Worth the green?

Green is the name of the game these days and design and construction professionals are finding the upside and downside of pursuing Leadership in Energy and Environmental Design certification to be significant.

An increasing number of designers and builders are incorporating environmental sustainability into their projects to help minimize project energy use and impact on the planet.

A major force in this industrial shift has been the U.S. Green Building Council, which created the Green Building Rating System and administers LEED certification. Multiple sources said the certification process is time-consuming and adds an average of 10 percent to total project costs.

Even so, 4 billion projects in the nation’s new construction market are LEED certified or are pending certification, and USGBC receives more than 100 new certification requests each month, said David Gottfried, a USGBC founder.

Many USGBC members are government institutions, such as the state of Washington, which mandated in 2005 that all new public buildings earn LEED silver distinction.

The depth to which LEED processes are incorporated into government projects can give an outsider the impression that USGBC is part of the government. Indeed, it has built a powerful reputation as the national authority on sustainable building practices. But despite its influence and Washington, D.C., headquarters, USGBC is not a government agency. Instead, it’s a nonprofit – one with a $70 million annual budget.

Where the money goes

While fees related to certification can reach six-figure sums, an average of $4,700 of those costs goes to USGBC, said Michelle Moore, USGBC’s senior vice president of communications. The rest of the costs typically go toward consultation, inspection and acquiring sustainable materials.

“The first time somebody’s building green, it’s a learning process for the project, team and owner,” Moore said. “Because it’s different, it’s going to take more time to work through those issues. And in design and construction, time means more money.”

Earning LEED certification can add up-front costs from $30,000 to $200,000 depending on the size of the project and how early certification becomes part of the planning process, said Timothy Buckley, a LEED-accredited professional who owns Vancouver-based Greenstone Architecture.

“It gets more expensive the later they decide to go for LEED,” Buckley said. “It’s always better to do that evaluation early so you can have some synergistic benefits that compound on themselves.”

Green, not LEED

But some green builders said LEED certification comes with a price that doesn’t match its payback.

“The world needs green buildings far more than it needs LEED-certified buildings,” said Ron Frederiksen, president of Vancouver-based RSV Construction Services Inc.

He often collaborates with LEED-accredited professionals, such as Buckley, to help clients determine if LEED certification is right for their projects. While it’s often feasible to use green materials and practices, that’s not so with certification, Frederiksen said.

“My clients are just like consumers when they buy something,” he said. “There is a hard limit to their budget.”

That was the case with the three-story Innovative Services NW building that opened in May in Vancouver. Frederiksen said the nonprofit’s facility is primarily built of recyclable and local steel and concrete with high-efficiency heating and cooling systems, motion sensor lighting and a smart building envelope.

But it won’t be certified.

Even without certification, Frederiksen uses LEED standards to evaluate RSV’s project sustainability.

“USGBC is the best yard stick any of us have,” Frederiksen said. “It’s been around the longest. It’s been nationally and internationally developed.”

He said certification would be beneficial if it were more affordable.

“It would make you focus on design choices as you were going through the preliminary budgeting and design decisions,” he said. “It would give you a road map.”

Return on investment

Despite the up-front costs, many companies are embracing LEED certification, pointing to benefits such as increased energy efficiency, property values, employee health and public approval.

When the $62 million Hilton Vancouver opened in 2005, it was one of the nation’s first hotels to attempt LEED certification.

The total costs related to certification were less than $200,000, said General Manager Gerry Link. Certification brought the hotel public recognition that would have required costly public relations efforts otherwise.

“We paid for it within a few months of opening the hotel through business booked because of our intention for LEED certification,” Link said. “We picked up media coverage that we could not have afforded.”

That exposure included winning Travel and Leisure magazine’s Eco Hotel of the Year and appearing in the New York Times and on CNBC.

The certification also brought more business from groups committed to sustainability.

“It’s important for them to stay at a property that aligns itself with their values,” Link said.

Going further, the hotel earned Green Seal certification, which verifies that operations and products used in the hotel are also sustainable.

“It’s not greenwashing because we’ve backed it all up,” Link said.

Vancouver-based Columbia Credit Union opened branches in Washougal and Vancouver this year that are pending LEED gold certification.  

About 10 years ago, the credit union began looking for ways to bring sustainable practices to its everyday operations, said Colleen Boccia, senior vice president of marketing and strategic planning.

The new buildings include floors of sustainably grown Brazilian cherry wood, high-efficiency heating and cooling systems, rain cisterns, skylights and self-dimming lights.

The company declined to share the construction cost of the green branches, but said certification added 10 percent to 12 percent to the total project cost.

Chief Operations Officer Steve Kenney expects those features to pay for themselves in five to seven years in lower utility bills, and Chief Executive Officer Parker Cann anticipates lower absenteeism with employees working in healthier buildings with more daylight.

“These LEED-certified buildings hold a higher value over their life,” he said. “We think it’s a differentiator in the marketplace. It reflects the feelings of our members and … it also makes good business sense.”

A hefty price tag

Also in Vancouver, the Washington State School for the Blind is building a new physical education building that was designed for LEED certification of silver or higher because of the state’s requirement for LEED-certified public buildings. The state is covering certification costs, which added more than $180,000 to the $9 million project.

Sustainability has been a priority at WSSB since the early 1990s, according to school officials. But when the school built its Ogden Resource Building with innovative green practices in 2003, LEED certification wasn’t a priority.

“It’s estimated that it could have been at least silver certified,” said Rob Tracey, facilities manager. “The cost of certification was $70,000, so we decided to put that into the building instead.”

Tracey sees the good in the state requiring LEED certification – it helps increase awareness of green practices, he said.

“LEED is good at getting people to focus on the fact that what they do affects everybody,” he said.

But if it were up to him, money for the P.E. building’s certification would go toward sustainability efforts with more direct impacts.

“I’m going to get killed for this, but there is no benefit (to certification),” he said. “The fact that we can hang a plaque in the hall and say we are gold certified may draw a little good press. … But the main thing is it forces us to look at the building from an environmental standpoint. And we do that anyway.”

Alternative certifications

Brian Lessler, president of Gresham-based Persimmon Development Group, is finishing the construction of Hazel Ridge Townhomes in Hazel Dell. The 88-unit development has a projected value of $21 million.

The project is his company’s first in Washington, and its units are selling quickly to a broad demographic. It will be Energy Star and Earth Advantage certified, but not LEED certified.

Persimmon began emphasizing sustainable practices about 10 years ago, before green was more than a color. But Lessler said sometimes going for green certification isn’t practical, especially with small projects.

“We try to dial the (project) level of sustainability to the conditions of the market,” he said. “If you’re building a $230,000 home, there’s much less discretionary ability to afford sustainable development than if you’re building a $600,000 home.”

Lessler said he would go with LEED certification if conditions were right – if the project were large-scale, if potential returns on the investment were strong and if potential buyers or tenants were willing to pay more to cover project costs.

“I think if LEED were less complicated and substantially less expensive, we would push harder to obtain (certification) on the right project,” he said. “But if you’re adding 10 percent to the cost of a project you’re probably going to knock yourself out of the marketplace.”

Charity Thompson can be reached at cthompson@vbjusa.com.

Editor’s note: The VBJ will look at working with the costs of LEED certification and green building in the next Design and Construction Focus Section, which publishes Aug. 8.

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