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8/7/2019 Cherokee Business Philosophy - TD Overview
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Cherokee Business Philosophy
Lessons Learned and Future Opportunities
Tom Darden, CEO
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Cherokees businessphilosophy
Lessons learned from
investing in brownfields andsustainable development
Trends support sustainabledevelopment
Opportunities to expand theapplication of sustainabilityabound
Presentation Objectives
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Business Philosophy
Tishman Speyer Rouse Company Mary Kay Cosmetics
Walking to the SkyJonathan Borofsky, 2004, Stainless steelpoll and fiberglass figures privatecollection exhibited at RockefellerCenter, New York.
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Introduction to Cherokee
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Cherokee Sustainability Philosophy
Cherokee is a private equity firm investing capital and expertise in theredevelopment of urban infill sites with a focus on brownfield and transit-oriented development.
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North Hills, Raleigh
Vacant and contaminated mall converted to mixed-usetown center
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Boisbriand, Quebec
Former GM plant is now a mixed-use, sustainablecommunity
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Charlotte Southline, North Carolina
Reducing carbon by investing in land near transit
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Cherokee Office
Cherokees office uses significantly less water andenergy
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National Mainstream GreenHome
GreenHome is a model for green building practices
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Brownfield Redevelopment
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Environmental Regulations in U.S.
U.S. Environmental Protection Agency Established and Clean Air Act Adopted
Clean Water Act Adopted
Safe Drinking Water Act Adopted
Resource Conservation & Recovery Act and ToxicSubstances Control Act
Amendments to Clean Air and Water Act
Superfund Act Adopted
19701972197419761977
1980
1880s to Mid-1900s. Simple, local rules. No dense smoke and norefuse in the water
1940s to 1950s. Research on the effects of pollution on air and waterstart modern environmental era
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Superfund Law 1980
1978. Love Canal in Niagara Falls,declared a state of emergency families evacuated
1980. Superfund Lawo Clean up the most highly
contaminated hazardous wastesites
Protect human health and theenvironment
Make the polluters pay by imposing
strict, joint and several liability
Change behavior to stop further toxicwaste dumping
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Superfund Unintended Consequences
EPA highly inefficient at conductingcleanups
In 20 years, only 750 sites cleaned up
40% of the $30 billion spent onlitigation, not cleanup
Arguably, huge price paid for littleenvironmental gain
Cleanup shifted to more efficientstate-level Superfund programs
Promoted greenfield developmentdue to liability concerns
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Superfund Law Amended -- 2002
Limit liability of lenders and prospective developers
EPA agrees to offer federal CERCLA authority to qualified state cleanupprograms
A host of state-level voluntary brownfield cleanup programs emerge
Federal grants and loans provided to state and local governments
Tax law changes more favorable for cleanups
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Sustainable Development
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What is Green or Sustainable Development?
Site Locationo Urban infillo Near transit (alternative transportation)o Reclaimed land
Site Designo Mixed-useo Walkableo Parks and open space
Green Buildingo Energy efficiento Conserves watero Protects the natural landscape
Economic Demando Addresses market needo Price point diversification reduces risk
and supports a diversity of householdtypes and incomes
Stapleton, Colorado
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Evolving Toward Sustainable DevelopmentSource: UrbanGreen
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Benefits of Sustainable DevelopmentSource: ULI Growing Cooler
Location-design of communities reduce themiles a person drives by 25% to 40%
Shifting 60% of new development to smartgrowth can reduce 79 million metric tons ofCO2 annually by 2030
Buildings make up 35% to 45% of the U.S.CO2 emissions
Building emissions can be reduced by 70%to 80% using current green buildingtechnologies
Market is significant and growing 25% to35% of the U.S. market today
Rosslyn, Virginia
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Economic Trends
Spending as a percentage of GDP:o 64% in the 1960so 72% in 2007
Personal savings:o 10% in 1960so 6% in the 1980so 0% today
Ratio of household debt to GDP:o 40 to 50% in the 1960so 70% in the 1990so 110% today
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Drivers for Sustainable Development
Growing Concerns about the Environment
Shifting Global Demographics
Increasing Market Demand
Public Policy Drivers
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Environmental Drivers
Climate Change & Water Eighteen of the last 20 years were
the warmest years on record
During the 20th century, the earthssurface warmed by about 1.4 F
Climate change affecting physicaland biological systems
World Bank reports that 80 countrieshave water shortages that threaten
health/economies
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Shifting Global DemographicsSource: ULI Global Demographics
Global population will increase by 2.5 billion by 2050o equivalent to the 1950 total world population
By 2030 1 in 8 people in the world will be 65 years or older
In 2020, the population in the U.S. living without children in the homewill reach 75 percent
Demographic trends and changing household composition will affecthow and where we live in the future
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Increasing Market Demand
Estimates of the marketfor sustainabledevelopment in the U.S.:
LOHAS: 25% Cultural Creatives: 30% RCLCO: 35% +
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Increasing Market Demand
McGraw Hill Outlook 09o Next five years green will grow: $96 -$140
billion market
o Non-residential market: green building will be10% to 12% of the 2008 new starts
o Residential: green building is $12-$20 billionof the marketplace in 2008
o Education, office and healthcare -- greatest
growth in green building
o Green will outperform others in a negativemarket
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Third-Party Standards for Green Building
US Green Building Council -- USGBC Members include:
o Designers and service providerso Developerso Universities
Rapid growth and market change: 1999 2008o 60% growth in membershipo USGBC Greenbuild conference attendance: 30,000
Up 25% in 2008o 180% growth in registered LEED buildings
o 3 billion SF of registered LEED buildings
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Consumer ConsciousnessSource: Google -- November, 2008
KEY WORDS
Barack Obama 81,400,000 sustainable 62,000,000 climate change 47,400,000
global warming 44,200,000 George Bush 41,000,000 Angelina Jolie 34,100,000 gas prices 31,400,000 Iraq war 30,500,000 green building 26,400,000
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Wells Fargo $2 billion in financing for Green buildings (November 2008)
JP Morgan Provides energy efficient mortgages Invests in renewable energy
Morgan Stanley Smith Barney
Formed carbon bank Investing $3 billion in environmental markets including carbon credits
Goldman Sachs Develops and generates wind energy
Investing $1 billion in renewable energy and energy efficiency projects Evaluating markets for water, biodiversity, forest management and other
ecosystem services
Other leading banks Bank of America Shorebank New Resource Bank
U.S. Financial SectorResponding to Trends
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Make It Right
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Make It Right
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Make It Right
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Conclusions
U.S. is well positioned to benefit from national and global trends that support
sustainable development
U.S. stimulus package and other public policy decisions will likely supportgreen building and alternative energy development
Opportunities will grow for those who want to pursue jobs in the area of
sustainable development
Convergence of technological advancements, public policy and demographictrends will significantly accelerate the application of sustainability over thecoming decade