Design firm rebuilds East bloc

Abstract

On a plane to Teheran 18 years ago, architect Theodore Liebman overheard a conversation that changed his notion of foreign trade. Two passengers struck a deal to exchange cement for beans, peas and chickens. So when his Manhattan-based firm, Liebman Melting Partnership, was approached this year by a trader proposing to finance the construction of a new community in Russia by selling scrap metal from the country's Baltic Fleet, Mr. Liebman was hardly surprised. "The line between trade, development and professional services is much more muddied in the rest of the world than it is here," he says. (excerpt)

On a plane to Teheran 18 years ago, architect Theodore Liebman overheard a conversation that changed his notion of foreign trade. Two passengers struck a deal to exchange cement for beans, peas and chickens.

So when his Manhattan-based firm, Liebman Melting Partnership, was approached this year by a trader proposing to finance the construction of a new community in Russia by selling scrap metal from the country's Baltic Fleet, Mr. Liebman was hardly surprised. "The line between trade, development and professional services is much more muddied in the rest of the world than it is here," he says.

In the 3-1/2 years that Liebman Melting Partnership has been working in former Soviet bloc countries that lesson has struck home again and again. Its design and planning projects range from enlarging an agricultural village outside Berlin to redeveloping and restoring 13th century buildings in Prague.

MUST CONTROL PROPERTY

"Two things we've found are critical," says TLMP partner R. an Melting. "You have to know that the person you're working with really has control of the property, because lots of properties are being peddled by several people at once. And you have to understand that the approval process can take years, the way it does in New York."

The eight-year-old firm, which specializes in community planning and affordable housing, has undergone its own transformation. With 11 architects on its 15-person staff, TLMP brings in close to $2 million in annual fees. But in 1989, before the recession, the firm was twice its current size.

TLMP's adventure in Eastern Europe began with a phone call from a German businessman seeking the firm's expertise in prefabricated and modular building to expand a town 30 minutes from Berlin. The result is a new German company called New Village, in which TLMP has a small equity stake.

"As soon as we saw the integrity of the villages in the region we realized that they're clearly going to be lost soon and we wanted to preserve their character," Mr. Liebman says. Rather than turn such towns into suburbs of the unified and reviving Berlin, the plan includes commercial and light industrial development to create jobs.

TLMP is also a partner in and the exclusive German distributor for a Hungarian company that makes a panelized building system, fabricating walls and floors in a factory to assemble on site. In the past six to nine months it has sold about 50 homes through that venture.

FORMING MANY PARTNERSHIPS

Projects in the Czech Republic and Russia require similar partnerships. TLMP always collaborates with local architects and increasingly with New York builders and developers, such as Zeckendorf Realty.

So far, TLMP's Russian projects are all offices, many of which are rented to Western companies whose executives have been working from hotel rooms. But many observers see a huge need for housing throughout the former East Bloc and expect the United States to pitch in.

The biggest problem, though, is financing. Zeckendorf Vice President David Sigman says that his finn has lost out on some deals to European developers backed by government funds. Although there's some U.S. government funding available for housing decommissioned military families, the subsidies offered so far are too low.

Messrs. Liebman and Melting attribute their firm's success overseas to its home address and its cultural sensitivity. "New Yorkers can do this better than anyone else," says Mr. Melting, "because we're used to dealing with many different cultures within our own city and with the approval process downtown."