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Customer Demand for Environmental Design has Developers Embracing
Green Building Practices - Side Benefit is Improved Bottom Line

By Mark Belko, Pittsburgh Post-GazetteMcClatchy-Tribune Regional News

Mar. 16, 2010--From a former bakery in the East End to a luxury hotel in the heart of Downtown, more developers are finding gold in green.

If once hesitant, developers now are embracing green building construction and practices not only as a way to save money and help the environment but because they are in high demand by those who matter the most, their customers.

"People who want to be in the project tell us that's what we have to have," said Todd Reidbord, whose company, Walnut Capital, is seeking a Leadership in Energy and Environmental Design gold certification as part of its Bakery Square mixed use development in Larimer.

Downtown, the high-end Fairmont Hotel, which is scheduled to open March 29 in Three PNC Plaza, itself a green building, hopes to secure the same LEED gold designation.

General Manager Len Czarnecki said the "lion's share" of proposals he gets these days from groups seeking to rent large blocs of rooms are asking for environmentally friendly features.

"In some cases, it's a flat out requirement," he said.

The Downtown hotel expects to be Fairmont's first to be LEED certified. It may also be the first LEED-certified hotel in the city.

But it is by no means the only project that has gone green.

Washington County developer Millcraft Industries hopes to secure a LEED silver designation in its conversion of the former G.C. Murphy store and adjacent properties into apartment, fitness and retail space. It also plans to seek a LEED rating in its proposed redevelopment of the State Office Building Downtown.

Millcraft also incorporated green features but didn't seek a LEED certification at Piatt Place, the former department store Downtown converted into condo, office and commercial space.

"It makes sense to do things the right way. It's what the public wants and it's at a minimal cost to do so," said Lucas Piatt, Millcraft executive vice president.

Even Longwood at Oakmont, an independent retirement community, is building an 89-unit apartment building, The Grandview at Longwood, that it says will be the first for older adults to obtain LEED certification in the region.

"It's not only good for business but positive for the health aspects of our residents. When you put the two together, we felt the difference was really worth it," said Jim Pieffer, senior vice president of Presbyterian SeniorCare, parent company of Longwood.

One local company, Burns & Scalo Real Estate Services, has taken going green to a whole new level, offering class G space to prospective office tenants.

James Scalo, Burns & Scalo president, said class G involves everything from the selection of building materials and how energy is utilized to the use of green-friendly chemicals for cleaning.

One of the biggest changes the company has implemented in its class G space is that the office cleaning is done during daylight while people are working rather than at night after everyone has gone home.

That not only saves on electricity since the lights in the buildings can be turned off at night but allows for better supervision and cooperation in cleaning, Mr. Scalo said.

The company also uses environmentally friendly paints and cleaning supplies in its class G buildings, which now make up the majority of its portfolio. Overall, about 2 million square feet of space is classified that way, Mr. Scalo said.

"We do not feel this is a fad. This is a movement," Mr. Scalo said.

At one time more the exception than the rule, green commercial and office developments now are budding like flowers in the warm spring air.

Holly Childs, executive director of the Green Building Alliance, said there's a big reason behind it: People are demanding it.

"Tenants are saying that if you want me in the building it has to be a green certified building or a green performing building," she said.

Going green also can improve the bottom line, according to a 2008 study by McGraw-Hill Construction. It found that green building cut operating costs by 13.6 percent and increased building value by 10.9 percent. A report by CoStar Group, a commercial real estate data firm, showed that LEED-rated buildings commanded higher occupancy and rental rates than non-LEED ones.

Ms. Childs said another factor in the growing interest in green development is that the cost of green building materials and products has dropped over the past few years as more and more suppliers carry the lines.

"It's not this expensive elite material," she said.

In Pittsburgh, the number of LEED-certified buildings more than doubled in less than three years, from 20 in April 2007 to 43 in November 2009. Seventeen of those came on line in one year, from November 2008 to November of last year.

Ms. Childs said the green movement is spreading outside the city into the suburbs and other counties.

"We're seeing interest throughout the region in areas where there has not been a lot of exposure to green buildings," she said.

At the Fairmont, vacant rooms will be in a dormant state essentially until a guest is ready to arrive. At check-in, employees will be able to send a signal to a room to get it ready for the guest. Lights will power up and the temperature of the room, depending on the time of the year, will then adjust to a comfortable level.

Sensors also will power off certain outlets and adjust the temperature when a guest leaves the room.

The hotel also will deploy a system that uses naturally occurring enzymes to decompose food scraps so they can be washed down the drain rather than trucked to a landfill.

That means fewer trucks on the road and less waste in landfills. It also helps to cut down on odor and the potential for rodents, Mr. Czarnecki said.

"It does exactly what composting does in your backyard but at a faster rate," he said.

At Bakery Square, the former Nabisco plant redevelopment, the developer retained lots of windows to allow for natural sunlight, installed a water-based heat pump system for heating and air conditioning rather than traditional forced air rooftop units, and will have special parking for hybrid vehicles and bike racks for those who want to bike to work. There also will be showers in the buildings for the tenants who bike and want to freshen up. The developer also crushed and reused materials from demolished buildings at the site rather than haul them to a landfill.

"We don't feel like it really cost us anything [to install green features]," Mr. Reidbord said. "When you're talking $130 million [in project costs], it's nothing that substantial. It wasn't anything significant."

At The Grandview at Longwood, officials, among other things, are designing the landscaping to minimize potable water and irrigation use, seeking to optimize energy performance in building equipment, and using operable windows to increase fresh air ventilation.

The environmental-friendly features have been a hit, Mr. Pieffer said.

"This a generation we see coming through that is very sensitive to the environment, very sensitive to cost. They really appreciate the commitment to LEED. It's really been an unintended marketing bonus for us," he said.

Mark Belko: or 412-263-1262.


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