Betting On the Green

Carl Frankel finds some developers are building green, even when they don't know who the future occupants will be

Ask people which industries harm the environment the most, and they're likely to name the ones that attract the lion's share of the media attention—so-called "polluters and extractors" like chemical, oil, and mining companies.

There's another significant source of problems, though - buildings, which gobble natural resources both in their construction and throughout their lifetimes. According to the Worldwatch Institute, buildings consume 16 percent of the water and 40 percent of the energy used worldwide. Building construction accounts for 25 percent of the virgin wood and 40 percent of the raw stone, gravel, and sand used globally each year. In the US, we produce about as much construction waste as municipal solid waste.

For the most part, builders have back-burnered environmental issues, or worse, pushed them behind the stove. Slowly, however, things are changing. Here and there around the country, buildings are going up that provide superior indoor air quality and improved resource and energy efficiency. That's good news in its own right, and for another reason as well. It's inspiring commercial real-estate developers to sit up and take notice, and in some cases to risk spending a bit more up front for buildings that will save substantially over their lifetimes.

A number of "green" buildings are clustered in and around Washington, DC. Topping the list is the White House, which has been the subject of an extensive and much-publicized green makeover. Steps taken have included upgrading fixtures and bulbs to the most energy-efficient designs, reducing emissions of volatile organic compounds, and using integrated pest management to cut back on pesticide use.

The Way Station mental-health facility in Frederick, Maryland, has reduced energy consumption by 75 percent through the extensive use of daylighting. Even the Pentagon is thinking of greening its building.

Green buildings are by no means limited to the nation's capital, however. The Natural Resources Defense Council and National Audubon Society buildings in New York City are well known for their green features, and several corporations are erecting green buildings around the country as well. Duracell has one in Bethel, Connecticut. Under the guidance of green architect William McDonough, Herman Miller's SQA subsidiary recently constructed an eco-building in Holland, Michigan. McDonough will also be involved in a new green headquarters Monsanto is planning for St. Louis, Missouri.

All these structures are owner-occupied. If green building is to really take off, the commercial real- estate developers who build speculatively will need to climb on board. This is starting to happen, according to Bill Browning, the Rocky Mountain Institute's director of green development services and a leading national authority on green building: "The shift from owner-occupied to speculative commercial properties is a significant transition."

Chicago developer Kevork Derderian, for example, is putting together financing for a 307,000 square-foot office tower in the Chicago suburb of Rolling Meadows. The building's green features will include expanded daylighting, superglazed windows with a high R-value, and a downsized heating, ventilation, and air conditioning (HVAC) system. Exit signs will use LED technology, non-toxic paints will be used, and drywall will be made with recycled materials. Perhaps most novel, washroom water will be warmed using excess heat from the elevator room and available in only one temperature - lukewarm.

Derderian is also the founder of the Meritt Signature Development Alliance, a collaborative of companies that have joined together with the aim of making green design and construction more cost-effective. The Alliance, which has already completed two major retrofits, boasts such major players as General Electric, Herman Miller, and the Rocky Mountain Institute.

New York City's Barry Dimson is another torch-bearer. The president of Healthy Properties LLC, a green building consultancy and a commercial developer in his own right, Dimson is finalizing plans to renovate a 179-room building in Philadelphia into a "green" hotel that will be the first in the US to offer filtered fresh air in each room 24 hours a day.

Construction will feature materials that release no volatile organic compounds, while energy consumption will be reduced through the use of "smart" computer-controlled technologies. Dimson is also overseeing the formation of a blind investment pool that will invest in green commercial properties.

Probably the most important trailblazers are Douglas and Jody Durst of the New York City-based Durst Organization. Douglas Durst is part owner of a 350-acre organic farm in upstate New York and has been chair of Earth Day New York since 1990. His company is making plans for a 1.6 million square foot multi-tenant environmentally-responsible office building, to be erected in the heart of Manhattan's Times Square area.

Environmental features of 4 Times Square are expected to include CFC-free air conditioning systems; energy-efficient heating and cooling systems; "low-e" glass windows to let light in and block heat; energy-efficient lighting; and separate waste disposal chutes on each floor for bottles, paper and wet garbage. In addition, gas-fired rather than electric-fired chillers will be used. A combination of steel and concrete is being used for the structure in order to reduce embedded energy consumption.

The Durst Organization's strategy is already paying off. The publishing company Conde-Nast and the law firm Skadden, Arps, Slate, Meagher and Flom have together committed to occupy over two-thirds of the space available at 4 Times Square. Executives at both organizations have cited the building's air quality and other environmental attributes as an important factor in the rental decision.

Nor do the Dursts plan to stop with this building. "We believe that green should be the way to build in the future," says Jody Durst, vice-president in charge of construction and operations.

While all these are promising signs, much work remains to be done. Commercial builders as a group have yet to be persuaded that building green is good for the bottom line.

It's quite easy to establish that upfront investments in building productivity have a rapid payback. What's more difficult - and potentially more significant to the bottom line - is proving that green features increase worker productivity.

Case studies do exist demonstrating that when people feel healthier and happier, they perform better. For instance, earlier this decade, Mike Nicklas, a North Carolina-based architect, found that students in daylit buildings outperformed students in non-daylit schools by 5 percent to14 percent.

Another study, conducted by the Alberta Education Department found that over two years, students exposed to full-spectrum lighting attended school an average of an additional 3.2 days per year, had nine times less tooth decay, and grew an average of 2.1 centimeters more than the students attending schools with normal light. Plus, they did better academically.

For the commercial building industry to become convinced, however, they need to see green buildings that are in high demand and command premium rents, along with reductions in operating costs. Green owner-occupied buildings don't make that case - buildings built by peer developers do. That's why ventures like 4 Times Square are so important. As they go, so will the green building movement.

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