GREENING HOUSTON S ENERGY CORRIDOR

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1 GREENING HOUSTON S ENERGY CORRIDOR

2 energy corridor projects and statistics BUILDING ENERGY SAVINGS WATER SAVINGS 11,000 Equity Drive 12% 30% Beltway 8 Corporate Center IV 19% 40% DNA Westway I 21% 40% Granite Westchase II 17% 40% Eldridge Oaks 22% 40% GE Oil and Gas 15% 40% BP Helios Plaza 30% 66% NATCO 17% 80%

3 greening houston s energy corridor BY: BRIAN MALARKEY, AIA, IIDA, LEED AP In the future, you will not find Shell in a non-green building said Jeri Ballard, manager of corporate real estate for Shell Oil Company, to a packed audience at a June 2007 Greater Houston Partnership luncheon. Green building is being taken very seriously by the energy industry, but why? Aside from its recent surge in popularity, green building not only makes environmental sense, but business sense as well. human resources Ms. Ballard also offered some very interesting information coming from their human resources department. Potential new-hires, mostly recent college graduates, were asking if they were going to be working in a LEED certified building. Their HR Department was not familiar with green buildings, much less the LEED certification program. After all, what would green building have to do with human resources?

4 Having become the standard in the industry, the LEED (Leadership in Energy and Environmental Design) green building rating system measures environmental performance as it relates to a project s site, energy use, water use, material use, and indoor environmental quality. In general, LEED certified buildings differ from their traditional counterparts by providing more natural light and views, better indoor air quality, recycling programs, alternative transportation programs, and an overall healthier work environment all very attractive factors to both employer and employee. The new generation entering the workplace and the general public, for that matter, have become highly sensitized to these issues and want to engage their companies on this level, says Anita Hayes of Horizon Wind Energy, another energy company that has become keenly aware of the current green zeitgeist that has taken over the public. marketing Let s face it green is hot right now. Corporate Social Responsibility, or CSR programs, are quickly becoming as common as the ubiquitous company mission statement. In brief, Wikipedia defines Corporate Social Responsibility as a concept whereby organizations consider the interests of society by taking responsibility for the impact of their activities on customers, suppliers, employees, shareholders, communities and other stakeholders, as well as the environment. Within the commercial building industry, the environment is a high priority of CSR programs. Most companies want to be (or at least appear to be) environmentally conscious. The LEED program becomes a concrete way to signal a commitment to the environment when making facility decisions. 2 greening houston s energy corridor

5 Buildings alone account for 12% of water use, 39% of CO2 emissions, 65% waste output, and 71% energy use. Often what begins as a marketing decision to go green turns into a sound financial decision when taking into account the lower operating costs, employee health and well-being benefits, and associated higher productivity realized from building green. health and well-being Healthy, happy employees perform better and are more apt to come to work every day. From a building standpoint, good air and light quality are key in positively affecting employee performance. Countless studies indicate improvements to health and performance when air and light are enhanced. In a 2000 study, Lawrence Berkeley Labs found that simple improvements to indoor air quality significantly reduced symptoms that contribute to absenteeism such as allergies, asthma, and respiratory illness. Other studies show performance improvements for individuals who have access to daylight and views. Specifically, children s test scores show increases up to 25%. Wal-Mart found sales in stores with skylights increased by 40% over those without. Call center workers process calls 6% - 12% faster and patient stays in hospitals are reduced when given a view. White collar performance is more elusive; however, the related research is clear. Daylight and views increase performance and well-being. All of this is critically important when considering that companies spend four and a half times more for their employees than any other expense. Just a small increase in productivity dramatically affects the bottom line. a better bottom line Saving resources saves money. It s that simple. According to the New Buildings Institute March 2008 report, the average LEED building is 25% - 30% more energy efficient than the national average. Typical water savings is 30% - 50%. According to the McGraw-Hill 2006 Smart Market Report, green buildings are 7.5% more valuable, lease more quickly, and have 3.5% higher occupancy rates than standard buildings. Some of the greatest advantages, however, are the health and well-being benefits appreciated by employees. why houston? Houston is clearly the energy capital of the United States, but soon it may also be the energy conservation capital. According to a report released in January of 2008 by the Burnham-Moores Center for Real Estate at the University of San Diego, Houston ranks second only to Los Angeles in the number of energy-efficient, green buildings. Based on information provided by CoStar, the report recorded the square footage of LEED and Energy Star-rated buildings. Houston s 21.1 million square feet comes very close to Los Angeles s 26.2 million square feet, and with the current building boom going on here, Houston could eclipse Los Angeles within the year. Houston currently has 15 LEED certified projects and 145 that are LEED registered, meaning those that are going through the LEED process. The number of projects seeking LEED certification in Houston represents approximately 70% of all commercial construction in the city. A look at the energy corridor alone reveals that greening houston s energy corridor 3

6 of the 27 projects that are under construction, 25 are seeking LEED certification. Based on square footage, that is 94% of all construction in the energy corridor. Houston s energy corridor just might be the largest concentration of LEED and green buildings in the country. case in point In addition to the LEED projects undertaken by energy leaders such as Shell, BP, and ConocoPhilips, there is a surge in speculative office buildings in the energy corridor seeking LEED certification under the U.S. Green Building Council s Core and Shell program. As a complement to that, many companies leasing space are using the LEED for Commercial Interiors program for their build-outs. A perfect example is the DNA Westway I project located off Beltway 8 and Clay Road. This 300,000-sf project is LEED Silver Certified (for Core and Shell) and their major tenant, NATCO, an energy service company, is seeking LEED Silver for their interior space. This scenario is becoming more common as the energy sector is seeking green buildings to move into and green spaces to build out. Whether your company s motivation is marketing, the bottom line, or employee health and well-being, green building makes good business sense for the energy sector and good sense for Houston. 4 greening houston s energy corridor

7 Brian Malarkey is Director of Kirksey EcoServices SM, the green consulting arm of Kirksey, a Houston sustainable architecture firm who has designed 7 of Houston s LEED certified buildings and whose portfolio contains more than 20 million square feet of LEED projects. Contact him at brianm@kirksey.com.

8 Kirksey Architecture 6909 Portwest Drive Houston, Texas Ponce de Leon Boulevard Suite 945 Coral Gables, Florida TX Registered Architect #16875