In a Stalled Economy

Greening Existing Buildings Keeping Contractors Busy

by Paula Widholm

In today’s recessionary times, when new construction is nearly at a standstill, some contractors are pursuing renovation and maintenance projects and helping building owners get LEED certification for existing buildings.

In early December, 172 buildings nationwide were LEED-for-Existing-Buildings certified and 2,063 building are in the process of obtaining it, according to the U.S. Green Building Council in Washington, D.C.

One behemoth building that’s already LEED-EB certified is the Merchandise Mart in Chicago, home to many design-oriented businesses committed to sustainability.

“We got started on the idea of becoming LEED certified after many of our tenants were pursuing the certification [for tenant build-outs],” says Myron Maurer, senior vice president of operations and management for the 4.2-million-sq-ft facility.

Like many building owners, the Mart had been collecting materials for recycling since the early 1990s and using green cleaning products. And, over the last eight years, the facility has been installing electronic sensors on its faucet aerators, which has dropped water consumption from 50 million gallons to 28 million gallons.

The investigation into getting LEED-EB certification began in early 2006. The Mart registered with the USGBC in July of that year and became certified in November 2007.

Process Key at Mart

While building management set out with visions of green roofs and mechanical equipment change-outs, the certification process actually called for less drastic measures.

“It isn’t so much about the project as it is about process,” Maurer adds.

Rewriting all the building’s operating guides was the main component. The Mart hired the Chicago-based Delta Institute—a nonprofit that creates programs that integrate environmental, economic and community health—to monitor the LEED certification process, which in total cost about $200,000.

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The rewriting of construction standards was a collaborative effort, says Lloyd Davidson, the Mart’s vice president of construction services.

“In that first meeting the whole operations team and all the general contractors sat down with the architect, consultant and engineers, and everyone had a chance to voice his or her opinion on how business is done at the Mart,” he says.

These operating guides direct all the Mart’s capital improvement projects, which totaled $1 million in 2006 and 2007.

“Everything we purchase and every contractor we work with has to have the right sustainable products, from green cleaning products to the right filters to the right paper and ink,” Davidson says. “We’re changing the way the building operates, from capital construction to tenant construction to how we clean the floors to the kind of light bulbs we use to our choice of carpet.”

The Mart also formed an energy committee that meets once a month. Meetings with contractors also occur twice a year to review standards. The process continues to maintain certification. The USGBC recertifies the Mart in five years.

Input from Tenants Needed

Another key to a successful LEED-EB certification process is to include the tenants. The Mart has 800 tenants that range in size from 400 sq ft to more than 100,000 sq ft.

“As a landlord we’ve got to promote using things like light sensors for reducing energy,” Davidson says. “We offer an education piece through our construction standards.”

The efforts have worked. “Overall was there has been a 10% decrease in energy usage, and the Mart has pledged to make another 10% reduction by the end of 2010,” Davidson adds.

The vacancy rate at the Mart is in the mid-90 percentile. “We have 3.5 million sq ft of rental space,” says Mark Bettin, vice president of engineering for the facility. “Being LEED certified has helped us retain existing tenants and has garnered interest from new tenants.”

From this vantage point, the Mart got a return on its $200,000 investment. But “we never went into it with an ROI perspective,” Bettin says. “We did it from the perspective of ‘we’re in the design business and we want to stay ahead of the curve.’”

Tall Task at Sears

Also, in downtown Chicago, the Sears Tower has been working with Chicago-based Adrian Smith + Gordon Gill Architecture in exploring LEED-EB certification.

“They’re seeing that it is a definite benefit to their operations and tenancy,” says Robert Forest, managing partner of AS+GG.

Specifically, the building owners, 233 S. Wacker Drive LLC, and management, U.S. Equities Asset Management LLC, are exploring ways to reduce energy and water usage.

Improvements to lighting systems, mechanical systems, the building envelope and elevator systems are being investigated. Other initiatives include looking at renewable energies, such as solar and wind power at roof level, and the installation of green roofs, which could include the tallest green roof in the U.S., says Randy Stancik, vice president, U.S. Equities Asset Management.

Pursuing a LEED-EB rating is not “a revelation by building owners that all of a sudden they wake up and say, ‘Let’s go after LEED-EB,’” Forest says. “They have money set aside at certain intervals for capital improvements and it makes sense to do it in a sustainable manner if they can.”

Chicago’s large stock of buildings from the 1960s and 1970s are ripe for LEED-EB because they need renovation and upgrades to mechanical and electrical systems anyway, Forest says.

Also, with today’s recessionary environment, Forest says engineers, architects and contractors can pursue renovation projects and talk to owners on improving their building’s performance and efficiency.

“There might be a way to spread capital improvement money out through smaller projects and achieve a LEED-EB certification, rather than focus on one aspect of the capital improvement,” Forest adds. “The contractor can discuss the most efficient and cost-effective renovations and weigh the options on retrofitting a chiller versus changing the lighting and which achieves a better cost return for the owner.

“LEED EB certification also gives buildings some marketing power. A tenant with a green agenda will move into a LEED EB building. Nobody wants to go to a building that’s out of date or unhealthy.”

Michael Cornicelli, executive vice president of the Building Owners and Managers Association of Chicago, agrees that “in an increasingly more competitive marketplace, owners have to differentiate themselves. LEED certification is rapidly developing as a benchmark to demonstrate that an owner is taking proactive steps that helps in the building’s valuation and desirability for tenants.”

BOMA moved its office Dec. 1 and sought LEED for Commercial Interiors for its interior build-out.

“It was helpful for me to know that the contractors working on the project understood what LEED required and what options or alternatives were available to achieve LEED points,” Cornicelli says. “These concepts also apply to contractors doing routine maintenance and building upgrades.”

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