Sweeping Construction Industry

By Frank Greve

AURORA, Colo. - Rows of little plastic domes dot the roof of the new Wal-Mart Supercenter here, looking like a marching band of "Star Wars" R2-D2s.

Inside each dome, a trio of computer-aimed mirrors tracks the sun and bounces its light down a reflective shaft and through a milky white lens, illuminating the stockroom below.

The skylight idea is centuries old. But the mirrors, the lenses and dozens of other energy- and environment-saving innovations are new, and they're showing up not just at Wal-Mart but at other companies, schools and public agencies.

In addition to the Wal-Mart's legion of skylights, for example, the store's foundation is made of ground-up chunks of runway recycled from Denver's old Stapleton International Airport. Porous paving in its parking lot soaks up and filters polluted storm-water runoff. Huge north-facing windows provide most of the store's interior light. Used motor oil from the tire and lube shop helps heat the store, as does old vegetable oil from the deli.

According to Don Moseley, senior Wal-Mart engineer for environmental innovation, these and other efforts "are good for the environment and good for our business."
That's the mantra of the so-called green building movement that's sweeping the nation. Among the adherents are financial institutions such as Citigroup, PNC and Bank of America; automakers such as Toyota, General Motors, Ford and Honda; and such retailers as Wal-Mart, Target, Home Depot, Lowe's, Chipotle and Patagonia.

The next two new Major League Baseball parks, in Minneapolis and Washington, D.C., are poised to go green. So is the biggest privately financed development under way in the United States: MGM Mirage's $7 billion Las Vegas City Center, due in 2009.
Future federal buildings will be green, too. The General Services Administration, the nation's biggest landlord, announced last spring that it was applying stringent green-building standards to its $12 billion construction portfolio of courthouses, post offices, border stations and other buildings.

States also are cracking down. Washington state began requiring in April 2005 that all state-funded construction projects larger than 5,000 square feet, including school district buildings, be built green. Many other states - including California, Arizona, Arkansas, Colorado, Connecticut, Florida, Michigan and Nevada - have followed suit. So have nearly 60 cities and counties nationwide.

Scores of colleges and universities - including Emory, Pennsylvania State, the University of Florida, the University of South Carolina and the University of California-Merced - also have taken the pledge. Harvard University alone has 12 green buildings.

Scads of students at architecture and interior design schools share the green zeal. "It's hugely, hugely, unbelievably popular," said Sylvie Sugg, 21, an interior design student at the Art Institute of Colorado in Denver. "Green is so big now that people shouldn't go into design if they don't like it."

The job market for grads with green credentials varies widely from city to city, reflecting the trend's ongoing spread from West to East. In general, green grads do well, according to Kira Gould, the incoming chair of the American Institute of Architects' environment committee. "I see a lot of firms looking for expertise in green buildings at all levels," she said.

The key to the movement is a new set of standards that's far more demanding, environmentally speaking, than local building codes. The movement invites innovation because it's based on environment-protecting performance standards, not rules. That leaves it up to architects, builders and designers to decide how best to reduce energy and water consumption, for example, or workers' dependence on cars.

The U.S. Green Building Council, a Washington, D.C. -based alliance of some 7,200 architects, builders, land use planners and academics, issued the first set of standards in 2000, covering big commercial construction projects. Standards for existing buildings and commercial interiors came out in 2004. Criteria for new single-family homes, public schools, hospitals and cookie-cutter commercial buildings such as bank and retail store branches will come in the next year or two.

The council's goal is to "transform the marketplace" in real estate in the United States and globally, said Rick Fedrizzi, the council's founding chairman and chief executive officer. "We'll be at that point" in the movement, Fedrizzi said recently, "when it's no longer called green building; it's just the way building is done and they are simply called buildings."

In fact, council-certified green buildings have been spreading like wildfire since 2000. In that year, about $790 million in new commercial construction met the council's standards. This year, about $7.2 billion does. In 2000, a few hundred projects sought council approval. Today, more than 4,900 have registered for certification.

The council's determinations are based, like a report card, on a numeric calculation of improvements in building performance. Relocating executive offices from a building's outer shell to its core so that more employees work in natural sunlight, for example, helps to earn a point.

Building on a cleaned-up former hazardous-waste site or vacant inner-city lot helps, too. So does recycling an old building's rubble and using renewable bamboo flooring rather than oak. So does planting rooftop vegetation for its insulating and runoff-reducing effects and seeding the building with motion detectors that turn off lights and computers when they're not being used.

Independent outside contractors grade the applications and the council awards certificates to projects that earn at least 26 points under its Leadership in Energy and Environmental Design program. Those that rate 33-38 points earn LEED-Silver, 39-51 points LEED-Gold and 52-69 points LEED-Platinum.

A burgeoning market offers new building materials and technologies to help builders score points. The council's GreenBuild convention last month in Denver was swarming with exhibitors of waterless urinals, recyclable industrial carpet, low-energy LED lighting systems, soybean-based fabrics, insulating window glass and other wares.

Ray Anderson, the founder of Interface Inc. of Atlanta, which makes office carpets entirely out of recycled material, offered two telling numbers that reflect the movement's growth: 135, the number of attendees when Anderson attended the Green Building Council's first convention in 1998; and 13,000, the estimate of the Denver convention attendees.

LEED's share of commercial construction doesn't seem like much: It's up from 0.7 percent in 2000 to 5 percent in 2006. But in a slow-to-change industry, the transition is huge and sudden, said Charles Lockwood, a busy green-building consultant.

In a Harvard Business Review article last June, Lockwood likened the movement's influence over construction to the transformations that electricity, elevators and air conditioning wrought in the late 19th and 20th centuries.

"Those changes rapidly made older buildings obsolete," Lockwood said in an interview, and he predicted the same effect for buildings that now are being exposed as energy-wasting and environmentally costly. Big commercial-property owners already are reviewing their portfolios with an eye toward dumping some holdings and upgrading others, according to Lockwood, who advises some of them.

It's easy to imagine a green building rout in the next few years, based on the virtually unchallenged logic that buildings in an era of global warming need to be designed to minimize their environmental impact. Already, some retailers, such as Patagonia and Chipotle, are marketing their greenness as an attribute that sets them apart from competitors.

That's likely to accelerate with the council's upcoming release of a performance-rating system for generic store designs that retailers such as Starbucks and Whole Foods rely on for their new construction nationwide. If the council influences those portfolios, thousands of green buildings will start popping up across the country at viral speed.

"A lot of us think retail is the tipping point," said Kim Hosken, the council's director for new construction.

Headwinds of resistance to the movement also are building, however.
For one thing, building green, at least until recently, was presumed to cost more upfront but to pay off in the long run through lower operating expenses.

"You will spend more on insulation and windows," said Glenn Munro, a Toronto-based retail shopping-center developer. "But you'll save on electrical costs by downsizing the air-conditioning and heating systems and so on."

That takes patience. Governments and universities have it because they tend to own their buildings and keep them for generations. For the same reason, retailers such as Wal-Mart, Home Depot and Target, which generally own their real estate, find it relatively easy to go green.

But for retailers such as T J Maxx, Pottery Barn and legions of others who lease their properties, there's little to gain from greening. Any savings on properties that they lease generally would go to landlords. And landlords, who often own properties only briefly and do business in highly competitive markets, will be hard to excite about green building.

A variant of that problem arises with new-home buyers, said Michele Myers, a custom-home builder in the Durham, N.C., area. Whatever the long-term savings on heating and cooling bills, she said, buyers rarely choose to spend more up front on energy-efficient appliances and extra insulation.

"The paybacks are too far down the road for most people," she said. "LEED may be great, but it's for the affluent, not the majority of Americans out there."

But that may be changing. The added costs of green building - long assumed to be 10 to 20 percent more than traditional construction - are falling and may have been exaggerated, according to some who've built green recently.

"There's an assumption of a green premium, but we haven't found that," said Jeffrey Smith, Harvard's director of facilities maintenance.

Smith's greatest surprise, he said in an interview, was "how interested building occupants are in these projects. It's almost as though they're looking for something they can believe in."

David Abeloe, the director of Patagonia's huge, LEED-silver national distribution center in Reno, Nev., said he discovered something similar: a work force that's enthusiastic about its workplace. Abeloe thinks that his employees are repaying Patagonia's investment in natural light, radiant heat and high-exchange air circulation, among other measures, with better productivity. It's a common but hard-to-measure claim often made for green buildings. Abeloe based his on worker error rates.

"Some companies in our industry are happy with error rates of 1, 2, even 3 percent" of their shipments, he said. "Ours is a fraction of a percentage point."

A more basic argument for green building came from Wal-Mart's Moseley: "The huge majority of changes we're making are financially beneficial."

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‘Green’ Gains Ground Among U.S. Builders
Rising Energy Costs & Renewed Environmental Awareness Drive Change

By Dennis Lien

As Gerry Flannery pondered a new building for his construction company, he calculated how much more to spend on environment- and energy-saving innovations. The key was how quickly he would see a financial payback.

"It had to be seven or eight years, tops,'' said Flannery, president of Flannery Construction, located on the north side of Interstate 94 near Hamline Avenue in St. Paul.

After his assessment, he put in solar panels and added a white roof to reflect sunlight and lower cooling costs. He installed recycled materials for insulation, used nontoxic paints and cleaning supplies to improve air quality and built a sawtooth wall facing I-94 to deflect freeway noise. That was just for starters.

Now, a year after the office opened, it's at the forefront of a new breed of commercial and public buildings popping up across the Twin Cities and Minnesota. Following a national trend, builders increasingly are eschewing old construction techniques for environmentally friendly features that use less energy, water and other resources, maximize natural sunlight and produce healthier indoor air.

Four buildings in Minnesota have been cited by a national program that certifies so-called green buildings, with an additional 51, including Flannery Construction's, seeking that status. In addition, about 60 buildings that received state bonding money have been built or are being built under a similar state program. An additional 87 schools, offices and churches have received the Environmental Protection Agency's Energy Star award for improving energy efficiency at least 10 percent.

Those numbers tell only part of the story. Hundreds of other green buildings have been built in Minnesota over the past decade without ties to those programs, said David Eijadi, a principal at the Weidt Group, a Minnetonka energy consulting and software firm, and a fellow of the American Institute of Architects.

Moreover, Minneapolis voted in July to require all new or renovated city buildings larger than 5,000 square feet to meet green-building standards. St. Paul has committed to such an effort.
"A lot of people are getting on the bandwagon now,'' said Rick Carter, senior vice president of LHB Inc., a Minnesota architectural and engineering firm.

Factors Behind The Trend
Driving this interest are higher and more volatile energy costs, a renewed environmental awareness, more public and private support for interested businesses and more attention to the long-term bottom line.

From skyscrapers to one-story structures, buildings use 40 percent of the energy consumed in the United States, including two-thirds of the electricity. In recent years, those costs have spiked, adding billions of dollars to expenses.

Using approaches such as geothermal or solar heating, new buildings can cut their energy costs by a third. Often, the payback for environmental extras comes in one to two years, according to the Weidt Group.

If some elements of the industry seem slow to respond, it's mainly because they're still tied to tradition, said Laura Millberg, green-building specialist for the Minnesota Pollution Control Agency.

In the 1970s, when energy costs rose quickly and an environmental ethos swept the country, many businesses and homes began using energy-saving techniques such as solar heating. That largely stopped during the 1980s and early '90s, and only picked up again in the past decade as new concerns emerged about long-term environmental sustainability.

"The sustainability movement has captured people's imagination,'' said John Carmody, director of the Center for Sustainable Building Research at the University of Minnesota.

The U.S. Green Building Council, a Washington, D.C.-based partnership of builders, planners and architects, helped by starting a rating structure called the Leadership in Energy and Environmental Design (LEED).

To get points, buildings must follow a number of steps, such as reducing water use, reusing materials and meeting minimum energy-efficiency standards.

Since 2000, more than 600 buildings, including four in Minnesota, have been LEED-certified, with more than 5,000 others in the pipeline. Some areas, such as New York and Portland, Ore., have been especially active.

Minnesota's relatively low LEED numbers don't mean the state is lagging, though.
Several years ago, Minnesota adopted a law requiring all buildings receiving state bonding money to follow standards called B3, for "Buildings, Benchmarks and Beyond.''

"That law required sustainable design guidelines, including a 30 percent energy reduction,'' Carmody said. But people have been doing energy-efficient buildings for a long time without calling it sustainable design, he noted.

Some LEED buildings are new, and others are refurbished. Still other prospective ones, such as Great River Energy's 166,000-square-foot Maple Grove headquarters, are being built. The state's first two LEED-certified homes held open houses earlier this month in Arden Hills.
For many, the critical issue is whether the improvements pay for themselves.

"We looked very closely at what was cost-effective and what wasn't,'' said Bill Karges, co-owner of the Karges-Faulconbridge engineering firm, the first project in the state to receive LEED's gold certification for existing buildings.

ROOM FOR INNOVATION
From the 16 rubber-ball plants at Flannery Construction's entrance (no water needed) to the solar-tube skylights in bathrooms, comparatively little upkeep or energy is necessary.

"That's just a simple way to provide light,'' said Jamey Flannery, a company project manager, pointing to tubular skylights that funnel light from the roof, enhance and reflect it, and then shoot it into bathrooms. All the enhancements added an estimated 6 percent to the cost.

As she walked through the building, she pointed to one feature after another: heated floors from solar heating, motion light sensors, and recycled newspaper and resin ceiling insulation.

"This building is 37 percent more energy-efficient,'' she said.

It's not just new buildings that are going green. Existing ones are, too.
Karges-Faulconbridge was looking for a new location when a secretary at the firm noticed an abandoned grocery store in Roseville.

In short order, KFI, as the company is called, bought the building and began looking at ways to make it more energy-efficient. It ran across the LEED program and decided to pursue certification.

"We felt we could design a building that is energy-efficient and cost-effective as well," said Chris Nelson, a KFI mechanical engineer.

The old parking lot was ripped up. A geothermal heating and cooling system, with 48 circulating pipes going down 200 feet, was installed. The new, smaller parking lot drains into a prairie garden and retention pond that collects and filters runoff. Inside, recycled rubber or carpet covers the floor. Natural light is emphasized. In addition, waterless urinals are being tested, contributing to a 70,000-gallon annual savings in water.

Karges said each improvement was designed for paybacks within 5½ years. But he cited an additional benefit: "Our employees love the building.''

A Critical Mass
The trend toward green-building construction should only pick up, according to Carmody and others.

Initial construction costs for going green may be slightly higher, but the premium isn't nearly what it used to be and often is quite small, according to Eijadi. It's also easier to determine how soon the savings payback will occur.

For companies that expect to own their buildings for a long time, the rewards of lower energy costs are clear. The advantage is less so for those that expect to sell buildings quickly.

Resale value, however, should be better with such improvements, according to Flannery.

Increasingly, architects are gearing up to meet the interest. In recent years, they've spent more time on green-building design, with schools also paying more attention, according to Eijadi.

"For the last five or six years, architectural students have been clamoring for more emphasis on sustainable design,'' Eijadi said.