Not Building Green Is Called a Matter of Economics

By MICHAEL BRICK

ROCKVILLE, Md., Jan. 8 — The tools for constructing environmentally conscious, energy-efficient office buildings have existed for decades, but commercial developers have not adopted the principles of what is commonly called green or sustainable building because a compelling case demonstrating the economic rewards has not been made, according to specialists in real estate, finance, design, construction and environmental health and safety. This is a concept that has sputtered along for 20 or 30 years," said Daniel R. Tishman, executive vice president of Tishman Realty Corporation. "It's an economic thing." It is a phenomenon with parallels to the popularity of sport utility vehicles, except that buildings are responsible for more than 36 percent of the country's energy consumption, and transportation only 27 percent, according to the Energy Information Administration of the Department of Energy.

Marty Katz for The New York Times Dan Wertz, a building engineer, shows the potassium permanganate pellets in the air-purification system of the Tower Building. The windows are made of glass that reduces the transfer of heat.

This is a concept that has sputtered along for 20 or 30 years," said Daniel R. Tishman, executive vice president of Tishman Realty Corporation. "It's an economic thing."
It is a phenomenon with parallels to the popularity of sport utility vehicles, except that buildings are responsible for more than 36 percent of the country's energy consumption, and transportation only 27 percent, according to the Energy Information Administration of the Department of Energy.

A movement is under way to promote green development as economically compelling, complete with a trade organization that sets standards and awards certifications to buildings under the Leadership in Energy and Environmental Design program administered by the private U.S. Green Building Council. This amounts to the early stages of an effort to create a marketable brand of buildings, one that addresses environmental issues outside the scope of the government's Energy Star program.

That program, administered by the Environmental Protection Agency, awards certification to voluntarily participating buildings that demonstrate energy efficiency. The Green Building Council's program offers escalating levels of certification, using a point system to measure a broader palette of green. Developers can win points by complying with more difficult, costly and unusual standards like replacing impervious surfaces with vegetative cover and treating waste water at the site.

Governmental entities are also pressing for green building. In 2001, the federal General Services Administration joined the Green Building Council. In 2000, New York State approved a tax credit for developments that comply with requirements for energy use, materials selection, indoor air quality, waste disposal and water use. It was the first state to do so, and others, including Maryland, have followed.

Still, of the 1.6 billion square feet of nonresidential construction projects started last year, only 2.3 percent applied for certification from the Green Building Council, according to an analysis by Robert K. Watson, director of the International Energy Project at the Natural Resources Defense Council. Of government buildings, 16.5 percent applied. In commercial projects, where by far the most construction was started, only 1.07 percent applied for certification. A factor contributing to the low participation rate is that the program has existed only since March 2000, and so far, most types of projects have needed to apply in the early, conceptual phases, though they do not achieve certification until much later.

"We need to make the business case," said Kenneth W. Hubbard, a partner in the Hines Company. "It has not caught on."

There are notable exceptions, mostly experienced developers who hold their properties for many years and who have seen a comparable long-term payoff from the use of distinctive, high-quality architecture. A prominent example in New York is the Durst Organization, developer of 4 Times Square.

Elsewhere in the country, the Hines Company has taken a pioneering role, with environmentally sophisticated office buildings in Boston, Seattle, Houston, Detroit and Atlanta.

Hines estimates that it has spent 45 cents to $1.30 a square foot, varying by building, above conventional construction costs to make mechanical and electrical systems in its buildings exceed building codes.

To date, Mr. Hubbard said, the financial returns are unproven.

Here in Rockville, a private developer called the Tower Companies has built a squat 10-story oval of dark reflective glass and metallic panels, split on the thin ends by angular wedges that look like supports for a lunar module. The 263,000-square-foot Tower Building cost $62 million and sits on 12 acres. It opened at the end of 2001 and is now 85 percent leased. The cost breaks down to $235 a square foot, and of that, $124 a square foot was spent on construction, $2 more than conventional construction by the developer's estimate.

The windows are made of double-paned, spectrally selective glass that reduces the transfer of heat. Carpets and ceiling tiles are made of recycled and recyclable materials. They are manufactured to reduce the emission of volatile organic compounds, the airborne chemicals familiar to most people for giving off the "new car" smell. Fiberglass is sealed behind aluminum to prevent its transformation into airborne particles.

The closed offices of more senior managers are lined with windows that are above the sight line (unless Shaquille O'Neal is visiting) to provide them privacy while still allowing natural daylight to reach workers in their cubicles.

Tenants cannot hear cars on I-270, an eight-lane freeway that passes within 200 feet of the building; the curtain wall is prefabricated and snapped together on the facade, with window fittings sealed with sound-minimizing gaskets instead of caulking.

In a mechanical room, 210 filters, each the size of a cat litter box, are filled with potassium permanganate, a purple granular powder that kills exposed pathogenic bacteria, part of a three-stage air filtration system that cost $75,000 more than a top-quality conventional system.

The Tower Companies has by no means employed all of the principles of green building, and the most obvious example is that this building does not generate energy. Photovoltaic cells were invented by Bell Laboratories in 1954, and their cost has been declining, but even the 4 Times Square building in New York, a high-water mark in green commercial office development when it opened in 1996, uses only a limited amount of solar power.

With this modest approach to green building, the Tower Companies says it has secured rental contracts for $30 to $40 a square foot, at a time when average annual asking rents in Rockville are $29.38, according to the real estate services firm Cushman & Wakefield. But Tower employees said that their tenants were driven by more traditional real estate concerns.

"I can tell you the reason Bank of America leased here," said Bernard Sanker, an agent of the company. "Green didn't hurt, but they've got sign rights facing that Interstate."
His boss, Jeffrey F. Abramson, a partner in the company, said that he did not expect tenants to pay a premium for green development, even though the energy cost savings were clearly demonstrable. The monthly bill comes to about $1.50 a square foot instead of the $2 of comparable nongreen buildings the company owns.

"Tenants at Tower refused to be on their own meter," Mr. Abramson said. "They wanted to be on a gross lease."

Leasing structures are a powerful obstacle to making economic sense of green building principles. Most office tenants sign gross leases, meaning that the building owner pays for energy and water, so tenants have no incentive to reduce their energy use.

"The lease structure is clearly not set up to address this issue," said M. Arthur Gensler Jr., chairman of the design firm that bears his surname.

And the Green Building Council's certifications, created as a marketing tool for developers and building owners, have even in their infancy become less than compelling to their intended audience, corporate tenants, according to brokers and developers across the country.

"They brought me on to this thing three years ago to open the door to the corporate sector, and it's not there; it's not even close," said Edward W. Caulkins, a senior director of Cushman & Wakefield in San Francisco who is a board member of the Green Building Council. "It can be very costly, and at the end of the day, you get a plaque."