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Green Construction Purchasing Story Archives |
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Green means growth to contractors with the know-how to get it done by Paul Markgraff America is famous for its revolutions. The American Revolution separated our fledgling nation from the British Empire, planting the seed that eventually flowered into the greatest economic and military power on the planet. The Industrial Revolution dramatically improved the productivity and efficiency of our economic engine in the mid-1800s and early 1900s. Over the last 50 years, the Information Revolution injected our economy with even more efficiency by shifting the way businesses produce, distribute, process and transmit data from analog to digital methods. Today, a new revolution may be blooming in America: a Green Revolution. And construction is beginning to feel its influence. In 2007, green building construction starts exceeded $12 billion. As of November 2007, more than 3.2 billion square feet of green commercial building space was registered or certified with the U.S. Green Building Council (USGBC). As of the same date, the USGBC counted 91,000 actively engaged individuals among its ranks, and since 2000, the organization’s membership increased tenfold. There’s more. USGBC’s Green Building Rating System, also known as Leadership in Energy and Environmental Design (LEED), has seen extraordinary growth in the last several years. As of November 2007, nearly 1,100 construction projects were certified using the LEED system, and contractors and owners registered more than 8,000 additional projects for eventual certification. The USGBC’s stated goal is 100,000 certified commercial projects by 2010. On the current events front, a new report from the non-profit American Solar Energy Society predicts that as many as one in four workers in the U.S. will be working in renewable energy or energy-efficiency industries by 2030. The California Public Utilities Commission has approved a plan for all new housing to be zero-net-energy by 2020; the same standard applies to commercial developments by 2030. On top of all that, energy and raw materials costs continue to climb to previously unforeseen levels; these costs also continue to fluctuate wildly based on world events and regional instability. And the concept of climate change is no longer seen as activist propaganda, but as a reality that potentially plays out in catastrophic ways for America and the world. After reading that, if anyone thinks green building is just a fad, you can stop reading right now, because this article isn’t for you. But if you want to know more about what LEED is, why contractors are embracing it, and where green building is headed, keep reading.
Launched in 2000, the LEED Green Building Rating System provides the design and performance parameters companies can use to have an immediate, measurable impact on energy conservation, global climate change and occupant health. According to Ashley Katz, communications coordinator for the USGBC, the LEED certification process uses a whole-building approach to sustainability and recognizes performance in five key areas: sustainable site development, water savings, energy efficiency, materials selection and indoor environmental quality. Projects enroll in LEED by registering their intent with the USGBC and paying a fee of $450. To get the project certified, owners usually pay certification fees of about 3 cents per square foot. LEED certification is awarded based on the level of sustainability the building achieves; the highest level is Platinum, followed by Gold and Silver, then Certified. “Building a green building is building a high-performance building,” says Katz. “There are obvious environmental benefits, but there are also financial and productivity benefits.” By following LEED provisions, building owners earn long-term, building-life-cycle cost savings. According to USGBC statistics, green buildings use an average of 40 percent less water and 39 percent less energy. Green building prevents 50 percent to 75 percent of construction and demolition waste going into landfills. Green workplaces annually account for $180 billion in increased worker productivity, as well. On the whole, an upfront investment of 2 percent in green building design usually results in life cycle savings of 20 percent of the total construction costs, more than 10 times the original investment, according to The Costs and Financial Benefits of Green Buildings: A Report to California’s Sustainable Building Task Force. Christopher Gorthy splits time in preconstruction services and as a green guru for DPR Construction, a California-based commercial contractor with between $1.5 billion and $1.8 billion in annual revenue. The company takes green building seriously, and with good reason. “Our core values – some of the culture behind DPR – are ever-forward, uniqueness, integrity and enjoyment,” says Gorthy. “Green building, for so many reasons, is part of our core values. By the year 2010, we want to achieve a proven track record of our environmental responsibility in the way we do business. This statement relates to everything we do, not just building buildings.” But why LEED?
There are three good reasons contractors may want to learn how to implement LEED, outside of obvious reasons such as social and environmental stewardship. First, it improves working conditions for the contractor’s employees. Second, contractors can benefit from the publicity generated by building green. And third, states and municipalities are beginning to enforce green regulations, so contractors that want certain contracts must understand how to build green. For contractors, building green can improve working conditions. Building entrance mats cut down on airborne dust, and clean-burning diesel and electric vehicles lower the toxic content of engine exhaust. Operational start-up of mechanical systems, combined with proper storage of organic materials such as drywall and insulation, prevents issues with mold. “DPR focuses on advanced technology, healthcare, corporate office, bio-pharmaceutical and lab-type facilities,” says Gorthy. “As ductwork comes to the job site, we make sure its wrapped, it’s clean and it’s empty of debris.” When the ductwork goes up into the ceiling and is attached to other ductwork, DPR recaps it so dirt, dust and drywall don’t find their way into the system during the construction process.
Publicity is another benefit of building green. DPR won the California Governor’s Environmental and Economic Leadership Award for Sustainable Facilities in 2004 for building the DPR Sacramento office building. The amount of press the company received drove business that more than exceeded the $80,000 premium DPR spent to earn the building its LEED Silver rating. “Every book, journal, magazine, TV show, everything you look at is talking about green building,” says Gorthy. “There’s a huge component of publicity and marketing that contractors can get out of that equation.” States and municipalities are also going green at a relatively quick pace. Gorthy worked on a Washington, D.C., task force nearly two years ago that formulated legislation designed to mandate LEED certification on certain buildings. The city adopted the legislation, and by the year 2012, all private projects in Washington, D.C., of more than 50,000 square feet will need to meet LEED requirements and certification levels. “There’s going to be a tremendous amount of opportunity in some jurisdictions,” says Gorthy. “Cities like Boston, New York, Seattle, Austin and Chicago already have some type of legislation either in the queue or that has already adopted LEED. I think that’s only going to continue to spread, and that’s probably the biggest thing for contractors that ask ‘What’s in it for me?’ ” The city in a garden Realistically though, how soon can contractors expect to see LEED mandates popping up in their backyard? If Chicago is any indication, it’s already happening. Richard Rodriguez, buildings commissioner for the City of Chicago, runs a department that oversees the issuance of all construction permits, conducts inspections and issues trade licenses. Chicago has historically embraced green building; the city’s Latin motto – Urbs in Horto – means city in a garden. Over the last several years, the city has taken even more dramatic steps to implement green building on a citywide scale. The Green Permitting Program was created by Mayor Richard M. Daley in 2005. It’s an incentive program that uses LEED standards to qualify applicants. If a developer is interested in pursuing LEED certification, the city provides a dedicated resource that sits down with the developer and holds his hand through the entire process, resulting in a shorter time to permit. The entire process is expedited. The plan reviews are stamped with a special green stamp and they are moved ahead of non-LEED-certified plans in the permitting process. “There’s also a financial incentive,” says Rodriguez. “You can qualify for up to a $25,000 waiver on the permit fee.” In 2005, the city issued a total of 19 green permits. In 2006, it jumped to 71 permits, and last year, the number of green permits climbed to 142. Rodriguez says the city hopes to issue at least 150 in 2008. Chicago also created The Chicago Standard, under which the city developed a total of 35 energy-efficient libraries, fire stations, police stations and public schools. The city also retrofitted about 15 million square feet of municipal facilities with energy-efficient elements. “We knew we couldn’t motivate people to do anything unless we were willing to do green first,” says Rodriguez.
“It’s amazing to see the heat island effect by virtue of having done that exercise,” says Rodriguez. “Since then, we’ve had more than 3 million square feet of green roofs that have either been built or are under development in the city. Ideally, the mayor’s vision would be to see green on every single high-rise building in the City of Chicago and on every single roof, so we can reduce energy costs.” In fact, the city has a total of $185,000 dedicated to installing green roofs. This equates to about 30 grants at $6,000 for each roof that meets or exceeds EPA Energy Star cool roof standards. Meeting challenges Even with the momentum in its favor, green building faces obstacles. Currently, it costs between 1 percent and 2 percent of a project’s total cost to build a LEED Gold or Platinum project. Many contractors and owners throw up this obstacle as proof green building can’t compete with traditional building methods and materials; they say this translates to similar cost increases for LEED Silver or Certified buildings. This is not true, says Katz. Just two years ago, it would have cost more to build a green building, she admits, but today the costs are coming down because it’s becoming more mainstream. “That’s a common misperception,” she says. “Builders would love to go green, but they think it’s going to cost so much money. It actually doesn’t have to cost more than building a conventional building. If you’re building a LEED Gold or Platinum building, you will see some up-front cost premiums. But if you’re building a LEED Silver or Certified building, you don’t have to pay a penny more than you would for a conventional building.” In fact, the USGBC predicts that as building green becomes more mainstream, the premium for building LEED Platinum and Gold projects will decline as well. The growth of green building is also outpacing green product availability in many areas. Many contractors face challenges finding green building materials when their customers want them. Most distributors don’t carry vast quantities of green building materials. So, in many cases, contractors need to search for materials that meet the LEED specifications their customers desire. This is not a comfortable situation for contractors that are used to finding the right products from sources they trust where and when they need these products. To overcome this challenge, the USGBC advocates that contractors employ a LEED Accredited Professional (AP) on any LEED project. A LEED AP is a trained and certified green building professional that will have the background knowledge necessary to make the right green product and process decisions. Plus, contractors can receive a point toward LEED accreditation simply by employing a LEED AP on a LEED project. “LEED APs know where to access green products,” Katz says. “Having someone like that on your team is extremely helpful, because they have so much familiarity with the products contractors need to use to earn points toward LEED certification. You can’t go into any distributor or Home Depot and find every single product you need, but we’re getting there. And there are distributors that work specifically with green products.” The color of money The word green has taken on many meanings over the past several years and is no longer relegated to its environmentalist past. Morgan Stanley and Deutsche Bank recently called green business a $1 trillion mega-market. And, renewable energy and demand-side technologies are currently the third largest venture capital investment in the U.S., according to Solar Today magazine. For now, the LEED system is the most comprehensive method for assuring green buildings meet strict environmental standards. “LEED is like a software program,” says Gorthy. “It’s evolving. Contractors that aren’t currently educated on green building are going to be grasping at straws to understand LEED, while everyone who’s already educated will be looking at newer and stricter green building methods. “These are very forward-thinking, evolutionary ideas,” he continues. “But those contractors that learn will have an opportunity to work on green projects. And if you don’t, you’re going to be out of luck.” Published in the Q2 2008 issue of Construction Purchasing magazine. |
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The more you know
“As you build, the contractors and the craft
guys out on that project don’t have to worry about the same level of
mold spores and other dangers when the mechanical system gets turned
on,” says Gorthy. “That’s a direct effect of building green for guys in
the field.”
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