected decisions in the project. It is notable than all final decisions were by Mr. Lo of Hong Kong. Approvals were the responsibility of the Client and the Tongji Institute. All meetings of this nature were conducted in Mandarin. Over 40 individual building permits were obtained each requiring approval from over a dozen government departments.
Environment and Technology
Because Xintiandi has a variety of entertainment options, Shui On installed special sound insulation to control the noise level from each outlet to 55 decibels or below. To control air quality, ventilators are located on the roof as stipulated by the government. In addition, air filtration devices are installed in ventilators that release air with strong smell. Shui On further describes the environmental considerations on the project as follows [1]” to control the quality of wastewater to meet government requirements, wastewater goes through the Class II sewage treatment chamber located at the basement of each building before being discharged to the City Council Sewage System. Oily wastewater from restaurants first goes through a grease intercept chamber before being treated by this system”.
Cultural Influences
Rather than demolish all the original declining neighborhood’s houses and replace them with modern structures as was typical of new developments within the city, the architect suggested to the developer to preserve and restore the ornamental façades of the structures. The developers painstakingly salvaged the area’s Shikumen lane houses, including their outer walls, lintels, eaves and wooden windows and adaptively fitted them into modern structures and fittings (See Fig. 7).
Preserving everything was not financially and structurally feasible. Most of the buildings were in poor shape after their 80 year life. Where there was severe deterioration, the developer and architect opted to retain only those architectural features (the stone gates and the alley exterior walls) that give the area its unique character, while rebuilding the rest of the structure (See Fig. 10).
Approximately half of the preserved Shikumen houses (See Figures 4, 5, 6.) were taken down and put back together brick by brick, an approach that is only financially possible in China because of the very low cost of labor. While the exteriors are now authentic period restorations, there are new structural frameworks within them. The buildings are fully equipped with state-of-the-art conveniences and mechanical services such as air-conditioning and fiber-optic systems. The choice of interior refurbishment and design was left to the individual tenant. Some buildings were demolished to make piazzas and passageways; the open, pedestrian-friendly space is a distinctive feature of Xintiandi’s urban design.
Affects of the Project
The Urban Planning Design and Research Institute of Shanghai Tongji University was in it’s infancy at the start of the project. Now, through the success of this project and other initiatives, it has grown to contain 4 departments with 5 undergraduate programs, 6 master degree programs, 4 doctoral programs and 1 post-doctoral mobile research station in Architecture and Urban Planning. On a national level, many replicas of this project have sprung up; the Xihutiandi project in Hangzhou (also developed by Shui on Properties), SOHO commercial street( called Beijing Xintiandi) and Jianguomen (an ancient city gate of Beijing) as part of Beijing CBD. Ben Wood is currently doing major mixed-use complexes in Chongqing, Wuhan, Hangzhou from his Shanghai office. Many of these projects have included some level of historic reuse.
In regards to international practice requirements, pursuant to the directives and regional requirements, Shui On Properties (In 1996) hired a local subordinate real estate company in the Luwan district, which became a partner of Shui On (nominally at 2 – 5%). This satisfied a policy requiring local participation. Moreover, almost the entirety of the project (99%) was constructed by local trades with local materials. Only a few operable skylights and small hydraulic elevators were imported.
Evaluation of Success
Xintiandi garnered much recognition, such as the ULI Awards, and the development was financial profitable (See Fig. 17). The completed master plan includes a lake, extensive sitework and upscale housing (See Fig. 3.) President Jiang Zemin visited the project after completion and complemented the developer on the quality of the experience.
In regards to historic and cultural responsiveness, it is important to note the era of evaluation. In the mid-1970s, Chinese leader Deng Xiaoping “unleashed his country's entrepreneurial energy by exhorting, "To get rich is glorious!" [2] to which this project may be seen as the fruition. But this development, which contains communist-era tchotchkes, markets filled with crafty knockoffs and the highest of high-end stores[3] encompasses the meeting place of the First National Congress of the Communist Party of China. It would be safe to say that Chairman Mao would not approve. Originally the urban redevelopment in Shanghai was to improve the living conditions of residents in the shanties and dilapidated areas. After market oriented economic reform, promoting economic growth and image-changing became important goals of redevelopment. The old lilong style neighborhoods comprising thousands of households were evacuated to make room for the property redevelopment (see Figures 11, 12). If added with the relocation of the Taipingqiao project, more than 3,800 households and 156 work units were relocated in 43 days- creating the fasted record of relocation in the history of Shanghai. According to interviews, some people even had to quit their jobs later because of expensive commuting charges.
Kenneth Frampton might scoff at the “simple-minded attempts to revive the …forms of a lost vernacular” [4] when done so without regard of the context of the original form. While some example of restoring the original spatial emotion exists in the narrow passageways of existing stones, much more is reconstructed as nostalgic ornamentation. Even Delphine Yip, an architect with Wood + Zapata and a Harvard graduate, acknowledged in an interview for Travel and Leisure Magazine “Everyone said “who would want to eat in a dirty peasant house?” This leaves one to ponder the purpose of historic preservation in light of eviction, control of property appearance and integrity of adaptive reuse. Despite those concerns, arguably the project seems in compliance with UIA standard 2.1. As preservation standards vary from neighborhoods to municipalities, this level of demolition/restoration would probably find favor in severval locales.
Moreover, this project seems to largely mimic Quincy Marketplace in Boston Massachusetts (See Fig. 18) and other Western developments. Although Xintiandi has incorporated indigenous concepts of space, and scale one would hope that they don’t duplicate the local/ national merchant ratio of the predecessor. At it’s inception in 1976, architect Rouse predicted ''a new kind of retailing with small merchants and small shops selling food and other items”[5]. The inclusion of national chains has adversely affected the market.
So, is this historic adaptive re-use project successful? Perhaps history is the best judge.

Bibliography

Greg Yager and Scott Kilbourn, “Lessons from Shangahi Xintiandi: China’s Retail Success Story,” Urban Land Asia, December 2004

Shenjing He,” Property-led Redevelopment in Post-Reform China: A Case study of Xintiandi Redevelopment Project in Shanghai.

Photographic Figures available upon request.

[1] http://www.shuion.com/eng/Group/CorpCitiz/ep-iem.asp
[2] “Notes from the desk” by Linda Tischler. FastCompany magazine, Issue 102, January 2006, page 18
[3] http://www.travelandleisure.com/articles/shanghai-surprises
[4] “Towards a Critical Regionalism” Kenneth Frampton, From Anti-Aesthetic, Hal Foster, ed.
[5] “Faneuil Hall revisited 30 years later, it is still an inspired urban space”
By Sam Allis, Boston Globe, April 16, 2006.
(COPYRIGHT © 2006 NYMAN/POWELL. All Rights Reserved)