How effective are green laws in prompting the development of sustainable buildings? How do the best of them blend incentives for doing so with punishment for not doing so?
Various jurisdictions offer lessons and models, the newest being the District of Columbia, where Mayor Muriel Bowser last week signed the Clean Energy DC Omnibus Amendment Act of 2018, setting a mandate of 100 percent renewable electricity by the year 2032. The measure is part of the mayor’s 57-item Clean Energy DC Plan, which among other goals includes:
That last goal was acted on in July, when Bowser signed into law the District of Columbia Green Finance Authority Establishment Act of 2018, officially making Washington, D.C., the first U.S. city to establish a green bank. Typically, green banks invest in mature clean energy projects in areas such as solar energy systems, energy efficiency measures, water management systems and clean transportation infrastructure and equipment.
“Washington, D.C., is a global leader on environmental issues, and by establishing a green bank,” she said then, “we will continue to build on the progress that helped us become the first LEED Platinum city in the world.”
That LEED Platinum designation happened in August 2017. In December of that year, Bowser pledged to make the nation’s capital carbon-neutral and climate resilient by 2050. Among other actions, she has finalized the largest municipal wind power purchase agreement deal of its kind in the United States; and launched one of the largest municipal on-site solar projects in the country.
Now comes the new legislation, signed into law at the newly renovated headquarters of the American Geophysical Union, the first net-zero renovation of a building in the District. Additionally, said a release from the District, the bill “will lead to a boost in clean energy investment in the District with the mandated increases in funding mechanisms such as the Renewable Energy Trust Fund (RETF) and Alternative Compliance Payment (ACP).”
Policy Design Meets Building Design
Among the law’s details is an expansion of D.C.’s building performance benchmarking requirements to encompass all publicly owned buildings of 10,000 sq. ft. or more by 2021 and all privately owned buildings of 10,000 sq. ft. or more by 2026. It also calls for the establishment of a Building Energy Performance Standard (BEPS, not to be confused with the international accounting BEPS acronym standing for Base Erosion and Profit Shifting) that includes all buildings in the benchmarking program and carries minimum energy efficiency standards no lower than the median D.C. ENERGY STAR score for each building type.
“The bill means about half of the existing buildings in D.C. will need to improve their energy performance over the next several years,” says Anica Landreneau, director of sustainable design at HOK and a member of the firm’s board of directors and design board. “We anticipate significant investments in the retrofitting, re-skinning and repositioning of existing building stock. The bill also increases green financing options, making more money available to help pay for the improvements.”
As part of her role on the D.C. Green Building Advisory Council, Landreneau contributed to the development of the Clean Energy DC action plan that gave rise to this bill. She moved to the D.C. area in late 2005, just before the District passed a green building act the next year. In an interview, she says even though that law didn’t require private buildings to be recertified until 2012, the private sector didn’t need to be told twice. Depending on how you choose to phrase it, companies either took the lead or were prodded to do so.
“I was working in buildings in 2007 where they said, ‘I don’t want to be the last brown building on the block, so we might as well do it now,’ ” she says. Her team also advised the District on how best to set up new review and permitting procedures. Among the reasons the new plan came into being was the fact that 74 percent of emissions in D.C. are attributed to buildings. “To meet our 50 percent reduction goal by 2032, we have to reduce 500,000 tons of CO2 from our existing building stock, which indicated the need for legislation that addressed improvement in existing building performance.”
Air Quality Means Breathing Easier
Landreneau’s testimony for the Clean Energy legislation included input from a task force of private-sector members of the D.C. Green Building Council. Asked which companies are walking the walk vs. just talking sustainability for its PR value, she says Akridge is among those leading the way in Greater D.C., as the developer has aspired to LEED-Platinum certification on virtually every project it’s pursued over the past decade. Hines, Skanska, Stonebridge and the Tower Companies are also innovative, Landreneau adds. In many cases these companies are re-skinning facades and making other changes to existing buildings, rather than tearing down. “It’s less than half the cost and less than half the time,” she says, “and the embodied energy is significantly less.”
Companies are also growing more aware of the dual value inherent in sustainable practices: You not only lower environmental impact and meet regulations, you also increase health and wellness — an easier pitch politically too, as people connect more directly to their own health and wellness than to climate change. LEED addresses water efficiency, for example, while the WELL Building standard addresses water quality. As for the air, WELL goes further than LEED in terms of odor control.
“The financial services sector has been all over health and wellness,” she says, starting with the first-ever WELL Building project from TD Bank in Toronto. “They did one floor first, and it was enough of a difference they want to continue doing it.” The newly consolidated Sealed Air HQ campus in Charlotte has recently earned sustainability honors from the U.S. Green Building Council, and got a lot of support from HOK in holding area and state authorities to their word on promised transit service.
Health science and biopharma companies are also high on sustainability, including HOK client AstraZeneca, which just finished a LEED-Platinum fit-out of a LEED-Gold building in South San Francisco, California, not far from the Genentech complex.
“They picked that site because of sustainability,” says Landreneau.
Martin Sharpless is AstraZeneca’s project director, R&D Capital Programs and GERE (from a French expression for “evaluation and management of water resources”). Based in D.C., his remit includes sites in California, Maryland the UK, where the company is in the midst of constructing a huge headquarters campus.
“AstraZeneca is on an absolute drive to become energy neutral, carbon neutral and water neutral by 2025,” he says in an interview. And they’re not alone. “It seems pretty clear that corporations need to take charge of their destiny, and that is basically our attitude. We’re a healthcare company. It would be strange for us to pollute the water, heat up the air and damage the climate when at the end of the day we’re trying to make people’s lives better and longer. We’re looking to make any facility we retrofit better and any new facilities pretty darned good — if not net zero, at least net-zero-ready.”
That means paying attention to how much air really needs to be pushed through the workspace, examining how to reuse or not use water, and considering off-grid options when the opportunity presents itself. “Laboratories don’t lend themselves to little power blips,” he says. “They are a lot more like data centers than people think. As an owner over the past three-and-a-half years, I’ve seen more strange power things than I’d have imagined.”
“The good thing about preparing for such unplanned blips is it’s made the AstraZeneca team more resilient,” says Sharpless, “and resilience is often about reducing the energy you need or making more of it yourself. You don’t have to buy as much capacity to back yourself up.” He actually prefers the term resilience to sustainability: “It makes more sense in terms of a capex and opex environment. Sustainability is the goal, resilience is a business operations decision, and it’s a good one when you can afford it. We’re trying to make ourselves as resilient and sustainable as possible.”
The SSF Process
The South San Francisco site came about because company leadership wanted to consolidate four divisions that were working from separate locations within 30 minutes of one another around the region. Bay Area employees from Acerta Pharma, MedImmune, Pearl Therapeutics and AstraZeneca’s TIDE (Technology Innovation & Delivery Excellence) are now located at HCP’s Cove at Oyster Point development.
The company needed about 100,000 sq. ft. Out of around 10 sites overall, the Cove stood out, says Sharpless: located next door to Genentech (which just finished yet another expansion), close to Interstate 101, with proximity to Caltrain, BART, buses and the Bay Trail, a planned 500-mile trail for bicyclists and pedestrians running through all nine Bay Area counties and 47 cities. Hotels are close by too. He says the Cove was actually designed in case Genentech wanted a campus for 10,000 people. Now Biomet is building across the street, and AbbVie is moving in too.
“The primary tenants were going to be a few folks like us and then a lot who wanted a floor or 30,000 square feet,” Sharpless explains. “They recognized those folks are used to having a campus with nice amenities — bar, fitness and food. They set up a common space that none of the rest of us had to build. So we didn’t have to give up space for those things. Our building is across the volleyball court from the food, bar and fitness center. They had a lot of garage parking. And there’s frontage on the 101 so we could hang up the AstraZeneca sign and have visibility for recruiting.
“They’re building 1 million or so square feet, and we are talking about 100,000 square feet of it,” he says, noting the AstraZeneca space is about 20 percent science space and 80 percent office. “I think some of the tenants already have graduated from a floor or two to a whole building. It tells you how fast bio moves sometimes.”
Sharpless says the whole process from selection to lease negotiation took eight months. It took about 18 months to get to the point of bringing AstraZeneca employees on site, staggering them a couple groups at a time rather than bringing in everyone at once. He says input from staff along the way meant very few issues as the move-in took place.
“Virtual reality modeling paid off handsomely,” he says, “even better than renderings or plans. We would walk folks through and show them.” Meanwhile, champions from each of the divisions helped the team with some of the graphics, signage and way-finding visuals.
“So they knew the building pretty well,” Sharpless says. “We haven’t seen a lot of user-driven changes. We were moving fast, but made sure, intensely, that they knew what they were getting. Spend a lot of time with users on the way in and you won’t have to spend as much time changing things afterward.”
Asked how he implements sustainability and wellness lessons from facility projects into other projects around the world, Sharpless says it’s “big and expensive and challenging,” but says the company’s goal of closely aligning its science and commercial units has blended well with the design trend of putting office and labs in close proximity to one another. “We effectively are building that kind of facility from the start in the UK,” he says. ‘At other sites, we’re looking to get close to that as we expand our master plans. In Gaithersburg we’ll move outer buildings into the center, and build a mega-building, allowing people to walk from lab to office and to their commercial friends very easily.”
In many ways the sustainable campus parallels sustainable cities seeking to increase density. “We’ve tended to say we want a more intense development for our campus space, and less outlying space,” Sharpless says. “I wouldn’t be surprised if that’s not consistent across the industry. Our CEO drives hard on collaborating effectively, and proximity does mean something. At the same time we have electronic ways to collaborate, it never hurts to be close to the friends you’re trying to accomplish things with.”
Proximity helps in community relations too. Sharpless says his team has great relationships with the cities of South San Francisco and Gaithersburg. As for California’s high bar when it comes to environmental rules and requirements?
“The good news about California is if you want to build high-quality, resilient and sustainable facilities, they’ve taken a lot of the guesswork out of it. For someone like us, it’s not onerous at all. South San Francisco is a small town in comparison to San Francisco, so they were actually very easy to work with. We tend to be extremely transparent, so we’re not hiding anything. We want them to know what a good steward we are. People tend to react well to that.”
That helped when the company wanted to make certain design changes, such as bringing in some large gas tanks for nitrogen that required a special enclosure, and taking down three walls in order to have a four-story open-communication staircase. “The fire marshall had to lean in and say, ‘I accept that,’ ” Sharpless says. “We had to put big garage doors on those three wall faces. It allowed us to open up the stairs, and it’s really wonderful. That was obviously a bit different than normal. But we showed we would maintain the systems and take good care of the space.
“I think a lot of people try to hide things and get away with it,” he says. “You just have to set up good communications and show that you actually follow through on your word, and jurisdictions are fairly supportive. South San Francisco was great to work with.” So were the union tradespeople, he adds.
What to Do Next
California and the Bay Area define the word “progressive.” But Landreneau says D.C. is the first region to pass a building performance standard for existing buildings, although a couple dozen jurisdictions have building energy use benchmarking and disclosure legislation on the books. “My guess is that some of those cities will at some point look at a mandatory improvement metric,” she says. “New York will almost certainly try to follow behind us and may pass something this spring. They had look at a cap on EUI [energy use intensity] per building type. And I think more cities will look into benchmarking or disclosure.”
States are doing their share too. Policy changes noted in recent Washington Post coverage of the D.C. law include:
As for the buildings using the energy, new laws and regulations will mean “there will be more transparency, so people will see the performance of your assets,” Landreneau says. “That requires tenant engagement — a component of building performance is occupant behavior and plug loads.”
She recalls a recent project in Toronto that involved six buildings in the financial district. Half the EUI correlated to occupant behavior. “The client said if we could reduce that percentage by 2 percent it would be worth it, and we ended up reducing by 10 percent,” she says, achieved not through a top-down mandate, but through involving tenant-appointed individuals on a green council that encouraged waste and water use reductions, for example. “It reduced their tenant turnover as well,” she adds, “which was not an intended outcome,” but a good one.
Even informal improvements that fall under best practices can help a lot, whether they’re part of a certification program or not. “Energy modeling is a no-brainer for HOK and our clients,” Landreneau says on the HOK website. “It’s like reading the miles per gallon rating before you buy a car. It’s basic performance information that every building investor should know.”
As with any business metric, it starts with paying attention, and sometimes comes down to asking the same question a bombing comedian asks the audience: “Is this thing on?”
“We have had clients with 1 million square feet, and you look at their energy bills and you realize the meters aren’t even plugged in,” she says of smart meters that aren’t given the chance to show their smarts. “Use Energy Star and hold your utility accountable. Look at your energy bill and ask, ‘Does that make sense to me?’ Too many people are paying the wrong bill, and not getting the benefits when they invest in upgrades.”
Sub-metering is a good step, and a must if you’re talking about a data center, she says. Sensor placement — including a new generation of wireless sensors — helps a lot too, so spaces can be tuned for actual occupancy rather than scheduled. Vacancy sensors should be calibrated to their most sensitive setting during commissioning: “If you’re breathing, it should keep the lights on,” she says. “Most people go with the cheapest commissioning available, then grow unhappy, and then turn off half their sensors.”
New construction has all manner of controls designed into the structure, but they’re only as good as they’re programmed and engineered. And that may be a vulnerability due to shortages in the industrial maintenance sector.
“I feel like we’re losing that work force,” she says. “There is a huge gap in tenant spaces — they might have a building engineer, but with a fit-out, the tenant may not have somebody capable of running that stuff … If you find a good commissioning consultant, stay with them. Have someone like a building engineer on your tenant side. And optimize — people reconfigure their spaces a lot. It’s important for people’s comfort and productivity, not just building performance.”
Last but not least, go visit a new installation and give it a chance, she says. The same goes for giving green policies a chance.
“With the lack of federal level leadership, it will be up to our cities and states to enact mandates to meet aggressive energy reduction targets that mitigate climate change,” said Landreneau of the law signing in D.C. “Our AEC industry must continue to drive progressive change at the local level. Other cities will be looking to the nation’s capital as an example for a path to healthier, more sustainable urban environments.”
Watch for more about AstraZeneca’s global site portfolio in the biopharma industry report in the March 2019 issue of Site Selection.
Adam Bruns has served as managing editor of Site Selection magazine since February 2002. In the course of reporting hundreds of stories for Site Selection, Adam has visited companies and communities around the globe. A St. Louis native who grew up in the Kansas City suburbs, Adam is a 1986 alumnus of Knox College, and resided in Chicago; Midcoast Maine; Savannah, Georgia; and Lexington, Kentucky, before settling in the Greater Atlanta community of Peachtree Corners, where he lives with his wife and daughter.
The Site Selection Energy Report features exclusive and in-depth reporting and analysis on the most important energy projects and energy policy issues impacting the world of manufacturing and industrial real estate. Topics covered include oil and gas projects, investments into alternative energy installations and R&D, tax credits and financing, electric utility issues and much more.