Even the mainstream media has noticed the revolution in green building, but when the subject comes up, flashy office projects tend to get the attention.
Quietly, mostly below the radar screen until now, green retail design has been coloring big boxes and shopping centers, both through the formal methods of Leadership in Energy and Environmental Design (LEED) certifications and a sprawling array of less formal initiatives undertaken privately.
“There's been a slow but steady process already underway in green retail, well before Al Gore's movie came out,” says Kent Jeffreys, a green building expert and legislative counsel in global public policy with the International Council of Shopping Centers.
The green retail designs that are leaving the drawing boards and appearing in the real world now have been in the works for some years, he points out. “It's been bubbling below the surface, and it's reached a critical mass within the industry. But there's still a long way to go, considering the millions of square feet of retail space out there built 20 or 30 years ago.”
A number of factors are driving the trend: retailers can look to examples of successful sustainable design in other property types; there's more governmental pressure favoring greener buildings these days; and retailers and retail developers are beginning to realize the PR value of green properties.
But perhaps most importantly, retailers — big retailers — now see significant cost-savings potential in operating green buildings, while retail developers are coming to realize that sustainable design doesn't have to be prohibitively expensive.
“The impact of building design on the environment, so little acknowledged even five years ago, has become a hot topic throughout commercial real estate,” says Michael Lingerfelt, project director at the Orlando-based architecture firm C.T. Hsu + Associates and chairman of the Architectural Institute of America's retail and entertainment committee.
“Generally speaking, office buildings have been ahead of other property types in terms of sustainability,”he explains, “but retail's catching up. Its time is coming.”
LEED or not to LEED?
Case in point: Standards for LEED certification specifically for retail are currently being developed by the U.S. Green Building Council. In February, the council released a second and updated pilot test for new retail construction, the purpose of which is to gather market feedback on the proposed standards. No timetable has yet been released.
Still, LEED certification isn't the be-all and end-all of green retail design. “A lot of sustainable properties are being built to performance standards rather than the certification process, because certification represents a cost, perhaps $100,000 for a big-box retailer,” says Jeffreys. “This is particularly true with energy conservation measures, which can generate considerable cost savings. In some cases, retailers have been pursuing green strategies without ever calling it green.”
Meanwhile, behemoth owner/developers such as Cleveland-based Forest City Enterprises and Chicago-based General Growth Properties are calling their initiatives “green” as they integrate sustainable energy building into the fabric of their companies.
Forest City's star project is a redevelopment of the former Stapleton International Airport in Denver, which includes the 1.2 million sq. ft. open-air mall Northfield at Stapleton. It received LEED certification in 2006 for its energy efficiency, selection of building materials and sustainable construction techniques, and water management.
General Growth Properties is likewise committed to green design in its enormous portfolio, with reflective roofs and energy-conserving HVAC systems in some locations. It also has plans to use solar or wind power in new developments.
“General Growth's John Bucksbaum, who's also the current chairman of ICSC, is committed to fully greening his company,” says Jeffreys. The company has set up task forces to examine current practices.
Most of the big retail REITs — besides General Growth, Simon Property Group, Westfield, Macerich and others — are all rolling out green initiatives of one kind or another, institutionalizing the policies, and empowering employees to come up with new ways to mind the store.
“There's still a fair amount of low-hanging fruit still out there because a lot of buildings are older,” says Jeffreys. An employee, for instance, might point out the use of the old version of the florescent tubes.
“Retailers are going to start demanding green features in their buildings soon, and in great numbers,” says Rick D'Amato, a principal with architecture firm LPA Inc. “I'd say we're on the verge of a rush into it.”
D'Amato ought to know. His Irving, Calif.-based firm has designed a number of pioneering green retail buildings, including three experimental stores for retail behemoth Wal-Mart scattered in the diverse climates of Aurora, Colo., McKinney, Texas and Flagstaff, Ariz., with the latter still under construction.
In building its experimental stores, Wal-Mart is pursuing the same two broad categories of sustainable building true in other property types. The first employs energy and resource conservation during construction, such as the recycling of materials from a previous structure or the use of recycled materials, such as steel.
The other goal in green design is to conserve resources and reduce waste during the operation of a building. “Wal-Mart wanted us to experiment with a large number of systems, which we have,” says D'Amato.
The experimental stores sport a variety of photovoltaic (solar) panels on the exterior and high-efficiency HVAC systems inside. Other systems reclaim waste heat, and signage and refrigeration systems use less electricity than standard ones. Skylights redistribute sunlight throughout a store in a process known as “light harvesting.”
The overall goal of the experiments is to find techniques that use about one-third less energy, generate one-third fewer greenhouse gas emissions, and reduce solid wastes by about 25%. According to Charles Zimmerman, vice president of prototype and new format development for the retailer, each green design element must pay for itself within three years to be considered for large-scale adoption.
Target, Wal-Mart's biggest rival, has obtained LEED certification for its new stores in Chicago and Allen Park, Mich. The designation means those stores meet numerous standards regarding energy efficiency, water use, carbon emissions and other environmental requirements, but the retailer's efforts at sustainability don't end there. The retailer also incorporates the best results of its green properties into other stores that may not necessarily strive for LEED certification.
Whole Foods also has a pair of LEED-certified stores, one in Sarasota, Fla., the other in Austin, which are touchstones for the rest of the chain. The stores use a variety of recycled materials in construction, woods that support sustainable forestry practices, and even a composite board made from sunflower seed hulls. Some of the chain's individual stores obtain power from solar panels and power generated by biological materials like sugar cane or switchgrass.
Small but green
Sustainability also has been incorporated into smaller structures, such as the HSBC retail bank in Rochester, N.Y., which is LEED-certified. “The building was designed to be carbon-neutral, meaning that its presence results in no carbon dioxide released in the atmosphere,” says Keith Hansult, assistant vice president of environmental sustainability for HSBC-North America.
“The move to sustainable retail is driven partly by social responsibility, partly by PR, and partly by the prospect of cost containment,” says Charles Kridler, director of retail operations at Gensler, a San Francisco architecture firm that specializes in sustainable design.
“It seems like everyone we talk to is interested in applying sustainable principles to their projects in one way or another,” he says.
Gensler has worked on a number of high-profile sustainable retail projects, such as retail bank branch designs for PNC Financial Services Group, a Pittsburgh-based bank that is pushing hard for sustainability throughout its operations. PNC is currently rolling out LEED-certified green branches, with plans for about 90.
PNC and Gensler not only applied sustainable elements to each building, but created methods by which green design could by applied en masse. Each PNC branch project uses construction materials purchased within 500 miles of the site. PNC also utilizes recycled construction materials such as carpet, hard-surface flooring, ceiling tile and furniture panels.
The company estimates that it is saving about $100,000 on the construction of each branch using local sources and recycled materials, and that the branches will save about 45% in energy costs once they are up and running.
Gensler also created the design for automaker Toyota for the first-ever green auto dealership in the United States. The LEED-certified 56,000 sq. ft. car dealership, which opened recently in the north Dallas suburb of McKinney, Texas, includes exterior panels made of recycled aluminum, energy-saving glass, a water cistern to capture and conserve water, walls covered with Japanese ivy and a special “membrane roofing” system to control temperatures inside.
“One of the unique green aspects of the project is a closed-loop car wash system that reduces the quantity of water consumed in each wash from 25 gallons to six,” notes Kristie Ritchie, director of sustainable design at Gensler.
The building also features rain and condensation water harvesting, a process able to pull 24,000 gallons of water from the air during a dry August 2006. “There aren't a lot of retail applications anywhere that do rain harvesting,” Ritchie adds.
Developers get in on the act
The Fairlane Green project, the first phase of which is a 450,000 sq. ft. power center in Allen Park, Mich., is an early example of multi-tenant green retail development. The project, developed by Irving, Texas-based Archon Group, a Goldman Sachs Group subsidiary, opened in late 2005 and received a gold-level LEED certification — the second highest rating — the following year.
Besides attracting attention as a green development, it has also attracted retailers such as Target, Barnes & Noble, T.J. Maxx and Old Navy.
Fairlane Green sits atop a former 243-acre industrial landfill owned by automaker Ford, whose real estate division, Ford Land, oversaw site remediation and the initiation of the green retail project.
The design features a highly reflective roof, energy-conserving HVAC systems, and landscape features such as an irrigation system that uses rainwater.
“One of Ford's priorities is building green, and this is a prime example of it,” says Lance Taylor, development manager with Archon Group. The automaker sold surface rights of the site to Archon to facilitate the retail development, and specified that it incorporate green building design.
A municipal mandate was the spur for another green shopping center, one that is part of the mixed-use 550,000 sq. ft. Promenade at Lyons in Coconut Creek, Fla. New York-based Brown Hill Development broke ground on the 23-acre project in May. When it is completed in 2008, it will be LEED-certified.
“Initially, the city asked whether the project could be LEED-certified, and then it grew into a requirement,” says Dale E. Scott, senior vice president with Boca Raton-based Sikon Construction Corp., the contractor on the project. “But it wasn't a surprise. Municipal governments are becoming a strong driver in green development.”
Some developers believe the cost to build green still outweighs the benefits. A report by PricewaterhouseCoopers and the Washington, D.C.-based Urban Land Institute concludes otherwise. While green buildings cost 10% more to construct, they generate energy savings up to 35%, according to the report.
But much of the cost has to do with retrofitting older structures. The green movement could put older buildings in a bind because retrofitting can be very expensive, according to the report.
“Buildings will be obsolete if they don't upgrade,” according to the report. “It's the equivalent of what happened in the 1980s, when fiber optics became necessary for running newfangled computer systems and telecommunications.”
Taylor also explains that timing is a critical factor when adding up the costs of green building design. “Since projects vary so much, it's hard to give an exact number,” he says, “but if the architects and engineers are involved early in a project, green design isn't that much more expensive.”
Dees Stribling is a Chicago-based writer.