Easy Being Green: Sustainable Building Pencils Out For Seattle Developers

Seattle Business Monthly, April 2007
By Roddy Scheer

Green building is all the rage these days in and around Seattle. Everyone from developers to builders to owners to tenants are getting on-board, enjoying not only the economic benefits such as reduced utility bills but also the environmental advantages like cleaner indoor air and more daylight. But for years the cost premium of “going green” has kept lots of would-be converts in the dark ages of traditional building techniques. But with that cost premium nearly if not completely gone these days, green building is enjoying a renaissance in the U.S. And not surprisingly, Seattle -- with more buildings (25) certified as sustainable under the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) program than any other city -- is leading the charge.

While Europeans are normally considered the world’s primary trailblazers in green building, their initiatives in the sector, although impressive, are the result of policy directives mandated by federal governments, not market forces. But here at home, builders cannot rely on subsidies and commands from the government to build green, and as such will only go down such a path if the marketplace warrants it. And as long term cost savings from green building become apparent in Seattle and environs, the marketplace is definitely starting to warrant it.

“What we’re really talking about is the baseline of what people are making choices about, and creating smarter buildings within the cost frameworks that exist today,” says Bert Gregory, CEO of Seattle’s leading green architectural firm, Mithun. As an example, he points to the fact that all the buildings the firm designs these days are about 30 percent more efficient with their water usage than traditional buildings -- at no additional cost. This saves owners significant amounts of money on their water bills every month moving forward.

In Mithun’s own headquarters in a converted pier building on the Seattle waterfront, Gregory says the firm decided to forego air conditioning systems entirely and instead plugged the money they would have spent therein on more operable windows to catch the cool breezes off Puget Sound during the hot summertime. The net result is not only tens of thousands of dollars in energy savings every summer (for the same initial outlay), but also, in Gregory’s words, “a much more delightful place to work” flush with natural light and fresh air.

Another obvious place where owners and tenants can reap the financial benefits of greener design is energy efficiency. Jack Davis, a project manager with the non-profit Northwest Energy Efficiency Alliance (NWEEA), concurs: “Energy efficiency, as part of any green building program, is usually the most direct way to reduce costs.” He says that simple lighting retrofits have payback periods of less than a year when on-going energy savings are factored in. “We view the energy component as a no-brainer. In almost every case, it reduces cost.”

Mythbusters

To Davis, the biggest thing holding green building back from overtaking traditional building methods across the country is the misperception that it entails a significant cost premium. “Most people on the street assume it would cost 15 to 20 percent more to build green,” he says, “but some of the data we’ve seen shows the premium to be closer to one percent for a simple LEED-certified building.”

A 2004 nationwide study conducted by Greg Kats of the research and consulting firm Capital E found that buildings which qualified for the lowest LEED rating (“LEED Certified”) cost developers only 0.7 percent more up-front to build than an equivalent non-green building. For projects with more sustainability-oriented features that qualified for higher LEED ratings (silver, gold and the highest, platinum), the cost premiums went up. Kats found that Silver-level buildings cost an average of 1.9 percent more, while the premium for Gold-rated projects cost 2.2 more on average. The greenest buildings, those that qualified for a LEED Platinum rating, cost about 6.8 percent more to build on average.

Another 2004 study by Lisa Mattthiessen of the consulting firm Davis Langdon came to similar conclusions about the costs of going green. Matthiessen, who has been working to update the study with data from 2006, believes the costs of going green have come down in the interim to be negligible for LEED Certified projects, and that’s not even factoring in energy and water savings down the road. “That is to say that most teams are figuring out how to build to LEED standards without having a huge impact on the budget,” she says, adding that incorporating sustainability elements in a project’s design from the get go -- not layering them on later in the process – is essential to keep costs down.

Another key to making sustainability economically feasible is employing managers, designers and contractors well-versed in the intricacies of green building. Luckily, according to NWEEA’s Davis, this is not a problem in a place like Seattle, which boasts the highest density of building industry professional accredited by the U.S. Green Building Council in managing the sometimes cumbersome LEED certification process. “People are becoming more familiar with how to do it and what solutions work,” he says. “The experience level out in the industry is such that you're not paying for a learning curve.”

The LEED scale is based on a points system, with a project garnering 69 points qualifying for a Platinum rating. According to Alan Whitson, a former developer responsible for building out 40 million square feet of commercial and residential space before turning his attention to teaching and consulting, developers end up spending between $750 and $1,000 per LEED point in site assessments, data collection and analysis and certification fees. According to such an estimate, then, a developer going for a LEED platinum rating would need to spend upwards of $60,000 to collect data and compile the right paperwork to lock the certification in. Given these costs and the excessive amounts of data collection and paperwork required, more and more developers incorporating sustainability features into their projects are opting not even to apply for LEED status, even though their projects probably would qualify.

One example is Harbor Properties, which specializes in developing residential apartment buildings in and around Seattle with an eye toward sustainability. Even though the firm has gotten previous projects LEED certified, it decided to forego the process for its two most recent developments, even though each would qualify.

“We just tell the story rather than rely on an independent certification,” says Harbor principal Doug Daley. “The leasing team and the building management team will tell the story of what has been done during the construction regarding choice of materials or sighting of the building, whatever it may be, that reinforces the sustainability characteristics of the project,” he says, adding that potential renters would not likely be willing to pay a monthly rent premium to offset the additional development costs that achieving the certification would entail. “At the end of the day, renters do value sustainability features, but we don’t think they’re willing to pay a premium for it to be LEED certified.”

To Matt Griffin, one of Seattle’s premiere developers through his firm the Pine Street Group, incorporating energy and water efficiency features into his buildings makes sense, but going for LEED certification does not necessarily. “I think doing the stuff that makes economic sense is really a good idea, and then you really have to make your own decision whether you want to go the last 10 or 20 percent to do the stuff that gives you the LEED certification, which to me is really a marketing issue,” he says. Pine Street has not applied for LEED certification for any of its Seattle projects, including the recently completed WaMu Center, which is currently Seattle’s tallest skyscraper. That said, all of Pine Street’s project make use of so-called “high performance” equipment, appliances and air flow systems so as to maximize energy efficiency while minimizing their environmental impact. Griffin, who lives downtown and three years ago gave up his car entirely, adds that by sighting properties in Seattle’s urban core, the firm has played a role in increasing urban density. People who live and work in the city, he points out, use less energy and require less impervious surfaces per capita than their counterparts commuting in polluting cars from their sprawling suburban homes.

Looking Forward

To Mithun’s Bert Gregory, the sustainability-oriented projects that serve as his firm’s bread and butter -- LEED certified or not -- do more for developers than just providing marketing advantages and lowered utility costs; they are smart investments, as banks and insurers are increasingly starting to factor in the costs of environmental compliance and health safety into their decisionmaking. “You’re going to see big changes in the future where lending institutions are going to start making their judgments about investments based upon lower risk buildings,” he says. “And green buildings, if they operate on less energy and healthier air quality, are going to be lower risk investments that are going to start to drive demand.” He adds that any legislation coming down the pike regulating the emission of the greenhouse gases linked to global warming will only serve to make energy-efficient, less-polluting green buildings that much more desirable in the marketplace: “We may see in the next five years, as very likely cap-and-trade initiatives get mobilized in the U.S., that we’ll start to see some interesting additional investment opportunities for the private sector, for-profit real estate industry in efficiency strategies that will get financed as methodologies to combat global warming.” He concludes rhetorically: “What will be the cost premiums of not building green?”

Formerly considered a luxury for those who could afford to pay for exotic and untested design and construction features, green building is quickly becoming the de facto standard in Seattle as the development community realizes the benefits extend beyond feeling good about doing right by Mother Nature. While incorporating sustainability features used to make sense from an environmental perspective, these days it is about dollars and cents as well.

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SIDEBAR
Red Hot and Green
By Roddy Scheer

Here is a run-down of some of the hottest green buildings going up around Seattle lately...

The Cobb Building
1305 4th Ave. in Downtown Seattle
As part of its master plan to “green” all of its real estate holdings, Unico Properties turned to local architecture firm GGLO to convert the 96-year-old Cobb Building in downtown Seattle from traditional offices to eco-chic luxury apartments this past year. An architectural jewel built in 1910 and listed on the National Register of Historic Places, the building was meticulously renovated with careful preservation of historic elements, including the façade’s hand-laid brickwork and art deco elevators. Some of the sustainability features woven into the new Cobb -- one of the first buildings in Seattle to qualify for the U.S. Green Building Council’s new LEED Existing Buildings (EB) program -- include cleaner indoor air quality, water savings, EnergyStar appliances, noise reduction, an environmentally-friendly outdoor garden, access to Flexcar and proximity to public transportation.

SBRI Building
307 Westlake Ave. North in Seattle’s South Lake Union
Tasked with building a world-class biotech research center for the non-profit Seattle Biomedical Research Institute (SBRI), Vulcan Real Estate and Harbor Properties tapped leading architectural firm CollinsWoerman to create a LEED Silver 112,000 square foot building featuring laboratory and office space as well as room ground-floor retail smack dab in the middle of the bustling South Lake Union neighborhood. Green features include non-toxic building materials, ultra-efficient energy systems, natural fresh-air ventilation, and recycled construction waste. The building’s water system was designed to reduce potable water use by 23 percent more than the industry standard, saving more than 186,000 gallons of water annually. Incorporating LEED standards midway through the planning process back in 2002 added a one percent premium to up-front costs, but developers were able to recoup many of the additional expenses through incentives, including $20,000 from Seattle’s LEED Incentive Program and $144,000 from Seattle City Light for energy conservation.

Alcyone Apartments
301 Minor Ave. N. in Seattle’s South Lake Union
Vulcan and Harbor also collaborated on the development of the LEED-certified Alycone Apartments, which feature 162 residential rental units plus ground-floor retail space. Green features incorporated into the design by architects GGLO include low energy fixtures and waterless urinals to save natural resources and money; non-toxic paints and carpets throughout to maintain good indoor air quality; Flexcar parking spots, electric vehicle charging stations, and bicycle storage to encourage alternative forms of transportation; and a rooftop Pea Patch garden with recycled rainwater irrigation providing green space while reducing potable water consumption and mitigating storm water runoff. The building opened to tenants in the summer of 2004.

Terry Avenue Office Building
Corner of Terry and Thomas in Seattle’s South Lake Union
Upon completion in 2008, the 4-story, 40,000 square foot Terry Avenue Office Building in South Lake Union will be the first privately developed office building in Seattle to achieve LEED Gold status. The future home of architecture and design firm Weber + Thompson (which designed the building and is developing it along with Stephen Grey & Associates and First Western Development Services), the building is foregoing air conditioning in favor of a passive cooling system that takes advantage of smart design techniques maximizing the circulation of fresh air through operable windows and heat shielding thanks to high performance adjustable sun shades and light-colored reflective exterior surfaces. An interior courtyard will allow natural light to penetrate deep into each floor while helping collect and disperse hot air on warm summer days. Other green elements include a shower and changing rooms for bike commuters and a fountain fed by recycled rainwater. The building is slated to consume 30 percent less energy than a standard office building of a similar size.

Alley24
241 Yale Ave N in Seattle’s South Lake Union
Another leading-edge green Vulcan development in South Lake Union, Alley24 opened its doors to office, residential and retail tenants in 2006. The 362,000 square foot LEED-certified project makes use of environmentally-sensitive building materials and finishes, energy- and water-saving fixtures to save natural resources and money, exterior sun shades and operable reflector blinds to help moderate interior temperatures throughout the year, and a hybrid HVAC system that offers tenants a choice of natural ventilation, energy-efficient air conditioning or both. To augment the building’s central location, developers included a Flexcar parking space as well as bicycle storage facilities to encourage tenants to do without cars. Also, builders were able to recycle 75 percent of building materials during construction to further minimize the development’s environmental footprint. The international architectural firm NBBJ not only designed the building, but has taken up three full floors as its Pacific Northwest headquarters.

5th and Madison
Corner of 5th Ave. and Madison Street in Downtown Seattle
Developed by Beacon Capital Partners and designed by Ruffcorn Mott Hinthorne Stine,
5th and Madison is a LEED-certified high-rise condominium development that will feature 24 floors of moderately-priced and uber-green studios and one- and two-bedroom residences when it opens its door this coming summer. Located across the street from the new Seattle Public Library, the building’s central location means residents can get to downtown jobs and run errands on foot while enjoying easy access to public transportation to get further afield. Sustainability elements include expansive operable windows, state-of-the-art energy-efficient appliances and systems, and non-toxic building materials and finishes, not to mention bike storage and on-site Flexcars. A plaza-level green roof is designed to mitigate the “urban heat island” effect while providing fresh air and a park-like environment for residents.

9th and Stewart Life Sciences Building
Corner of 9th Avenue and Stewart St. in Seattle’s Denny Triangle
Centrally located in the Denny Triangle section of downtown Seattle, the LEED-certified 9th and Stewart Life Sciences Building was “future-proofed” by developer Touchstone Corporation and designer MBT Architecture with a green building strategy to support long-term appreciation. With easy access to 30 different bus routes not to mention bike storage and showers, biotech researchers in the 11-story office and lab building can leave their cars at home. Builders sourced a majority of the materials used in construction from local and regional suppliers, minimizing transport costs while bolstering the regional economy. The building’s systems use 27 percent less energy and 45 percent less water than a similarly sized traditional code-compliant building. Touchstone went to great lengths to create a green streetscape outside the building, and even redeveloped adjacent properties’ sidewalks with green landscaping as a neighborhood amenity.