This past summer, the Urban Land Institute (ULI) sponsored a Developing Green conference aimed at exploring the latest trends in green buildings. Reduced energy costs were among the many benefits of environmentally conscious development discussed.
Gregory Kats, principal of Capital E, Washington, pointed out that while green building features can add $3 to $4/sq ft (approximately 2 percent above normal construction costs), energy costs are cut by one-third.
Some cities, including New York, Chicago, Houston, and Los Angeles, now require green buildings, he added. Green construction elements include water and energy efficiency; healthy paints and glues; all-natural, undyed carpet; and recycled wood and other building products. The greatest cost savings, however, are gained with energy efficiency.
In addition to the financial benefits of green building, Kats cited a study by the Natural Resources Defense Council that evaluated productivity and health benefits of green buildings. The study found a 7 percent increase in productivity of workers in green buildings.
"The most important aspect of green building is caring about our employees," he said.
Other BenefitsMichael Pawlukiewicz, director, environmental and policy education for ULI, highlighted the benefits of green building. He referred to a study by the Real Estate Round Table that showed a number of major corps., such as J.C. Penney, which saved $30 million a year on energy costs, and PNC Bank in Pittsburgh, which realized a 15 percent increase in productivity in its green buildings.
Dan Winters, principal of Evolution Partners in Washington, said while there are no direct benefits provided by capital markets for green projects, there are hidden benefits in that the market translates green construction features into economic benefits. He said there is an initiative underway by a consortium of financial firms to translate green into an underwriting bonus by modifying the underwriting standards and providing a credit for green construction. "This is the tipping point," said Winters.
Speakers at the conference all stressed the importance of an integrated approach from the start of a project, making it clear that there is monetary value in building green, and that the additional cost (about 2 percent) would be recovered in operating savings within five years. Several best practices for building green were cited, including:
"The number one lesson to take away is that you need high density where infrastructure exists," said Jonathan Rose, president of Jonathan Rose Co. LLC, in Katonah, N.Y. "If we are going to get people to live in dense communities, we have to make them really great places."
Rose's company is working on more than $1 billion of green development throughout the nation. He stressed the importance of integrated design. "When you integrate architectural, mechanical, and structural function as one, that is how you get green buildings that are cheaper," he said.
According to Rose, green building, particularly on brownfield and other infill sites, is critical to help save the country's declining ecosystem.
"We are in the midst of dramatic climate change which affects us in many ways," said Rose. "The entire ecosystem is being threatened and this is a human-created problem."
Rose said in addition to being environmentally responsible, successful green construction projects mix uses, incomes, and housing types; and they pay attention to the quality of the life and work they provide.
Developers, he said, must keep in mind that their projects depend on their relations with their surroundings and will need to change over time. Rose described a green community initiative by the Enterprise Foundation, which involves a $550 million loan fund for buying inner-city land to build affordable housing and make it green. Such tools are arriving just in time because the demand for green construction is growing. He said 17 states are imposing green requirements for affordable housing.
Proof Is In ProjectMeanwhile, the U.S. Environmental Protection Agency (EPA) is doing its part to dispel the belief that green is costly. The agency's National Computer Center, Research Triangle Park, N.C., recently won a LEED silver certificate from the U.S. Green Building Council. It was built for about the same cost as a traditional structure.
The 100,000-sq ft building was completed in 2001 for roughly $18 million. Minus site work and utility infrastructure costs, that comes to about $150/sq ft.
"We had a standard building budget. No extra money was put in to make it green," Chris Long, director of sustainable development for the EPA in Research Triangle Park, told The Charlotte Business Journal.
To determine the rating, the U.S. Green Building Council evaluates buildings based on specific requirements. Points are given for each sustainable feature, with the total determining the rating. The highest rating, platinum, requires at least 52 of 57 points. The rating typically increases costs.
According to Kevin Montgomery, project manager for O'Brien/Atkins, the Durham, N.C.-based architectural firm that designed the building, if you want a LEED rating, there are additional design fees. However, there are benefits. He said the EPA building was designed to use 40 percent less energy than a typical computing/office facility.
Additional costs can stem from using more windows for natural lighting. Glazing, Montgomery noted, costs more than brick. Recycling construction waste to satisfy a LEED requirement also increases costs, he said.
But Montgomery said there are paybacks for the extra expense. "It's a question of short-term costs over long-term costs. Some materials and equipment last longer," he told The Charlotte Business Journal.
Pete Schubert, the EPA's project engineer, agreed. "Most builders look at a three- to five-year return on their investment," he told the publication. "Green buildings offer higher performance and more benefits for the owner."
EPA started with a single-source, design/build strategy, which ensured all team members were dedicated to using green solutions, materials, and systems. Skanska USA in Durham won the bid as general contractor largely because of previous green building experience. Because today's supercomputers take up less space, only 25,000 sq ft of raised floor was necessary. The designers were able to reduce the building's size by 20 percent, allowing a due south orientation of the building and the use of natural lighting. Windows on the southern side are lined with shades to reduce heat and glare during the summer and permit maximum sunlight in winter.
A 100-kW solar unit covers more than 15,000 sq ft of the roof. It produces 5 percent of the electricity needed to run the building. Although the photovoltaic system cost $800,000, the EPA received $500,000 in grants to offset the expense.
Long said every attempt was made to save energy and money. Carbon dioxide is monitored, and if a room is determined to be vacant, the ventilation system slows. Motion detectors can shut off office lighting. While Long said this system was an extra expense, it will save money in the long run.
Other features helped the building secure a LEED rating:
Sidebar: Green Building Council Founder: "We Are Waking Up"David Gottfried, founder of the U.S. Green Building Council, described his personal transformation from "greed to green" that took place while attending a 1992 meeting of the American Institute of Architects on sustainable development. Soon after, he abandoned what he described as the "greed is good" approach and formed the U.S. Green Building Council in 1993.
At the recent Urban Land Institute-sponsored conference, Gottfried said the council's model for environmentally conscious development practices is used in more than 12 countries today. "Globally, we are waking up. We have an opportunity to change the course of history and that can be profitable," he said.
Although the initial costs of green building can be higher than more traditional forms of development, Gottfried said, "Ultimately, there will be a return on investment." For instance, he noted, green building can command higher rent prices and cut operating costs from one-third to one-half. He advised the audience to "prepare for the day when you can't get a loan without a green check list. It's coming."
Look At Rooftops, Too
At the conference, Steve Peck, founder and president of Green Roofs for Healthy Cities in Toronto, said one key element in green construction is the use of green roofs, which is the use of a roof to help manage the environment of the building. This building practice, which is common in Europe, needs to be imported to this country, because these roofs offer an opportunity for financial and social benefits, he said. Considering that more than 20 percent of worldwide land area is on rooftops, effective management of this space can help control storm water runoff, improve air quality, and reduce urban heat and landfill waste, he explained.
Peck said Chicago, with 1.6 million feet of green roofs under construction, is the U.S. leader in this building practice. Atlanta, Portland, New York, Minneapolis, and Vancouver are all developing green roof incentives.
For the building owner, Peck said a green roof can:
Publication date: 11/14/2005