pho

to b

y: K

ryte

n

Architecture

Urban Planning

Store Design

Mixed-Use

Retail Development

strategiesto createnew value

Architects

For more information: Amie E. Tesler 212.599.0044 x 214 www.kennethpark.com

Celebrating 20 years

Solid commitment

When commercial real estate leadership matters most.

These days, it takes more than financing to close a deal. Bank of America Merrill Lynch earns its reputation in the real estate industry by understanding your objectives and addressing them with proven expertise, capital strength and bedrock commitment.

Let us put it all together for you. Visit bankofamerica.com/commercialre.

Bank of America, N.A. Member FDIC. Equal Housing Lender .“Bank of America Merrill Lynch” is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, Banc of America Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, which are both registered broker-dealers and members of FINRA and SIPC, and, in other jurisdictions, locally registered entities. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured * May Lose Value * Are Not Bank Guaranteed. ©2009 Bank of America Corporation.

Supporting your sustainable business goals:

n 10 year, $20 billion environmental initiative

n $8 billion allocated to commercial real estate financing

n Financing solutions for LEED certified and brownfields reclamation projects

n Paperless business solutions

n Solar or historic tax credit equity investments

pho

to b

y: K

ryte

n

Architecture

Urban Planning

Store Design

Mixed-Use

Retail Development

strategiesto createnew value

Architects

For more information: Amie E. Tesler 212.599.0044 x 214 www.kennethpark.com

Celebrating 20 years

Solid commitment

When commercial real estate leadership matters most.

These days, it takes more than financing to close a deal. Bank of America Merrill Lynch earns its reputation in the real estate industry by understanding your objectives and addressing them with proven expertise, capital strength and bedrock commitment.

Let us put it all together for you. Visit bankofamerica.com/commercialre.

Bank of America, N.A. Member FDIC. Equal Housing Lender .“Bank of America Merrill Lynch” is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, Banc of America Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, which are both registered broker-dealers and members of FINRA and SIPC, and, in other jurisdictions, locally registered entities. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured * May Lose Value * Are Not Bank Guaranteed. ©2009 Bank of America Corporation.

Supporting your sustainable business goals:

n 10 year, $20 billion environmental initiative

n $8 billion allocated to commercial real estate financing

n Financing solutions for LEED certified and brownfields reclamation projects

n Paperless business solutions

n Solar or historic tax credit equity investments

Ad No.: BRA-09-8 R2 SAP No.: IMN.IMNBRA.09007.K.011Ad Title: IBM Smart Planet - Premise Setter

This advertisement prepared by: Ogilvy & MatherTo appear in: Standard Pubs.

Size: Page Color: 4/cBleed: 8.75” w x 11.25” h Trim: 7.5” w x 10.5” h Live: 7" w x 9.75" h

Creative Director: Tom Godici/Greg Ketchum Art Director: Lew Willig Copywriter: Rob JamiesonAccount Exec: J Angrisani Print Producer: Mike Piscatelli Traffi c: Rachel Fuller

Engraver: HUDSONYARDS

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A mandate for change is a mandate for smart.The world is ready for change — that much is clear.

For leaders of all kinds, this moment presents a rare opportunity. Our planet is not just getting smaller and fl atter. It is also becoming smarter. And that means we have the potential to change the way the world literally works.

Computational power is now being put into things we wouldn’t recognize as computers — cars, appliances, cameras, roadways…even pharmaceuticals and livestock. We are interconnecting all of this through the Internet, which has come of age. And we are applying powerful new systems and sophisticated analytics to turn oceans of data into insight, knowledge and intelligence.

Consider the changes already under way.

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Smart food systems based on RFID technology embedded into supply chains are monitoring meat, poultry and other items from the farm to the super-market shelf.

Smart healthcare systems are helping to lower the cost of therapy by as much as 90%.

Police departments are correlating street-level information from myriad observations and devices to identify crime patterns — helping prevent crime, rather than simply punishing it.

The list is long, and the transformation is just beginning. Its benefi ts will be reaped not only by large enterprises, but also by mid-sized and small companies — the engines of economic growth everywhere — and by individuals and communities around the world.

Imagine how a smarter planet will transform all the things we seek. The ways we pursue economic growth, societal progress, environmental sustainability and cures for disease. The way we interact with each other and with the world.

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Join us at ibm.com/think

IBM

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IBM, the IBM logo and ibm.com are trademarks of International Business Machines Corporation, registered in many jurisdictions worldwide. A current list of IBM trademarks is available on the Web at “Copyright and trademark information” at www.ibm.com/legal/copytrade.shtml.

74863_0_BRA_09_8_R2.pgs 03.06.2009 20:54 PDFX1a

For the past three decades, Reznick Group has provided exceptional accounting, tax and value-added business advisoryservices to our clients. Through our focus on real estate, we provide the in-depth industry knowledge, vision and extensiveexperience needed to steer our clients through the capital markets and the constantly changing landscape of global real estate.

As one of the top 20 CPA firms in the United States, Reznick Group is committed to providing proactive personal service andtimely delivery of a superior work product to consistently meet client deadlines. Our clients include institutional private equityfunds, pension funds investing in real estate, REITs, commercial and residential property owners and operators, hotels andresorts, real estate developers, homebuilders and land developers.

Value driven.

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Strategic insight.

Atlanta | Austin | Baltimore | Bethesda | Birmingham | Charlotte | Chicago | Los Angeles | Sacramento | Tysons Corner

Ad No.: BRA-09-8 R2 SAP No.: IMN.IMNBRA.09007.K.011Ad Title: IBM Smart Planet - Premise Setter

This advertisement prepared by: Ogilvy & MatherTo appear in: Standard Pubs.

Size: Page Color: 4/cBleed: 8.75” w x 11.25” h Trim: 7.5” w x 10.5” h Live: 7" w x 9.75" h

Creative Director: Tom Godici/Greg Ketchum Art Director: Lew Willig Copywriter: Rob JamiesonAccount Exec: J Angrisani Print Producer: Mike Piscatelli Traffi c: Rachel Fuller

Engraver: HUDSONYARDS

74863_0_BRA_09_8_R2

A mandate for change is a mandate for smart.The world is ready for change — that much is clear.

For leaders of all kinds, this moment presents a rare opportunity. Our planet is not just getting smaller and fl atter. It is also becoming smarter. And that means we have the potential to change the way the world literally works.

Computational power is now being put into things we wouldn’t recognize as computers — cars, appliances, cameras, roadways…even pharmaceuticals and livestock. We are interconnecting all of this through the Internet, which has come of age. And we are applying powerful new systems and sophisticated analytics to turn oceans of data into insight, knowledge and intelligence.

Consider the changes already under way.

Smart traffi c systems are helping to reduce gridlock by 20%, cutting pollution and increasing ridership on public transit.

Smart food systems based on RFID technology embedded into supply chains are monitoring meat, poultry and other items from the farm to the super-market shelf.

Smart healthcare systems are helping to lower the cost of therapy by as much as 90%.

Police departments are correlating street-level information from myriad observations and devices to identify crime patterns — helping prevent crime, rather than simply punishing it.

The list is long, and the transformation is just beginning. Its benefi ts will be reaped not only by large enterprises, but also by mid-sized and small companies — the engines of economic growth everywhere — and by individuals and communities around the world.

Imagine how a smarter planet will transform all the things we seek. The ways we pursue economic growth, societal progress, environmental sustainability and cures for disease. The way we interact with each other and with the world.

The opportunity is before us, and the moment will not last forever. Will we seize it? As we look to stimulate our economies and rebuild our infrastructure, will we simply repair what’s broken? Or will we prepare for a smarter future?

Join us at ibm.com/think

IBM

, the

IBM

logo

and

ibm

.com

are

trad

emar

ks o

f Int

erna

tiona

l Bus

ines

s M

achi

nes

Corp

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IBM, the IBM logo and ibm.com are trademarks of International Business Machines Corporation, registered in many jurisdictions worldwide. A current list of IBM trademarks is available on the Web at “Copyright and trademark information” at www.ibm.com/legal/copytrade.shtml.

74863_0_BRA_09_8_R2.pgs 03.06.2009 20:54 PDFX1a

For the past three decades, Reznick Group has provided exceptional accounting, tax and value-added business advisoryservices to our clients. Through our focus on real estate, we provide the in-depth industry knowledge, vision and extensiveexperience needed to steer our clients through the capital markets and the constantly changing landscape of global real estate.

As one of the top 20 CPA firms in the United States, Reznick Group is committed to providing proactive personal service andtimely delivery of a superior work product to consistently meet client deadlines. Our clients include institutional private equityfunds, pension funds investing in real estate, REITs, commercial and residential property owners and operators, hotels andresorts, real estate developers, homebuilders and land developers.

Value driven.

Reznick Group. Commercial Real Estate.

www.reznickgroup.com

Strategic insight.

Atlanta | Austin | Baltimore | Bethesda | Birmingham | Charlotte | Chicago | Los Angeles | Sacramento | Tysons Corner

4p10

4p5

3p10

3p2

3p

20.5 mm

18.7 mm

16.2 mm

13.4 mm

12.7mm

.8"

.74"

.64"

.53"

.5"

Size A: Six ColumnAd Space width: 15.00" to 13.04" Size A

Size B

Size C

Size D

Size E

Size A

Size B

Size C

Size D

Size E

Size B: Five ColumnAd Space width: 13.03" to 10.64"

Size C: Four ColumnAd Space width: 10.63" to 8.26"

Size D: Three ColumnAd Space width: 8.25" to 5.86"

Size E: Two & One ColumnAd Space width: 5.85" to 1.00"

Why It Pays to Read The Wall Street Journal and WSJ.com/CommercialRealEstate

Building a Commercial empire?

There has always been real money to be made in commercial real estate. But in this economic climate, earning that money is much more difficult.

Keep your edge with a sophisticated and insightful take on today’s most important market trends and opportunities from The Wall Street Journal and WSJ.com/CommercialRealEstate. And don’t miss the extraordinary portfolio of prime commercial listings from around the world.

Inside the business of Commercial Real Estate: Wednesdays in The Wall Street Journal; and all day, every day at WSJ.com/CommercialRealEstate.

©2009 Dow Jones & Company, Inc. All Rights Reserved. 021809

4p10

4p5

3p10

3p2

3p

20.5 mm

18.7 mm

16.2 mm

13.4 mm

12.7mm

.8"

.74"

.64"

.53"

.5"

Size A: Six ColumnAd Space width: 15.00" to 13.04" Size A

Size B

Size C

Size D

Size E

Size A

Size B

Size C

Size D

Size E

Size B: Five ColumnAd Space width: 13.03" to 10.64"

Size C: Four ColumnAd Space width: 10.63" to 8.26"

Size D: Three ColumnAd Space width: 8.25" to 5.86"

Size E: Two & One ColumnAd Space width: 5.85" to 1.00"

Why It Pays to Read The Wall Street Journal and WSJ.com/CommercialRealEstate

Building a Commercial empire?

There has always been real money to be made in commercial real estate. But in this economic climate, earning that money is much more difficult.

Keep your edge with a sophisticated and insightful take on today’s most important market trends and opportunities from The Wall Street Journal and WSJ.com/CommercialRealEstate. And don’t miss the extraordinary portfolio of prime commercial listings from around the world.

Inside the business of Commercial Real Estate: Wednesdays in The Wall Street Journal; and all day, every day at WSJ.com/CommercialRealEstate.

©2009 Dow Jones & Company, Inc. All Rights Reserved. 021809

Green before it was fashionable.

Our commitment to the environmentis no fad — it’s second nature.

We have helped forward-thinkingclients implement their sustainablebusiness plans for decades.

build to suit lease for LEEDgold certified building

land conservation andconservation restrictions

One of the largest proposed LEED-NDurban neighborhoods in the U.S. fromGale International, Morgan Stanley

and W/S Development

preservation of agricultureand family farms

power plant permitting, plasmagasification/renewable biomass

eco-friendly resort

eco-friendly LEEDcertified resort

eco-friendly resort group

40R smart growthdevelopment

investment in smart growthdevelopment projects

contracts for LEED Gold certifiedhotel and conference center

debt and equity financing

licensing, loans, collaborationagreements and intellectual

property matters

office leasing of LEEDcertified development

preservation of 116,000 acresin Adirondacks

owners, developers andmanagers of sustainable

real estate

2009 ULI Fall Meeting & Urban Land Expo

ConneCt with the right peoplel The Fall Meeting is the place industry leaders meet to share

survival strategies and opportunities, and to build relationships with prospective clients, business partners, and employers.

Sharpen your SkillSl Workshops and sessions provide take-home value and

the skills to gain a competitive edge in today’s challenging business environment. Get continuing education credits for AIA and AICP.

hear about trendS from the people Shaping theml Get the information you need from top experts on capital

markets, financing, demographics, what’s next for real estate, and how it will affect your bottom line.

tailor your experienCe to meet your buSineSS needS and budgetl Choose a one-day ticket or attend the full meeting. Select

tracks, interactive sessions on a wide variety of topics, work-shops, tours, and networking events that will give you the most value and make this meeting worth your time and money.

See San franCiSCol Experience innovative projects firsthand and stay to

explore the city.

RegisteR Nowwww.uli.org/Fall2009Interested in sponsorship, exhibiting, or advertising? Contact JB Rauch, VP for Development, at jb.rauch@uli.org or call 202.624.7135.

1025 thomas Jefferson street, Nwsuite 500 westwashington, DC 20007-5201

November 3–6, 2009 SaN FraNciSco, caliForNia

Invest In your busIness and your future

C1-19+spine.indd 8 8/11/09 1:05:21 PM

2009 ULI Fall Meeting & Urban Land Expo

ConneCt with the right peoplel The Fall Meeting is the place industry leaders meet to share

survival strategies and opportunities, and to build relationships with prospective clients, business partners, and employers.

Sharpen your SkillSl Workshops and sessions provide take-home value and

the skills to gain a competitive edge in today’s challenging business environment. Get continuing education credits for AIA and AICP.

hear about trendS from the people Shaping theml Get the information you need from top experts on capital

markets, financing, demographics, what’s next for real estate, and how it will affect your bottom line.

tailor your experienCe to meet your buSineSS needS and budgetl Choose a one-day ticket or attend the full meeting. Select

tracks, interactive sessions on a wide variety of topics, work-shops, tours, and networking events that will give you the most value and make this meeting worth your time and money.

See San franCiSCol Experience innovative projects firsthand and stay to

explore the city.

RegisteR Nowwww.uli.org/Fall2009Interested in sponsorship, exhibiting, or advertising? Contact JB Rauch, VP for Development, at jb.rauch@uli.org or call 202.624.7135.

1025 thomas Jefferson street, Nwsuite 500 westwashington, DC 20007-5201

November 3–6, 2009 SaN FraNciSco, caliForNia

Invest In your busIness and your future

C1-19+spine.indd 9 8/11/09 1:05:23 PM

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AST_ULI_Aug09.pdf 7/14/09 6:07:20 PM

august 09 urbanland®

a u g u s t 2 0 0 9 u r b a N la N D 11

58 The race to Clean energy Patricia L. KirK

With 2050 fast approaching as the deadline for replacement of fossil fuels with clean, renewable energy resources, scientists around the world are working to expand the use of alternative energy and development of new technologies to ramp up production, storage, and distribution of clean energy.

63 Harnessing the Wind Jerry W. Szatan

In recent years, the use of wind power has grown rapidly in the United States—and is poised for greater growth if transmission and political challenges can be met.

66 Developing biofuel research Facilities rob Lynch and

raLf eLSaeSSer

The convergence of environmental awareness, scientific innovation, political will, and entrepreneurship has pushed forward the development of alternative-fuel technologies.

68 Q&a with Green leaderscharLeS LocKWood

“Worldwide, we will see more nations forming green building councils, and millions of buildings constructed or retrofitted to green standards. The financial and environmental benefits are too compelling for this not to happen.”

42 a New Shade of Green Matt canterbury

New design strategies, energy-efficient materials, and innovative building technologies are helping take green mainstream.

48 regenerative DesignJaSon King and

Scott e. thayer

Sustainable design and planning strategies are setting new standards for green development projects that integrate the social, economic, and environmental needs of communities.

51 modeling High-Performance buildingsrobert boLin

Sustainability and modeling tools, which enable multiple energy-efficient design strategies to be evaluated in a short period, are driving today’s high-performance buildings.

O n t h e C Ov e r : t h i n F l at s, t wO - s tO r y s taC k e d d u p l e x e s n e a r d Ow n tOw n p h i l a d e l p h i a , i n C l u d e a g r e e n rO O F, s O l a r t h e r m a l pa n e l s, a s tO r m wat e r C O l l e C t i O n s y s t e m , r a d i a n t h e at e d i n t e r i O r F l O O r s, a n d e x t e n s i v e day l i g h t i n g . ( s e e pag e 4 0 . )

p h OtO : m a r i k O r e e d

Volume 68, Number 8 www.uli .org/urbaNlaNd

mainstreaming GreenNew sustainable design strategies, materials, and modeling tools are enabling the mainstreaming of green development projects.

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70 Land Writes

70 The Greening of EgyptSam ali

Egypt intends to create a nationwide green building code and to join the World Green Building Council, an effort that presents daunting challenges—and the possibility of substantial rewards—to a developing country that wants to follow the path of sustainability.

72 China’s New Real Estate Opportunitiesmalcolm Riddell

China presents new opportunities for foreigners to invest in Chinese real estate and for U.S. and western property owners to sell to Chinese investors. Foreign investors are finding opportunities not only in Chinese property and operating companies but also in the assets owned by cash-strapped western firms.

74 Global Investing: Keep it Simple Paul PhilliPS

While the long-term strengths of regional economies may not be clear, the short-term reality of pricing core opportunities at value-added prices is clear.

20 Developments

U.K. Approves Only One-Quarter of Ecotowns; Proposes Zero-Carbon Standard by 2016

Patrick L. Phillips Named ULI Chief Executive Officer

BREEAM Introduces New Rating System for Sustainable Communities; Pilot Tests with MediaCityUK in Manchester

ULI Energy Efficiency Exchange Set for Launch on Web

Solar-Powered City in Sunshine State Sets Example for Sustainable Design

Plans Unveiled in Chicago for First Smart Grid for U.S. Commercial Building

ULI Releases Recommendations for Transportation Reform

Real-Time Carbon Counter Launched in New York City

First U.S. Solar Highway Installed in Oregon

Recession Watch:

l Commentary: Hints of Recovery?

26 Dialogues

26 Dialogue: PolicyClimate Change: The Good, the Bad, and Obama edwaRd t. mcmahon

The recently passed U.S. economic stimulus plan includes numerous provisions—and billions of dollars—aimed at advancing the energy and climate change agenda.

28 Dialogue: Climate Change Betting on Market-Driven SolutionschandRan naiR

The global public good should not be placed on the sacrificial altar of the private interests of unregulated financiers. Governments, not solely the market, should be involved in alternative energy industries.

30 Dialogue: Environment Q&A With Fred Krupp About Cap and TradeRon nyRen

The president of the Environmental Defense Fund talks about emissions cap-and-trade systems, the potential for integrating renewable energy sources into buildings, and methods for minimizing greenhouse gas emissions in the production of building materials.

34 Dialogue: EnergyRenewable Communities SuSan Fine and

caRoline G. haRRiS

By increasing renewable energy resources at a community level, the value of foreclosed homes could be raised while reducing the carbon footprint on a community-wide basis.

36 ULXResidential Green Ron nyRen

Ten multifamily housing developments give high-density living an even greener spin.

76 ProActive 76 Capital MarketsApplying Responsible Investing to Green Building KiRK SyKeS

A recent real estate investment strategy emerging out of the smart growth and sustainability movements takes green to the next level by marrying business interests with environmental and social goals.

78 At IssueInitiatives to Set Up Cap-and-Trade ProgramsJeRRy w. Szatan

While federal legislation is being debated, coalitions of states and provinces have been developing and implementing regional cap-and-trade programs to control greenhouse gas emissions.

82 In PracticeSustainable Development at the Graduate LevelJoan caPelin

Everyone’s talking about “green,” but who’s teaching it—and what’s being taught?

87 Solution File

91 In Print, Etc.Why Your World is About to Get a Whole Lot Smaller: Oil and the End of Globalization

Hungry City: How Food Shapes Our Lives

93 Trustee Profile

112 Back Page Stimulus Package Recharges Renewable EnergyPeteR l. GRay

The 2009 economic stimulus package has changed the ground rules for investors. Projects considered unthinkable a year ago are now underway.

Departments16 Publisher Note

19 This Issue

95 Regional Spotlight: New York/Massachusetts108 Advertisers Index

20

12 U R B A N LA N D a u g u s t 2 0 0 9 ©2009 RCI, LLC. All rights reserved.

Want to talk success? In just six years, The Registry Collection® exchange program has gained over 30,000 members and a global network comprising more than 130 affi liates on fi ve continents. We help developers like you position your properties for growth—while helping your owners enjoy exclusivity, superlative quality and unsurpassed service.

Ready for success that opens doors?Talk to us. We’ll hand you the key.

For more information, contact us at 1.866.937.5979or visit theregistrycollection.com.

The Registry Collection and related marks are registered trademarks and/or service marks in the United States and Internationally. All rights reserved.

The Residence Club at Pronghorn, Oregon Quinta Real, Mexico The Regency Country Club, Spain

2009 TRC Ad (UL).indd 1 2/6/09 9:19:41 AM

©2009 RCI, LLC. All rights reserved.

Want to talk success? In just six years, The Registry Collection® exchange program has gained over 30,000 members and a global network comprising more than 130 affi liates on fi ve continents. We help developers like you position your properties for growth—while helping your owners enjoy exclusivity, superlative quality and unsurpassed service.

Ready for success that opens doors?Talk to us. We’ll hand you the key.

For more information, contact us at 1.866.937.5979or visit theregistrycollection.com.

The Registry Collection and related marks are registered trademarks and/or service marks in the United States and Internationally. All rights reserved.

The Residence Club at Pronghorn, Oregon Quinta Real, Mexico The Regency Country Club, Spain

2009 TRC Ad (UL).indd 1 2/6/09 9:19:41 AM

14 u r b a N la N D augu s t 2 0 0 9

www.uli .org/urbaNlaNd

Volume 68, Number 8

Publisher

Rachelle L. Levittrlevitt@uli.org

editor iN Chief

Kristina Kesslerkkessler@uli.org

maNagiNg editor

Karen Schaarkschaar@uli.org

CoPy editors

James A. Mulliganjmulligan@uli.org

David James Rosedrose@uli.org

art direCtor

Betsy VanBuskirkbvanbusk@uli.org

graPhiC desigNers

Anne Morganamorgan@uli.org

Byron Hollybholly@uli.org

ProduCtioN maNager

Craig Chapmancchapman@uli.org

ProduCtioN CoordiNator

Colleen DiPietrocdipietro@uli.org

seNior adVertisiNg maNager

Carmela Acampora 202-624-7042/carmelaa@uli.org

NatioNal sales maNagers (design/planning/engineering/construction)

Yasmine Yates 202-624-7175/yyates@uli.org

(financial/legal/accounting services)

Tom Mitchell 202-624-7133/tmitchell@uli.org

Urban Land® (ISSN 0042-0891) is published monthly (except the combined November/December issue) by the Urban Land Institute, 1025 Thomas Jefferson Street, N.W., Suite 500 West, Washington, D.C. 20007-5201; www.uli.org/urbanland. ©2009 the Urban Land Institute, all rights reserved. Receipt of Urban Land is a benefit of membership in the Urban Land Institute. Single and multiple copies are available through ULI Publications Orders (800-321-5011 or E-mail: book-store@uli.org); single-copy price, $15; $9 each for five to 24 copies; $4.50 each for 25 or more copies.

Opinions expressed in articles or columns appearing in Urban Land are those of the author(s) or person(s) quoted and are not necessarily those of Urban Land or of the Urban Land Institute. Advertisements appearing in the magazine do not constitute or imply endorse-ment by Urban Land or the Urban Land Institute. Urban Land assumes no responsibility for the loss or damage of unsolicited manuscripts or graphics. The contents of this publication are protected by copyright and may not be reproduced in whole or in part or in any form without written authorization. Article proposals for Urban Land can be sent by E-mail to Kristina Kessler (kkessler@uli.org). Letters about articles and columns published in Urban Land, as well as comments about other topics of interest to its readers, can be sent by E-mail to Karen Schaar (kschaar@uli.org). Submissions are subject to editing for clarity, style, and length. Urban Land’s 2009 editorial calendar, editorial and graphics specifications, and photo permission agree-ment forms can be found at www.uli.org/urbanland. To request permission to reprint Urban Land articles, contact Lisa McNeil at lmcneil@uli.org.

Postmaster: Send address changes and circulation inquiries to Urban Land, Member Services Division, ULI, 1025 Thomas Jefferson Street, N.W., Suite 500 West, Washington, D.C. 20007-5201. Periodicals post-age paid at Washington, D.C., and additional mailing offices. Printed in the U.S.A.

urbanland®

Advisory Services Program

First Aid for Ailing Real Estate ProjectsDo you nEED stRAtEgiEs AnD solutions foR youR Ailing PRojEct? Arrange a session with the “Deal Doctors” at the uli fall Meeting in san francisco, november 3–5, 2009.DeAl Doctor sessions (formerly Project Analysis Sessions) offer a two-hour review of your project by an expert inter disciplinary team of members, assembled by UlI to address your specific issues. our Deal Doctors provide: l In depth, project specific, pragmatic advicel Interdisciplinary team of practitioners in the land use

and real estate professionsl Intimate, conversational format for creative thinkingApplicAtions due: September 30, 2009 • Fee: $3,500

to Apply or For more inFormAtion, contact tom eitler at thomas.eitler@uli.org or go to our webpage at www.uli.org/dealdoctors.

ULAUG09 VRT advis-srv.indd 1 8/10/09 2:31:40 PM

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16 U r b a n La n D a u g u s t 2 0 0 9

Seminal research on the effect of transportation and land use policy strategies on production of greenhouse gases (GHGs) was released at the end of July by the Urban Land Institute. Titled Moving Cooler, the report is expected to inform the debate at all levels of government on how to reduce emissions. The product of a unique collaboration among nonprofit

organizations, federal govern-ment agencies, the private sector, and foun-dations, Moving Cooler should provide policy makers the data to understand the implica-tions of decisions made to reduce GHGs.Moving Cooler measures the potential effec-tiveness of strategies to reduce GHGs against a current trends baseline. The strategies examined are: pricing and taxes; land use and smart growth; nonmotorized transport; public transportation improvements; rideshar-ing, car sharing, and other commuting strate-gies; regulatory strategies; operational and intelligent transportation systems; capacity expansion and bottleneck relief; and a more effective multimodal freight sector.While increased automobile fuel efficiency would seem to be a logical solution to reduce greenhouse gas emissions, in fact, increased auto travel more than offsets expected sav-

ings. For evidence it is only necessary to look back to 1975, when federal automobile fleet efficiency was increased from 15 miles per gallon to 25, but increased travel more than offset any savings. Moving Cooler found that to achieve significant impact on GHGs, a multipronged policy is necessary—a policy that includes local and regional pricing and regulatory strategies that increase the cost of single-occupancy vehicle travel; lowering of speed limits; educational strategies to encour-age eco-driving behavior; land use and smart growth strategies that reduce travel distances; and expanded multimodal strategies to broaden travel options.

Land use changes that increase density and proximity to jobs and that enable non-motorized travel would provide a reduction of 6 to 9 percent in GHG emissions by 2050, Moving Cooler found, constituting a significant component of the solution.

But, the ultimately frightening conclusion of the research is that if all transportation and land use policies were implemented at the highest level possible, carbon emissions would only be reduced by 35 percent by 2050—prov-ing how difficult it will be to achieve what is necessary to control global warming. Consider-able changes to transportation systems and operations, travel behavior, land use patterns, and public policy and regulations will be needed. The challenge will be for the public and private sectors to work toward making the hard decisions that will be required.

Rachelle L. LevittPublisher

Moving Cooler is available for purchase from ULI’s Web site, www.uli.org.

pub l i s h e r n o t e

Moving Cooler a Challenge to the Land Use Community

Who’s Who at ULI and the ULI foUndatIon

ULI–the Urban Land Institute is a nonprofit educa-tion and research organization that was founded in 1936. Its mission is to provide leadership in the responsible use of land and in creating and sus-taining thriving communities worldwide.

ULI offIcers

Jeremy Newsum, ChairmanRandall Bone, Vice ChairmanJoseph E. Brown, Vice Chairman, Policy and PracticeDaryl J. Carter, Vice ChairmanJames J. Curtis, III, Vice Chairman, CouncilsMichael D. Fascitelli, Vice ChairmanPatricia R. Healy, Vice Chairman, District CouncilsKeith G. Kerr, Vice ChairmanScott D. Malkin, Vice ChairmanAlexander Otto, Vice ChairmanPeter S. Rummell, Vice ChairmanLynn Thurber, Vice Chairman and TreasurerDaniel C. Van Epp, Vice ChairmanBret R. Wilkerson, Vice Chairman and SecretaryTodd W. Mansfield, Immediate Past ChairmanMarilyn Jordan Taylor, Past ChairmanJames D. Klingbeil, ULI Foundation ChairmanRichard M. Rosan, Chief Executive Officer

ULI trUsteesDouglas D. Abbey; Dorothy L. Alpert; Joseph F. Azrack; Peter E. Baccile; Claude M. Ballard; Michael Banner; Bryce Blair; John Bucksbaum; Preston Butcher; James H. Callard; Joseph C. Canizaro; John A. Carrafiell; James J. Chaffin, Jr.; Simon H.T. Clark; Alice M. Connell; Jan A. De Kreij; Charles H. Fedalen, Jr.; Gary W. Fenchuk; Leonard Forkas, Jr.; Harry H. Frampton III; Merrie S. Frankel; Theresa O. Frankiewicz; Stephen J. Furnary; Lizanne Galbreath; William A. Gilchrist; Eugene J. Godbold; Rosalind E. Gorin; Greenlaw Grupe, Jr.; Joseph Gyourko; Veronica W. Hackett; John S. Hagestad; Helen D. Hatch; Ian D. Hawksworth; John J. Healy, Jr.; Tara Carter Hernandez; John W. Higgins; Gregory W. Hummel; Wayne S. Hyatt; George Jautze; Harold S. Jensen; Marty Jones; Neisen O. Kasdin; Gadi Kaufmann; Michael F. Kelly; Charles R. Kendrick, Jr.; Bernd Knobloch; Hakan Kodal; Cheong Koon Hean; John Z. Kukral; Christopher W. Kurz; Robert C. Larson; Charles B. Leitner; C. Y. Leung; Randall W. Lewis; Robert C. Lieber; James W. Light; Peter D. Linneman; Vincent H.S. Lo; Robert J. Lowe, Sr.; Victor B. MacFarlane; Jay Mantz; George M. Marcus; Paul Marcuse; John E. McNellis; Santiago Mercade; Bruce E. Mosler; Barry G. Moss; Toshio Nagashima; Stephen P. Navarro; Daniel M. Neidich; Joseph W. O’Connor; Gerald N. Parkes; Patrick L. Phillips; Olivier Piani; Stephen R. Quazzo; I. Rocke Ransen; Wayne Ratkovich; Jonathan F.P. Rose; Kenneth T. Rosen; Stuart M. Rothenberg; Randall K. Rowe; Mitchell E. Rudin; Hitoshi Saito; P. Sheridan Schechner; Jonathan Short; Michael Spies; Geoffrey L. Stack; Martin E. Stein, Jr.; Robert S. Taubman; J. Ronald Terwilliger; Anthony J. Trella; Marilee A. Utter; Greg J. Vogel; John M. Walsh III; Carl Weisbrod; Kazuhiko Yamamoto; Smedes York; F. Karl Zavitkovsky; Jon H. Zehner

ULI foUndatIon James D. Klingbeil, ChairmanRichard M. Rosan, Chief Executive OfficerJoseph E. Brown, SecretaryHarry H. Frampton III, TreasurerPeter S. Rummell, Past Chairman

ULI senIor staff

Richard M. Rosan, Chief Executive OfficerCheryl G. Cummins, President, The AmericasWilliam P. Kistler, President, EMEA (Europe/Middle East/Africa)/IndiaMichael Terseck, Chief Financial Officer/ Chief Administrative OfficerDavid Howard, Executive Vice President, Development/ULI Foundation Maureen McAvey, Executive Vice President, Initiatives

ULI feLLoWsStephen R. Blank, Senior Resident Fellow, Real Estate FinanceMichael Horst, Senior Resident Fellow, LeadershipTom Murphy, Senior Resident Fellow and ULI/Klingbeil Family Chair for Urban DevelopmentJohn K. McIlwain, Senior Resident Fellow and ULI/J. Ronald Terwilliger Chair for HousingEdward T. McMahon, Senior Resident Fellow and ULI/Charles Fraser Chair for Sustainable Development

nonprofit

organizations, federal govern-

An AnAlysis of TrAnsporTATion

sTrATegies for reducing

greenhouse gAs emissions

Moving Cooler

Cambridge Systematics, Inc.

ULI_Aug09.indd 1 7/9/2009 9:20:10 AMC1-19+spine.indd 16 8/11/09 2:06:38 PM

ULI_Aug09.indd 1 7/9/2009 9:20:10 AMC1-19+spine.indd 17 8/11/09 1:05:47 PM

t h i s i s s u e

A Low-Carbon FutureThe Obama administration’s stimulus bill allo-cates about 13 percent of its spending, or $104 billion, to green initiatives. These include renewable energy, smart grid, and energy efficiency programs; tax incen-tives and grants for renewable-energy technology manufacturers and facilities; clean-water infrastructure improvements; improved public transit; and other items. The administration’s new energy plan—which calls for reducing carbon emissions by 80 percent by 2050, a possible cap-and-trade system for emissions, and a 40 percent increase in fuel efficiency for cars and trucks by 2016—will more directly affect the develop-ment industry.

While the pros and cons of a cap-and-trade system are currently being debated, developers are looking at a near future in which almost all new buildings will have to be green and all existing buildings will have to be more energy efficient, with a percentage of electricity coming from renewable sources. In the switch to renew-ables, the electricity grid will almost surely need to be rebuilt, which will require federal financing and policy action in land use, interstate law, and liability.

With cities around the world implementing new green goals and standards, the pace of innovation in materi-als, clean technology, and green design is accelerating rapidly, enabling development of healthier buildings and the upgrading and retrofitting of existing stock. The U.S. Green Building Council predicts that the value of green building construction will increase to $60 billion a year in 2010 and that the green building market will reach $140 billion by 2013.

In addition to solar and wind power, clean technolo-gies being explored include biomass, geothermal energy, radiant cooling, ocean thermal energy conversion, coal gasification, and nuclear fusion reactors. California’s Mojave Desert is already home to the world’s largest solar installations. Texas is planning an “energy highway” transmission grid to move wind energy from the west Texas plains to urban centers. The proposed High Plains Express intends to deliver energy by integrating wind projects in New Mexico, Colorado, and Wyoming.

A $1.5 billion clean coal plant prototype called Future-Gen, to be built with coal gasification technology by the U.S. Department of Energy in Mattoon, Illinois, will gener-ate enough electricity to power up to 150,000 homes with virtually no greenhouse gas emissions. Lockheed Martin

plans to convert wave energy from the Pacific Ocean off the coasts of California and Oregon into electricity. Sie-mens reportedly is developing the world’s first floating wind turbine to open the deep ocean for wind farming.

On the materials side, nanotechnology is being explored for its potential to offer silicon-replacing mate-rials to produce an inexpensive, portable solar energy product and a carbon nanotube wire that can conduct electricity with no need to store energy. In addition, advanced modeling tools are enabling the evaluation of multiple energy-efficient building design strategies in record time.

Roughly $150 billion in global government stimulus spending has been proposed for clean energy projects. Yet, in a world where gas, coal, and electricity are still cheap, the greatest challenge is finding the money to nur-ture the green energy industry until it becomes viable. As the credit crunch has caught up with the industry, many recent developments in energy efficiency have come to be considered risky investments by the private sector. In the first three months of this year, new investment in clean energy was down 53 percent from 2008. Invest-ment by venture capitalists in early-stage companies dropped 48 percent to $1 billion for the first quarter.

Energy costs more than $1 trillion a year in the United States alone. When carbon is assigned a price by the world’s governments, demand for carbon-free electricity is expected to explode. The nation that leads the 21st-century global economy will be the nation that leads the world in creating a new clean-energy economy. ULI can play a vital role in this new economy by partnering with worldwide agencies and city leaders to help plan for a low-carbon future.

Kristina KesslerEditor in Chief

a u g u s t 2 0 0 9 u r b a N la N D 19

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20 U r b an La nD A u g u s t 2 0 0 9

U.K. Approves Only One-Quarter of Ecotowns; Proposes Zero-Carbon Standard by 2016The U.K. government has scaled back its ecotown proposals in England fol-lowing widespread opposition from the communities that would have been affected and has abandoned

its intention to bypass the planning system to fast-track approvals. Only four of the original short list

of 15 proposed settlements, each of which was to include 10,000 homes built to zero-carbon standards, were given the go-ahead to proceed to the next stage in a July 16 announcement by Housing Minister John Healey. Two others are being supported for further preparation. (See “U.K.’s Proposed Ecotowns Spur Local Objections,” June 2008, page 25.)

The four projects are all led or backed by local authorities, and the sites are already included in regional and local development plans. Only one, which will be an extension to Bicester, Oxfordshire, is a green-

field site. The others are on former military and industrial land at St. Austell in Cornwall, Rackheath in Norfolk, and Whitehill Bordon in East Hampshire.

Developers in each of the four locations will be able to bid for a share of £60 million ($101 million) to support local infrastructure. The original timetable for the schemes, which are intended to serve as ex -emplars for a low-carbon future, envisioned construction starting in 2010, with 10,000 homes in place by 2016, but this schedule is now likely to slip back. Private investors who were initially involved in propos-als are reported to have lost interest in the ecotown projects following the government’s retreat from its original intent to establish a separate approv-als process for the developments.

In a parallel announcement, Healey reported the same day that the U.K. government had decided to define “zero-carbon” home, as it will be applied in the revised statutory building standards, as a home with carbon dioxide emissions—taking account of emissions associated with all energy use in the home—of zero or negative across the year.

“Our definition of ‘energy use’ will cover both energy uses cur-

rently regulated by the building regulations and other energy used in the home,” he said. The pro-posed regulations will require all new homes built starting in 2016 to be zero carbon by this definition.

In order to address concerns raised by investors and builders regarding these definitions, Healey has formed a group of experts to report back to him by September. “They will examine the energy-efficiency metrics and standards which will realize our ambition of the highest practical energy effi-ciency level realizable in all dwell-ing types,” he said. “I intend to announce decisions on a clear new standard by the end of this year.”

The Home Builders Federation (HBF), which represents most of the large residential developers, wel-comed the greater clarity provided, but warned that the challenge of delivering a zero-carbon standard by 2016 was enormous. “The gov-ernment must support the industry wherever necessary on research funding, mitigating cost, and other commercial issues,” said Stewart Basely, HBF executive chairman.

Brian Baker is a freelance journalist based in Glasgow, Scotland.

develop ments

Development of four proposed new ecotowns, with homes built to zero-carbon standards, is expected to proceed as part of recently trimmed-down U.K. government plans, including one on the site of a former army barracks at Whitehill Bordon in East Hampshire.

R e a l-T i m e C h i n a

“E.T.—energy technologies that produce clean power and energy

efficiency—is going to be the next great global industry, and . . .

China has gotten on board—big time. Now I am worried that

China will . . . ‘clean our clock’ in E.T.”From “Can I Clean Your Clock?” by Thomas L. Friedman, New York Times, July 5, page WK8.

E DAW / A E C O M

A u g u s t 2 0 0 9 U r b a n La n D 21

develop mentsPatrick L. Phillips Named ULI’s Chief Executive Officer Patrick L. Phillips, president and chief executive officer of ERA AECOM (formerly Economics Research Associ-ates), has been named chief executive officer of the Urban Land Institute. Phillips, as of September 14, will be taking over the position being vacated by ULI CEO Richard M. Rosan, who has led the Institute’s staff for more than 17 years.

Phillips, 52, is a ULI trustee whose career in the economic analysis of real estate and land use spans more than 20 years. Since 1993, he has coordi-nated all aspects of ERA’s organiza-tion, strategy, business development, and service delivery; his own consult-ing practice focused specifically on the intersection of private investment and public policy. To further expand ERA’s reach and impact, Phillips guided the sale of the company in 2007 to AECOM, a global provider of profes-sional technical and management support services to a broad range of industries, including land use, trans-portation, environmental, and energy.

“The opportunity to guide ULI staff presents a unique chance to help boost the influence the Insti-tute has on land use both globally and locally,” says Phillips. The global recession has presented a challenging environment in which ULI must stay relevant and provide high member value, he adds. “While ULI has tradi-tionally been viewed through the lens of development and growth, we are facing lower prospects for growth in a number of the established markets

we serve worldwide. At the same time, we are starting to have a larger presence in emerging markets.

“We need to take a fresh look at the entire portfolio of products and services ULI provides to make sure that what we offer reflects member needs, both in times of changing market conditions and for the long term,” he says.

He emphasizes that ULI’s core pri-ority areas—sustainability, including environmentally and economically viable investment and development; connecting infrastructure and land use planning; workforce housing; and capital markets—continue to be relevant in the current economic environment. It is important to position ULI in the dialogues on sustainability and restoring capital flows—two areas of particular urgency, says Phillips. Given the worldwide scope of the discussions and public policy changes related to these issues, “ULI has a profound role to play.”

Phillips foresees reinforcing ULI’s value to members not just through the improvement of the Institute’s traditional programs and business development tools, but also through the development of research de signed to have an impact on various policy debates. “ULI is hugely influential in how urban areas are developed around the world,” he points out. “I look forward to exploring new ways and new partnerships to build on ULI’s previous success and move the Institute forward in the decades to come.”

Recently named ULI chairman Jeremy Newsum, executive trustee of U.K.-based Grosvenor Estate, says ULI is “very fortunate to have someone of such high integrity

and intellect, and who, as a long-time member, is so devoted to the fulfillment of ULI’s mission.” Refer-ring to Phillips as “a land use leader for the 21st century,” Newsum says his “breadth of industry knowledge, interest in diverse ideas and opin-ions, and belief in the synthesis of different perspectives create a perfect match for such a multidisciplined organization as ULI.”

Todd W. Mansfield, ULI chairman until this past June, points to Phillips’s years of involvement with the Institute, both as a volunteer member since 1990 and a ULI staff member in the policy research program during the mid-1980s. In recent years, Phillips served on such high-profile ULI advi-sory service panels as those following Hurricane Katrina in New Orleans and the 9/11 attacks in lower Manhattan. He was a juror on the ULI Hines Stu-dent Urban Design Competition, and a member of the Urban Development/Mixed-Use Council, the Program Com-mittee, and the ULI J.C. Nichols Prize Management Committee.

“Patrick truly understands the im -portance of active member engage-ment and the need to encourage the information exchange that distin-guishes ULI from other professional

organizations,” notes Mansfield, CEO of Crosland LLC in Charlotte, North Carolina. “The various perspectives he has gained from his experience in the industry and with ULI will serve Patrick well as the new CEO.”

Rosan will be shifting full time into the role of president of the ULI Foundation, a position he has held simultaneously while serving as ULI’s CEO. (See “Succession Plan-ning at ULI,” March, page 29.)

Trish riggs is vice president, communications, ULI.

Patrick L. Phillips

W i n d T u r b i n e a s a r T

“Rising from the land in shapes as gracile as Brancusi sculptures,

they seem to inhabit a middle ground between technology and

nature—perfect emblems, perhaps, of a conflicted culture that

cherishes its iPhones and organic gardens in equal measure.”

From “Windscapes: American Vistas Where Energy Is in the Air,” by Adam Goodheart, New York Times Magazine, July 19, page 35

22 U r b an La nD A u g u s t 2 0 0 9

developments

BREEAM Introduces New Rating System for Sustainable Communities; Pilot Tests with MediaCityUK in ManchesterThe U.S. Green Building Council (USGBC) later this year will launch its much-anticipated Leadership in Energy and Environmental Design–Neighborhood Development (LEED-ND) program, which will rate new communities on their density, walk-ability, open space, green buildings, and mixed-use features. The new LEED-ND designation is expected to transform development patterns, much as LEED ratings have already encouraged construction of healthy, high-performance green buildings.

The U.K.-based Building Research Establishment’s Environmental Assess ment Method (BREEAM), however, has beaten the USGBC to the punch. This June, BREEAM released its new sustainable com-munities assessment program. Under BREEAM, the world’s first and most widely used building assess-ment system, more than 110,000 buildings in the U.K., Europe, and the Persian Gulf states have been certified, and more than a half million have been registered for upcoming certification.

The program, BREEAM Communi-ties, promotes a planning process intended to result in sustainable development. BREEAM Communi-ties gives local planning boards and developers a tool to ensure that sustainability objectives and public planning requirements are satisfied at the site according to BREEAM guidelines. Next, an independent third party, the BREEAM assessor, evaluates the proposed develop-ment for its adherence to sustain-ability standards. This approval is

required before any final approvals are granted.

In creating its communities pro-gram, BREEAM pilot tested the ini-tial guidelines at various projects in the U.K., including the first phase of MediaCityUK, now under con-struction on a long-forlorn, 36-acre (14.6-ha) site on the Salford water-front near downtown Manchester, 220 miles (355 km) northwest of London. The project eventually is expected to encompass the entire 200-acre (81-ha) waterfront property.

The first phase is being developed and managed by a division of the Manchester-based Peel Media, a division of the Peel Group, which is investing £500 million ($800 million) in the first phase. At its opening in 2011, the first phase will include 378 apartments and 80,000 square feet (7,400 sq m) of retail space.

Tenants will include five depart-ments of BBC (British Broadcasting Corporation) and 2,500 employees, part of the network’s move to de cen -tral ize some of its operations away from congested, high-priced London.

MediaCityUK reuses a long-derelict waterfront site, incorporating existing infrastructure and easing pressure for sprawl development at the end of Greater Manchester. The develop-ment’s mix of uses, including resi-dential, is expected to reduce trips to and from the site. In addition, Media-CityUK connects to the Manchester Metrolink tram system.

MediaCityUK will rely on sustain-able power generation from an on-site combined heat-and-power (CHP) tri-generation plant that will provide the base-load power for the site. Tri-gen power is the simulta-neous provision of electricity, heat, and cooling. Through the use of the heat byproduct, the power gen-eration will be 70 percent efficient, compared with 30 percent efficiency for power from the U.K.’s national grid; similar systems have reduced costs and CO2 emissions.

In the tri-generation scheme, elec-tricity is produced by a large engine powered by natural gas or biofuel. The waste heat generated is captured and used to heat water, which is cir-culated in arterial pipes buried deep underground. This system supplies heat to each building connected to the pipe circuit, and any excess heat pro-duced by the engines is used to drive absorption chillers. The chilled water is used for cooling, which is distributed in the same manner as the heat.

MediaCityUK is ex pected to pro-vide a significant economic and image boost for the community, as well as for its investors. Further development will depend on the success of its first phase.

Charles loCkwood is a green real estate authority and consultant in southern California and New York City.

ULI Energy Efficiency Exchange Set for Launch on WebThe first phase of the ULI Energy Efficiency Exchange, a new inter-active Web site designed to create a pan-European online exchange of current information and best practice in energy-efficient design and retrofit-ting, is scheduled to go live in Sep-tember. (See “ULI Europe Introduces Energy Exchange Initiative,” Urban Land Green, Spring 2009, page 17.)

The first phase of the project will comprise the following:

l A home page that explains the goals of the site and how visitors can get the most out of it.l A knowledge center of information relevant to practitioners, where visi-tors can filter information according to their profession, location, type of project, and design stage to ensure the most useful results.l A learning zone that includes best-practice case studies, and high -lighted articles from Urban Land magazine, ULI senior fellows, part-ners, and industry leadership.l Policy summaries of pan-European and national regulation, commen-tary by leading experts, etc. l Short examples of research into energy efficiency and retrofitting from Arup, including the top five interven-tions for each featured sector, such as office, retail, and hotel.l A venue for practitioners to con-tribute their data to develop a shared business case for the financial in -vestment in energy efficiency and retrofitting. A data amnesty is being developed to allow post-occupancy data to be provided anonymously.

The second phase of the project will go into development in October—contingent on funding—and will include:

The Building Research Establishment’s Environmental Assessment Method (BREEAM), used in the U.K., Europe, and the Persian Gulf states, has released a neighborhood development assessment program that encourages sustainability features in new developments. One of the pilot projects is MediaCityUK, now under construction in Manchester.

A u g u s t 2 0 0 9 U r ban La nD 23

l An online community in the form of interactive forums, with a site mod-erator to lead, monitor, and stimulate conversations; the forum will be built on the existing LinkedIn group.l Webinars offering information online on topics such as green leases and sustainable financing.l Blogs by invited experts.

A third phase, including online professional networking through the MyULI online membership, will also be developed.

alexandra noTay is director, research, ULI Europe.

Those interested in offering a case study, commentary, or contributing to the site as an expert practitioner or peer reviewer should contact Alexandra Notay at anotay@uli.org or Josie Baum at jbaum@uli.org.

ULI is seeking a number of other supporters to join Arup as primary project partners and allow the on ­going development of the Exchange site. Opportunities also exist for lower levels of support and recognition. For information, contact Brian Kilkelly at bkilkelly@uli.org or Alexandra Notay at anotay@uli.org.

Solar-Powered City in Sunshine State Sets Example for Sustainable DesignLocated alongside a 73,000-acre (30,000-ha) nature preserve, Bab-cock Ranch, a sustainable com-munity planned near Fort Meyers, Florida, will span 18,000 acres (7,300 ha) and include 19,500 homes surrounding a central busi-ness district with more than 6 million square feet (557,000 sq m) of retail and office space. A 75-megawatt solar power plant cost-ing $300 million to $400 million will be located on 400 acres (160 ha) at the northern tip of the develop-ment and be managed by Florida Power and Light (FPL). Smart-grid technology will help monitor system efficiency and manage peak loads by providing instant data streams from all electrical outlets and remote access to them.

Syd Kitson, chairman and chief executive officer of Kitson & Part-ners, a Florida-based real estate company, says he is seeking to prove that a truly ecofriendly city can be economically successful. He acknowledges the challenges pre-sented by the current market, but believes that his development will prove that sustainable communities can be economically competitive.

The idea, says Kitson, is to first establish the business center, then the community infrastructure—part of the strategy to ensure financial stability. To keep Babcock Ranch competitive, Kitson has established a financing structure that includes as a major component a public/private partnership with the state, which has agreed to manage the nature preserve and appropriate the revenues from logging, tourism, and other operations to upkeep of the land. Because of this agree-ment, no taxpayer money has been needed to support the property during the recession. The Florida legislature also granted Babcock Ranch independent special district status, allowing for certain financial benefits, such as use of tax-exempt

bonds, without the associated risks, such as liability in civil lawsuits.

Babcock Ranch is envisioned as a proving ground for photovoltaics—a place where businesses, universi-ties, and government can test and implement their ideas. It also will serve as a living laboratory where companies can evaluate sustainable technologies, as well as research and develop their own solutions to combat climate change.

The design has been completed, but Kitson says several more steps remain before the project moves forward, including breaking logjams in the Florida legislature, which recently failed to pass a bill that would have established a standard for renewable energy technology in Florida. This provision would have given FPL the funding it needs for the photovoltaic facility, the keystone of Babcock Ranch’s solar-powered design. Despite the current economic climate and political setbacks, Kitson says he hopes to begin construction of the photovoltaic facility during the first quarter of next year.

adam maynard is studying urban studies at Brown University in Providence, Rhode Island.

Plans Unveiled in Chicago for First Smart Grid for U.S. Commercial Buildings A $185.4 million smart grid pro-gram that would deliver a utility-scale, clean, virtual generator through implementation of smart grid technol-ogy in more than 260 commercial buildings in downtown Chicago was announced early this month by the Building Owners and Managers Asso-ciation (BOMA) of Chicago. To help fund what would be the nation’s first commercial office building smart grid program, BOMA/Chicago has applied for $92.7 million in matching stimulus funds from the U.S. Department of Energy’s Smart Grid Investment Pro-gram, which was formed under the recently passed American Reinvest-ment and Recovery Act.

BOMA/Chicago represents more than 80 percent of the square footage and an estimated 1,000 megawatts of peak demand in the city’s central business district. The virtual generator could provide as much as 200 megawatts of demand response capability, lowering costs, and eliminating the need to con-struct expensive new generation plants. Annual energy cost reduc-tions are estimated at $82 million, and carbon emissions are expected to be cut by 300 million pounds.

The program calls for upgrading the buildings’ electricity metering infrastructure with smart meters that will communicate with a BOMA/Chicago-run network operating center (NOC) in real time. The NOC will analyze electricity demand in light of grid conditions and electric-ity market prices, then send sug-gested response strategies back to the buildings for implementation. The program will enable commer-cial buildings to compete in mar-kets formerly dominated by large central station generators.

Set to include the world’s largest photovoltaic facility, Babcock Ranch near Fort Myers, Florida, will be the world’s first city powered exclusively by the sun.

24 U r b an La nD A u g u s t 2 0 0 9

“Our program will demonstrate that demand-side resources, such as our commercial buildings, can provide operat ing reserves, fre-quency regulation, and capacity in wholesale grid markets,” says Michael Cornicelli, executive vice president of BOMA/Chicago.

First U.S. Solar Highway Installed in Oregon The first U.S. solar highway installation —covering about 8,000 square feet (740 sq m) and roughly the length of two football fields—has begun operating in Tualatin, Oregon. The 104-kilowatt solar photovoltaic system is producing about 112,000 kilowatt-hours per year, 28 percent of the 400,000 kilowatt-hours used to light the Interstate 5/Interstate 205 inter-change. (See “Solar Power along the Highway,” October 2008, page 214.)

The $1.3 million solar photo-voltaic demonstration project is a public/private partnership involv-ing Portland General Electric (PGE), US Bank, and the Oregon Depart-ment of Transportation (ODOT). The solar panels produce electricity during the day, supplying power to the PGE grid, and PGE returns an equivalent amount of power at night to light the interchange.

For more information on the project, visit www.oregonsolarhighway.com.

ULI Releases Recommendations for Transportation ReformThe upcoming reauthorization of federal surface transportation legislation—the current legislation expires in September—presents a historic opportunity to funda-mentally rethink how the United States plans, funds, and builds its transportation networks. A new ULI report, Transportation for a New Era: Growing More Sustainable Commu-nities, lays out recommendations for transportation policy reform.

A number of proposals for reform are on the table as Congress, the Obama Administration, and others work to forge a path forward, and the connections among land use, infrastructure, and sustainability are being considered as they have never been before. To contribute to this conversation, the Urban Land Institute, through its National Transportation Policy Dialogue pro-gram, brought together leading real estate and transportation thinkers and practitioners in workshops and other forums over the past year to consider the links among real estate, development, and transpor-tation. Several recommendations—intended to guide transportation policy and programs at the federal level—are laid out in the report, including the following: l Create a national vision for trans-portation and infrastructure.l Support the metropolitan areas that drive U.S. prosperity. l Recognize the role of land use in linking infrastructure, housing, and sustainability. l Foster and encourage more com-pact development.l Channel funding through the “three Bs”—use base formula funds to maintain the system; provide a bonus pool to create incentives for sustainable investment; and create an infrastructure bank, to invest in infrastructure.

ULI receives support for the ULI National Transportation Policy Dia-logue from the Rockefeller Founda-tion and ULI trustee James Curtis.

raChel macCleery is managing director of ULI’s infrastructure initiative group.

Transportation for a New Era is available for download at the ULI Web site, www.uli.org.

Real-Time Carbon Counter Launched in New York City The world’s first scientifically valid, real-time carbon counter, a nearly 70-foot- (21-m-) tall digital billboard displaying the running total of long-lived greenhouse gases in the atmosphere, was launched in mid-June by global investment firm Deutsche Bank’s Asset Man-agement (DeAM) division outside Madison Square Garden and Penn Station in New York City. The number on the carbon counter is based on measurements developed by scien-tists at the Massachusetts Institute of Technology that include all long-lived greenhouse gases covered under the Kyoto and Montreal pro-tocols—24 gases excluding ozone and aerosols.

“The carbon counter is a bold new experiment in communicat-ing climate science to the public,” says Ronald Prinn, professor of atmospheric science at MIT. “With

climate change in the news around the world, it is useful to have an up-to-date estimate of a single integrat-ing number. . . . This number can help convey how fast these green-house gases are increasing, and the progress, or lack thereof, in slowing the rate of increase.”

The Carbon Counter Number is available at www.know­the­number.com; updates will be available at http://twitter.com/knowthenumber.

watch

developments

R e a l e sTaT e R e T u R n s ?

“We are now looking at one of those rare opportunities to invest

in commercial real estate.”

—Hessam Nadji, managing director, Marcus & Millichap, a commercial real estate investment adviser based in Encino, California, referring to properties that are located in places where supply is constrained—otherwise solid properties now on sale because losses elsewhere are forcing owners to raise money.

From “There’s Value in Real Estate, If You Find Your Florida,” by Paul Sullivan, New York Times, August 8, page B7.

The first solar highway in the United States is supplying renewable power to help light the way for drivers at a major freeway interchange in Tualatin, Oregon.

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A u g u s t 2 0 0 9 U r b a n La n D 25

re c e ss i o n watch

Commentary: Hints of Recovery?The financial crisis has pushed the U.S. economy into a severe recession, and the commercial real estate in ­dustry is facing its most serious crisis since the last major real estate down­turn during the early 1990s. Stresses associated with the ongoing reces­sion, including large­scale deleverag­ing, limited financing options, and declining net operating income, are putting downward pressure on both property values and market funda­mentals. Because the performance of real estate markets is a deriva­tive of the larger economy, those involved in commercial real estate are watching for signs of a bottom and hints of recovery.

There has been considerable dis­cussion lately about “green shoots of recovery” in the economy. While a variety of indicators continues to present a mixed message, some eco­nomic data suggest that the recession is running out of steam, including smaller­than­expected declines in gross domestic product and employ­ment. An examination of several key credit market indicators, along with some important economic indicators—among them, employment, housing, and retail sales—helps gauge the overall condition of the U.S. economy and the outlook for the commercial real estate industry.l Credit markets. Several important market indicators now suggest that general credit market conditions have improved noticeably lately. These improvements may reflect the return of liquidity to the fixed­income market, improved confidence in counterparty risk, the return of some level of risk tolerance, and a reduction in uncertainty for both lenders and borrowers.

Following its policy meeting on June 23 and 24, the U.S. Federal Reserve Board commented that “the pace of economic contraction is

slowing” and noted that “conditions in financial markets have generally improved.” Interest rates reportedly are going to be kept at “exceptionally low levels” for an extended period, and the Fed will continue with its plans to purchase up to $1.25 trillion of mortgage­backed securities and up to $200 billion of agency debt. The Fed is also expected to wrap up its program to purchase up to $300 bil­lion of long­term Treasury securities in September. That effort, over the past six months, has helped keep interest rates low. These recent announcements coincide with the growing notion that the worst of this economic downturn might be over and that the economy may begin to recover later this year.

In late April, the Federal Reserve announced it would expand the acceptable maturity from three years to five years under the Term Asset­Backed Securities Loan Facil­ity (TALF) program for some assets. In May, the Fed decided to accept legacy real estate–backed bonds that were created before this year. Previously, only newly issued com­mercial mortgage–backed securities were deemed acceptable collateral. This could help restart the securiti­zation market and provide needed relief for the wave of commercial real estate financings coming due over the next few years.l Employment. The July employment report provided a pleasant surprise, with estimated job losses well below market expectations. While the drop in the unemployment rate in July was probably a statistical anom­aly, U.S. job cuts are moderating and the job market has marginally improved, though it remains weak. Nonetheless, the unemployment rate probably will continue to rise in the coming months and prob­ably will not peak until early 2010.l Housing. Prices likely will con­tinue to fall through the end of this year at the national level, though the change in prices will vary signifi­

cantly by metropolitan area. Histori­cally, an increase in home sales has been a reliable leading indicator of a rebound in prices as well.

Both new and existing home sales have shown clear signs of stabilization during the first half of this year, though there has not been a strong and consistent uptick yet. This stabilization is threatened, however, by an increasing supply of foreclosed homes coming to the market. It will still take many months before the housing inventory returns to a normal figure. When the hous­ing market finally reaches bottom in terms of inventory, the subsequent increase in residential investment will help drive gross domestic product growth, while improving home prices will help buoy consumer confidence and, ultimately, personal spending.l Retail sales. After a record free fall of six consecutive months during the second half of 2008, U.S. retail sales are beginning to display signs of sta­bility. U.S. consumers will continue to be under pressure from mounting job losses, declining disposable income, and declining home and investment portfolio values through at least the end of the year. While the savings rate will remain elevated compared with recent years, stabi­lization in the job market should improve both consumer confidence and spending. However, retail sales will improve gradually, rising at a rate of about 3 percent annually over the next few years, compared with the 5 percent annual growth between 1992 and 2007.

In past recessions, the recovery of the commercial real estate sector has consistently lagged the larger economy, and there is no reason to expect a different result this time. In addition, because of the continued challenges facing the economy, the recovery process could be less robust and more protracted than in previous recoveries. Finally, the unprecedented actions taken by the Fed and the U.S. government may

result in some unintended risks and consequences, with the cur­rent high level of federal spending raising worries about higher taxes, a declining dollar, and inflationary pressures in the future. Rising long­term Treasury yields will inevitably put upward pressure on lending costs for mortgages and business borrowings, which could temper the economic recovery process, particu­larly for commercial real estate.

In the long run, commercial real estate remains an attractive asset class in a mixed­asset portfolio for the benefits of diversification and high current cash flow, and as a potential hedge against inflation. With develop­ment pipelines rapidly shrinking, new supply will be more constrained going forward, which should help boost market fundamentals as the economy improves. In addition, the dislocation in the current market is presenting unprecedented oppor­tunities for patient and well­funded investors to capitalize on lower prices and the eventual recovery of the real estate market.

DaviD Lynn is managing director and head of research and investment strategy for ING Clarion Partners in New York City. Tim Wang is a vice president, and BohDy heDgcock is an associate in the research and investment strategy group.

New information will be posted in the middle of each month on ULI’s Real Estate Business Barometer, a new online resource that helps ULI members track economic and financial trends. More than 60 key indicators are gathered and summarized, with graphs showing how these indicators are changing over time; an overview explains what these changes mean for the U.S. real estate industry. Visit www.uli.org/researchandpublications/barometer.aspx.

26 U r b an La nD A u g u s t 2 0 0 9

Recently, there was some good news—and some bad news—on climate change. The good news is that the United States reduced energy-related carbon emissions in 2008 by 2.8 percent while the gross domestic product (GDP) increased by 1.1 percent. According to the U.S. Department of Energy’s Energy Information Administration, the transportation and industry sec-tors led the reductions.

The bad news is that the reduc-tions resulted from lower demand caused by high gasoline prices and the worst economy in decades. Gas-oline and diesel prices hit all-time highs in 2008, and the GDP fell in the fourth quarter by 6.3 percent, leading the United States into its worst economic downturn since the Great Depression.

To make matters worse, the Ameri-can Association for the Advancement of Science earlier this year reported that the pace of climate change has picked up more quickly than expected and is triggering self-reinforcing mech-anisms in global ecosystems. “We are basically looking now at a future climate that is beyond anything we have considered seriously in climate model simulations,” says Christopher Field, founding director of the Car-negie Institution’s Department of Global Ecology at Stanford Univer-sity in Palo Alto, California.

In May, the Massachusetts Institute of Technology’s Joint Program on the Science and Policy of Global Change added to the bad news when it said new research shows that “in the absence of stringent reductions in greenhouse gas emissions, 21st-century climate change may be far more significant than previous cli-

mate assessments had indicated.” The results also showed that even if nations act quickly to reduce emis-sions, it is more likely that warming would be greater than previous studies indicated.

Now, after years of discussion, debate, and delay, the U.S. Congress and the new Obama administration have finally set aggressive new goals for addressing global warming and reducing dependence on foreign oil. The recently passed U.S. economic stimulus plan includes numerous provisions—and billions of dollars—aimed at advancing the energy and climate change agenda.

President Obama has also announced an ambitious new energy plan that would move the United States away from fossil fuels and toward renewable and alterna-tive sources of energy. While many of the goals in the energy plan will not directly affect the real estate industry, those that do include the following:l Reducing carbon emissions 80 percent by 2050. This is an extremely ambitious goal that will require drastic change in what people build and how they live and move around. Because U.S. buildings currently account for about 40 percent of the country’s carbon dioxide emissions, the real estate industry will have a big role to play. Jones Lang LaSalle (JLL) recently advised its clients that the administration’s “stated goal is not attainable without active participa-tion of the commercial real estate industry.” As a result, JLL said, “real estate executives should act now to review their properties’ energy and sustainability performance.” Added JLL, “a comprehensive energy man-

agement program can generally pay for itself in one to two years and save tens of millions of dollars in utility expenses annually after that.”l A cap-and-trade system. Early this year, the U.S. Environmental Protection Agency proposed a rule that all major carbon emitters begin reporting their emissions by 2011. This rule is a prerequisite to imple-menting a cap-and-trade system for emissions. Such a system would allow companies to emit a specified amount of carbon dioxide, set by the government, each year. If a company exceeded the cap, a financial penalty would be imposed. If the company’s emissions fell below its cap, it could sell the unused emissions credits to another company that would other-wise exceed the cap.

A bill to establish a cap-and-trade system was approved by the U.S. House of Representatives in June, and while its prospects in the Senate are unclear, it remains a high priority for the Obama Admin-istration, and real estate companies would be well advised to prepare themselves for big changes ahead. Some of the likely changes include a requirement that new buildings be carbon neutral by 2030. This means that in the future virtu-ally all new buildings will have to be green buildings. Also likely are requirements to increase the energy efficiency of existing build-ing stock. In addition, the adminis-tration is expected to require that a certain percentage of electricity be generated from renewable resources. Because buildings consume 70 per-cent of the electricity in the United States, building owners should also expect new tax incentives and subsi-

The recently passed

U.S. economic stimulus

plan includes numerous

provisions—and billions

of dollars—aimed at

advancing the energy and

climate change agenda.

Climate Change: The Good, the Bad, and Obama

d i a l o g u e p o l i c yE D wa r D T . M c M a h o n

Edward T. McMahon is the Charles E. Fraser Chair for Sustainable Development and Environmental Policy and a senior resident fellow at ULI.

A u g u s t 2 0 0 9 U r b a n La n D 27

thirds of the development expected by 2050 is not yet built. Sticking to the sprawling development patterns of the past will require more time spent behind the wheel.

Compact, mixed-use communi-ties are a key to the future because even when there is a need to drive, there will be shorter and fewer trips. By building compact, mixed-use com-munities and by investing in green buildings and energy-efficient retrofits, the real estate community can make major contributions toward solving the climate change problem. UL

Moving Cooler: An Analysis of Transportation Strategies for Reducing Greenhouse Gas Emis-sions, and Growing Cooler: The Evidence on Urban Development and Climate Change are ULI published books available at www.uli.org/bookstore, or call 800-321-5011.

dies to encourage the use of renew-ables and to spur building upgrades.

Perhaps, most significant, Obama announced in May a new plan to boost full efficiency standards for new cars and trucks to an average of 35.5 miles per gallon by 2016. This amounts to a 40 percent increase in fuel efficiency, up from an average of 25 mpg today.

The new standards also will impose —for the first time ever—a limit on greenhouse gas emissions from vehi-cles. The new requirements would eliminate tailpipe emissions of 890 million metric tons of greenhouse gases by bringing vehicle emissions down from roughly 400 grams per mile today to 250 grams by 2016. According to Scientific American (May 19), this is equivalent to taking 177 million cars off the road—more than two-thirds of the entire U.S. automobile fleet—or shutting down 194 coal-fired power plants.

Under the plan, all classes of vehicles—from compact cars to SUVs—will be required to make fuel-efficiency improvements. Auto mobile mileage will need to rise from an average of 27 mpg today to 39 mpg by 2016, while truck mileage will have to jump from 23 mpg today to 30 mpg.

The new fuel-efficiency standards, together with the ethanol and biofuel requirements enacted during the Bush Administration, provide two of the three approaches needed to reduce carbon emissions from transportation—improved vehicle effi-ciency and low-carbon fuels. To make a meaningful dent in the emissions problem, a third element is needed—reduction of vehicle-miles traveled (VMT) through improved urban growth patterns. The importance of sustain-able land development in mitigating climate change is highlighted in a research report, Moving Cooler: An

Analysis of Transportation Strategies for Reducing Greenhouse Gas Emis-sions, published by the Urban Land Institute in July.

Given that most scientists now say carbon emissions must be reduced by at least 80 percent from 1990 levels by 2050, much more will be needed than fuel-efficient cars. Americans will also need to drive a lot less. “The projected 59 percent increase in total miles driven between 2005 and 2030 will overwhelm expected gains from vehicle efficiency and low carbon fuels,” says Reid Ewing, transportation and urban develop-ment professor, city and metropoli-tan planning department, College of Architecture and Planning, at Uni-versity of Utah in Salt Lake City.

The best way to reduce driving is to build compact, walkable, mixed-use communities that encourage walking, biking, and the use of public transportation. At least two-

ULAug09_p26 dialog.indd 27 8/11/09 12:23:07 PM

28 U r b an La nD A u g u s t 2 0 0 9

d i a l o g u e c l i m a t e c h a n g eC h a n D r a n n a i r

How to expand the global econ-omy without depleting the planet’s resources is a challenge that has been ignored for far too long. The financial meltdown has now come as a stark reminder of the grave con-sequences of the world’s failure to strive for sustainable development.

Humanity faces an urgent chal-lenge: climate change, largely brought about by human activity and excess. As few as five years ago, many governments, politicians, and cor-porations were in denial, refusing to accept the limits to unsustain-able practices. The financial world relied on market mechanisms for righting breakdowns, even those affecting the natural world.

The origins of the financial crisis—subprime mortgages—tell the story of unsustainable ways. Those in the United States who procured subprime loans were not destitute, homeless individuals. According to the Durham, North Carolina–based Center for Responsible Lending, 90 percent of the people who obtained subprime loans from 1998 to 2006 already owned homes and, accord-ing to world averages, probably belonged to the top 10 percent of the population in terms of quality of life and housing.

Many people refinanced homes, further fueling a consumption-driven lifestyle—in some cases to make ends meet, but in others, to pur-chase second homes and other extravagances. With banks miracu-lously financing these excesses, many spent beyond their means. Second homes not only tax the planet’s resources, but their heat-ing and cooling needs also gobble up energy.

Consumers are not the only offenders. Lured by the promise of disproportionate rewards, banks fed this culture of “more and bigger is better,” overlooking how high-risk loans would be repaid. Banks lent to unqualified borrowers, ultimately leading to plummeting property prices, a slowdown in the U.S. econ-omy, and trillions of dollars in bank losses, and wiping out the savings of millions of people around the world.

With climate change, the parallels are evident: mankind heads toward disaster while many people hold on to the belief that the markets will save the day. Much of this philoso-phy is pushed by the Anglo-Saxon centers of finance in London and New York City. Many policy makers pin hopes on market-driven solutions—in the form of carbon credits or bets on investments in renewables—to solve the climate crisis. The reality, however, is that market mecha-nisms have serious limitations and carry the potential to create more problems than solutions.

A closer look at carbon trading shows rampant problems with this proposed panacea. First, carbon trading does not reduce emis-sions, but rather frees polluters of responsibility by allowing them to purchase credits elsewhere—typically in developing countries—thus encouraging complacency.

Carbon trading also is unreliable, and the tools to measure credits are imprecise. Trading companies dis-agree on the level of credits required for the simplest offset calculations. Companies tend to favor a quick fix by investing in cheap, short-term proj-ects. The remedy demands sacrifices of people in the developing world

who are already scratching out a miserable living; even in booming China, almost half the population still struggles on an income of $2 or less per day. With political survival at stake, no government, democratic or otherwise, will adopt complex global trading schemes run by Western banks and risk dashing the eco-nomic aspirations of their people.

Renewable energy schemes also are vulnerable to excesses. As the stakes rise and project proponents become greedier, bankers and law-yers develop increasingly complex, opaque financial instruments to tap into growing potential—as is already happening in the emissions trad -ing markets. The results will be high, short-term profits for the usual suspects of investment banks, fund managers, analysts, and speculators with little regard for reversing negative trends. This distorts the focus, shift-ing it from crisis mitigation to profit generation. Reckless behavior will not be self-corrected by the competitive market until it is much too late.

Problems associated with over-dependence on market solutions to address climate issues are already apparent. In the past few months, investments in renewable energy resources have dried up—a decline triggered by the financial crisis and decisions by bankers driven by short-term profit motives and lacking under-standing of the renewables industry. Even in areas that have remained strong throughout the downturn—namely early-stage venture capital investments in developing clean-energy technologies and building new capacity, such as wind farms or solar parks—project proponents depend on funding from the same

The global public good

should not be placed on

the sacrificial altar of

the private interests of

unregulated financiers.

Governments, not solely

the market, should be

involved in alternative

energy industries.

Betting on Market-Driven Solutions

Chandran nair is founder and CEO of Hong Kong’s nonprofit think tank Global Institute for Tomorrow.

A u g u s t 2 0 0 9 U r ban La nD 29

Contact: Kim Morque • 203-354-1554 • kim@spinrep.com

BUILDING PLACES OF VALUE

Norwalk, CT - St Louis, MO - Portland, OR

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Redevelopment / Compact Development / TOD

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in Beijing by imposing restrictions on car use on certain days of the week. Public acceptance in China of this policy promoting the greater good illustrates that effective solutions to the climate crisis depend on taking actions free of political intervention by vested interests.

The financial crisis demonstrated the need for strong government to protect the public good. In a resource-constrained world, likewise, there is no substitute for sound regulations. Policy makers must concede that capitalism has met its nemesis in climate change and should not be seduced by the market’s promise of a quick fix. UL

See “Talking Global Sustainability with Chandran Nair” by Ron Nyren, July 2007, page 30.

institutions that brought down Wall Street through their preoccupation with maximizing profit.

Natural checks on rampant consumption-driven growth exist, but the market, corrupted by perverse incentives and over-consumption, has ignored the warning signals. Those who hold the belief that there should be no limits on the market are living in a fantasy world, and one can hope that steadfast belief in market mechanisms is beginning to lose credibility. With global markets on shaky ground, governments have intervened to ensure stability.

The same should be the case for climate issues. The global public good should not be placed on the sacrificial altar of the private interests of unregulated financiers. In the case of climate change, clean-technology projects need funding, and that fund-ing should come from the public

purse, not solely through financial instruments designed to create dis-proportionate profits for the few who control capital flows.

Better strategies must be found to combat climate change, but the most obvious strategy is also the least popular. Reducing emissions requires rapid reduction in the con-sumption of fossil fuels, and that means accepting limits to growth based on promoting relentless consumption.

A close look at the unfettered ecological consumption patterns of countries shows that economic growth pursued under free-market conditions allows the same type of excesses that caused the financial crisis. Population and consumption patterns of three ecological-debtor countries are particularly telling: the United States consumes 1.8 times its national biocapacity— the area avail-able to produce resources and cap-

ture emissions; China consumes 2.3 times its biocapacity and India, 2.2 times. The global average available biocapacity per person is 5.2 acres (2.1 ha) per person, but the global average actual per-person footprint is as high as 6.7 acres (2.7 ha). Americans require 23.2 global acres (9.4 ha) on average, while residents of poorer countries require only one to two acres (0.4 to 0.8 ha).

Until far-reaching regulations are introduced to reduce emissions, the true innovations needed to protect humanity will not surface. Draconian measures to make sustainability operable are a key element because few people act purely for the greater good. Awareness and pious words do not constitute action.

Such measures, of course, are easier to enforce under authoritarian forms of government than in liberal democracies. China, for example, managed to reduce pollution levels

Betting on Market-Driven Solutions

30 U r b an La nD A u g u s t 2 0 0 9

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Fred Krupp, president of the Environmental Defense Fund, a New York City–based nonprofit environ-mental group that partners with businesses, governments, and com-munities to find environmental solu-tions, cowrote Earth: The Sequel: The Race to Reinvent Energy and Stop Global Warming with writer Miriam Horn, published this year, which profiles inventors and inves-tors who are devising creative strategies for producing renewable energy as well as for greening con-ventional energy sources. During the late 1980s, Krupp played a cru-cial role in convincing the admin-istration of George H.W. Bush to promote the world’s first emissions cap-and-trade system to reduce acid rain, requiring power plants to cut sulfur dioxide emissions to a certain targeted level or else pur-chase allowances from other plants that were cutting emissions below their own targets. In Earth: The Sequel, Krupp maintains that a cap-and-trade system is the best option for stimulating innovations in the private sector to reduce greenhouse gas emissions as well.

As a tactic for fighting global warming, what makes a federal emissions cap-and-trade system superior to renewable energy tax credits, or to a carbon tax?If you look around the world at other air pollution problems, we’ve never solved a single one without estab-lishing a legal limit. Establishing a cap on greenhouse gas emissions—one that becomes more restrictive over time, at a rate consistent with what the climate scientists tell us is necessary—is the only way to guar-

antee that the atmosphere can be protected. A cap-and-trade system also provides incentives to develop many ways to reduce emissions—and even to capture greenhouse gases already in the atmosphere.

Of course, a cap-and-trade system doesn’t preclude the possibility of also having renewable energy tax credits. Tax credits could be a com-plementary measure. A carbon tax might well be redundant, however, because the cap-and-trade system will already add a cost to producing carbon emissions.

How should a cap-and-trade system be crafted for maximal effectiveness?To be maximally effective, a cap-and-trade system would set short-, mid-, and long-term declining caps on emissions. It would include all the sources of greenhouse gases—not merely carbon dioxide, but also methane, perfluorocarbons, and gases that are used in small amounts in industry but that are in some cases thousands of times more powerful than carbon dioxide in contributing to global warming.

The system should cover the whole country—ultimately, the whole world—in all sectors of the economy: buildings, transportation, energy, and manufacturing. This is the only way to guarantee we safeguard the atmosphere. When you start the hunt for solutions to global warm-ing, you want that hunt to cover the widest possible territory to find the best solutions that provide maximal reductions for the investment.

Congress has a history of letting tax credits expire, and that uncer-tainty has hindered the growth of the renewable energy industry. What makes a cap-and-trade system more likely to “stick” and support long-term change?The proposals in Congress for cap-and-trade systems call for a time frame of 40 or more years, with a cap that declines steadily over time. This is in contrast to the shorter time limits that have been placed on renew-able energy tax credit proposals. The Environmental Defense Fund supports tax credits as well, and we think they should be made long term.

Many of the innovators that my coauthor and I write about in Earth: The Sequel want the problem solved, and so they’re happy to have the level playing field that a cap-and-trade system provides. So the cap-and-trade idea gets support from a lot of innovators, whether they are in the solar energy business or in the advanced biofuels industry, or whether they’re proposing to preserve forests or change agricultural practices in a way that captures greenhouse gases already in the atmosphere.

From the standpoint of the emit-ter, too, the cap-and-trade system

Q&A with Fred Krupp on Cap and Trade

The president of the

Environmental Defense

Fund talks about emissions

cap-and-trade systems, the

potential for integrating

renewable energy sources

into buildings, and methods

for minimizing greenhouse

gas emissions in the production

of building materials.

r o n n y r E n

d i a l o g u e e n v i r o nm e n t

ron nyrEn is a freelance architecture and urban design writer based in the San Francisco Bay Area.

ULAug09_p26 dialog.indd 30 8/10/09 10:48:54 AM

Can your roof irrigate your landscape?

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to learn more, visit syska.com/WateringCan.

Can your roof irrigate your landscape?

SYSKA-14412-09 WateringCan UL.indd 1 7/23/09 10:59 AM

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ULAug09_p26 dialog.indd 31 8/10/09 10:48:54 AM

32 U r b an La nD A u g u s t 2 0 0 9

dialogueenvironment

provides more choices. For instance, if the operators of coal plants can find a way to capture the gases coming out of their stacks and safely bury them and keep them locked up underground, that would be allowed under the cap-and-trade system—as long as the U.S. Environmental Protection Agency scientists certify that they really are safely locked up. The trading mech-anism would allow coal plants the option of buying allowances from elsewhere in the economy instead. So I think the emitters are seeing the very flexibility of the system as something that gets the job done while allowing them a future.

If technological advances are made that significantly reduce greenhouse gas emissions at low cost in certain industries, others can still operate by purchasing offset credits until similarly cost-effective technological advances become available for them?

Yes, you get the most aggressive schedule of reduction that Congress will mandate, but you get it at a lower cost, because the reductions are cap-tured from the areas that can do it the fastest. Lower costs create more political will to make the steeper reductions that scientists tell us are necessary. Under a system like this, industries that are ready would con-tribute bigger reductions earlier, and the ones that take longer to develop practical technologies would con-tribute later on.

Earth: The Sequel has chapters on solar energy, biofuels, ocean energy, geothermal energy, and coal. In which of these realms do you see the most innovative thinking or the most readily effective solutions?The reality that I found as we researched the book is that there are hundreds of alternatives. It’s not just one area that can contribute, and the policy proposal that we are

advocating doesn’t require that we all place our bets on even a few areas. I do think that there is enor-mous near-term potential in solar energy over the next few years. The costs are coming way down, thanks to some of the policy initiatives in Europe. I see a lot going on in the geothermal industry as well.

How much potential do you see for integrating renewable energy sources into buildings?I see a lot of potential. More and more businesses and homeowners are already integrating renewable energy generation into their build-ings. Companies like Wal-Mart are using third-party financing to inte-grate rooftop solar power arrays into their buildings. Wal-Mart doesn’t pay for the panels or own them, it just commits to buy the electricity at a set price for 20 years.

Gridpoint is a company in Wash-ington, D.C., that makes smart bat-

teries that customers can use to store excess power coming from variable energy sources, such as solar or wind, saving it for use later when the sun goes behind a cloud or the wind stops.

In New York City, Credit Suisse’s offices at the Metropolitan Life tower rely on an ice storage–based air-conditioning system that uses off-peak power to freeze ice, which is then used to cool the building during the day. The electricity is cheaper, and the system requires less energy to operate than con-ventional air conditioning does.

What kinds of innovative building materials are showing the most promise for helping to reduce greenhouse gas emissions?Other than fossil fuel consump-tion, cement manufacture is the biggest source of carbon dioxide emissions in the country. If we can make cement with different materi-

A u g u s t 2 0 0 9 U r ban La nD 33

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als, such as fly ash, we can reduce carbon dioxide emissions.

There are structural insulated panels available to build homes—these are prefabricated panels, a sandwich of insulating foam and fiberboard that uses far less energy to make than traditional building materials. And because they are insulated, they reduce energy use over the life of the building.

Conventional drywall is responsible for 12 million tons (10.9 million metric tons) of carbon dioxide emissions globally every year. In the book, we talk about Serious Materials in Sunny-vale, California, which is making an alternative product called EcoRock and claims that manufacturing it doesn’t require the extensive use of external heat sources that drywall production does. There’s also a company called Calera Corporation in Los Gatos, Cali-fornia, that claims it has a process for capturing the carbon dioxide emitted in the fumes produced by natural gas power plants—and then using that carbon dioxide to make cement.

The best sites for building large-scale wind farms and solar power plants are often far away from population centers. What are some of the challenges of developing the transmission infrastructure to bring renewable energy to the places that need it most?We need to identify corridors where we can safely put in new transmis-sion lines. Our Texas office has worked closely with the Southwest Power Pool Electric Energy Network, a regional transmission organization based in Little Rock, Arkansas, to push legislation to create what are called competitive renewable energy zones (CREZs) for new transmission lines in places where renewable energy sources are plentiful, but go untapped because they’re not accessible to cities. It’s important that environmentalists not be just critics of the past, but also architects of the future. We have to do more than just say what isn’t good—we have to be willing to come forward and say what is good. UL

34 U r b an La nD A u g u s t 2 0 0 9

d i a l o g u e e n e r g y

SuSan Fine , a real estate professional (left), and Caroline G. HarriS , a land use attorney (right), founded Renewable Communities (www.renewablecommunitiesinc.com) to help communities and institutions develop comprehensive energy conservation plans that are capable of practical and cost-effective implementation.

S U S a n F i n e a n D

C a r o L i n e G . H a r r i S

Renewable Communities

The homes foreclosed during the U.S. subprime crisis tend to be clustered in discrete—and histori-cally poor—neighborhoods across the country. Last year, the U.S. Congress enacted the Housing and Economic Recovery Act (HERA) to stabilize these vulnerable neighbor-hoods. The plan, designed by the National Community Stabilization Trust, is to move the foreclosed residences from banks to local gov-ernment or not-for-profit ownership for rehabilitation, and then back to homeownership.

Retrofitting the dwellings for energy savings is being considered as a requirement. But, the cost of energy investment combined with the Herculean chore of moving these residences off banks’ balance sheets will likely eclipse the primary goal of ensuring long-term value to the homes. Providing renewable energy to the communities where these dwellings are clustered is not even on the radar screen—but it should be. The concentration of large numbers of homes in each distressed neighborhood is the key to developing a pilot for delivering solar and other greening strategies at economies of scale.

A neighborhood-oriented renew-able energy strategy, in conjunction with the implementation of the HERA, can reduce bureaucratic hurdles, facilitate citing and bulk discounts for equipment and installation, and generate local green jobs. Energy costs would be reduced for each of the homes in the program. Other homeowners in the neighborhood who kept their residences through the crisis could join the network as well, at affordable costs.

A federal program to support the installation of renewable energy technology at the community level would enable this model to be implemented. Although the gov-ernment has in place a tax credit to help homeowners incorporate solar energy, even the wealthiest homeowners find the upfront costs too high and the benefits too long term. The costs to individual home-owners become affordable only when a critical mass of homes in a specific community is being retrofit-ted, allowing for economies of scale. With existing incentive programs, the upfront cost of retrofitting and provid-ing renewable energy to 1,000 homes is estimated at between $5,000 and $10,000 per home.

These amounts are less than 5 percent of the face value of most of the foreclosed mortgages, and they are much less than the amounts being written off the mortgages by the banks. However, these upfront installation costs would still be out of reach for the people who live in the communities where foreclosures are concentrated. There is a need for federal support.

The U.S. Department of Energy, the U.S. Environmental Protection Agency, and the U.S. Department of Housing and Urban Development should coordinate their activities to achieve this goal, first as a model project, then as a pilot program. The funding should support feasibil-ity studies, startup costs, and initial infrastructure purchases. Once the renewable energy projects are up and running, any revenues derived from selling power back to the grid could be returned to a revolv-ing grant fund that would provide

startup costs to other community renewable energy projects.

Such a program could start as a vehicle to provide improvements, jobs, and renewable energy to neigh-borhoods that were taken advantage of by unscrupulous lenders. It could result in a model for renewable energy at the local level for the rest of the country’s communities.

For example, a distressed neigh-borhood in Atlanta is able to effec-tively use solar power. Because the installation of solar panels is now happening across a neighborhood, the cost of installation per home—whether paid for by a federal grant or by the homeowner—becomes more manageable, and paperwork and bureaucratic demands are streamlined. The energy consumed by these homes decreases due to retrofitting and consumer aware-ness, and the supply of energy comes from a local renewable source. These savings make the homes more affordable for new occupants. As a result, the entire community could participate in generating and using a new—renewable—supply of energy.

By greening, jobs are created. Where possible, public and private buildings add green roofs, and vacant lots are turned into community gar-dens. These combined efforts have the potential of promoting sustain-ability and reducing the carbon foot-print of an entire neighborhood. UL

By increasing renewable

energy resources

at the community level, the

value of foreclosed homes

could be raised while reducing

the carbon footprint on a

community-wide basis.

A u g u s t 2 0 0 9 U r ban La nD 35

Stimulating the Economy through Energy RetrofitsThe recent steep decline in U.S. residential construction employment suggests this sector would be a good target for job creation through a gov-ernment stimulus program. With large inventories of unsold homes in many markets, however, it is hard to argue that the government should prime the pump for new construction. But the construction of new homes is not the only form of residential construction activity; the government could put laid-off construction workers to work improving older homes’ energy efficiency.

A massive program to improve the energy efficiency of older residences would reemploy hundreds of thousands of unemployed workers in the construction and related trades. At the same time, it would substantially reduce greenhouse gas emissions and energy use, improve energy secu-rity, and reduce utility costs for millions of Americans.

How much would such an undertaking cost? A research brief issued by the Washington, D.C.–based National Association of Home Builders last October estimated that $100,000 of housing rehabilitation supports about half of a construction/specialty trade worker for a year, plus another half of a worker for a year, spread out among jobs in manufacturing, transportation, and the like. This means that $1 billion would support jobs for roughly 5,400 construction workers, plus 5,700 workers in supporting fields, and $100 bil-lion would support jobs for 540,000 construction workers and 570,000 work-ers in manufacturing, transportation, and other supporting fields.

Amortize this $100 billion over a two-year period to give the workers time to do all the work and provide support for what is likely to be a pro-longed downturn, and two years of employment can be supported for some 270,000 construction workers, and another 285,000 workers in supporting fields, for a grand total of 555,000 jobs directly supported for two years. Tens of thousands of additional jobs could be created from the spillover effect on communities that results when the workers spend their salaries.

Could $100 billion possibly be spent on energy-efficient retrofits? A recent analysis by officials at the EPA Energy Star program found that the average costs of energy-efficient home modifications using the industry-leading home performance with Energy Star approach was $7,000. (Estimates based on pro-grams to weatherize homes occupied by low-income families are lower, but the home performance estimates seem more relevant to large-scale efforts to modify homes of varying income levels.) Thus, $100 billion would enable about 14.3 million homes to be modified. Assuming lower per-unit costs to improve the energy efficiency of multifamily units—say, half the $7,000 average for single-family homes—would increase the number of housing units that can be served to about 16.4 million. That is roughly 15 percent of all occupied residential units, 21 percent of all occupied housing units built earlier than 1985, and 28 percent of units built before 1975.

Roughly one-fifth to one-fourth of the nation’s older housing stock needs energy-efficient improvements. The U.S. Congress has already allocated $5 billion for weatherization of low-income homes and another $6 billion for state and local energy-efficiency programs in the American Recovery and Reinvestment Act of 2009. Additional funds are included for energy-efficient improvements in public housing, energy-efficient tax credits, and other provisions.

But much more is needed to put the nation’s unemployed contractors back to work improving the energy efficiency of older homes. In particular, there is a need for a robust program of low-cost financing—using U.S. Fed-eral Housing Administration insurance or other credit enhancement—that would allow much of the $100 billion in energy-efficient improvements to be financed. Low-cost financing combined with an extended payback period could allow homeowners to pay for the improvements with their monthly savings from lower utility costs. Owners of rental units with individual meter-ing may have to charge somewhat higher rents to cover the financing costs, but these rent increases would be offset by lower utility costs.

A second priority is a more robust and effective tax credit. The recently passed recovery package strengthened the existing tax credit for energy-efficient rehab, but the reimbursement rate is still only 30 per-cent, with a strong focus on the installation of big-ticket items like fur-naces and windows. This will surely benefit many higher-income families who choose to undertake home improvements, but it is hard to believe that a 30 percent credit is enough to induce moderate-income homeown-ers, with incomes just above the 200 percent of poverty limit for weath-erization funding, to undertake the needed repairs.

To reach moderate-income families, the tax credit needs to reimburse a much larger share of qualifying costs. How about a tax credit equal to 75 percent of the cost of qualifying improvements with the same $1,500 maximum credit that we have now? At the same time, it is important to make sure a parallel incentive is in place to improve the energy efficiency of rental units and that it is clear that labor costs and the costs of simple low-tech solutions like caulking are covered. This would provide a strong incentive for owners to undertake the first $2,000 in repairs. Once con-tractors are on the scene, and low-cost financing is easily available, it is likely that additional work will get done.

Finally, we need to address the need for energy-efficient improvements in privately owned subsidized housing. Funding to improve the energy efficiency of this important component of the housing stock was included in earlier versions of the economic recovery package, but was drastically reduced in the final bill. We should also determine if additional funding is needed to complete energy-efficient improvements in public housing and rental units occupied by families with federal housing vouchers.

Where will the funding come from? In short: the climate change bill. At present, Congress is considering climate change legislation that is expected to reduce greenhouse gas emissions and raise billions for investments in energy efficiency and alternative energy by putting a price on carbon emissions. By using a portion of the funds generated through this process for energy-efficient home improvements, Congress could help reduce the amount of greenhouse gases emitted and improve housing affordability by lowering families’ utility costs—all while stimu-lating the economy by providing desperately needed construction jobs.

JEFF lubEll is executive director of the Center for Housing Policy in Washington, D.C.

36 U r b an La nD a u g u s t 2 0 0 9

ulx r o n n y r e n

Residential Green

Ten multifamily housing

developments give high-

density living an even

greener spin.

Multifamily housing is intrinsi-cally green, making more efficient use of land and infrastructure, lowering individual energy bills with less heat loss per unit, and requiring fewer building materi-als per unit. With renters and homebuyers becoming more cost-conscious in the current economic climate and more aware of envi-ronmental issues, developments

sited close to public transit and fitted with design measures that lower energy and water bills have an additional edge over their con-ventional counterparts.

Being close to neighborhood-serving retail as well as pedestrian- and bike-friendly environments are essential as well to allow residents to reduce their reliance on cars. One of the challenges ahead is to

mainstream the incorporation of significant green building strategies into all multifamily developments, not mainly those aimed at the luxury market or at the affordable housing sector.

Ron nyRen is a freelance architecture and urban design writer based in the San Francisco Bay Area.

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1. Accordia HousingCambriDge,engLanD,UniteDKingDom

Close to Cambridge’s city center, a site formerly occupied by dilapidated, single-story 1940s-era government office buildings is being converted for high-density living. Feilden Clegg Bradley Stu-dios of Bath, England, master planned the 23.5-acre (9.5-ha) site for developer Countryside Properties of Brentwood, Essex, Eng-land, and designed the majority of the buildings, which altogether include 378 residential units in a variety of building types, includ-ing apartment blocks, rowhouses, and semidetached homes.

The design preserved more than 700 mature trees, with resi-dences overlooking a variety of shared green spaces linked by

bicycle and pedestrian paths. Each unit has dedicated bicycle parking, and the project is close to public transit and the city center. Precast concrete construction provides high thermal mass, supplemented by significant insulation to cut energy costs. Whenever possible, timber used in construction came from sources certified by the Bonn, Germany–based Forest Stewardship Council. Green roofs, permeable paving, swales, and reed beds enhance stormwater retention and filtration. The first phase was completed in 2006.

a u g u s t 2 0 0 9 U r ban La nD 37

2. Carabanchel 19maDriD,Spain

As a way to accommodate Madrid’s fast-growing population—fueled by economic growth and an influx of immigrants—the city’s housing authority, Empresa Munici-pal de la Vivienda y Suelo, has been pairing foreign architecture firms with local ones to bring fresh thinking to high-density public housing. In Madrid’s Carabanchel suburb, Sheppard Robson of London teamed up with ACP Arquitectos of Madrid to design the 107-unit Carabanchel 19. The five- and six-story blocks are organized around three courtyards that maximize natural light and contain landscaping and pools of water that cool the air.

A screen of white aluminum louvers wraps the entire exterior, providing protec-tion from solar heat gain and wind. For individual control of their environment, residents can adjust louvers above the balustrade level of their balconies. Con-crete frame-and-slab construction and insulated walls work in combination with extra-thick roofs to moderate temperatures. Rooftop solar thermal panels heat the building’s water. The project was completed in 2006.

4. EllevenLoSangeLeS,CaLifornia

A few blocks from the Staples Center, the 13-story Elleven includes 176 studio, one-bedroom, and two-bedroom lofts and penthouse units as well as nine two-story live/work townhomes. Designed by Ankrom Moisan Associated Architects of Portland, Oregon, and completed in 2006, Elleven received Gold certification from the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) green building rating system for sustainable measures, such as operable floor-to-ceiling windows for natural ventilation and daylight, water-saving fixtures and landscaping, odorless paint, and other low-emitting materi-als and finishes.

Residents received memberships in a car-sharing program and have access to on-site bicycle parking. The base of the building offers ground-floor retail as well as gardens, paseos, plazas, and water features. Elleven is one of a trio of LEED-certified condominiums completed in the South Park neighbor-hood in recent years by local developer South Group.

3. Cave Avenue Homesbanff,aLberta,CanaDa

The 19-unit cooperative housing of Cave Avenue takes cues from the natural landscape. Located in downtown Banff, the Cave Avenue Homes project fol-lows the site’s sloping topography, and the rooflines echo the distant moun-tain peaks. The layout preserves an existing wildlife trail, while vegetated roofs and native landscaping further help the structures blend in.

Thickly insulated walls, highly insulated and oversized windows, and heat-recovery ventilators enable each home to rely solely on a high-efficiency gas fireplace for warmth in winter. Rainwater is collected for reuse in toilet flushing and site irrigation. Parking is tucked underground. Completed in 2005 for local developer Arctos & Bird Enterprises, Cave Avenue was designed by William McDonough + Partners of Charlottesville, Virginia, with IBI Group Architects of Calgary as architect of record. The homes are paired with the mixed-use Bison Courtyard at Bear Street, which includes retail and restaurant space as well as residences and was completed a year later for the same developer.

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ulx5. Gish Family ApartmentsSanJoSe,CaLifornia

The Gish Family Apartments project addresses two challenges: the high cost of housing in the Bay Area and the scarcity of family housing in urban areas. The 35 units include efficiencies as well as two- and three-bedroom apartments, all renting to households earning between 35 and 50 percent of the area median income. Thirteen units are reserved for resi-dents with developmental disabilities. The building includes a computer center for residents as well as a ground-floor convenience store and beauty salon. Residents receive a free transit pass.

The redevelopment of a former gas station site, the building includes rooftop photovoltaics; low-flow water fixtures; low-emitting adhesives, paints, and sealants; and highly insulated windows and walls. Designed by the Office of Jerome King, a local architecture firm, for local nonprofit developer First Community Housing, the Gish Family Apartments were completed in 2007 and received LEED Gold certification.

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In the Bronx’s Charlotte Gardens Urban Renewal Area, the local nonprofit organization Women’s Housing & Economic Development Corporation has cleaned up a long-vacant brownfield and built 128 units of housing for households earning 60 percent of the area median income. Because of the high asthma rate in the neighborhood, improving air quality was a concern: interiors make use of low-emitting adhesives, paints, and sealants and formaldehyde-free particleboard, while green roofs, two landscaped courtyards, and more than 40 new street trees remove carbon dioxide from the air and soak up rainwater.

Other sustainable measures include low-flow water fixtures, high-efficiency water boilers, and high-recycled-content flooring. Marble and Italian porcelain tile was diverted from the landfill and donated for use throughout. Designed by Edel-man Sultan Knox Wood Architects of New York City, Intervale Green incorporates elements such as red brick, decorative cornices, and ironwork that reflect the architectural traditions of the Bronx. The ground floor comprises commercial storefronts, while a public sculpture garden displays work by local artists.

a u g u s t 2 0 0 9 U r ban La nD 39

8. RiverClayDenver,CoLoraDo

Making solar power more affordable to home-buyers is a continuing challenge. Buyers of con-dominiums at RiverClay in Denver, Colorado, were able to take advantage of not only federal solar tax credits and utility rebates, but also a mortgage that includes the cost of each unit’s share of the photovoltaic system of 30 rooftop 1.26-kilowatt solar modules. Completed in 2008 for Zocalo Development of Denver and designed by John Gagnon of Samuel Engineering in Greenwood Vil-lage, Colorado, the six-story, 60-unit RiverClay proj-ect is located across from a seven-acre (2-ha) park a couple of blocks north of Invesco Field stadium. Nine of the condos are earmarked for households earning 80 percent of the area median income.

RiverClay has been awarded LEED Silver certifica-tion for features such as water-efficient fixtures, reflective roofing to reduce solar heat gain, a high-efficiency mechanical system, highly insulated low-emission glass, and high levels of building insulation. Close to mass transit, RiverClay provides numerous bicycle parking spaces as well as a com-munity bicycle maintenance facility.

7. Pine Ridge TownhomesKetChUm,iDaho

To blend into the surrounding neighborhood of single-family and multifamily housing, the Pine Ridge Town-homes development consists of two- and three-story structures designed to resemble large single-family homes in their massing. They are arranged around a central open space to enhance views and daylight penetration into the living areas, with a water feature, barbecue pavilion, and play area. Completed in 2006, Pine Ridge includes 32 units: 19 are for-sale market-rate units and 13 are deed-restricted community housing units for households earn-ing 80 percent of the regional median income.

Window placement, overhang design, and building orientation are intended to maximize heat gain during cold months. Solar tubes bring sunlight into kitchens, bathrooms, and internal circulation areas. Other sustain-able strategies include radiant heat; nontoxic adhesives, cabinets, paints, and stains; high levels of insulation; and native, drought-tolerant landscaping. Close to public transit, the site’s pedestrian and bike paths connect to a county bicycle path network. Living Architecture designed the townhomes for developer Thunder Spring LLC; both are based in Ketchum.

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40 U r b an La nD a u g u s t 2 0 0 9

ulx9. Thin FlatsphiLaDeLphia,pennSyLvania

Located among the rowhouses of Philadelphia’s Northern Liberties neighborhood, close to downtown, the Thin Flats live up to their name: each of the eight two-story duplexes, stacked in pairs, is only 18 feet (5.5 m) wide. Facing the street, the complex presents a double facade: a rhythmic composition of glass and metal panels punc-tuated with openings stands three feet (1 m) in front of the inner facade, providing shade and a sense of unity.

The top of the building supports both a green roof and solar thermal panels for heating the building’s water. A stormwater collection system brings water into a cistern for use in irrigation. Inside, the concrete floors are equipped with radiant heating. Skylights, open internal layouts, and interior glass walls and staircases allow natural light to penetrate throughout. Materials were sourced from providers within a five-mile (8-km) range. The creation of local development/design/build collective Onion Flats LLC and its architectural firm com-ponent Plumbob LLC, Thin Flats was completed in 2008 and is awaiting LEED Platinum certification.

10. Vento ResidencesCaLgary,aLberta,CanaDa

Part of the city’s master-planned redevelopment of a former hospital site into an urban village, the Vento Residences are located along an exist-ing commercial corridor, a short walk from light-rail and bus lines. The three-story structure includes 20 two-story townhouses organized around a sec-ond-floor courtyard, with ground-level commercial space and two affordable housing suites for households earning 65 percent of the median income.

Completed in 2006, the building reduces energy costs by relying on a highly insulated exterior envelope, radiant floor heating and heat recovery ventilators in each unit, and extensive use of daylighting. The structure forgoes mechanical cooling. A graywater recycling system collects 100 percent of rainwater from the roof and courtyard as well as water from sinks and showers for reuse in toilet flushing and site irrigation. Designed by Busby Perkins + Will of Vancouver, British Columbia, for Windmill Development Group of Ottawa, Ontario, the Vento Residences project has achieved a LEED-Canada Platinum rating. UL

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Creating sustainable places to live, work and play is our mission, which over three hundred EDSA staff members work to achieve each and every day. Our goal is simple - to improve the way the world looks, one project at a time, with integrity, inspiration and professionalism. After all, it’s what we’ve been practicing for nearly 50 years.

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H E R E ’ S T O

Introducing the sports utility home.

Finally, a home that’s as excited about the weekend as you are. One that comes standard equipped with an oversized lot ready for your RV, watercraft or ATV. Inside, quality-crafted interiors offer inviting spaces to drop from exhaustion. And it sports a price that’s pure utility. Check out these all new McCaffrey homes under construction. Poet’s Crossing in NW Fresno, from $199,990.

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saving the planet.

TOO SMART TO FAIL .T O U G H M A R K E T S D E M A N D S H R E W D M A R K E T I N G , T H E K I N D T H A T C A N T U R N H E A D S A N D C H A N G E M I N D S .

M A R K E T I N G T H A T W O R K S .

B E T H O R C R A I G A T 6 1 9 . 7 4 4 . 4 0 2 4 G R E E N H A U S . C O M

5reasons to take your life off hold.

42 U r b an La nD a u g u s t 2 0 0 9

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a u g u s t 2 0 0 9 U r ban La nD 43

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newdesignstrategies,energy-efficientmaterials,

andinnovativebuildingtechnologiesarehelping

takegreenmainstream.

Conceptual structures showing off exotic new envi-

ronmentally friendly technologies have given way to

real buildings, achievable goals, practical standards,

energy-efficient materials, and innovative and sus-

tainable new spaces. Today, green design is an

integral and inescapable feature of the design and

development landscape. The extent to which many

architects, designers, developers, and builders are

incorporating sustainable and ecofriendly materials

and technologies into their everyday work reveals

the power and presence of green design.

The dramatic growth of the U.S. Green Building

Council (USGBC) is evidence in itself that green de-

sign and development have entered the industry’s

mindset. From about 500 members at the beginning

of the decade, the organization’s membership has

grown to nearly 20,000 organizations from across

the development industry.

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44 U r b an La nD a u g u s t 2 0 0 9

The USGBC’s Leadership in Energy and Environ-mental Design (LEED) guidelines have become more expansive and sophisticated over the years, setting universal standards that have helped promote and popularize green construction. In the United States, buildings account for 72 percent of electricity con-sumption, 39 percent of energy use, 38 percent of all carbon dioxide emissions, 40 percent of raw materials use, 30 percent of waste output (136 million tons a year), and 14 percent of potable water consumption, according to the USGBC. In addition, the council pre-dicts that the green building market will nearly triple in size over the next few years, reaching $96 billion to $140 billion by 2013. By next year, the value of green building construction is projected to increase to $60 billion, and the market for green building products is projected to reach $30 billion to $40 billion a year. Cities everywhere are implementing comprehensive new environmental goals and standards for commer-cial and residential development.

A closer look at the specific ideas and technologies attracting attention reveals an intriguing aspect of the green revolution—the degree to which sustainable, energy-efficient, and environmentally friendly materials and technologies have helped spur an architectural design renaissance. The realization that green design is good design has spurred renewed interest in the practical application of sustainable strategies, recycled and renewable materials, and new energy-efficient tech-nologies and design innovations. It also has motivated builders, architects, and designers to increase invest-ment in the pursuit of effective products and ideas.

The increasingly favorable cost/benefit equa-tion has helped create a vital marketplace for green ideas. But assessing a product’s potential in terms of practical utility and financial viability is only part of the equation. Today’s green architect needs to be equal parts designer, engineer, and conservationist, and must have a more sophisticated skill set in order to be able to balance traditional ideas about space, light, utility, and visual appeal in the context of a rapidly expanding palette of promising materials and technologies. Some firms already devote resources to keeping abreast of new developments in technology and green design, and are working closely with green manufacturers and suppliers of sustainable and recycled materials to stay informed.

The pace of innovation is accelerating, including in wind power, increasingly sophisticated photovol-taic cells that capture solar energy, use of thermal and radiant heating to heat water and for climate control, turnstile door–powered engines and eleva-tor counterweights that capture and store potential energy, and a growing selection of recycled and sus-tainably harvested materials.

Landscape efficiency is increasing with advances in smart irrigation, including moisture sensors and weather stations that incorporate weather forecasts into water-saving, energy-efficient systems that can save 30 to 60 percent on irrigation costs. Daylight sensing and timers provide programmable control of lighting components, and designs that take better advantage of daylight and ambient light are prolif-erating. Sunshades and programmable louvers can respond to environmental cues to adjust to maximize natural lighting and reduce reliance on heating and air-conditioning systems. A host of new materials, such as healthier paints, finishes, and adhesives, and carpets that use recycled fibers and ecofriendly dyes, have contributed to cleaner and healthier buildings.

Upgrades and renovations have made retrofitting a viable option. Updates to the U.S. Custom House in lower Manhattan, for example, included redesign of the building’s lighting to accentuate the structure’s grandeur. The addition of light-emitting diode–based fixtures cut energy consumption by 43 percent and is expected to save $6,654 a year in electrical expenses, plus the fixtures have a life expectancy 25 times longer than traditional incandescent bulbs. Wal-Mart and other retailers have promoted the sale of compact fluorescent light bulbs (CFLs), another longer-lasting and energy-efficient lighting option; replacing one conventional bulb with a CFL can save up to $30 in electric costs over the lifetime of the bulb. Wal-Mart plans to add solar panels at ten to 20 stores in California within the next 18 months; 18 of its stores already use solar energy.

Studies have shown that natural lighting not only lowers energy bills, but also leads to better performance by employees and better test scores for students. The academic performance of students in schools with abundant natural light is 20 percent higher than students in schools lacking natural lighting. Wal-Mart found that registers positioned to receive more natural light consistently had higher

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sales. Use of low-volatile-organic-compound (VOC) paints and other low-VOC building materials can decrease incidence of asthma and allergies and improve the health and productivity in offices. With rising numbers of insurers acknowledging the finan-cial benefits of a healthier workplace by rewarding companies with lower insurance premiums and other financial incentives, the motivation to go green in the workplace has never been stronger.

A team of researchers at North Carolina State University recently developed a new design approach that requires 30 percent less reinforcing steel in the manufacture of certain concrete beams commonly used in construction of parking garages. The new

design maintains strict safety and reliability stan-dards while reduced use of steel allows manufactur-ers to cut labor costs and manufacturing time in half.

Modular housing shows promise as a sustain-able development strategy. This approach not only facilitates precise control over materials and finishes, but also eliminates a significant amount of mate-rial waste and can speed up construction by up to 50 percent for most projects. Because many of the components can be assembled before they reach the construction site, much of the building site and adjacent land can be kept nearly in its original state, allowing retention of mature trees, grasslands, wet-lands, and other natural resources.

Currently in the design stage, the corporate headquarters for an energy co-op in central Ohio has a sustainable site design that includes a natural bioswale for stormwater treatment, evaporative cooling from a reflecting pool, extensive green roof systems, and terraced facades allowing natural daylight to penetrate the interior of the building.

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While energy-efficient technologies such as radi-ant floor heating have improved and become more popular—for example, newer systems eschew the use of circulating water and instead use a heated gel topped with self-heating materials—some of the oldest and most familiar green technologies are regaining popularity.

Improvements in the efficiency and effectiveness of photovoltaic technology, along with broader legislative trends promoting solar energy and a greater apprecia-tion of the power of energy-efficient engineering and design possibilities, have prompted some architects and developers to forge green-oriented deals. Under a recent power purchase agreement between Develop-ers Diversified Realty (DDR), a Cleveland-based real estate investment trust, and Beltsville, Maryland–

based SunEdison, a solar energy services provider, solar technology is to be introduced to more than 200 DDR shopping centers. The agreement allows SunEdi-son to install solar power systems on unused rooftop space that it will lease from DDR, which subsequently will be able to buy energy for use in common areas of the shopping centers. Retail tenants will have the option of buying the solar-generated power at a rate lower than that for retail energy.

Agreements such as this are prompting architects and developers to continue to plan for the future and accommodate green design potential into their designs. For example, even in projects that do not have immediate plans to implement a solar energy system, many new buildings have rooftop space designed and engineered to accommodate solar panels. At the same time, the increasing popularity and growing demand for green design features has motivated some architects to increase their in-house capability to conduct feasibility studies and other energy-efficient, preconstruction evaluations.

The ability to execute professional feasibility and profitability studies during the design and development

or schematic phase of a project is becoming less a luxury and more a necessity in the marketplace. Studies like these show the initial investment, consider factors such as depreciation and state and federal incentives, and predict a return-on-investment time frame.

While technological advances have been a driv-ing force behind newer and more efficient green design innovations, architects have continued to move forward by looking back for inspiration: green design strategies that rely on old-school remedies like improved air circulation and the capture and reten-tion of passive energy are proliferating.

Focused more on reducing wasted energy and taking full advantage of natural lighting, heating, and cooling potential, passive energy can have a signifi-cant impact on energy demand, particularly in tem-

perate climates. Fans, operable windows, and timed vents that open and close at different times of the day can limit a building’s reliance on forced-air heating and cooling. South-facing surfaces and exposures that use dark surfaces, stone, and other natural materials hold heat longer. The trend toward use of larger and more open and shared spaces likely has hastened a passive design reawakening and—by necessity—increased awareness of the value of understanding the way air and heat move through designed space.

One building that has not only transformed a large shared space into an energy-efficient asset, but also has attracted attention for its implementation of multiple green design elements is the Lillis Business Complex at the University of Oregon School of Busi-ness in Eugene. Completed in 2003 and awarded a LEED Silver designation for new construction in 2005, the Lillis Center is considered one of the most energy-efficient university buildings in the United States. The $41 million, 195,600-square-foot (18,200-sq-m) complex was not only built with salvaged, recycled, and sustainable materials, but also uses motorized daylight shades, low-flow water fixtures,

Greendesign asks people to reexamine the places where they live and work with a critical eye, to ask new questions, and to adopt a more holistic, long-term approach to development.

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operable windows for fresh air intake, and high-effi-ciency lighting systems. The building’s south-facing exposure and large-scale four-story glass atrium were transformed from an energy liability into an asset with photovoltaic elements in the atrium glazing, strategic ventilation systems, and classrooms and offices positioned to derive maximum benefit from natural lighting. The Lillis Center is so energy efficient that the university is able to sell surplus power back to the local utility company.

Architects and designers are doing a better job of advocating for green materials and technolo-gies, articulating the pluses and minuses to clients and introducing elegant new green solutions in ways that balance financial and aesthetic priorities. Green design asks people to reexamine the places where they live and work with a critical eye, to ask new questions, and to adopt a more holistic, long-term approach to development. That motivation is

reflected in the increasingly popular idea of a triple bottom line, a value system in which the health and well-being of people, the condition of the planet, and a project’s ability to turn a profit all merit equal consideration in design and development decisions. The triple bottom line acknowledges that design is not a theoretical exercise: all construction and devel-opment affects the people that inhabit those spaces and the communities in which people build. UL

Matt Canterbury is director of business development with

Dublin, Ohio–based M+A Architects, a full-service architecture firm.

Canterbury can be reached at mattc@ma-architects.com.

Cost and Benefits of Energy Efficient Buildings and Retrofitting

Buildings to Be Green, ULI InfoPackets, are available at www.uli.org/

bookstore, or call 800-321-5011.

In the Marina District along the Lake Erie shoreline in Sandusky, Ohio, a mixed-use complex is planned that will include buildings constructed with recycled-content materials and energy conservation technologies. The site will incorporate pervious pavers and be within walking distance of a municipal park and shoreline areas.

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Green design solutions typically have aimed at doing less harm to the environment than previous approaches, but they tend to fall short of achieving true sustainability. Reduce, reuse, and recycle—the three Rs of sustainability—have succeeded in intro-ducing the concept to a broad audience. But in order to expand from the concept of doing less harm to actually restoring the environment and enhancing the prospects for future generations to meet their needs, a fourth R is needed—regeneration.

Regeneration, biologically speaking, is the active involvement of an organism in restoring a lost or dam-aged part so that the original function is restored. In this case, the organism is Earth, and the original func-tion is the variety of ecosystem services that nature has performed over millennia that often are harmed by development activities. Regenerative development leaves a more equitable and healthy world for everyone.

The Portland, Oregon, region offers a number of examples of regenerative development, among them Independence Station, a mixed-use, 57,000-square-foot (5,300-sq-m), three-story structure that through a combination of technological innovation and inte-grated design strategies will become self-sufficient

and ultimately provide a net positive in water and energy use.

The structure will have a number of standard green development features—rainwater collection and reuse; extensive daylighting; highly energy-efficient lighting, mechanical, and building envelope systems; use of recycled and reclaimed building materials and com-ponents; low-volatile-organic-compound paints and adhesives; and rapidly renewable materials such as wheatboard cabinetry panels, cork-based linoleum flooring, and bamboo paneling. In addition, it will employ waste heat reuse and climate control provided in the form of radiant heat and cooling delivered in a thermal mass structure. The building will have a heat-and-power cogeneration system fueled by locally sourced waste vegetable oil, and use thermal storage, photovoltaic solar panels, and high-tech batteries for storage of excess solar power that allow recharging many more times than standard batteries.

Rather than being dependent on the local power grid, Independence Station will be capable of oper-ating off grid for extended periods during which it can feed the excess energy it generates back into the system, creating a net-positive energy flow. The

DesignRegenerativeJasonK inGanDsCott e . thayer

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project also will have an alternative energy research center that will partner with Oregon State University to monitor and evaluate all systems, providing con-stant performance updates.

Rainwater will be collected, purified, and used on site; wastewater will be naturally treated. Eventually, Indepen-dence Station will be connected to a larger restorative system with regenerative design strategies that include habitat restoration along adjacent Ash Creek, a black water waste treatment bioreactor, and natural wastewater treatment ponds. Organic-production greenhouses and tilapia farming will add to the project’s net-benefit capa-bility by producing food for the community.

The design will create other community ameni-ties such as an open space with café seating, water features, paths, and educational opportunities pro-vided by classes, signs, workshops, and tours. Inde-pendence Station’s goal is to become not only the world’s greenest building, but perhaps the world’s most environmentally and socially regenerative devel-opment. The project is seeking the highest rating ever achieved by a commercial building under the Lead-ership in Energy and Environmental Design (LEED) program —a Platinum rating with 66 points awarded of the 69 possible.

In addition to the U.S. Green Building Council’s LEED system, Independence Station also is using the Living Building Challenge as a design and decision-making framework. Developed by the Cascadia Region Green Building Council, the Living Building Challenge has as its goal creation of buildings that are fully functioning members of the ecosystem, contributing to its overall health. Phase I of Inde-pendence Station, which is under construction, is planned for completion next year.

Another regenerative development project in the Portland area is the Headwaters at Tryon Creek, a residential project that incorporates market-rate con-dominiums, affordable apartments, and housing for seniors, and provides residents with access to the site’s amenities as part of its goal of restoring the surround-ing natural urban ecosystems. The central design com-ponent is restoration of Tryon Creek as a functioning urban waterway after it had been buried for years in a pipe under layers of asphalt. A range of restorative site

Regenerative

In Portland, Oregon, the Headwaters at Tryon Creek balances mixed-use residential development with restoration of a key urban watershed.

Independence Station in Portland, Oregon, will integrate a range of strategies to achieve net-zero energy, including a combined photovoltaic and ecoroof array.

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solutions—flow-through planters, rain gardens, green streets, ecoroofs, and permeable pavement—work in tandem to protect the newly restored natural resource and to create the nexus for watershed regeneration.

Tanner Springs Park, in Portland’s Pearl District, is an example of the regenerative potential of parks and open space through emulation of a wetland ecosys-tem in a public setting, illustrating how habitat and nature can be reintroduced into the heart of a densely developed city. The park, next to Tanner Creek, cap-tures stormwater from the surrounding streets and funnels it into the low point of the park where it can

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rise and fall, fluctuating with storms and dry periods as it would in nature. The flow is recirculated through a series of cleansing vegetated biotopes made up of 27 native wetland species that clean, cool, and slow runoff before releasing it into the Willamette River. Aside from the major improvements it provides for the health of the river and for the benefit of endangered aquatic species such as salmon, the park has become a draw for urban naturalists, as well as great blue herons, mallard ducks, and red-winged blackbirds.

Every new sustainable project helps shift the devel-opment community a bit closer to a holistic regenera-tive strategy. But rather than get there incrementally, it is time for development to add the essential fourth ele-ment, regeneration, so that innovative site and building solutions can be implemented to restore and support the ecosystems on which life depends. UL

Jason King , a senior associate and landscape architect with

Portland, Oregon–based GreenWorks PC, has been named by the U.S.

Green Building Council as a member of the new technical assistance

group for LEED implementation of sustainable sites. sCott e .

thayer , a principal with Portland-based Ankrom Moisan Architects

and co-leader of the firm’s sustainable design initiatives, has been

involved with a number of projects that have obtained or are

seeking LEED or Living Building Challenge certification.

(Independence Station was designed by an interdisciplinary

team including Ankrom Moisan Architects and GreenWorks PC.

Headwaters at Tryon Creek was designed by GreenWorks PC.

Tanner Springs Park was designed by GreenWorks and Atelier

Dreiseitl, based in Überlingen, Germany.)

Modeled after a wetland ecosystem, Tanner Springs Park provides an urban park for the public—and wildlife—in Portland’s densely developed Pearl District. g

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Years ago, architects were master builders. They understood how performance was related to aesthetics and built engineering principals into their architecture naturally, accounting for mass, shade, and climate at every turn. But, as the 20th century approached and the ability to electrically light and mechanically heat and cool a building presented itself, climate-specific building massing and orienta-tion became less significant. Instead, technology could bring thermal and visual comfort to any facility, regardless of locale.

When circumstances in the 1970s ushered in a worldwide oil crisis, energy for the first time became a driving force in the built environment. Windows were locked to maintain close control of energy use, and aesthetically pleasing, unhealthy buildings fueled the division between architecture and engineering. This continued until the 1990s, when efforts in sustainabil-ity returned holistic design to the drawing board.

Since then, the desire to reduce energy consump-tion while creating more environmentally sound, comfortable facilities has led to the unveiling of mature, high-performance buildings. The key to the design and construction of these structures, however, is collaboration between project architects and engi-neers. The opportunity for making major improve-ments in building performance presents itself when all team members are part of an integrated design process implemented early on and linking architec-ture with passive systems design. Collaborating to drive integration from day one, today’s architectural and environmental systems designers have a better chance to meet the project’s budget, schedule, and increasingly challenging sustainability goals to create a more livable, breathable, comfortable facility.

The Natural Resources Defense Council’s (NRDC) 15,000-square-foot (1,400-sq-m) Santa Monica, Cali-fornia, office building—adapted from buildings that

Modeling

Buildingssustainabilityandmodelingtools,whichenablemultipleenergy-efficientdesignstrategiestobeevaluatedinashortperiod,aredrivingtoday’shigh-performancebuildings.

robert boLin

High- Performance

The Natural Resources Defense Council’s office building in Santa Monica, California, includes an integrated light well on the second floor that provides natural light and a path for air to exit the building.

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housed a school of acupuncture and a three-unit residence—offers a case in point. The building repur-posing, designed by Pasadena, California –based Moule & Polyzoides, Architects and Urbanists, with help from New York City–based engineering and construction firm Syska Hennessy Group, is pro-jected to achieve 70 percent energy savings com-pared with a conventional building through passive techniques. Among the elements employed at the building are daylighting via integrated light wells; control of pendant-mounted indirect lighting fixtures with occupancy and photo sensors and dimmable electronic ballasts; tankless natural gas–fueled water heaters for domestic water and space heating; oper-able windows with contacts to disable the heating, venting, and air-conditioning system when open; high-efficiency split systems for peak cooling periods and perimeter convectors for peak heating periods; an indoor air monitoring system; and energy-efficient computers and equipment.

The facility’s advanced stormwater and waste-water system uses 60 percent less potable water than a comparable facility, saving 60,000 gallons (227,000 liters) per year through its use of recycled water for toilet flushing and landscape irrigation, as well as drought-resistant plantings and water-efficient plumbing. A 7.5-kilowatt rooftop photovoltaic array meets 10 percent of the site’s electricity demand, with the rest met by green power resources through clean energy contracts.

The early project team collaboration on the NRDC headquarters office helped the building earn a Lead-ership in Energy and Environmental Design (LEED) Platinum rating not long after the adaptive-use build-ing was completed in September 2003.

The use of modeling and simulation tools has furthered integration across project teams. Provid-ing the ability to model energy use and simulate daylight patterns or air flow and temperature control, the tools allow engineers and analysts to evaluate multiple design strategies in a short period, permitting potential conflicts to be resolved early in the building process. For example, the precise amount of external solar shading balanced with daylighting needed for a building can be simulated during the initial design phase, before construction documentation, using energy modeling and daylighting simulation tools (see “Using the Right Tools,” facing page). This interac-tive process allows early decision making while also optimizing design and maximizing energy savings.

Design work also can be shared through inte-grated modeling tools that convert three-dimensional data from the architect’s building information modeling (BIM) software directly into compatible engineering performance tools, automatically creat-ing a thermodynamic model of the architecture. This can streamline the design process by reducing the time necessary to evaluate alternative strategies, ultimately resulting in a more efficient, integrated building design.

A 7.5-kilowatt rooftop photovoltaic array meets 10 percent of the NRDC facility’s electricity demand; the rest is met by green power resources through clean energy contracts. ©

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Choosing the appropriate modeling or simu-lation tool can be a challenge for any designer. While software like Integrated Environmental Solu-tions’ (IES) Virtual Environment is a suite of perfor-mance tools, others are function specific, perform-ing focused analysis on a single building element. The following is a short list of widely employed tools and how they are putting designs to the test. l Energy simulation software analyzes building designs and technologies in an effort to predict energy use and cost. Using building layouts, op-erating schedules, utility rates, local weather, and measurements of the building’s lighting, water, and heating, venting, and air-conditioning systems as input, the software simulates a variety of possible design scenarios. Programs range from those that are simple and easy to use with a graphic interface to those that provide stand-alone simulation, read-ing input and writing output as text files. These tools include eQUEST/DOE-2, IES Virtual Environ-ment, EnergyPlus, and Trace 700. l Computational fluid dynamic (CFD) modeling software allows designers to model air flow, heat

transfer, contaminant transport, and thermal com-fort. With CFD modeling, designers can obtain and compare the environmental implications of their designs. CFD tools include AirPak, Fluent, and IES Virtual Environment.l Daylighting simulation software provides en-vironmental analysis for a variety of lighting and daylighting applications. Some programs include ray-tracing that predicts light levels and how a particular space will appear under varying levels of natural illumination. Tools include Ecotect, IES Vir-tual Environment, AGI32, and Radiance. l Climate/solar modeling software helps designers evaluate the potential energy production and sav-ings, costs, emission reductions, financial viability, and risk involved in use of different renewable energy sources. Simulating the amount of energy produced by these technologies within a climate-specific framework will help designers evaluate potential scenarios. Most programs also include climate databases. Tools include Ecotect, IES Vir-tual Environment, PVWatts, RETscreen, and Climate Consultant.—r.b.

Using the Right Tools

The U.S. Environmental Protection Agency’s 250,000-square-foot (23,000-sq-m) Region 8 headquarters in Denver includes external, vertical sun shades on the building’s northeast and northwest sides (left) that counter low sun angles early in the morning and late in the afternoon. A horizontal external shading configuration on the southeast and southwest of the building (above) minimizes solar penetration while maximizing distribution of daylight. ©

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In the case of design for the U.S. Environmental Protection Agency’s (EPA) Region 8 headquarters in Denver, a team was formed during the bid competi-tion consisting of Syska Hennessy and Portland, Oregon–based Zimmer Gunsul Frasca Architects (ZGF). Working together on the building’s massing and orientation, the team was able to capitalize on the sun’s rays and local wind patterns to create a double-L floor plan—forming a central atrium in the middle of a rectangle—that promotes energy efficiency and responds to the site’s climate and orientation.

The team created one architectural performance solution for the southeast and southwest portions of the building, where a horizontal external shading configuration could minimize solar gain while maxi-mizing interior daylight distribution. An alternative configuration was developed for the northeast and northwest orientations, where low sun angles in the early morning and late afternoon could be controlled with vertical external shades. Once the building’s envelope had been designed, its mechanical system was modeled to require less infrastructure, resulting in a smaller-than-typical air-conditioning system to support the 250,000-square-foot (23,000-sq-m) build-ing. Through early and close collaboration, the team was able to use the appropriate climate and energy modeling tools to develop a climate-specific concept for the building that helped the team win the job.

Building on the original competition design, the team fine-tuned each building component during the period leading to the project’s completion in 2006. EPA’s Region 8 headquarters building is 85 percent naturally lit as a result of the interior shades, exterior vertical fins, and atrium sails that control daylight, solar heat gain, and glare; an under-floor air distribution system delivers condi-tioned air to individual offices, providing optimal thermal comfort in an energy-efficient manner. A 20,000-square-foot (1,900-sq-m) modular green roof reduces stormwater pollution and minimizes the urban heat-island effect, while 48 photovoltaic panels mounted on the building’s south corner are expected to generate a peak output of 10 kilowatts.

The interior of EPA’s Region 8 headquarters building is 85 percent naturally lit using interior shades, exterior fins, and atrium sails that control daylight, solar heat gain, and glare.©

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Energy modeling predicted just over 35 percent cumulative energy savings for the building, compared with an American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE) Standard 90.1–compliant building—savings currently being sur-passed, according to preliminary data. Water calcula-tions indicated 100 percent landscape irrigation water savings compared with baselines through a drought-tolerant landscape and a green roof, and 49 percent plumbing water savings through high-efficiency and waterless plumbing fixtures—savings being met by the building, according to preliminary data. These savings were made possible through the integration of high-performance engineering with architecture.

Use of integrated design to create high-performance buildings is also changing the complexion of project delivery. Traditionally presented in two-dimensional drawings, today’s building designs are three-dimensional models that evolve with each design change and addi-tion. Both engineers and architects are involved earlier

in the design phases of projects, eliminating the need for contractors to resolve coordination issues during construction. Owner requirements, BIM soft-ware, and programs such as the American Institute of Architects’ new integrated project delivery process—a project delivery methodology through which an architect, builder, and owner enter into a venture to use the building information model to deliver the building from design through construction—will con-tinue to expand collaboration as the drive for high-performance buildings grows. UL

robert bolin , a Chicago-based professional engineer and

LEED-accredited professional, is senior vice president with New

York–based engineering firm Syska Hennessy Group.

Cost and Benefits of Energy Efficient Buildings, a ULI InfoPacket,

is available at www.uli.org/bookstore, or call 800-321-5011.

As much as 76 percent of the energy produced by domestic coal-fired power plants is used to sup-port today’s built environment, reports Architecture 2030, an organization that promotes the design, con-struction, and operation of carbon-neutral buildings by 2030. In an effort not only to slow the growth of greenhouse gas emissions, but also to reverse their effects, Architecture 2030 has issued the 2030 Chal-lenge, asking the global building community to scale back its fossil fuel use on a graduated scale.

The challenge calls for a 60 percent reduction in fossil fuel use by 2010, an 80 percent reduction by 2020, and a 100 percent cut by 2030, making all buildings carbon neutral. Thousands of firms and organizations—including design firms, contractors, government agencies, municipalities, universities, nonprofits, and trade organizations—as well as in-dividuals have joined the challenge and are working together to create high-performance, integrated de-signs intended to make the following net-zero build-ing definitions a reality:l net zero site energy: structures that produce at least as much energy as they consume annually when accounted for at the site.

l net zero source energy: structures that produce at least as much energy as they consume annually when accounted for at the source, which includes energy required both to generate and to deliver the energy to the site.l net zero energy costs: structures for which the utility pays at least as much to the building owner for energy the building exports to the grid as the owner pays the utility for its services and energy used over the year. l net zero energy emissions: structures that pro-duce at least as much renewable energy free of emissions—including carbon, nitrogen oxide, and sulfur oxide—as they use from emission-producing energy sources annually.l near zero energy—structures that generate at least 75 percent of their required energy with on-site renewable technologies, such as photovol-taic cells or wind turbines. Off-grid buildings that use some nonrenewable-source energy for backup power are also considered near-zero-energy build-ings because they typically cannot export excess renewable energy to account for use of fossil fuels.—r.b.

Power Packed with Net-Zero Energy

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With 2050 fast approaching as

the deadline for replacement of

fossil fuels with clean, renewable

energy resources, scientists around

the world are working to expand

use of alternative energy and

development of new technologies

to ramp up production, storage,

and distribution of clean energy.

Replacement of fossil fuels with clean energy by 2050 is a tall order, particularly since the world’s energy requirement will dou-ble by then to 2 trillion watts. Though scien-tists say Americans must reduce their energy use by 80 percent to avoid helping trigger ir-reversible climate change, they contend that through conservation, a switch to clean en-ergy resources, and advances in technology, people can live without fossil fuels while con-tinuing to enjoy their current creature com-forts. Americans represent just 5 percent of the world’s population, but use 25 percent of all energy produced.

EnergyPolicyPower

While the cap-and-trade system proposed in the American Clean Energy and Security Act of 2009 does not go as far or have an impact as soon as many scientists had hoped, it would gradually

reduce allowable carbon dioxide emissions. It sets targets of a 17 percent reduction from 1990 levels in CO2 emissions by 2020, 42 percent by 2030, and 83 percent by 2050. The policy would employ incentives and slowly rising penalties to encourage the switch to clean energy resources, explains Svend Brandt-Erichsen, attorney at the Seattle firm of Marten Law Group.

In the beginning, the government would distribute 85 percent of CO2 allowances to high energy users, such as utilities and man-ufacturers, with the remaining 15 percent sold on an open market. The Economic Stimulus Act of 2009 triples the federal tax rebate for clean energy installations to 30 percent.

California is the master at creating sus-tainable policy targeted at desired outcomes. Combining the federal tax incentive with Cal-ifornia’s solar rebate lowers the cost of solar installations by up to 50 percent; cash rebates

The Race to CleanEnergy

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a u g u s t 2 0 0 9 U r ban La nD 59

offered by some local governments can cut the cost by 75 percent. The state’s Public Utili-ties Commission projects that solar equipment installed on rooftops will provide 3,000 mega-watts (MW) of electricity by 2017. The state’s Mojave Desert is already home to the world’s largest solar installations, with facilities owned by Solar Energy Generating Systems generat-ing 354 MW of electricity. Four solar compa-nies are planning facilities that would boost the state’s grid-tied solar capacity from 530 MW to nearly 3,000 MW.

California-based OptiSolar and SunPower Corporation are building facilities in central California that will supply 800 MW of electric-ity to Southern California Edison (SCE). An-other California company, eSolar, has part-nered with NRG Energy Inc., a global energy provider based in Princeton, New Jersey, to build 500 MW of solar capacity at three

sites in California and New Mexico. Arizona’s Stirling Energy Systems currently is construct-ing two 7,000-acre (2,800-ha) solar farms in the desert with a combined capacity of 800 MW. SCE and San Diego Gas & Electric have signed a 20-year-contract with Stirling for the 800 MW, but may take an additional 950 MW.

Texas, the leader nationally in wind en-ergy with 8,916 MW installed to date, plans to build its own smart grid to move wind energy from the west Texas plains to urban centers. The Texas legislature in 2005 approved $5 bil-lion in funding to build as part of the Compet-itive Renewable Energy Zone (CREZ) process, 2,400 miles (3,900 km) of transmission lines to create an “energy highway” scheduled for completion in 2013. CREZ is a new energy grid to transport power from wind and solar farms to urban centers, ultimately saving Texans $3 billion annually in utility costs, according to a

study by the Wind Coalition, an Austin-based nonprofit association that promotes develop-ment of wind energy resources.

tappingMothernature

Meanwhile, scientists are working on ways to exploit untapped power sources. Researchers at Florida Atlantic University’s (FAU) Center for Ocean Energy Technology in Dania Beach are working on ways to capture energy from the Gulf Stream, a powerful, sustained ocean cur-rent that originates in the Gulf of Mexico, then moves through the Florida Straits up the coast to Newfoundland before circulating to north-ern Europe and Africa.

According to the center’s technical direc-tor Rick Driscoll, the Gulf Stream could provide Florida a reliable supply of 4 to 10 gigawatts (GWs) of electricity, or the equivalent of the output of four to ten nuclear power plants. His

The Race to CleanEnergy

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A passive ventilation system will keep the National Oceanic and Atmospheric Administration’s Pacific Region Center in Hawaii cool without using air conditioning. The system will employ wind scoops on the roof (above) to catch the prevailing breezes, which will be directed down into the building and across coils cooled with seawater, then distributed under the floor. Hot air will be released through a central atrium (facing page) that collects moisture in the air for use in the atrium’s water feature.

60 U r b an La nD a u g u s t 2 0 0 9

team is deploying turbines to assess the tech-nology’s performance in various locations and the potential environmental impact.

Similar turbines use the current in New York’s East River to help light Manhattan, and many similar projects are in the works nationally and globally. Submerged turbines operate like wind turbines and cost about the same, according to feasibility studies by the California-based Electric Power Research Institute, but they are more re-liable and environmentally friendly, turning slow enough to allow marine animals to avoid them.

The FAU center is also exploring the poten-tial for two other types of energy derived from the ocean—ocean thermal energy conversion, which uses the difference in temperature be-tween warm surface and cold, deep seawater to generate electricity, and radiant cooling, a system in which cold, deep seawater is piped directly into buildings near shore for use as a coolant. Radiant cooling is planned at the new National Oceanic and Atmospheric Ad-ministration (NOAA) facility in Hawaii. NOAA will use cold seawater to cool coils containing air from the prevailing ocean breeze, which is heated and cooled to remove humidity. This process will create a natural ventilation sys-tem that will reduce the building’s energy load by 70 percent.

Also in greater use globally is geothermal energy—use of steam from groundwater that is heated when it seeps into the ground near reservoirs of molten rock from dormant volca-noes or fractures in the earth’s crust. Fifteen Calpine electric plants use steam from geysers that make up 30 square miles (78 sq km) of steam fields along the border of Sonoma and Lake counties in northern California to gen-erate 725 MW of electricity, enough to power about 725,000 homes—a city the size of San Francisco—for a year.

Globally, geothermal energy provides 10,500 MW of power, but 9,000 MW will be added by projects in the pipeline, nearly half of which are in the United States. A new process called enhanced geothermal systems (EGS) could make geothermal power generation fea-sible almost anywhere. Funded in part by the U.S. Department of Energy (DOE), a demonstra-tion project has been launched by California startup AltaRock Energy at the northern Califor-nia geysers to test EGS, which would reposition oil-drilling technology to tap into the earth’s

molten crust to heat reservoirs of water, which would produce steam to turn turbines.

A study by the Massachusetts Institute of Technology (MIT) for DOE indicates that exploi-tation of geothermal energy with EGS could pro-vide enough electricity to power the entire na-tion for 140,000 years. The MIT scientists admit, though, that possibly only 12 million MW of elec-tricity for 30 years may be recoverable—still an impressive amount. Though total U.S. annual geothermal production capacity is currently 1.1 million MW of electricity, AltaRock Energy pres-ident and chief technology officer Susan Petty says that with federal support, funding, and re-alignment of some oil drilling rigs for geother-mal wells, this clean, renewable energy resource could account for 20 percent of the nation’s en-ergy by 2043.

CleaningUpCoal

The U.S coal industry is spending thousands of dollars on ads promising clean-coal tech-nology—an energy resource hard to ignore be-cause the infrastructure is already in place and the United States alone has a 250-year supply of known coal deposits.

The DOE recently committed funding for FutureGen, a next-generation, clean-coal plant prototype to be built with coal gasification tech-nology. Gasification uses ammonia to capture CO2 in the flue, then stores it as liquid 3,000 feet (915 m) underground. The $1.5 billion dem-onstration plant, to be built in Mattoon, Illinois, will generate 275 MW of electricity to power up to 150,000 homes with almost no greenhouse gas emissions.

Technology companies also are conducting gasification retrofit demonstrations. Chicago-area Jupiter Oxygen, in partnership with the National Energy Technology Laboratory (NETL), is testing its patented high-flame-tempera-ture oxy-fuel combustion process together with the NETL’s Integrated Pollutant Removal system at a 15-MW thermal (equivalent to 5 MW electric) test facility at Jupiter Oxygen’s re-search center in Hammond, Indiana. The goal is to advance creation of a virtually zero-emis-sions plant eliminating multiple pollutants— including nitrogen oxide, sulfur oxide, particu-late matter, and mercury—as well as capturing 95 percent of CO2. The company, together with the NETL, already has successfully tested this technology at a smaller scale.

NRG Energy has begun carbon-capture ret-rofits on two plants—the 125-MW W.A. Parrish Power Station near Sugar Land, Texas, and New York state’s 540-MW Dunkirk Generating Sta-tion. The Texas plant uses technology developed by New Hampshire’s Powerspan Corporation at a North Dakota project that captures 90 per-cent of CO2 and recycles it for use in enhanced oil field recovery. That project—located at Basin Electric Power Cooperative’s Antelope Valley Sta-tion, a coal-based electricity-generation facility near Beulah, North Dakota—will capture about 1 million tons of CO2 annually from the 120-MW slipstream project, making this demonstration among the largest in the world.

SafernuclearEnergy

Both the White House and members of Con-gress have voiced support for increasing nu-clear power capacity, and the industry has been provided with subsidies, including $500 million in risk insurance from the DOE. Re-search and development in the area of new reactor designs may make fission reactors cleaner, safer, and less of a risk for nuclear weapon proliferation. Many of the new de-signs, collectively known as generation IV re-actors, attempt to provide passive safety fea-tures that automatically shut down a plant when equipment malfunctions occur, as well as foolproof security measures.

The International Thermonuclear Experimen-tal Reactor, a collaborative effort of the Euro-pean Union, the United States, Japan, Russia, South Korea, India, and China, is attempt-ing to finally deliver nuclear fusion reactors, which would diminish or eliminate most of the risks associated with fission reactors. Fusion, the nuclear reaction that takes place in the sun, also would extend the lifespan of nuclear power facilities, generating enough electric-ity over the life of a plant for payback 25 times over, according to the University of Wisconsin– Madison Fusion Technology Institute.

According to the Nuclear Energy Insti-tute, nuclear power plants currently generate 20 percent of the nation’s energy. The United States has 102 nuclear reactors, more than any other country in the world, and the U.S. Nuclear Regulatory Commission expects that up to 29 nuclear power plants will be con-structed over the next 20 years. NRG Energy recently submitted the first application for a

augu s t 2 0 0 9 U r b a n La n D 61

Going for the Green in the Pacific NorthwestPresident Obama’s vision of a green economy fueled by the renewable energy industry—and the promise of a $15 billion annual investment in renewable energy technologies—already has taken flight in the Pacific Northwest, where Oregon, Washington, and Idaho are vying to capitalize on new tech-nologies, manufacturing opportunities, and legislation that will buffer the impacts of the national recession and benefit the environment.

Four years ago, Washington state adopted legislation that provides “feed-in” production incentives for homes and businesses that use solar and wind power, and offers tax breaks to attract renewable energy companies. This past January, legislation was proposed to create nearly 3,000 jobs in 2010 and 2011, expand the state’s green economy, and promote energy independence; it includes $455 million over the next two years for energy-efficiency projects, green buildings, clean energy technology, and transportation projects that reduce energy use.

Becky Kelley, campaign director for the Washington Environmental Council, in 2005 worked with architects, developers, and edu-cators to pass the state’s first-in-the-nation law requiring public buildings to meet green building standards. Last year, she helped shape legislation that calls for reduced green-house gas emissions, increases the number of green jobs, and decreases spending on imported fossil fuels.

The Oregon legislature also is considering a climate change package that focuses on greenhouse gas reduction, energy efficiency, sustainable transportation, and renewable energy; the renewable energy component calls for expansion of solar pilot projects through a feed-in incentive program similar to the one in Washington state. The package sets a goal of 100 percent renewable energy use for state government, which includes a geothermal campus at the Oregon Institute of Technology and the nation’s first highway solar photovoltaic project. The highway’s 594 solar panels produce nearly 112,000 kilowatt-hours of electricity each year and use the utility grid as a battery, supplying energy

during the day for use to light a highway interchange at night, according to the Oregon Department of Transportation.

In addition, Oregon’s legislative package includes expansion of the state’s business energy tax credit (BETC), designed to encour-age businesses to invest in energy conserva-

tion, renewable energy resources, and use of sustainable resources through provision of a tax credit of up to 35 percent of eligible energy project costs. During the 2007 leg-islative session, the legislature increased the BETC for renewable energy projects to 50 percent. The BETC already has proved to be an economic boon for Oregon. Accord-ing to a study commissioned by the Oregon Department of Energy, the program delivered a nearly three-to-one return on the state’s investment, creating more than $616 million in economic investments and wages and more than 1,700 jobs in the past two years.

Washington, which already has the larg-est hydroelectric power industry in the nation, now is home to a growing number of privately owned wind farms, thanks to

increasing customer demand and the state’s renewable energy initiative. Oregon has attracted its share of wind power companies as well. Turbine supplier Vestas Americas announced late last year that it will build a 500,000-square-foot (46,500-sq-m) head-quarters in Portland.

Along with solar and wind power, Oregon companies are exploring the potential for wave energy. Columbia Power Technologies has partnered with Oregon State University researchers to develop and commercialize technology to harvest power from waves. According to the company, the “raw energy of the ocean” has the potential to generate 500 times the global demand for power, and wave energy could generate 2 trillion to 4 tril-lion kilowatt-hours of electricity per year.

In Idaho, the private sector is paving the way, with business owners like Boise developer Mark Rivers taking the initiative to build the state’s renewable energy industry. Earlier this year, Rivers organized the North-west Energy Innovation Summit to showcase emerging energy companies in the region and create a forum for business leaders to talk about industry opportunities. Last year, he opened in Boise the WaterCooler, an incubator for small businesses developing intellectual property, including renewable energy tech-nologies. Rivers plans to open WaterCooler 2, which will be composed entirely of renewable energy companies that focus on smaller appli-cations such as smart technology.

In eastern Idaho, the city of Pocatello is drawing renewable energy companies attracted to its business-friendly environ-ment, which includes tax incentives and a readily available workforce. Hoku Materials plans to build a $260 million plant that will produce polysilicon for solar energy compo-nents and create about 250 jobs, according to Gynii Gilliam, executive director of the Bannock County Development Corporation. In addition, Pocatello has attracted two manufacturers of wind power components.

Though Oregon, Washington, and Idaho are striving to outshine each other in attract-ing renewable energy companies, the compe-tition, most agree, benefits the region—and the nation—as a whole.

Melody Finnemore is a freelance writer based in the Pacific Northwest.

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A Portland, Oregon–based wind power company has partnered with TriMet, the city’s mass transit agency, to bring to market the Helyx HE-100 wind turbine helix, made from post-consumer, locally sourced recycled materials.

62 U r b an La nD a u g u s t 2 0 0 9

nuclear reactor in 30 years, seeking to add two advanced boiling-water reactors at the South Texas Project south of Houston, dou-bling that plant’s capacity to 4,500 MW.

Game-ChangingScience

Nate Lewis, professor of chemistry at the Cali-fornia Institute of Technology, is working on a revolutionary nanotechnology material to re-place silicon, the most expensive component in solar energy products. The material would be used to develop an inexpensive, portable so-lar energy product that could be rolled out like bubble wrap or painted on buildings, roads, and other flat surfaces. The idea is to make so-lar power efficient, inexpensive, and portable so that everyone, even people living in unde-veloped nations, can afford clean energy.

In fact, nanotechnology is expected to be the underlying game changer in the world’s energy future, ultimately improving renewable energy efficiency, lowering costs, and offering ways to store electricity or transport it quickly where it is needed. Nanotechnology con-trols material at the atomic or molecular level, causing it to undergo a quantum change that makes it lighter and increasing its surface size and strength. Nanotechnology, for exam-ple, allows data contained on 250 DVDs to be stored on film the size of a coin.

Wade Adams, director of the Richard B. Smalley Institute for Nanoscale Science and Technology at Rice University, is working on a superconductive wire, the carbon nanotube wire, which conducts electricity with little or no resis-tance. Possibly ready within five years, the wire could be used to build a global grid that moves energy quickly anywhere in the world and elim-inates the need to store it. With the current en-ergy-grid wire, 8 percent of the energy being car-ried is lost over a 200-mile (320-km) stretch and 40 percent over 1,000 miles (160 km).

A lithium-ion battery patented by 123 Sys-tems that uses a nanophosphate cathode chemistry material is already improving elec-tric car batteries. Developed at MIT, the nano-phosphate material is more stable than the cobalt oxide used in typical lithium-ion bat-teries so it does not heat up. Electric vehicles made by San Carlos, California–based Tesla Motors, which have cobalt oxide batteries, use an elaborate cooling system that adds to the cost. Unlike typical lithium-ion batteries,

which can only be discharged partially or else they will deteriorate, the 123 Systems battery, which is being used in the new Chevy Volt hy-brid, can discharge to 10 percent, giving it a range of 200 miles (320 km).

At the University of Delaware (UD), research-ers have developed a vehicle-to-grid (V2G) battery that doubles as a power generator. It charges when demand is low and adds power back to the grid during peak-demand periods. Vehicle owners could eventually be paid for the energy their cars produce. The 30-kilowatt-hour battery runs off the grid’s regulation signal and could power the average home for at least 20 hours. While a car’s impact on the grid is minus-cule, the aggregate effect of hundreds of cars, 95 percent of which are parked most of the day, using batteries that could be plugged into the grid would be significant, points out Scott Baker, a UD graduate student who worked on the V2G project team.

PJM, the grid operator for 14 states, in-cluding Delaware, is interested in buying the power when potential capacity gets to 300 MW, or at least 300 cars. The UD team is col-laborating with California-based AC Propul-sion to create and test car prototypes and fix potential problems before putting the inven-tion on the market. The V2G battery charges in two hours if plugged into a 240-volt con-nection or 12 hours with a 110-volt connection and allows cars to travel up to 60 miles per hour (100 kmph) and cover 120 to 150 miles (190 to 250 km) between charges.

Japan’s Daihatsu Motor Co. Ltd. recently announced development of a fuel cell that uses alkali, rather than acid, in the ion ex-change membranes, allowing fuels cells to work with inexpensive materials like cobalt, rather than platinum. Instead of hydrogen, Daihatsu’s fuel cell uses hydrazine hydrate, a liquid industrial material that emits no CO2.

Anticipating mass rollout of all types of clean-energy vehicles, Chevron has established five service station prototypes that use six dif-ferent fuel technologies to make hydrogen from natural gas, water, and ethanol. The service stations, designed to produce and store hydro-gen on site, are located in California, Michigan, and Florida to assess performance under dif-ferent climatic conditions, notes Puneet Verma, manager of hydrogen power research at Chev-ron Technology Ventures.

Nanotechnology is what ultimately is hoped will shift the energy paradigm to clean fuel resources, making energy cheap, plenti-ful, reliable, and storable. If created at nano-scale, hydrogen fuel cell, or micro-fuel cell, batteries, once charged, could self-charge as long as the car is running, providing unlim-ited driving range and adding power to the grid when idle. Garry Golden, futurist consul-tant, predicts that within ten years, nanosci-ence will make it possible to store enough hydrogen energy in a block the size of a bar of soap or brick to power an average home for a month.

Fixing climate change, a number of scien-tists suggest, would inadvertently effect posi-tive changes in other areas. Driscoll points out that clean energy research and development present an opportunity for the United States to become energy independent, reverse the trade deficit, and solve the nation’s economic woes with new jobs that cannot be shipped offshore. “We have so much invested in tra-ditional energy methods, it’s hard to switch, but our country is hemorrhaging from fuel payments. Our economic problems and bud-get deficit would take care of themselves if we stop spending on foreign fuel,” he contends.

“You can’t solve water, food, and health problems without solving the energy prob-lem,” says Adams. “You’re not going to win the war on terrorism if two-thirds of people on Earth are disenfranchised and desperate to earn a living to feed their families.”

Lewis contends that people alive today are uniquely positioned to change the fate of the world. “No generation ever before or ever again will have this opportunity,” he says. “We get to do this experiment with our planet exactly once, and we can’t afford to fail.” UL

Patricia L. KirK is a freelance writer based in

Austin, Texas.

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a u g u s t 2 0 0 9 U r ban La nD 63

In recent years, the use of

wind power has grown rapidly in

the United States—and is poised

for greater growth if transmission

and political challenges

can be met.

New wind power installation in the United States set a record in 2008 for the fourth consecutive year. The wind energy in-dustry installed 8,545 megawatts (MW) of wind power capacity last year, more than 3,000 MW greater than the previous annual record set in 2007, according to the Washing-ton, D.C.–based American Wind Energy Asso-ciation (AWEA). Total U.S. wind power capac-ity is 28,206 MW as of the second quarter of 2009 and AWEA estimates that wind will gen-erate about 1.25 percent of the nation’s elec-tricity needs, enough to power more than 8 million average homes. The AWEA projects about 5,000 MW in new capacity to be in-stalled by the end of the year.

The American Recovery and Reinvestment Act of 2009, signed by President Obama in February, includes provisions to encourage wind and other alternative energy technolo-gies. The production tax credit (PTC)—a key wind industry priority that provides a 2.1-cent per kilowatt-hour generated tax credit for ten years for wind and other renewable energy projects—has been renewed through Decem-ber 31, 2012. The legislation also allows wind energy developers to choose between the PTC and a 30 percent investment tax credit, con-vertible to a grant from the U.S. Treasury, en-hancing the ability to monetize renewable energy tax credits. Other provisions include financing for planning and building new transmission lines.

WIndJErryW. Szatan

The Maple Ridge Wind Farm northeast of Syracuse is the largest wind farm in the state of New York, providing up to 322 MW of electricity toward the state’s goal of obtaining 25 percent of its power from renewable energy by 2013.

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64 U r b an La nD a u g u s t 2 0 0 9

Both the public and private sectors have been promoting renewable energy. Some 28 states and the District of Columbia have en-acted renewable energy standards (RES), re-quiring that some percentage of electricity be supplied from renewable sources, usually in the next five to 15 years. The Obama Admin-istration called for a national RES of 25 per-cent by 2025. The American Clean Energy and Security Act of 2009 (also referred to as the Waxman-Markey bill), passed by the House of Representatives 219–212 on June 26, calls for a national RES of 6 percent in 2012, increas-ing to 20 percent by 2020; up to 40 percent of which can be met by utilities increasing energy efficiency. The Senate is working on its own RES legislation. Further action is ex-pected in the fall.

Many private companies have set volun-tary goals for using or developing green en-ergy. In July, the U.S. Envrionmental Protection Agency recognized 58 Fortune 500 compa-nies (and universities, governments, and oth-ers) for their purchases of green energy, total-ing more than 8 billion kilowatt-hours annually. For example, Mountain View, California–based Goggle, Inc., launched in November 2007 an investment and research effort to develop elec-tricity from renewable sources that would cost less than coal. Round Rock, Texas–based com-puter maker Dell, Inc., announced in February that 35 percent of its U.S. energy consumption was from green sources.

A U.S. Department of Energy (DoE) study concluded in 2007 that wind power is com-petitive at the wholesale price level and has been consistently priced, including all rebates and credits, at or below the price of electric-ity produced at fossil-fuel or nuclear power plants. Moreover, wind project performance has been increasing due to improved project siting, larger turbines, and technological ad-vances, and average prices have been de-clining for many years, though they increased in 2006 due to increasing costs for turbines. Prices vary by region and are the lowest in Texas and the Plains states, which the DoE defined as North and South Dakota, Ne-braska, Kansas, Oklahoma, Minnesota, Iowa, Missouri, and Arkansas.

As of the end of June, 35 states had utility-scale (generally defined as designed to be hooked to the commercial grid rather than

providing power to a single user such as a business or home) wind generation facilities. Texas, the leading state by far in total installed wind power capacity, again led the country in new installations in 2008, adding 2,671 MW (see table above). Iowa vaulted past Califor-nia into second place in 2008. Minnesota and Iowa rely most on wind-generated electricity, obtaining about 7.5 and 7.1 percent, respec-tively, of their electricity from wind, followed by Colorado, North Dakota, and New Mexico.

Only three of the top ten states in installed wind energy capacity are among the top ten for wind energy potential: Texas (2), Minne-sota (9), and Iowa (10). The other top ten states for annual wind energy potential are as follows: North Dakota (1), Kansas (3), South Dakota (4), Montana (5), Nebraska (6), Wyo-ming (7), and Oklahoma (8).

Wind energy proponents tout its economic impact. Wind farms provide income for rural landowners, ranging from $3,000 to $5,000 per turbine, according to the AWEA, while al-lowing farming or ranching to continue, and create construction and maintenance jobs. Since the turbines do not require water for steam to produce electricity, as do fossil-fuel and nuclear plants, they suit the often-arid Plains. Windmill component manufacturers announced more than 55 new or expanded facilities in 24 states last year.

In May 2008, a DoE report, “20 percent Wind Energy by 2030: Increasing Wind Ener-gy’s Contribution to U.S. Electricity Supply,” concluded that wind energy could provide 20

percent of U.S. electricity without major tech-nological breakthroughs, though it would re-quire significant capital and transmission in-vestment. (Denmark and parts of Spain and Germany already get 20 percent of their elec-tricity from wind.) While there is opportunity for growth, there also are barriers.

First, a potential wind farm site has to be windy. Generally, wind speed of 15.7 to 16.8 miles per hour (25.1 to 26.9 km per hour) 164 feet (50 m) above ground (class 4 on a 1-to-7 scale) or higher is necessary for viable com-mercial-scale wind farms with current technol-ogy. Preferred sites are hilltops, ridge crests, mountain summits, large clearings, and other locations free of local obstruction and with less surface roughness.

Windmills are tall—rotor diameters can be 262 to 295 feet (80 to 90 m) and towers can be just as tall—and getting taller, and wind farms sprawl as individual towers are spaced to avoid each other’s wind shadows. Wind is stronger higher up, and the energy output of wind increases proportionally to the cube of wind speed; e.g., doubling wind speed in-creases energy potential eightfold. Offshore windmills are bigger still, in part because it is easier to transport larger blades over wa-ter. While it is difficult to cite average wind farm size since some cover flat rectangular sites and others follow mountain ridge-tops, they are getting bigger. The 137-turbine Fen-ton Wind Project in southwest Minnesota, for instance, covers a seven-by-seven-mile (11-by-11-km) span of farm fields in two counties. It takes about 18 to 24 months to develop a wind farm, with six months for construction and the rest for approvals.

Wind alone is not enough for an ideal site, however. Environmental issues, protecting mi-grating birds and endangered species, avoid-ing radar interference, and concerns about noise and aesthetics all factor into site selection, but perhaps the biggest barrier is access to the elec-trical grid. The DoE notes: “While access to nearby transmission lines is a key requirement for large renewable power facilities, the first step for developing many renewable resources is for someone to actually build a transmission line.” Wind farms in wide-open spaces, where there are few conflicting uses or few residents to raise objections, also are often far from the demand for electricity and from transmission lines. The

top ten states’ total Installed WInd poWer CapaCIty (MW) (as of June 27)

State Ranked by Existing Capacity Existing

Under Construction

Texas 7,907 1,102Iowa 2,883 210California 2,653 125Minnesota 1,803 0Washington 1,479 0Oregon 1,363 126New York 1,261 21Colorado 1,068 0Kansas 1,014 0Illinois 915 312

Source: AWEA.

a u g u s t 2 0 0 9 U r ban La nD 65

Peetz Table Wind Energy Center in northeast Col-orado, built in 2007, required a 78-mile (125-km) transmission line to connect to the grid.

Some states and business are taking steps to encourage transmission line build-ing. In Texas, T. Boone Pickens, most widely known as an oil man, advocates develop-ing wind power and plans to build transmis-sion lines along a water pipeline right-of-way to connect wind farms in the panhandle with users in Dallas/Fort Worth, though plans have been postponed by falling natural gas prices and tight credit markets. In 2007 New Mexico established a Renewable Energy Transmission Authority, the first state-level authority, with the power to issue bonds to finance trans-mission lines to serve renewable energy facil-ities. The California independent system oper-ator has been working with the Federal Energy Regulatory Commission to develop innovative financing for new transmission lines.

Wind’s variability presents another chal-lenge: wind generates power 65 to 80 per-cent of the time and on average generates at 30 to 35 percent of rated capacity annually—challenging grid operators to balance supply and demand and avoid blackouts. Traditional power plants also have downtime. Adding more wind farms to a larger grid would pro-vide diversification and reduce variability con-cerns. “Improvements in wind forecasting are a key advance that can be used to better schedule wind power into the market, easing a lot of [variability-related] issues,” Christine Real de Azua, AWEA’s assistant director of communications, says.

Efforts to maximize energy potential from wind include collocation with other energy sources. In November 2007, Puget Sound En-ergy began a demonstration project producing electricity from a 450-kilowatt solar facility lo-cated within the company’s Wild Horse Wind Facility in Washington. Also in 2007, a $2 mil-lion wind-to-hydrogen project was dedicated in Minot, North Dakota, to research using electricity generated by wind to separate hy-drogen from water, which then could be used to power hydrogen-fueled vehicles.

Offshore wind farms are common in Eu-rope and technically attractive for their strong and steady winds—NREL estimates that off-shore wind farms could supply up to 5 percent of U.S. electricity by 2030. But in the United

States they have proven particularly contro-versial, with residents and vacationers argu-ing that they mar ocean views and may inter-fere with fishing or navigation, notably in the proposed 130-turbine Cape Wind project in Nantucket Sound. In May, the Massachusetts Energy Facilities Siting Board granted environ-mental approval to the project, though federal approvals remain and opponents have vowed to appeal the commonwealth’s decision.

Offshore wind may offer particular potential in the Northeast, where electricity costs are high, demand is growing, and scarce land makes on-shore development expensive. In the first con-tract for offshore wind power in the United States, Delaware-based utility Delmarva Power signed a 25-year contract in June 2008 with wind farm developer Bluewater Wind Delaware, LLC, for up to 200 MW from Bluewater’s pro-posed wind farm more than 11 miles (17.6 km) off Rehoboth Beach. The U.S. Minerals Manage-ment Service issued final regulations on Earth Day, April 22, guiding wind power development on the outer continental shelf, which should add predictability to the process. In a first for freshwater, also on Earth Day, the New York Power Authority asked for expressions of interest for projects in Lake Erie and Lake Ontario.

While the iconic wind farm image may be of huge pinwheel towers in rural areas, there

also is potential in urban areas. Architects have designed buildings now under construction with integral wind energy generators. Mayor Michael Bloomberg of New York City advo-cates exploring the feasibility of installing wind turbines and other renewable energy genera-tors on the city’s bridges, buildings, and water-front. The city of Chicago is experimenting with roof-mounted windmills designed for urban areas, where the wind is typically too turbu-lent for rural-style windmills, on several build-ings near downtown. These compact cylindrical structures resemble the cage and blades of an old-fashioned push lawn mower and can be mounted horizontally or vertically.

In the last few years, demand for wind power has grown measurably as more states have adopted renewable standards, tax cred-its have become available, and prices have come down. Concern about climate change and enacting a national RES would further boost demand. The wind industry has re-sponded by adding capacity at a record pace, but challenges remain, including building transmission capacity and access. UL

Jerry W. Szatan is a Chicago-based consultant

and writer on corporate site selection and community

economic and real estate development.

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Wind resource and energy potential is abundant in the Great Plains area of the United States.

66 U r b an La nD A u g u s t 2 0 0 9

As capital markets tighten and competition in the alternative-fuels industry intensifies, accelerating the transition from the test tube to the gas tank, biofuel research and prototype facilities are quickly coming online throughout the industrialized world and, in particular, in the San Francisco Bay Area. Driven by federal and state incentives and carbon-reduction requirements, the Bay Area is among the world’s leaders in research-ing alternative energy sources. Scientists and entrepreneurs in this area are developing energy sources by using microbes derived from syn-thetic biology techniques or harvested from termite intestines to convert feedstock such as switchgrass, sugar cane, and other forms of cellulosic biomass into biofuels.

Building the laboratories and support facilities for the discovery, prototyping, and production of alternative fuels can be a chal-lenge for developers, architects, engineers, and construction companies since very few models exist in this emerging, experimental field.

Pioneering biotechnology companies require design and construction partners that have an appreciation for scientific applications—and teams that reflect this commitment. These projects require specific expertise in working on science-based projects. Many biofuel clients are funded with limited venture capital or closely watched government funds, which requires identifying creative ways to construct these facilities in the most cost-efficient manner possible. Given the urgency in developing clean fuel technologies as quickly as possible, completion deadlines can be aggressive, sometimes requiring facilities to be completed in phases that allow initial opera-tions to commence long before completing the final components of the project, or installing complex equipment in the midst of ongoing laboratory operations, without adversely affect-ing research or production. All of this has to be done with virtually zero margins of error.

Given the constantly evolving science and technologies associated with developing alter-

native fuels, the most critical factor of project execution is a thorough understanding of the science. Project teams need to work closely with the scientists at the initial stages of the project to comprehend the current state, as well as the future potential, of the research operations to develop cost- and schedule-effective construction solutions for flexible and adaptable facilities.

The Biofuel Research Center for the Joint BioEnergy Institute (JBEI), a partnership led by Lawrence Berkeley National Laboratory, which includes Sandia National Laborato-ries, the University of California campuses of Berkeley and Davis, the Carnegie Institu-tion for Science, and Lawrence Livermore National Laboratory, is one of three new U.S. Department of Energy Bioenergy Research Centers. Headquartered in EmeryStation East, a new state-of-the-art laboratory building in Emeryville, California, JBEI’s primary scientific mission is to advance the development of the next generation of biofuels. The center will

robLynchanDraLf ELsaEssEr

The convergence of environmental awareness, scientific

innovation, political will, and entrepreneurship has pushed

forward the development of alternative-fuel technologies.

Developing

FacilitiesResearch

ULAug09_p66 b-ftr .indd 66 8/11/09 5:00:01 PM

A u g u s t 2 0 0 9 U r ban La nD 67

focus its scientific effort in three key areas: feedstock production, deconstruction, and fuels synthesis in a multipronged approach to develop biomass-to-biofuel solutions.

“JBEI was a design-build approach where program input from the users was accom-modated throughout the design process,” explains Ken Leong, senior associate at DGA Architects, an architectural design firm based in Mountain View, California. “There were also building code issues for such a facility due to the increased use of hazardous materials. Since JBEI is dealing with larger quantities of hazardous materials due to the nature of its research, the city of Emeryville worked with the design team to provide fair interpretations of code criteria,” he notes. “Biofuel research facilities need to be flexible to respond to changing research directions quickly, so labs must be flexible,” says DGA Architects princi-pal Nancy Escano.

The JBEI project, like almost all projects of this nature, was challenged with an extremely aggressive schedule. To meet research dead-lines, the project had to be constructed in phases, allowing for dedicated areas to come online to support research operations while adjacent areas were still under construc-tion, with no adverse impact on any earlier research activities.

When Emeryville-based Amyris Biotechnol-ogies’ renewable diesel fuel science evolved from the research and development stage to pilot plant production, it was crucial that its complex mechanical, electrical, and piping requirements to support its fermentation pro-cess were well understood. From the design and permitting phase to the final installa-tion and commissioning of Amyris’s process equipment, the project was executed under major cost and schedule pressure. To support Amyris’s goal of rapid commercialization of its renewable diesel fuel product, the team had to identify and select a suitable location for the pilot plant, design the facility, procure the specialized process equipment, obtain the necessary building permits, and construct and commission the facility within an extremely aggressive schedule for a facility of this complexity. To achieve the most cost-efficient delivery of the facility, the design-build con-struction team continually evaluated alterna-tive design concepts and construction means

and methods, providing real-time cost and schedule information. Amyris’s technology of producing biodiesel made from sugarcane has the potential to lead the way to a future independent of fossil fuels.

South San Francisco–based LS9 is moving ahead with development of synthetic fuels that are essentially indistinguishable from commer-cially available hydrocarbon-based fuels. The fuel production process calls for specialized fermentation equipment. The challenge was to install the equipment in an existing facility while operations were ongoing. Working closely

with the LS9 scientists, the design and con-struction team had to evaluate the capacity of the existing facility and utility systems required to support the new equipment.

Once the detailed requirements were iden-tified, the team prepared the engineering docu-ments, obtained the required building permits, and constructed the necessary modifications while the facility and utility systems were fully operational supporting ongoing research. When these modifications were complete, the spe-cialized fermentation equipment was installed within the facility, connected to the operational utility systems, and commissioned without adversely affecting the ongoing operations of the LS9 scientists. “Our pilot plant is running and producing renewable transportation fuels,” says Wei Huang, LS9’s vice president of pro-cess development and engineering.

The development of process technolo-gies to support alternative-fuel development, including the raw materials used for the sci-

ence, as well as the end byproducts of the research, requires strong utility systems and code-mandated architectural features to sup-port them. The ability to economically provide these systems and achieve compliance with all jurisdictional codes and ordinances ulti-mately determines the feasibility of a project within a given location. This evaluation also must be reconciled with the appropriate juris-dictional building codes and ordinances for life safety, environmental, and noise param-eters to ensure that all requirements can be economically incorporated into the design and construction of the facility.

The utility systems needed to support the scientific operations within these facilities require mechanical equipment—chillers, air-handling units, boilers, steam generators, and the like—all of which can generate elevated noise levels. Local jurisdictions often mandate detailed sound studies as a precondition to project approval to ensure that the appropriate design features to mitigate the generated noise are incorporated into the design and construc-tion. In addition, the raw materials and end byproducts often require atypical architectural design and life safety components to ensure compliance with code provisions.

The development of alternative-fuel tech-nologies is of vital national interest from both an environmental and an economic perspec-tive. Successfully meeting the challenges of constructing alternative-fuels facilities requires design and construction partners who understand this emerging, experimental field; appreciate the economic and schedule constraints of project delivery; and possess specific expertise in working on science-based projects. UL

Rob Lynch is chief operating officer and

RaLf ELsaEssER is project manager/biotech

focus group leader at Dome Construction Corporation

in San Francisco, California.

Building the laboratories

and support facilities for the

discovery, prototyping, and

production of alternative

fuels can be a challenge

for developers, architects,

engineers, and construction

companies since very few

models exist in this emerging,

experimental field.

68 U r b an La nD A u g u s t 2 0 0 9

TheGreenQuotient

Q&awithGreenLeaders

Fourteen countries have green building councils, a number that is expected to rise in coming years. The leaders of three green building councils—Thomas Mueller of Canada, Chilin Cheng of Taiwan, and Mario Seneviratne of the United Arab Emirates (U.A.E.)—discuss how they have addressed the issues of formation of green building councils, choice of a rating system, local incentives or mandates, roadblocks, sup-porters, and expectations for the future.

Why was the Emirates Green Building Council (GBC) formed in 2006?Seneviratne: Before the widespread talk about green building in this country [the U.A.E.], some professionals and property developers knew we had to improve the

buildings that were being constructed here. In particular, we wanted to reduce energy and water use and their costs. We thought the best way to achieve that objective was a green building council, particularly because we knew the success of such councils in the United States, India, and Australia at that time.

Now, we are pleased that our market is beginning to value the cost savings and health benefits of green buildings. Actually, it’s all part of a global trend. People are always striving to live and work in better con-ditions. The public is becoming more aware about green and its value in their lives.

The Taiwan Green Building Council adopted its own Ecology Energy Waste Reduction and Health [EEWH] system in 1999 because it wanted a Taiwan-specific program. What are its key components?Cheng: Our EEWH program has nine indi-cators. The prerequisites are energy and water savings. If structures cannot meet those two, they will not be certified. Then, a building must satisfy two of the remain-ing seven indicators to be certified. That’s the minimum.

Since the start of EEWH, our government has promoted this green building movement. All the government buildings with budgets above $2 million must file for certification.

In 2005, the government made it a law for private buildings, and it became part of

the construction code for commercial and big residential buildings. If you don’t com-ply, you don’t get a permit.

How is Taiwan’s EEWH rating system evolving to meet new demands and market conditions?Cheng: The original goal was energy savings. Now, that is expanding. The healthy build-ing materials criteria, for example, say that 5 percent of the interior materials by area should be green construction materials. That requirement went to 30 percent in July. The requirement will increase 10 percent every year until it reaches 80 percent. Regulations only calculate the interior materials now. We recommend that they also use environ-mentally friendly materials in the facade, the driveways, and the walkways.

Why did the Emirates GBC adopt the U.S. Green Building Council’s Leadership in Energy and Environmental Design [LEED] rating system rather than create its own program? Seneviratne: The market trend in the U.A.E. was such that developers were adopting the LEED rating system in their projects. Our council, in keeping with that market trend, worked with the U.S. Green Building Council to adapt it to the local situation, bringing regional climatic conditions into consider-ation within the localized rating system.

How does LEED work in Dubai’s desert climate?Seneviratne: Some people think that LEED could not work in Dubai, but they are mis -informed. Much of LEED is based on known international standards like ASHRAE [Ameri-can Society of Heating, Refrigerating, and Air-Conditioning Engineers]. Dubai has been using ASHRAE standards for several decades. That’s just one example where we had already adopted core LEED principles.

LEED offers another advantage—its con-stant evolution and adaptability. Like many green building advocates, for example, we wanted a great emphasis on water conserva-tion. Previously, LEED had only five possible points for water in new construction. Now, the 2009 version of LEED raised the number of possible water credits to ten points.

ThomasmUELLEr, president/CEO, Canada Green Building Council

chiLinchEnG, founder/CEO, Taiwan Green Building Council

mariosEnEviraTnE, founder, Emirates Green Building Council (GBC)]

“Worldwide, we will see more

nations forming green building

councils, and millions of buildings

constructed or retrofitted to green

standards. The financial and

environmental benefits are too

compelling for this not to happen.”

A u g u s t 2 0 0 9 U r ban La nD 69

In Canada, green buildings are gaining widespread acceptance. Why?Mueller: Yes, the market is swinging in our direction. It’s being driven by the proven benefits of green buildings and by corporate social responsibility. Buildings have been identified as a ready opportunity to reduce carbon emissions, reduce energy consump-tion, and save money. That’s a great package —environmental, social, and financial.

Developers and investors have become supporters, too. When you look at our council’s board, you see our major support-ers like the Real Property Association of Canada, which represents the 100 biggest owners, developers, and pension funds. Big homebuilders, too, are board members.

Pension funds, in particular, recognize the value of green building. They don’t want to invest in buildings with lesser operating and environmental performance; they don’t want to invest in obsolete buildings.

Unlike some U.S. cities and counties, we don’t have green mandates for privately owned construction. We don’t have as many incentives, either. That’s been a bit of a problem to get the market moving faster. But any incentives must be very targeted, and they must have a sunset clause. Other-wise, you are giving a free ride.

Which Canadian building sectors are leading, and which ones are lagging?Mueller: Our leaders are office buildings, schools, universities, and mid- and high-rise residential. As far as a lagging sector, we have no LEED Canada hotels. There’s lots of talk—lots of ecobranding—but that’s it.

In Taiwan, what are the hindrances to green buildings?Cheng: Our green materials industry is not really strong at this point. In the earliest EEWH standards, only 5 percent of building materials had to be green. Now that the requirement is 30 percent, we have the big demand, but the industry has not caught up yet. Often, the prices are still too high because the market is too small. That will

change with time as EEWH requires ever-larger percentages of green materials and as mass production takes over, increases the volume, and reduces the costs.

In Canada, what are the major roadblocks to green buildings?Mueller: One big roadblock is proper main-tenance of building systems to achieve the expected green benefits. Plus, we need performance measurement, verification, and reporting. We are doing that benchmark-ing. Two years ago, we started performance audits of the best [-performing] buildings to understand why they worked so well. Now, we give workshops to teach how to mea-sure and improve operational and recom-missioning practices, retrofits or upgrades, and improve tenant knowledge about the best practices. Existing buildings can reduce their energy use by 50 percent.

We want a green building performance sys-tem online that allows a building manager to make improvements. We want a database of performance, which becomes a performance management tool for building managers.

The U.A.E. has experienced an extraordinary surge in green building construction. It’s unprecedented. Why did it happen?Seneviratne: Throughout 2005, 2006, and 2007, property market leaders were register-ing their buildings for certification. Then in October 2007, his Highness Sheikh Moham-med, ruler of Dubai, announced that all new commercial and residential buildings must meet one of the internationally recognized standards for green buildings. Most of our leading developers and architects were already familiar with the LEED system, and they adopted LEED for new projects.

Taiwan has some very good incentives for green buildings. Give an example of one of the most successful ones.Cheng: We have a government program called the Urban Regeneration Program, started in 2008. If a condominium devel-oper applies the EEWH system and gets Silver certification, you can get 6 percent

extra FAR [floor/area ratio], which is worth a lot of money in densely built Taipei. You get 8 percent extra for Gold and 10 percent extra for Diamond, our top rating. Builders have been eager to get that incentive and the greater profits.

In most nations today, new construction has slowed greatly because of the recession. How can green buildings make a difference now? Cheng: The greatest need is renovation of existing buildings everywhere. In Taiwan, we have a program, the Existing Building Improvement Remodeling Program. It’s being used for federal buildings first: they are the pilot projects. Energy savings, sun shading, and water savings are the main portion of the improvements. Soon, we will expand the program to housing—particularly in Taipei, where land is scarce, where many office buildings are high rises, and most residential areas are very compact with condominium-type housing. Green upgrades of these buildings will provide so many benefits.

Do you have any predictions for green buildings in Canada? Around the world? Mueller: First, the recession will end, and green buildings will probably lead the real estate comeback. By 2015, Canada will have 100,000 LEED-certified green buildings. One million homes, including condos, will use half the energy they use today.

Worldwide, we will see more nations forming green building councils, and mil-lions of buildings constructed or retrofitted to green standards. The financial and envi-ronmental benefits are too compelling for this not to happen. UL

chaRLEs Lockwood is a green real estate

authority and consultant in southern California

and New York City.

The Green Quotient: Insights from Leading Experts on Sustainability, written by Charles Lockwood, is a ULI published book available at www.uli.org/bookstore, or call 800-321-5011.

70 U r b an La nD a u g u s t 2 0 0 9

Because developing nations, by their very definition, are starting at a much lower standard of living than developed countries, they have a much greater distance to cover in implementing sustainable measures. Egypt to­day faces daunting challenges: a rapidly grow­ing population; water and energy shortages; soil, water, and air contamination; and a se­vere shortage of affordable housing. Estimates place its current population at close to 100 million, with a growth rate of 1.3 million per year. More environmental degradation is in­evitable in the face of such rapid growth.

Most Egyptians live in two regions that ac­count for just 5 percent of the country’s total area—Cairo and Alexandria along the Nile River, the nation’s major water source. The Egyptian government is planning to build more than 3 million residences in new communities in the desert west and east of the Nile. Encroaching further into the desert will require utility infra­structure, water pipelines, and roads to criss­

cross the desert to connect the new develop­ment to the cities along the Nile.

With the rapid population growth, water demand for domestic and agricultural use has increased significantly. This, in turn, has placed increased demands on the nation’s energy resources to pump and treat water from deep aquifers and the Nile. Adding to energy demand are the inefficient appliances used by Egyptians, such as air­conditioning units imported from China. Most of the na­tion’s energy is generated by hydroelectric facilities built on the dams on the Nile and by the burning of coal and oil. The primary conventional option for increasing energy resources is to build nuclear plants— not feasible economically or politically.

Soil, water, and air contamination is reach­ing critical levels. Soil contamination in Egypt is severe due to sewage system leakage, use of pesticides and chemicals, factory dump­ing, and garbage disposal. The air is contam­inated by emissions from vehicles, factories, and crop burning. The contamination of the Nile has increased in recent years due to fac­tory discharge, dumping of untreated sewage, contaminated drainage from farms, and the dumping of trash. This is especially sad for the Egyptian people who regard the Nile as a major artery keeping their country alive.

The country’s housing shortage is evident in the major cities, which teem with slums. There is no affordable housing in urban areas, and growth at the edge of the cities has cre­ated even more environmental problems be­cause of the lack of sanitary infrastructure to support slums in the new development areas.

TheGreeningofEgyptSamaL i

Egypt intends to create a

nationwide green building code

and to join the World Green

Building Council, an effort that

presents daunting challenges—

and the possibility of substantial

rewards—to a developing country

that wants to follow the path

of sustainability.

landwri tes

The majority of Egyptians live in either Cairo or Alexandria and there is no affordable housing in these urban areas. Growth at the edge of cities has caused additional environmental problems due to the lack of sanitary infrastructure to support slums in the new development areas.

a u g u s t 2 0 0 9 U r ban La nD 71

landwr tesGiven the stark reality of the challenges

facing the country, sustainable solutions be­come even more important. This January, a group of international experts in sustainabil­ity traveled to Cairo for the kickoff meeting of the Egypt Green Building Council—a gath­ering seen as a signal of the country’s deter­mination to move forward in initiating green building standards. More than 100 engineers and architects attended the conference, which was sponsored by the Housing and Build­ing Research Center, an arm of the Minis­try of Housing, Utilities, and Community De­velopment. Presenters were predominantly from the United States, but a number of other countries were represented, including Brazil, Russia, and Saudi Arabia.

Sustainability was a new concept for the developing country. Egypt is starting from scratch in establishing green building codes, and significant obstacles exist. During the three­day conference, the international partici­pants emphasized a number of challenges that need to be addressed to ensure success of the fledgling effort:

l The critical need for private sector involve­ment. As is the norm in most developing na­tions, the Egyptian government is not ac­customed to involvement of a volunteer­run organization in setting rules and regulations. The U.S. team strongly encouraged the inclusion of private consultants, planners, engineers, archi­tects, and contractors in this process.

l The perception among Egyptian technocrats that green design applies solely to expensive projects for the wealthy.

l The need for education at all levels con­cerning the principles underlying sustainabil­ity. Many of those attending the conference did not understand the concept of sustainabil­ity, thinking it pertained to measures to keep a building running. An education campaign to promote green building concepts will be

needed for professionals, in the schools, and for the general public.

To move forward, the Egyptians are creat­ing their own version of the U.S. Green Build­ing Council’s Leadership in Energy and Envi­ronmental Design (LEED) certification program, which they call the Green Pyramid. Officials are creating their own green building codes, choosing what they want to implement from the LEED palette. Because tourism is a ma­jor revenue generator for Egypt, the ministry plans to establish the first green design pilot project at a high­profile archeological site in order to not only help protect the site’s trea­sures, but also provide a showcase for tour­ists, demonstrating Egypt’s commitment to sustainability.

The rewards for adopting green building principles are expected to be significant for Egypt. With more than 3 million residential units planned in the Egyptian desert, the con­cepts underlying community building embed­ded in the LEED for New Development pro­gram should be valuable for the country’s

planners, architects, and builders. Implemen­tation of sustainable measures should help effect major improvements in sanitation, es­pecially for the poor. Use of renewable energy, such as solar and wind power, to replace cur­rent fuel sources will help reduce long­term air pollution and energy costs.

With this effort, it is possible that the Egyptians, builders of the pyramids—the first sustainable structures—will be able to set an example for developing nations worldwide. UL

Sam ali is an engineering consultant. Recently, as a vice president of civil engineering services and a LEED

coordinator at Los Angeles–based engineering firm

Psomas, he traveled to Cairo to assist with formation

of the Egypt Green Building Council.

Egypt faces a rapidly growing population, water and energy shortages, and soil, water, and air contamination. The Nile River, shown here in a northeastern Egyptian city near the Suez Canal, is the nation’s major water source.

72 U r b an La nD a u g u s t 2 0 0 9

landwritesChina’s real estate market is recovering quickly, due in large part to the Chinese gov­ernment’s swift and effective actions. Besides a $586 billion stimulus package, it has loos­ened many restrictions on home purchases and on land sales and development. It also has ordered banks to lend heavily to real es­tate companies and has given permission to insurance companies to invest in real estate. The market has gained confidence and seems to have found its bottom. Home sales are up, and Chinese developers are once again buy­ing land to replenish their land banks. Un­derlying all this is a strengthening economy— analysts, both foreign and domestic, have raised their estimates of Chinese 2009 gross domestic product to between 7 and 9 percent.

As the market recovers, foreign investors are finding a landscape very different from the past. In the boom years of the China real estate mar­ket, immediately before the economic downturn, foreign investors put billions of dollars into the market buying Chinese properties, developing projects, and investing in Chinese development companies that were preparing to go public. They made these investments with little equity and a lot of credit. Then, several years ago, dur­ing the boom, the Chinese government, seeking to rein in the market and stamp out speculation and dubious practices, implemented a series of restrictive regulations and taxes, aimed at both domestic and foreign players. As a result, foreign investment directly in properties and their sale in China became difficult and expensive.

In response, many foreign investors estab­lished offshore companies with complex hold­ing and financial structures to own properties. In this way, investors could exit their deals by selling their shares in the offshore company to other investors outside China and avoid Chi­nese taxes and problems of capital repatria­tion. In addition, they could increase returns through leverage by adding on more debt off­shore than was allowed onshore in China.

Those who exited their investments, held ei­ther directly or through offshore companies, be­fore or at the height of the market two years ago generally made money, often with excellent returns. Those who came in at the height of the market or continued to hold their interests are, for the most part, stuck without an exit:

l Although property values have fallen, few want to buy their assets.

China’snewrealEstateOpportunitiesmaLCOLmr iDDELL

China presents new opportunities

for foreigners to invest in

Chinese real estate and for U.S.

and western property owners

to sell to Chinese investors.

Foreign investors are finding

opportunities not only in

Chinese property and operating

companies but also in the assets

owned by cash-strapped western

firms. At the same time, sellers

in sagging western markets are

encountering Chinese individuals

and institutions searching for real

estate investments outside China.

l Those who invested heavily in Chinese devel­opers, who then failed to go public when the initial public offering (IPO) market shut down, have seen the value of their shares dwindle.

l For those with interests in offshore holdings, there is practically no market for their shares, and the huge debts these offshore companies took on to leverage returns will begin to come due in 2010.

Today, scarce equity and expensive credit, if available at all, combined with the downturn in the China market, have brought most for­eign investment to a halt—but, perhaps, not for long. “The period of standstill in foreign in­vestment in China real estate is over. Although no one is rushing to do new deals, people are looking at the market again. If you are a global real estate player, you cannot dismiss the world’s third­largest economy,” says Joel Rothstein, partner at the Paul Hastings law firm in Beijing.

As foreign investors look to return, they are finding that the investment process is becom­ing easier as the Chinese government loosens restrictions on foreign investment and stream­lines the investment process. “Serious long­term foreign investors will find that the trans­action approval process has become easier,” points out Jianbo Lou, director of the Center for Real Estate Law at Peking University. “For­get the restrictions,” adds Brad Markoff, part­ner at the DLA Piper law firm in Hong Kong. “With the right partner, right deal, right struc­ture, right city, and right relationships—and if all this conforms to Chinese policy objectives—you can now do almost anything.”

They are also finding new opportunities that include:

l Directly investing in properties or projects. As the market stabilizes, appropriately priced properties are becoming attractive for invest­ment. But note that while many foreign com­petitors have retreated, new domestic com­petitors have taken some of their places. One major cash­rich Chinese developer has set aside $2 billion to buy properties in Beijing and Shanghai from foreign private equity firms eager to exit.

l Partnering with Chinese developers. Foreign investors are now finding two distinct types of Chinese developers: those who are cash strapped and hungry for equity, and those who are cash rich with full access to bank

a u g u s t 2 0 0 9 U r ban La nD 73

bound investment in real estate is coming and that it will create new opportunities for sellers in markets outside China.

Foreign residential real estate is currently the primary target. China has about 400,000 millionaires, according to the Boston Consult­ing Group, and just below that a developing and increasingly well­to­do middle class. With falling prices and a weak dollar, their interest in buying U.S. residential property is high, as evinced by the following:

l Homebuying trips to the United States have become one of China’s most popular pack­age tours—so popular that they are over­subscribed, and operators have had to put hundreds on waiting lists.

l The “America for Sale” expo of U.S. residen­tial real estate in Beijing attracted over 7,500 potential Chinese buyers.

l Delegations of U.S. residential brokers going to China to showcase their properties consis­tently attract large audiences.

The Chinese have also begun competing for U.S. commercial real estate. “Now interna­tional markets are open to Chinese investors to pick commercial properties in prime loca­tions with a good history of performance, fa­mous addresses, some at ‘once in a lifetime’

prices. They can diversify their portfolios over­night,” says Hand. “What motivates Chinese real estate investors, besides stability of the investment environment where the assets are held, are pricing and the currency play. Chi­nese see an opportunity in London, for exam­ple, because prices have fallen and the cur­rency has weakened,” adds Hand.

Furthermore, in a recent policy reversal, the Chinese government has begun encour­aging Chinese companies to establish off­shore enterprises and to invest in or buy over­seas companies. These corporations will need buildings for their own use, as well as housing for their Chinese expatriate staff.

China’s sovereign wealth fund, the China Investment Corporation (CIC), with $200 bil­lion under management and another $200 bil­lion likely on its way, has begun to focus on real estate investment outside China and has hired a six­person, in­house real estate team. “Having seen other sovereign wealth funds come to grief in real estate investment, the CIC will likely invest initially with a leading in­ternational real estate fund. Then, after the CIC gains experience, it will begin to make direct investments,” says Rothstein.

Along with these new opportunities are new challenges. For foreign investors, this means identifying the new categories of in­vestment and accurately assessing the new mood and needs of Chinese developers. For sellers to the Chinese, this means understand­ing, according to Hand, that “Chinese inves­tors are looking for a certain type of seller. A seller they can communicate with, but not just in terms of language; someone who under­stands the art of the transaction or partnering, as the case may be; who shows a willingness to compromise and be flexible about how things are done; who doesn’t just say this is London or New York and this is how we do it here.” For both, this means embracing new market realities, new strategies, and new ways of doing deals. UL

malcolm Riddell is president of RiddellTseng, a

boutique investment bank that advises on China real

estate, and academic leader and instructor for China

real estate executive education programs at the Har-

vard Graduate School of Design.

lending—and not interested in a foreign or a domestic partner. To do a deal with the latter, “the foreign investor has to bring more than money; he must bring soft skills that the Chi­nese side needs and lacks,” advises David Hand, international director, head of China Property Investment, at Jones Lang LaSalle. “He must leverage his expertise in develop­ment, management, strategic planning, de­sign, implementation, and so on,” he adds.

l Investing in Chinese developers. Foreign investors can find bargains in the shares of other foreign firms that invested in pre­IPO de­velopers who then failed to go public. Also, as the industry consolidates, high­quality, cash­strapped developers have become acquisi­tion targets of the large, cash­rich develop­ers. Many of these targeted developers would prefer an equity infusion from a foreign inves­tor who allows them to continue to own and run their companies. Many also have access to bank loans for new projects, and, when the IPO market opens again, they may be strong candidates for going public.

l Purchasing the shares of offshore compa-nies. Many investors in offshore companies are looking for buyers for their shares. Prices have fallen because the value of the under­lying properties has fallen and because their debt will begin to become due in 2010.

l Refinancing offshore companies. There is an opportunity to refinance offshore companies before that debt comes due. Some foreign firms are already gathering resources to step in as mezzanine or senior lenders at very at­tractive terms.

At the same time, in a dramatic reversal of capital flows, the Chinese are poised to make investments in overseas real estate, both resi­dential and commercial. “The Chinese have an affinity for investment in real estate as an as­set class. So when they look abroad for invest­ments, they look at real estate,” Hand says.

Yet, “because China’s outbound real es­tate investment relies not only on the mar­ket alone but also on the political processes of the Chinese government, it is difficult to say how much or how quickly it will find its way into real estate investments,” notes Xiaoping Zheng, principal at BAZO in Shanghai, a China­focused real estate advisory and invest­ment management company. But, there ap­pear to be few who doubt that Chinese out­

“What motivates Chinese real

estate investors, besides stability

of the investment environment

where the assets are held, are

pricing and the currency play.

Chinese see an opportunity in

London, for example, because

prices have fallen and the currency

has weakened.”

—David Hand, international director,

head of China Property Investment,

Jones Lang LaSalle

74 U r b an La nD a u g u s t 2 0 0 9

Globalinvesting:KeepitSimplePaULPhiLL iPS

While the long-term strengths

of regional economies may not

be clear, the short-term reality

of pricing core opportunities at

value-added prices is clear.

landwritesThere is a pall shrouding property in­vestment conferences these days as consul­tants, advisers, and investors commiserate and deal with the decline of global real es­tate markets. Tom Barrack, chairman of Los Angeles–based Colony Capital and investment real estate guru, has graphically described eq­uity capital market behavior as “lemmings hurtling themselves off the efficient frontier.”

Regardless of what has happened, portfolios will seek global diversification, and markets will find a fundamental balance in due course. In the meantime, investors should embrace the short­ to intermediate­term changes in global investing, including capital allocation, the role of operators and advisers, and shifting markets. Overall, a re­turn to fundamentals must be sought.

So, what are the fundamentals of real es­tate investment? Those who gain the courage to recommence their investment activities will have the luxury of using the framework of val­uation, structuring, and management. From a valuation perspective, investors can focus on current income to drive value, instead of growth assumptions, since most are not brave enough to model high rates of growth at this

point in time. The scarcity of global debt cap­ital has diminished the role of leverage in de­termining total returns and, thankfully, has re­duced bloated expectations. Current returns from most property sectors are adequate to meet benchmark actuarial return requirements for institutional portfolios.

Replacement cost is an important assess­ment of fundamental value. Significant discounts to replacement cost for hard­to­access properties should not be ignored. In the inflationary econ­omies that are likely to emerge in the interme­diate term, real estate should perform well. As commodity prices escalate, those properties ac­quired at significant discounts to replacement cost ought to perform even better.

Scarcity is the foundation of value. In a re­turn to a fundamentally sound longer­term view, investors can focus on traditionally hard­to­get properties in hard­to­access markets. These kinds of investments can be viewed as founda­tion investments whose purpose is to provide an anchor in a portfolio seeking to match its long­term assets and liabilities. This will allow for less focus for short­term engineered strate­gies that depend upon leverage, high rates of

Strategic core investment opportunities in logistics and industrial properties along the supply chains in key markets are compelling. In the inflationary economies that are likely to emerge in the intermediate term, real estate in these areas should perform well.

a u g u s t 2 0 0 9 U r ban La nD 75

short­term growth, and short holding periods to generate high rates of internal return.

History has served up a lesson on these strategies. In the end, the principal benefi­ciaries of short­term strategies have been the brokers and bankers who managed the place­ment of debt and equity at formation, exit, and redeployment.

At present, there is no need to take exces­sive risk to get core­plus to value­added real estate returns. Keep it simple. Return to fun­damentals. Take advantage of the supply of properties that were not available or accessi­ble in the past.

While capital is likely to be in short supply for some time, it must still be allocated in a log­ical way—or in a completely different manner than what has been seen in the past few years. While global diversification will still drive long­term allocation decisions, investors may need to take another view with short­term investment decisions until debt and equity capital markets have stabilized. In the short term, investments will be made in product that has been hard to acquire for institutional portfolios and in mar­kets posing historical barriers to entry.

Traditional allocation strategies are often illustrated in pie charts that divide the world into North America, Europe, and Asia, and oc­casionally include Latin America and the Mid­dle East/North Africa. Analysts customarily are prone to simplify and categorize risk by geog­raphy. However, experience tells us that the United States is drastically different by culture, values, and economic productivity across the different regions of the country; Europe and Asia are no different.

To oversimplify these markets downplays the significant cultural differences across each continent, and therefore it is not wise to make diversification decisions simply based on geo­graphical boundaries. Allocations need to be focused by country, and investors must try to understand inherent limitations to transpar­ency, liquidity, and the rule of law for each. In choosing countries for allocations, it is fun­damentally important to first grade individ­ual country risk, followed by individual mar­ket risk, and then individual property risk. If a country risk measurement does not grade high enough, do not go there. Not all countries de­serve capital allocations, so always think stra­tegically when making these decisions.

As markets shift, there is much discussion about the appropriate roles of managers and operators working for institutional portfolios. In talking with plan sponsors, it is clear that there will be change. How much change is not clear since understaffed plan sponsors need the rep­resentation of investment advisers on the com­mittees and boards of their investment vehi­cles. One thing is clear, however: the role of the operator manager as a direct provider of service to institutional portfolios is likely to increase. Those who invest in research, compliance, and portfolio services that meet institutional stan­dards are likely to win investment management business on a direct basis with plan sponsors and sovereign wealth funds.

The industry is now embracing many of these operator managers and refers to them as “emerging managers.” To call them emerging managers belittles their longstanding presence and importance in the investment world. Oper­ator managers are the entrepreneurial univer­sal joints in the real estate investment system, taking primary risk in focused strategies, timing markets, and feeding institutional demand for property. Plan sponsors are now realizing that they do not need the middlemen in the roles they have been playing for the last 15 years—they can go directly to the operator managers.

Local markets have changed as regional economies have evolved and, therefore, the rel­ative strengths of markets will remain unknown for some time. For example, we will not see the effects of increased government intervention in the economies of the United States and United Kingdom immediately. We will not know what the Chinese economic stimulus package will do to promote internal consumption, and what that will mean for the rest of the world’s exports to China. In the long term, inflation and domes­tic consumption in developing economies and, most notably, China, will be key drivers for in­vestment decision making.

But while the long­term strengths of re­gional economies may not be clear, the short­term reality of pricing core opportunities at value­added prices is clear. Investments in technology and infrastructure to promote world supply chains have been made. Stra­tegic core investment opportunities in logis­tics and industrial properties along the sup­ply chains of world markets are compelling and should include Shanghai, Amsterdam/

Rotterdam, Dubai, Los Angeles, Dallas, Chicago, Singapore, and Frankfurt.

Likewise, strategic opportunities in tradi­tional world financial centers should not be overlooked. Given current pricing relative to historic pricing and replacement cost, London, New York, Singapore, and Sydney are compel­ling prospects.

Lastly, middle­income strategies for retail and residential investment in emerging econ­omies should perform well for many years. Middle­market strategies for retail in Sin­gapore, Kuala Lumpur, Sao Paolo, and Rio de Janeiro are worthy considerations as are middle­income residential properties in Bei­jing, Shanghai, Rio de Janeiro, and Sao Paolo.

The big question on everyone’s mind is market timing. People ask, “Are we at the bot­tom?” or say things such as, “We will only start investing once we have hit the bottom,” as if all investing is a mapped roller­coaster ride of ups and downs. Both the top and bot­tom of the market are fictitious as finite points of value defined by capitalization rates. They are spans of time during which the predom­inant flow of capital either leaves or enters the market. The “top” or “bottom” of the mar­ket is determined by the relative value plays in the market, whether it is spread over debt rates or premiums over actuarial benchmark returns. The process is entirely one of self­ determinism. You do not wait for it to happen; it happens when you act. UL

Paul PhilliPS is senior vice president of IDI

Investment Management at IDI, a full-service industrial

real estate company headquartered in Atlanta,

Georgia, offering development, investment, property

management, and leasing services.

Strategic core investment opportunities

in logistics and industrial properties

along the supply chains of world

markets are compelling and should

include Shanghai, Amsterdam/

Rotterdam, Dubai, Los Angeles, Dallas,

Chicago, Singapore, and Frankfurt.

LW.indd 75 8/11/09 12:45:40 PM

76 U r b an La nD A u g u s t 2 0 0 9

Last October at the Urban Land Institute’s annual fall meeting, ULI’s Responsible Property Investing Council made an official entrance with the purpose of providing a forum for industry leaders to dis-cuss responsible property invest-ment (RPI) and how growth can be catalyzed in today’s market. Shortly afterward, the economic climate changed significantly. Now more than ever, the investment commu-nity’s goal is to get higher returns on their investments while using RPI fundamentals that minimize operating expenses. [See “Respon-sible Investing,” Urban Land Green, Spring 2007, page 108.]

However, defining the premium for RPI is somewhat esoteric. RPI has entered the investment arena on two distinct investment paths: investing in cash-flowing properties and then upgrading them to be green, or investing in the develop-ment of new green buildings. From an investment perspective, the key is to have a diversified approach

and to appropriately pursue both options when the timing is appropriate. [See “Responsible Prop-erty Investment Cri-teria,” Urban Land Green, Spring 2009, and “Doing Good—and Doing Well,” 2007, page 118.]

There are green-specific funds with equity in place, including the

Urban Strategy America Fund (USA Fund), which are currently seeking investment opportunities in exist-ing green buildings. The challenge with acquiring existing structures is the limited amount of product on the market. Another investment approach is to focus on cash-flow-

ing assets that can be converted to green by changing systems, fuels, use, and property management. The overarching questions that inves-tors are asking include the follow-ing: Will the building recapture its investment? Will its return be higher than its less sustainable competi-tion? Or does it make more sense to just invest in run-of-the-mill acquisitions and developments?

RPI properties do provide clear investment opportunities for a return on investment (ROI). A study from last year that was revised this past March titled, “Investment Returns from Responsible Property Invest-ments: Energy-Efficient, Transit-Oriented, and Urban Regeneration Office Properties in the United States from 1998–2008,” by Gary Pivo and Jeffrey Fisher of the University of Arizona, analyzed 1,114 nongreen or “brown” buildings and 336 green structures and found that, “with few exceptions, RPI properties had incomes, values per square foot, price appreciation, and total returns that were either higher or insignifi-cantly different from conventional properties with lower or insignifi-cantly different cap rates.”

Specifically, the study found that Energy Star office properties have:l 5.9 percent higher net incomes per square foot (due to 9.8 percent lower utility expenditures, 4.8 per-cent higher rents, and 0.9 percent higher occupancy rates); l 13.5 percent higher market values per square foot; and l 0.5 percent lower cap rates and appreciation and total returns simi-lar to other office properties.

Pivo’s and Fisher’s study also points to higher returns for both smart growth locations and green buildings. Other studies have offered additional proof that green buildings tend to obtain higher rents than their nonsustainable counterparts. Despite

these higher rents, tenants are eager to move into them, mainly for the benefits they bring to employees’ health and productivity. This, in turn, creates less churn as the ten-ants who are able to secure a lease in a green structure are more likely to renew. In fact, a study published by the U.S. General Services Admin-istration found that postoccupant satisfaction was 29 percent higher in the U.S. Green Building Council (USGBC) Leadership in Energy and Environmental Design (LEED) and Energy Star buildings compared to other structures.

“Doing Well by Doing Good? Green Office Buildings,” by Piet Eichholtz and Nils Kok of Maastricht University and John M. Quigley of the University of California at Berke-ley, found that on average a green building brings in $5 million more in market value than its nongreen counterpart. In addition to provid -ing evidence that rents are 2 per-cent higher in green buildings, their research shows that the effective rents are about 6 percent higher in green structures than in similar office build-ings located nearby. An additional study by Franz Fuerst and Patrick McAllister of the University of Reading titled, “Green Noise or Green Value? Measuring the Price Effects of Envi-ronmental Certification in Commercial Buildings,” found a rent premium of 11.8 percent for green buildings versus nongreen structures, as well as a 31 percent increased value dif-ference between LEED and non-LEED buildings and a 10 percent increased price difference between Energy Star and non–Energy Star structures. The investment community understands that buildings with sustainable design demonstrate lower operating costs and lower vacancies, thus increasing the overall value of a building.

This evidence marks the intersec-tion between the concept of RPI and

Applying Responsible Investing to Green Building

A recent real estate

investment strategy

emerging out of

the smart growth

and sustainability

movements takes

green to the next

level by marrying

business interests

with environmental

and social goals.

K i r K S y K e Scapital marketsproactive

ULAug09_p76 pa.indd 76 8/10/09 2:49:26 PM

A u g u s t 2 0 0 9 U r ban La nD 77

a boutiqueinvestment bankadvising leadingreal estate and

financial servicesfirms on

investments andtransactions

in Chinasince 1988

!"#$%#&'()**+##

Principal,'(,--.//01.23

,nvestment banker andlawyer with 20 years’experience in China real estate and financial services

Senior Visiting Fellow,Center for Real Estate Law,Peking University

Academic Leader for Chinareal estate exec programs, Harvard University,Graduate School of Design

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DISCUSS YOUR

CHINA PLANS

AND QUESTIONS

malcolm.riddell@riddell-tseng.com

China’s New Real Estate

Opportunitiesby Malcolm Riddell

in this issue of

URBANLAND

C

M

Y

CM

MY

CY

CMY

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riddelltseng-ad-rev.ai 7/31/09 2:43:00 PM

the actual profitability of greening assets by implementing Energy Star appliances, adding additional insu-lation, introducing green cleaning methods, or through the reevalu-ation of the type of heating and cooling systems and power source used in a building. Studies have shown that the value creation from greening buildings can increase their net operating income (NOI) through operational and energy savings. Some companies are even turning nontraditional green policies such as the use of vehicles by paying pre-miums for Zipcar accounts or other car-sharing services, rather than pur-chasing company vehicles, as a way to drive results.

Although there will be significant opportunities to invest in cash-flowing assets and then make them greener, there is still value to permitting

and approving green projects in this economy to be executed as the economy recovers. Reducing operating costs and increasing NOI has value at any time in a market cycle. Different markets have dif-ferent strengths and weaknesses; attention needs to be paid to an area’s employment, economic stimulus potential, and the eco-nomic drivers of a community—and most of all the right market timing.

The market is, at the moment, treating existing cash-flowing assets more favorably, and market fundamentals require that current product be absorbed. However, the wise investors and developers will be those who are fully permit-ted and entitled and have their shovels ready to get their green development projects underway when the market returns.

The RPI Council is committed to evaluating projects and analyzing opportunities, exploring best prac-tices in this new genre, and evaluat-ing the metrics that make projects successful. It also is creating a forum for those who are interested in RPI, including developers, archi-tects, fund managers, and inves-tors. There are financial benefits to be gained through RPI for develop-ers, tenants, residents, and inves-tors. RPI balances economic returns with environmental and economic sustainability; promotes upzoning, or increased density, not solely because it is better for the environ-ment, but because it can increase profitability; emphasizes the pre-mium pricing that transit-oriented development leverages—again, not just for the environment, but for the value of the assets or rents being

charged; and finds subsidies or gap financing for the use of energy efficiency or improved infrastructure.

The variables are too numerous to define an absolute delta between properties that subscribe to the RPI doctrine and those that do not. But the failure to understand the impact of RPI not only will have an effect on the planet but also could influ-ence the value of portfolios. UL

KirK SyKeS is president of the Urban Strategy America (USA) Fund, a private New Boston real estate investment fund. He also is on the Steering Committee of the Responsible Property Investing Center and is membership chairman of the newly formed ULI Responsible Property Investment Council (RPIC).

Responsible Sustainable Property Investment is an InfoPacket available at www.uli.org/bookstore, or call 800-321-5011.

78 U r b an La nD A u g u s t 2 0 0 9

A number of states and prov-inces have created or are planning three regional cap-and-trade pro-grams. These work by capping the maximum emissions allowed and auctioning or distributing emission allowances equal to the cap, and then creating a market for auctions and trades to determine prices for emission allowances. If an emitting entity’s emissions exceed its allow-ances, it has to buy more allow-ances; if it has been efficient in reducing emissions and has excess allowances, it can sell them.

Proponents of cap-and-trade programs generally cite the advan-tages of clear, enforceable caps on emissions, tightened over time, and a market-determined price for allow-ances. An alternative is to tax green-house gas (GHG) emissions, giving emitters an incentive to reduce them, whose proponents cite sim-plicity and potential broad effect on all carbon-emitting sources. [See “The Carbon Solution: Cap-and-Trade or Tax,” June 2008, page 127.]

The regional cap-and-trade pro-grams have broadly similar goals: reducing greenhouse gas emissions at the lowest possible cost, protecting the environment, expanding energy efficiency and renewable energy efforts, and promoting clean energy technologies and jobs. Their differ-ences in scope and process illustrate some of the issues facing the pro-posed national program.

TheregionalGreenhouseGasinitiativeThe Regional Greenhouse Gas Ini-tiative (RGGI), the first mandatory, market-based CO2 emissions-reduction program in the United States, is an effort by ten north-eastern and mid-Atlantic states (initially Connecticut, Delaware, Maine, New Hampshire, New Jersey, New York, and Vermont; joined in 2007 by Maryland, Massachusetts, and Rhode Island) to limit GHGs by reducing CO2 emissions from the electric power sector by 10 per-cent by 2018. RGGI estimates that covered power plants account for approximately 95 percent of the region’s total CO2 emissions from electricity generation, and for more than one-fourth of the region’s total annual CO2 emissions.

Governors in the original seven states began discussions in 2003, agreed in 2005 to implement the program, and in 2006 published a model rule for participating states to guide implementation. Each state sets and enforces its regulations and retains authority for its auction activity, but they function as a single regional market for carbon emission compliance; an emission allowance from any member state can be used to satisfy compliance in any state. The New York City–based nonprofit RGGI, Inc., provides technical and administrative support to the states in setting caps; maintains the auc-

tion system and trading platform; and keeps records of emissions, allowances, and offsets.

RGGI’s goal is to first stabilize power sector CO2 emissions by 2014, begin-ning with the first three-year compli-ance period, which started this past January, at a level roughly equal to current emissions. The emissions cap will then be cut by 2.5 percent annually from 2014 thru 2018, resulting in emissions 10 percent lower than 2009 by year-end 2018. This phased approach is intended to give power plants time to adjust while market prices are established.

A key issue is whether to distrib-ute allowances to existing emitters; i.e., give them allowances for free or to auction all the allowances. States are required to auction at least a quarter of the allowances and use the proceeds for consumer benefits such as energy efficiency, though most states have decided to auc-tion almost all allowances, accord-ing to RGGI officials.

RGGI permits offsets (credits for actions taken to reduce or mitigate carbon emissions outside the covered sector and/or region), but initially limits them to 3.3 percent of a power plant’s total compli-ance obligation. Five categories of offset-eligible activities have been defined, including “reduction or avoidance of CO2 emissions from natural gas, oil, or propane end-use combustion due to end-use energy efficiency in the building sector,” perhaps providing an opportunity for building owners who reduce energy use to sell offsets.

In the first auction last September, almost 12.6 million allowances were offered and sold at $3.07 each (each allowance is for one ton of emis-sions during the compliance period, though companies can bank unused allowances for future use). The fourth auction in June offered and sold

at issue

While federal legislation

is being debated,

coalitions of states

and provinces have

been developing

and implementing

regional cap-and-

trade programs to

control greenhouse

gas emissions.

Initiatives to Set Up Cap-and-Trade Programs

J e r r y W . S z a Ta n

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approximately 31.9 million allowances for the 2009-to-2011 compliance period at $3.23 each; and almost 2.2 million allowances for the 2012 com-pliance period at $2.06 each. Since the program inception’s, almost 111 million allowances have been auc-tioned for more than $360 million; a secondary market is developing and future auctions will be held quarterly.

TheWesternClimateinitiativeThe Western Climate Initiative (WCI), launched in February 2007, comprises seven U.S. states and four Canadian provinces: initially Arizona, California, New Mexico, Oregon, and Washing-ton, later joined by Montana and Utah; and British Columbia, Mani-toba, Ontario, and Quebec. Six more U.S. states, one province, and six Mexican states are formal observers. Together, the members represent more than 70 percent of the Cana-dian economy and 20 percent of the U.S. economy, according to the WCI.

The WCI calls its program the most comprehensive to date, covering the six most common GHGs (carbon diox-ide, methane, nitrous oxide, hydro-

fluorocarbons, perfluorocarbons, and sulfur hexafluoride) and even-tually covering “nearly 90 percent of the region’s emissions.” The goal is to reduce GHG emissions 15 percent below 2005 levels by 2020.

WCI partners will begin report-ing emissions in 2011 and the first three-year phase of the cap-and-trade program begins on January 1, 2012, covering emissions from elec-tricity generation, industrial combus-tion at large sources, and industrial process emissions for which ade-quate measurement methods exist. The second phase will begin in 2015 with expanding coverage to transpor-tation fuels and residential, commer-cial, and industrial fuels not covered in the first phase. The plan calls for a minimum 10 percent of allowances to be auctioned at the start, increas-ing to 25 percent by 2020; members can choose to auction more.

The work plan for 2009 to 2010, released this past February, calls for developing auction procedures, a GHG-emissions reporting system, methodologies for establishing partner caps, economic modeling of policy and design options, and

other steps. Individual states and provinces are at different stages of enacting enabling legislation.

MidwesternGreenhouseGasreductionaccord(aCCOrD)Six midwestern governors and one Canadian premier (Illinois, Iowa, Kansas, Manitoba, Michigan, Min-nesota, and Wisconsin; observers are Indiana, Ohio, Ontario, and South Dakota) agreed in November 2007 to establish the Midwestern Greenhouse Gas Reduction Accord (ACCORD) reduction targets and time frames and develop a market-based and multisector cap-and-trade mechanism.

Controlling emissions in Midwest states will require more aggressive efforts because it is the “most coal-dependent region in North America,” according to ACCORD, and a carbon price potentially has greater impact on regional residents and businesses. Moreover, the manufacturing- and agriculture-based economy tends to produce more GHGs, according to Jesse Heier, Washington director of the D.C.-based Midwest Governors Conference of the Council of State Governments. The governors and pre-miers recognize that carbon-burning business as usual is not sustain-able, want to find ways to use green energy development to transform the regional economy, and want to be at the table when federal policy is debated, according to Heier.

The ACCORD advisory group’s recommendations issued in July call for reducing, beginning in 2012, emissions of the six major GHGs 20 percent below 2005 levels by 2020, and 80 percent by 2050. They also recommend that allowance value be put toward climate-related purposes in transformational investment such as low-carbon technology, mitigat-ing adverse transitional impacts, and addressing harmful impacts due to climate change.

On June 26, the U.S. House passed 219-212, the American Clean

Energy and Security Act (ACES, or the Waxman-Markey Act), providing wide-ranging renewable energy, effi-ciency and climate control measures, including a national greenhouse gas cap-and-trade system. The bill sets caps for covered entities (large stationary sources emitting 25,000 tons of GHGs annually and others) to reduce aggregate GHGs—it adds a seventh gas: nitrogen trifluoride—3 percent below their 2005 levels in 2012, 17 percent by 2020, 42 percent by 2030, and 83 percent by 2050. It sets minimum prices for carbon at initial auctions. It gives allowances to distributors of energy and to con-sumers, trade-exposed businesses, and others to mitigate potential price hikes for energy. Initially, only about 20 percent of allowances will be auctioned, according to the Washington, D.C.–based Pew Center on Global Climate Change. Critically for the regional programs, ACES pre-empts state programs from 2012 to 2017, placing them on hold while the federal program is established; after which states can enact more strin-gent measures if they choose. Com-panies holding state allowances will be able to exchange them for federal ones if the bill becomes law.

While the federal government has been debating controlling GHGs, groups of states and provinces have joined together to create regional cap-and-trade programs. RGGI has shown that a multistate auction system can be developed and other regions have proposed broader plans. Potential federal legislation now has significant momentum and may supplant the regional programs, but these pro-grams have led the way. UL

Jerry W. Szatan is a Chicago-based consultant and writer on corporate site selection and community economic and real estate development.

Sustainable Development: Navigating the New World of Green Regulations and Incen-tives is a ULI book available fall 2009 at www.uli.org/bookstore, or call 800-321-5011

at issue

Regional Cap-and-Trade Program Members and ObserversThe Regional Greenhouse Gas Initiative (RGGI)MeMbers: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, rhode Island, and Vermont.ObserVer: Pennsylvania.

Western Climate InitiativeMeMbers: Arizona, California, Montana, New Mexico, Oregon, Washington, Utah, and british Columbia, Manitoba, Ontario, and Quebec, Canada.ObserVers: United states: Alaska, Colorado, Idaho, Kansas, Nevada, and Wyoming.MexICO: baja California, Chihuahua, Coahuila, Nuevo Leon, sonora, and Tamaulipas.CANADA: saskatchewan.

Midwestern Greenhouse Gas Reduction Accord (MGGRA)MeMbers: Iowa, Illinois, Kansas, Michigan, Minnesota, Wisconsin, and Manitoba, Canada. ObserVers: Indiana, Ohio, south Dakota, and Ontario, Canada.

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proactive

82 U r b an La nD A u g u s t 2 0 0 9

J O a n C a p e L i n

Sustainable Development at the Graduate Level

Training in green develop-ment is not a bonus for the current crop of graduates, it has become a necessity. “It used to be that all you needed was a site and a vision to become a developer,” says Ryc Loope, founder and, until this past May, director of the master of real estate development (MRED) pro-gram at Arizona State University (ASU). “Today, you need much more, including a ‘green strategy.’ ”

A developer, trained architect, and design/builder as well as a real estate educator, Loope initiated the MRED program at ASU three years ago with a growing focus on sustainability. “Everyone’s talking about ‘green,’ but who’s teaching it? And how do you teach it?” he asks. “Students must understand the science, economics, ethics, and strategies of sustainabil-ity before developing a building or planning a new community.” Loope has taught sustainability, drawing

from his own master’s degree in environmental design; experience as head of Taliesin, the design firm started by Frank Lloyd Wright; and his years in the solar energy field, including service as chairman of the Washington, D.C.–based Solar Energy Industries Association.

In the past, Loope has brought in Jerry Yudelson, principal of Yudel-son Associates, based in Tucson, Arizona, and Charlie Popeck, presi-dent and founding principal of Green Ideas, based in Phoenix, Arizona, to prepare all students to take and pass the Leadership in Energy and Envi-ronmental Design (LEED) accredited professional exam, to achieve the LEED AP, a national designation of the U.S. Green Building Council (USGBC). The Arizona State master of real estate development program has required every student to train for and to pass the exam. While the certification is important, Loope

points out, “A development’s total sustainability—at the economic and community levels, as well as at the environmental level—hinges on the developer’s leadership and skill.”

“The information from professors and guest lecturers is not enough,” says Loope. “To learn ‘green,’ you have to get out there and experi-ence how to do it yourself.” Thus, to expand beyond the desert focus offered in Arizona, he has taken his class to New York City and Boston, where they speak directly with East Coast developers about challenges in their sustainable commercial and residential developments. This past year, they visited the New York Times Building, New York City’s first green skyscraper, designed by Renzo Piano and developed by Forest City Ratner, based in New York City.

Real estate investor, planner, and developer Mark Stapp, founding principal of Phoenix-based Pyramid

Everyone’s talking

about “green,” but

who’s teaching it—and

what’s being taught?

in practice

Oxford University and the Prince’s Foundation for the Built Environment to Offer a New Master’s Program in Sustainable Urban DevelopmentA new master’s program in sustainable urban development was created in mid-May by Oxford Univer-sity’s department for continuing education and the Prince’s Foundation for the built environment. The Msc in sustainable urban development, a part-time program scheduled to begin in september 2010, will provide an analytical and integrated study of urban sustainability, urban design, and the management of urban develop-ment. The two-year program is aimed at professionals in the fields of development, sustainability, architecture, engineering, surveying, and planning—including architects, planners, land economists, landscape architects, property developers, urbanists, and those working in the property finance sector.

“sustainability is becoming a goal of many city plans, and is increasingly informing the practice of architecture, urbanism, landscape design, and environmental planning,” notes Johnathan Michie, direc-tor of Oxford University’s department for continuing education. “Given the growing worldwide pressure for identifiable change in this crucial area, this is an appropriate time to launch an applied postgraduate course aimed at early and mid-career practitioners currently working [in] these sectors.”

The program, says Hank Dittmar, chief executive of the Prince’s Foundation for the built environment, “will give professionals in any of the key disciplines the multidisciplinary skills they need to plan and development sustainable cities, towns, and districts.”

For more information about the master’s program in sustainable urban development: http://cpd.conted.ox.ac.uk/msud/default.asp.

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The green building market is projected to double over the next five years. For virtually all real estate and construction professionals, knowledge of the latest principles and practices in sustainable design, construction, and development is now essential. The NYU Schack Institute of Real Estate offers a variety of sustainability-focused programs, through Master’s degrees, professional certificates, and a wide range of continuing education courses.

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• The Master’s of Real Estate Development and Urbanism (MRED+U) at the University of Miami is an interdisciplinary one-year graduate program that combines the fundamentals of real estate development with livable community design. • The MRED+U Program provides students with the skills and experience to compete in the evolving world of urban real estate development. • The curriculum is enriched by the University’s location in one of the most dynamic real estate markets in the world.

• The School of Architecture’s faculty provides outstanding experience in urban architecture, place making and community building. The School of Architecture was ranked number one in the nation for the study of New Urbanism in a survey conducted by New Urban News, and in 2007 was awarded the John Nolen Medal for Contributions to Urbanism in Florida.

• The program combines the strengths of the University of Miami’s School of Architecture, School of Business Administration, Law School, and College of Engineering.

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Developers, has taught green con-struction technology at ASU’s MRED program; in mid-July, he was named director of ASU’s master of real estate devel opment program, replacing Loope. The MRED program, which was started within ASU’s College of Design, recently was moved to the school’s W.P. Carey School of Business.

Terrence Farris, director of the Clemson University MRED program

in Clemson, South Carolina, and the former director of the development division for the city of St. Louis, Missouri, incorporates green de -velopment, brownfields, financing, and tax incentives into a course on public/private partnerships.

At both Clemson and the Uni-versity of Maryland in College Park, a common standard in sustain-ability is the triple bottom line,

a term coined by corporate social responsibility expert John Elkington in 1994. Margaret McFarland, director of Maryland’s MRED program, tweaks it, she says, to become the “quadruple bottom line. According to the triple bottom line, we must be account-able socially, environmentally, and fiscally,” notes McFarland. “Students must learn a fourth element: the im -portance of a beautiful building, as the greenest building is the one we don’t have to tear down.”

New York architect and developer Gregg Pasquarelli emphasized this fourth element at the Maryland program’s spring 2009 symposium, which focused on the complexi-ties of “Sustainable Development: Smart, Adaptive, and Green.” Carl Bovill, a professor from Maryland’s architecture school, teaches a sus-tainable architecture course. James Cohen, a professor of planning, teaches growth management, which has been a required course for the MRED students. Maryland’s MRED will offer a new course this fall titled, “Practical Issues in Sustainability for Business, Finance, and Real Estate,” taught by Dan Winters, a member of the USGBC financing committee.

Clemson students visit develop-ments in Atlanta, Charlotte, and Savannah. Farris also accompanies his first-year students on a two-week trip to the South Carolina coast, where they visit an array of smart growth developments and some of the first modern planned communities in the country.

Students in Maryland’s MRED program also have the chance to participate in the Solar Decathlon, a competition staged in Wash-ington, D.C., in which university students compete to design, build, and operate the best solar-powered house. Maryland’s MRED students who want to participate in the competition can take the energy policy and practice course taught by Matthew Ferguson, head of the energy practice at the Reznick Group, a national accounting and consult ing practice headquartered

in Bethesda, Maryland. This fall, CoStar, a commercial real estate research provider, also based in Bethesda, will be beta-testing a course on the enhanced value in commercial buildings with Energy Star or LEED ratings.

To cap off the degree program at each of the three universities given as examples here, the directors chal-lenge the students with cumulative projects that incorporate all aspects of the curriculum. These are referred to as synthesis projects at ASU, where students create viable plans for development, including financial backing and feasibility studies, all with respect to sustainability. Mixed-use and transit-oriented developments are recent additions to project typologies.

Two similar practicum courses, as they are called at Clemson, are taught by Jeff Randolph, head of the green building sector at the Ran-dolph Group, a residential develop-ment firm in South Carolina, and Robert Benedict, a former developer pursuing a PhD in environmental design and planning. “We try to present one commercial and one residential challenge to the stu-dents in their last semester,” Farris explains. “Four teams compete to prepare feasibility analyses that meet the triple bottom line for real deals in Atlanta, Charlotte, or South Carolina, and the winning team receives a fellowship.”

As a research-based institu-tion, Maryland requires a graduate thesis. The focus is on a full project feasibility study, not just a single topic. During the final capstone course, students work in small groups with a developer to plan the redevelopment and positioning of a site. Each student is required to incorporate the quadruple bottom line and all aspects of sustainability into the plans.

Taking advantage of their train-ing in sustainability, a number of graduates from programs such as these have already found them-selves green careers. Even before graduating, Philip Beere, ASU MRED

84 U r b an La nD A u g u s t 2 0 0 9

in practice

University of Colorado at Boulder Leeds School of Business Working on New Green Development Standards Research, along with Vail Resorts The University of Colorado at boulder Leeds school of business and Vail resorts, Inc., are partnering on research that will create new green development standards. Faculty and gradu-ate student leaders from the real estate Center at Leeds will col-laborate with the Initiative for sustainable Development and the school of engineering and Applied science on the project. The research collaboration is expected to provide a comprehensive resource for integrating green design and sustainable building methods into both residential and commercial developments, and create a more holistic approach to internal green building codes for all stakeholders such as developers.

Development teams, executives, and managers across the development industry will have access to resources from the research including a searchable database that will provide access to advanced real estate development solutions. These research materials will cover all aspects of development, giving designers and builders the framework to plan and execute green projects from initial due diligence to operations.

Dennis Ahlburg, dean of the business school, says the project is an avenue for educating students about emerging sustainable practices. “Our students will have a firsthand look at current and emerging best practices in sustainability in the real estate development industry. They will have a hand in creating the com-prehensive resources to be made available to all development professionals; this takes them way beyond the classroom.”

Information about the Colorado University Real Estate Center at the Leeds School of Business, University of Colorado at Boulder, can be found at http://leeds.colorado.edu/realestate.

University of Colorado’s Leeds School of Business also has a newly estab-lished Initiative for Sustainable Development that operates within the Real Estate Center, with the intent of crossing disciplines to pull together ideas in sustainable land use and real estate. For information, visit www.cufund.org.

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2008, launched Green Street De -velopment, which provides devel-opment and consulting services for green building, and built the third LEED-certified home in the country. He is currently working on a 50-unit sustainable community in Phoenix. Bambi Tran, UMD MRED 2008, has started a consulting firm of her own. “Doing it Green” works with developers to teach them how to “do it [green building] right.” Before graduating, Charles Rulick, Clemson MRED 2007 and LEED AP, joined Forest City Enterprises to lead research on retail tenant sustain-ability practices. After graduating, he returned to Forest City to work on various sustainability projects. He is currently a senior consultant with Australia-based GHD in Char-lotte, working with developers to create new value through sustain-

able practices and integrated urban planning solutions.

Whether through green train-ing, networking opportunities with developers, or the outcome of a final thesis, students in real estate devel-opment programs are learning how to be effective participants in green development. UL

Joan Capelin is a New York–based public relations consultant to real estate developers; construction, architecture, and design firms.

in practice

MacArthur Foundation to Support New Master’s in Development Practice ProgramsGrants totaling $7.6 million will be awarded by the John D. and Catherine T. MacArthur Foundation to nine universities in seven countries to establish master’s in development practice (MDP) programs. Another $15 million has been committed to help create MDP programs at up to 15 universities worldwide over the next three years. The first of these programs will launch this fall at Columbia University in New York City.

The universities slated to establish MDP programs are:l emory University, Atlanta, Georgia;l The energy resources Institute University, New Delhi, India;l James Cook University, Cairns and Townsville, Queensland, Australia;l Tsinghua University, beijing, China;l University of Cheikh Anta Diop, Dakar, senegal;l University of botswana, Gaborone, botswana;l University of Florida, Gainesville, Florida; andl University of Ibadan, Ibadan, Nigeria.

Additional information at www.macfund.org.

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proactive

Brewing Power

The production of beer requires a large amount of uninter-ruptible heat and power. On a quest for stable and sustainable energy at reasonable prices, Chico, California–based Sierra Nevada Brewery has turned to stationary fuel cells for heat and power for its building and brewing operations.

Earlier this decade, California’s antiquated electrical grid sent rolling blackouts throughout the state, forc-ing millions of homes and businesses to deal with unexpected power out-ages. “It was very important to have a reliable clean source of power,” says Bill Manley, communications director for brewery. “We brew batches of 800 barrels at a time. If we lose power at any point during the process, then we will have a significant loss on our hands.” The outages and California’s energy market deregulation com-bined to create unpredictable power and disruptive price fluctuations.

Fossil fuel–based central power plants typically transform only about a third of their British thermal unit (BTU) input into electricity, losing the remaining potential energy output to heat and transmission losses. By generating its own power through distributed power generation tech-nologies, the brewery could elimi-nate a large proportion of these losses and dramatically reduce its environmental impact.

The 14-acre (5.7-ha) plant operates 24 hours a day, seven days a week, brewing 700,000 barrels of beer a year. The need for continuous power ruled out both solar photovoltaic and wind power, which require a steady source of sun or wind to maintain full power. The company initially turned to conventional gas-powered generators, but upon learning that the Danbury, Connecticut–based company FuelCell Energy had in -stalled its first commercial station-ary fuel cell to power the Kirin

brewery in Japan, Sierra Nevada decided to do the same.

Fuel cells create electricity through an electrochemical process that pro-duces energy by combining hydro-gen and oxygen into water. Like gas engines, fuel cells can use natural gas or biogas hydrocarbons as the source of hydrogen fuel. Unlike those engines, however, they discharge very few harmful emissions.

Invented by English physicist William Grove in 1839, the fuel cell has long been heralded as a next-generation power supply. Expensive components, limited hydrogen gen-eration, and meager power output left the technology to scientists until the 1960s when NASA needed a power source for prolonged space missions. Fuel cells emerged as the best solution and were used to power Apollo and Gemini. The tech-nology has matured and fuel cells have proven to be a reliable source of clean and quiet power. They are particularly viable for isolated loca-tions without grid access or where installing new service is cost pro-hibitive or disruptive.

In 2004, the brewery signed a five-year agreement with FuelCell Energy to install and operate four 250-kilowatt fuel cells. The fuel cells have since been improved to a 300-kilowatt rating, supplying 1.2 megawatts of power (enough to power 800 to 1,300 homes) and approximately 55 percent of the plant’s current power usage.

The small shipping container–sized fuel cells have three main components. First, the natural or methane gas passes through a reformer, where the gas is sepa-rated into hydrogen and carbon waste. It is then piped into the stack, where the electrochemical reaction occurs. The fuel is oxidized at the anode electrode, releasing electrons that move to the cathode

electrode via an external circuit. These electrons meet the hydrogen and push charged ions across the electro-lyte and cause hydrogen and oxygen to combine to form water. The direct current (DC) charge then passes through an inverter to become alter-nating current (AC), and is routed through the electric meter before powering the brewery’s equipment.

The brewery’s fuel cells use car-bonate, a melted mixture of lithium potassium salts, as the catalyst. Other types of fuel cells use different catalysts with different operating con-ditions. FuelCell Energy’s direct fuel cells operate at 47 percent efficiency with internal temperatures between 1,200 and 1,300 degrees Fahrenheit (649 to 704 degrees Celsius), which is necessary to separate the hydrogen from the gas fuel, producing waste heat at 650 to 750 degrees F (343 to 399 degrees C). They are called direct fuel cells because they create their own hydrogen from hydrocar-bon gases. Vehicle manufacturers have invested heavily in proton exchange membrane (PEM) fuel cells, which operate at a low tem-perature but require pure hydrogen and expensive metals, like platinum. Carbonate cells are able to achieve higher efficiencies with cheaper

The largest California craft

brewer cogenerates power

and heat for its brewery

from stationary gas-fueled

hydrogen fuel cells.

WiLL iaMp. MaChTsolution fi le

The production of beer requires large amounts of uninterruptible heat and power. The need for continuous power at the Sierra Nevada Brewery in Chico, California, ruled out both solar photovoltaic and wind power, which require a steady source of sun or wind to maintain full power, or large battery arrays for storage. Stationary fuel cells provide continuous power and heat.

88 U r b an La nD A u g u s t 2 0 0 9

materials. “They are particularly well suited for applications that have a high-heat power system structure, like the brewery,” FuelCell Energy’s Joseph Heinzmann explains.

To make use of the approximately 700-degree F (371-degree C) exhaust heat, the brewery installed heat-recovery units on each fuel cell. The exhaust is then piped into the brewery where it is used for boiling processes. By utilizing the heat cre-ated by the fuel cells, the brewery is able to extract much more of the BTU input of the hydrogen. They effectively operate at efficiency rates as high as 65 percent, versus conventional power plants that typically operate at efficiencies of 30 to 35 percent.

“Fuel cells are the perfect applica-tion for us because they produce a constant and quantifiable source of power and heat,” Manley notes. “The brewery relies on pitch-perfect temperature control, both in the actual brewing process through heat-ing water and the wort [a sugar-sat-urated liquid and hops], and most critically during fermentation when yeast is added to the wort. If the temperature is too hot, the yeast will be stressed and will produce drastic off-flavors; the yeast could even die off and leave the wort unfermented. On the other hand, if the yeast is too cold, it will go dormant and not consume any of the sugars.”

The fuel cells also power heating and cooling systems for the plant’s large storage tanks. “We have capac-ity to house millions of gallons of beer at one time. Midday summer temperatures in Chico can reach over 110 degrees. If the temperature sys-tems fail, that would be a cataclys-mic loss of product,” Manley says.

FuelCell Energy has installed fuel cells for bakeries, manufacturers, hotels, jails, hospitals, universities, and wastewater treatment plants. The company forecasts a general cost range of 10 to 16 cents per kilo-watt-hour, depending on natural gas prices. The Sierra Nevada fuel cells were also fitted to use methane-rich

biogas created by the brewery’s on-site wastewater treatment facil-ity. The brewery power plant is the first fuel cell installation that can operate on either fuel or a mixed blend. When using the biogas gener-ated on site, the energy cost drops to below 7 cents per kilowatt-hour.

Sierra Nevada used a combination of tax credits and incentive programs to cover almost two-thirds of the $7.1 million installation cost. The brew-ery received a little over $1 million through federal investment energy tax credits that offer 30 percent of capital cost, up to $3,000 per kilowatt.

The largest single sum received was a $2.4 million rebate from Pacific Gas and Electric Company through the California Public Utilities Com-mission’s Self-Generation Incentive Program (SGIP). The program was established in 2000 to offer incen-tives to businesses to develop distrib-uted power sources linked to the grid.

Sierra Nevada also received a $1 million grant from the U.S. Depart-ment of Defense Climate Change Fuel Cell Program, a joint program set up in 1996 with the Depart-ment of Energy to promote fuel cell energy. The brewery paid the remaining $2.5 million out of pocket. The electricity bill was immediately halved, although the doubling of the natural gas bill reduced those sav-ings. Since installation, the fuel cells

have generated over 6.5 million kilo-watts. With incentives, the brewery expects a six-year payback.

The plant recycles 99.5 percent of its solid waste, processes its waste vegetable oil into bio-diesel, recycles wastewater, recovers CO2, and raises its own grass-fed cattle for its 350-seat restaurant.

In 2006, the brewery installed photovoltaic panels over its roof-tops and a mechanical sun-tracking array over its parking lot. Together, the nearly 10,000 solar panels complement the fuel cells with an additional 1.9 megawatts of energy. When generating more power than the brewery needs, Sierra Nevada sends excess electricity back to the grid and receives a credit from Pacific Gas and Electric. This often occurs during peak energy usage periods, so the brewery fetches a higher price for its generated power than the price it pays PGE when needing additional electricity on nights and overcast days. The plant now self-generates nearly 85 percent of its own power.

Fuel cells that operate on pure hydrogen do not create any emis-sions but water, but direct fuel cells that take their hydrogen fuel from gases do create emissions during the reformer process when the hydrogen is separated. It is classified as hazard-ous waste because of the presence of

mercaptins, the sulfur chemicals that are added as a safety precaution to natural gas to give it an odor.

Unlike hydrogen-powered vehi-cles, the technology for stationary applications is already here. Most of the country has the existing natural gas infrastructure to supply hydro-gen, and early-adopter companies like Sierra Nevada have now shown its reliability. Though still a small part of the market, stationary fuel cells have proven to be economi-cal for projects with high power and heat needs. They now power hotels, supermarkets, data centers, hospitals, universities, jails, call centers, post offices, and numerous industrial plants. The self-contained modules are easily transported where needed and can be linked to provide as much power as needed.

Since buildings consume 40 percent of all U.S. energy and 70 percent of its electricity, building developers, owners, and tenants may begin to choose distributed generation systems for stable clean energy and heat. UL

William p. maCht is a professor of urban planning and development at the Center for Real Estate at Portland State University (PSU) in Oregon and a development consultant. PSU graduate student Shadrach Pilip-Florea researched and initially drafted this profile. (Comments and proposals for future profiles can be directed to the author at machtw@pdx.edu.)

solution file

The fuel is oxidized at the anode electrode, releasing electrons that move to the cathode electrode via an external circuit. These electrons meet the hydrogen and push charged ions across the electrolyte and cause hydrogen and oxygen to combine to form water. The direct current (DC) charge then passes through an inverter to become alternating current (AC), and is routed through the electric meter before powering the brewery’s equipment. Waste heat is captured and transferred to the brewery.

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Making a Visible Difference in the Real Estate and Land Use IndustryThe ULI Foundation, the philanthropic arm of the Urban Land Institute, provides essential financial support for the core programs and initiatives (core research, education, and public service activities) that allow ULI to advance its mission of providing leadership in the responsible use of land.

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U r b a n L a n d I n s t I t U t e b o o k s t o r e Just Published!Moving Cooler An Analysis of Transportation Strategies for reducing greenhouse gas emissionsCambridge Systematics, Inc.The Urban Land Institute

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to Get a Whole Lot Smaller: Oil and the End of Globilization, Rubin details what’s happen-ing in the oil industry and argues that glo-balization will end as oil prices go up and oil availability goes down. No longer supported by abundant and cheap oil, the global economy, dependent on

moving things around the world, will shrink to more local dimensions.

More food will come from local fields and more products will come from local factories. We will drive less, walk more, and shop and work closer to home. Smart growth will be spurred by the high costs of transpor-tation, as well as rising interest rates, and distant suburbs may be depop-ulated and reclaimed by nature. New work opportunities may arise as triple-digit oil prices reduce China’s wage advantage and make Western workers competitive once again.

Rubin shows how cheap energy has powered our markets and shaped our tastes, and how its absence will upset much of contemporary daily life, starting with the things we eat. Atlan-

tic salmon is a case in point. Cheap shipping and Asian labor changed salmon from a local seafood to a global commodity. Caught off Norway, frozen, and shipped to China for processing and then refrozen and sent to U.S. supermarkets two months later, “fresh” salmon consumes much more energy in its production than it generates in its consumption.

The service sector will decline because the United States will have to produce many goods that the country previously could afford to import, such as cars, televisions, clothing, and steel. The things that will continue to be imported, such as coffee, will cost a lot more. The tech-nological innovations aimed at cut-ting down on both gasoline use and emissions, such as electric cars, will need major new sources of electricity that can come only from building new nuclear power plants as the United States turns away from burning coal.

Even if North America and Europe meet their Kyoto Treaty obligations, the growth in oil consumption and greenhouse gas emissions in the developing world will dwarf any declines in the developed world. Three years ago, China passed the United States, becoming the largest single emitter country in the world, and India and developing countries also are producing more cars and building more coal-fired plants.

Rubin believes that the answer to the worldwide problem of burgeon-ing emissions from the developing countries could be an appeal to their economic self-interest through imposing a carbon tariff. The first step is to enact a cap-and-trade policy at home, as the Obama Administration has proposed and the U.S. House approved in June. The second step is to impose a carbon tariff that goes up with increases in the emissions that have gone into producing goods for export. This would be more effec-tive than another round of Kyoto talks calling for voluntary cuts. Not only will it give an incentive to developing countries to reduce their

emissions, it could also bring long-lost jobs back to the United States, where manufactured goods can be produced for roughly half the carbon emissions.

Meanwhile, the United States needs to lessen the economy’s dependence on oil. Instead of supporting the auto industry and building freeways, transit subsi-dies should be increased. Solar and geothermal energy should be substituted for coal and oil. Land use planning for greenbelts and farmland preservation should be supported. Rather than propping up a collapsing way of life based on car-dependent suburbs, invest-ments should be made instead in redeveloping the country’s dense urban centers.

DaviD r. GoDSChalK is professor emeritus of city and regional planning at the University of North Carolina at Chapel Hill.

hungryCity:howFoodShapesOurLives

CArOLYN sTeeLCHATTO & WINDUs/rANDOM HOUse20 VAUxHALL brIDGe rOAD, LONDON sW1V 2sA; www.rbooks.co.uk2008. 383 pages. $16.50.

In Hungry City: How Food Shapes Our Lives, author Carolyn Steel, an architect, researcher, and teacher, posits that if we are “to understand cities properly, we need to look at them through food.” Hungry City advises us in no uncertain terms that “if the global future is urban, as every indication suggests it is, we need to take an urgent look at what that means.”

Steel examines the evolution of how we’ve fed ourselves from the beginning of man and ends the book by looking at the recent past and its idealized utopian settlements, then into the near future of a planned eco-city juxtaposed to a 31 million–person eco-disaster waiting to happen—Chongqing, China.

Before the discovery of agriculture there were no cities; hunter-gatherers tracked and killed beasts as their

92 U r b an La nD A u g u s t 2 0 0 9

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basic sustenance. Fast-forward and put simply, man discovered how to grow and store grain, a means that provided a surplus food source to sus-tain an emerging and organized civil society. The city was born. Since that time, the rural, the land in nature, has always mirrored the way we live and treat the source of our food.

The local market used to serve as the most convenient source of a family’s food, as well as a public center. Farmers grew crops and came to town to supply the demand. Although small farmers and produc-ers, along with local suppliers and retailers, faded from view for quite some time with the rise of large-scale grocery chains, farmers’ mar-kets are now beginning to supply the demands of “locavores”—i.e., people who are dedicated to consum-ing food that is grown or produced

locally—in much of the Western world. Yet, even though a greater awareness of the benefits of supporting local growers and markets has come about in recent years, most of the food we

eat now is produced and distributed by huge agribusiness conglomerates.

Along with the discussion of food supply and demand, Steel maintains that food insecurity in the developing world is directly connected to the abundance of food that is enjoyed in more developed countries. This connec-tion stems from a “global food system gone mad,” a modern food industry that “is a law unto itself,” and a transnational cartel with more political clout than government. Food battles rage, not just due to the power of the conglomerate, but because in the city, food and where it is purchased—whether in a public market or in a sidewalk café—represent society itself. Modern supermarkets have weakened the social glue where public life serves to hold cities together. They do not serve

as physical expressions of public life and public space, but as food “highways” where we rush through artificial light and air grabbing what we need as quickly as possible for the sake of convenience.

Hungry City deftly shows how food has played a crucial role in the way society has evolved and the urgent need to act on its impact on the planet. Our environment is dan-gerously compromised to feed the world. While prices rise, irreplace-able Amazonian rain forests go up in smoke to make way for beef and soya. What we eat—and how we get it—should be our primary envi-ronmental concern, not so much for the health of our bodies, but urgently for the health of our planet.

Debra hill is a writer who lives in Chapel Hill, North Carolina.

A u g u s t 2 0 0 9 U r ban La nD 93

proactive

Charles R. Kendrick, Jr.: Changing Communities

Having five years of experience running his own business by the age of 30, Charles Kendrick made his way quickly into commercial real estate. At the age of 24, after graduating from Princeton University with a BA degree in architecture, Kendrick was hired to run a small independent Maryland country school. “The head of an indepen-dent school, in contrast to a public school, hires the faculty, sets the budget, raises the money, enrolls the children, among many other responsibilities. You are, in effect, the CEO of a tiny business,” he acknowledges.

After receiving an MBA degree in finance from George Washington University, Kendrick decided to leave the independent school in Maryland and pursue opportunities with real estate developer James Rouse. “I was incredibly lucky to get a start in the business with Jim Rouse,” he says. “It was because of Jim Rouse—and the way he did business—that taught me what is the true business of real estate, the business of com-panies building communities.”

During his time at the Rouse Com-pany, Kendrick was a development director. In the 1970s, he worked on multifamily housing in Columbia, Maryland. Later, he focused on the creation of major retail developments, including the development of down-town mixed-use projects as well as regional shopping centers and malls.

Kendrick eventually left the Rouse Company to go work in the public sector. From 1979 to 1983, he worked in the Office of Urban Development Action Grants (UDAG) of the U.S. Department of Housing and Urban Development (HUD). In 1983, he was appointed the deputy direc-tor of UDAG. Kendrick eventually returned to the private sector as a partner of the First Winthrop Corpo-ration, a real estate firm based in

Boston, where he managed a port-folio of more than 400 properties worth $6 billion.

Kendrick has served as a trustee during 14 of his 25 years as a mem-ber of the Institute. During the past quarter of a century, he has served as a ULI vice chair overseeing the District Councils Chairs Advisory Group, was the founding chair of both the ULI Inner-City Council and the ULI Affordable Housing Council, has served on numerous Awards for Excellence committees, and was a juror of several Hines Urban Design Competitions. He has also been fre-quently selected to chair ULI advisory services panels.

“My whole business life has been constructed around a double-bottom-line approach to real estate,” he explains. “This means not only making money, but also building and creating some kind of com-munity value. One of the reasons I have spent so much time with ULI is because [the Institute] fits this idea very well. ULI is not only pursuing a mission, but it is also a collection of people surrounding land use and real estate and com-munity development, who are real good at doing that as a business.”

His advice to young people just starting their professional careers in today’s market: “Look for anomalies and see what needs to be changed. As bleak as it looks, real estate is not going to go away and people are not going to stop growing. The physi-cal world is going to continue need-ing work and there are still things that have not yet been addressed.”

While Kendrick highlights the im -portance of keeping an optimistic outlook, he emphasizes the value of an organization, such as ULI, to the professional development of young people. “ULI is the most likely place where the intellectual content of land and community development

exists. There is more talent packed into ULI over a broad set of real estate activities than any other organization in the United States,” he confides. “Not only is it the best place to learn about all of the facets of the real estate business, but over time it gives you time to build an extraordinary Rolodex and your circle gets bigger and bigger. That is the advantage of doing this at a younger age.”

Kendrick says one of the most im -portant leadership skills he possesses is “not only knowing your goal, but being able to communi cate that goal to the people you work with.” This vital ability, he says, serves both old and young industry leaders: “You need to have people want to go with you, no matter where you lead. Effec-tive leaders have to have people who want to follow them.”

As for what he would like his legacy to be, Kendrick says there is no specific project he wishes to be remembered by. “It may go back to my time running a school, but I like being a mentor,” he says. “In the real estate business, people are driven by the physical part and changing the landscape. However, the thing that is most lasting is that you create an ongoing and growing set of people and ideas that can keep these communities thriving, growing, and changing.” UL

robert KrueGer is a communications associate at ULI.

Being fortunate enough

to have run a school and

worked for James Rouse

prepared Charles Kendrick

for leadership in real estate.

rOberT KrUeGertrustee profile

Charles Kendrick, Jr., is founder and senior vice president of Boston-based Clarion Ventures, LLC. He has spent more than 30 years as a developer, investment banker, and strategic adviser special izing in urban redevelopment projects and portfolios.

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augu s t 2 0 0 8 U r b a n La n D 95

Reg ional  S potl ight

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In lower Manhattan’s Battery Park City, Milstein Properties

is building two green residential towers on the last

parcels of land in the ground-breaking development.

When the structures—Liberty Green and Liberty Lux,

designed by Ehrenkrantz Eckstut & Kuhn

Architects (EE&K) of New York—open in

two years, they will contain 421 units as

well as a state-of-the-art 65,000-square-

foot (6,038-sq-m) community center.

Reg ional  S potl ight

New York/Massachusettsb y M i k e SheriD an

Via Verde, a new green affordable housing development in the south Bronx, will include simplexes, duplexes, and live/work units. The $100 million, 294,000-square-foot (27,313-sq-m) mixed-use development will serve residents with a range of incomes.

RS.indd 95 8/11/09 12:57:00 PM

Furthernorth,codevelopersJonathanRoseCompanies

(JRCo)andPhippsHouses,inpartnershipwithDatt-

nerarchitectsandgrimshawarchitects,hopetobreak

groundlaterthisyearonViaVerde,anaffordablehous-

ingdevelopmentinthesouthBronxthatwasthewin-

ningentryinNewYorkCity’sfirstjurieddesigncompeti-

tionforaffordable,sustainablehousing,theNewHousing

NewYorkLegacyProject(NHNY).Comprisingtraditional

apartments,duplexes,andlive/workunits,the$100mil-

lion,294,000-square-foot(27,313-sq-m)mixed-usedevel-

opmentwillserveresidentswitharangeofincomes.

andinQueens,VornadoRealtytrusthasbegun

constructiononthe$550millionRegoParkCenter,a

mixed-usedevelopmentthatisoneofthefirstattempts

tobringbig-boxretailtoanurbaninfilllocation.three

floorsofretailspace—694,000squarefeet(64,474sq

m)—willsupplementtheexistingmallsinthearea;a

pedestrianpromenadewilllinktheRegoretailwithsur-

roundingresidentialstreets.

toparaphraseMarktwain,thereportsofthedeath

ofNewYorkCity’srealestatemarketmaybeexagger-

ated.RealestatedevelopmentisstilloccurringintheBig

apple,notesPaulMadden,anassociateanddirectorof

projectsforNewYorkCity–basedKennethParkarchi-

tects.thedifferencenowadays,headds,ismorecaution.

“Manydevelopersanddesignersarerethinkingtheirproj-

ectsandchangingtheminscopeandsizeasdictated

bycurrentprojectedmarketneeds,”Maddencontinues.

“thedevelopmentsarenotgoingtobethesameas

whentheywereinitiallyconceivedacoupleofyearsago.

Certainprojectswillmoveforward,butwe’llprobably

notseethesamepaceofdevelopmentaswe’veseen

intherecentpast.Eveninthiseconomicenvironment,

thereareplacesthatneedtobedevelopedandpeople

whowouldlovetodevelopthem.”

PaulFreitag,aregionaldirectorofdevelopmentat

JonathanRoseCompanies,theNewYorkCity–head-

quarteredmission-based,multidisciplinaryrealestate

development,planning,consulting,andinvestmentfirm,

emphasizesthatthereisalwaysaneedforaffordable

housinginNewYorkCity.JRCoanditspartnerswon

aninternationaldesigncompetitionfortheViaVende

sitelastyear.“Wewereaskedtocreateamodelforthe

nextgenerationofgreenaffordablehousingonanarrow,

brownfieldsitethatusedtobearailroadright-of-way,”

heexplains.“Itisanextremelychallengingsite,butwe

havebeenabletoholdtruetoourcompetitionproposal.

WeexpecttocloseontheViaVerdedevelopmentlater

inthefallandcompleteconstructionintwoyears.”

ViaVende’ssteppeddesignisintendedtointegratecity

andnature,withconnectedgreenrooftopsthatwillbe

usedtoharvestrainwater,growfruitsandvegetables,and

provideopenspaceforresidents,headds.“Withintheir

owndevelopment,ViaVerderesidentswillbeableto

haveawonderfulconnectionbacktonatureinthisvery

densesetting,”Freitagsays.“ViaVendeisdesignedto

exceedLEEDgoldstandardsforenvironmentallyrespon-

sibleandenergy-efficientdesignandwilldemonstrate

NewYorkCity’scommitmenttoinnovativedevelopment.”

Whilethecurrentrealestatemarketischallenging,

saysEricFang,anassociateprincipalatNewYork’s

EhrenkrantzEckstut&Kuhnarchitects,itisprovid-

ingopportunitiesforwell-thought-outdevelopment

bybuilderswhohaveconfidenceinthecity’sfuture.

“We’vealwaysfoundthisisthemostopportunetimefor

planning—atimetotakeastepbackandmakestrategic

decisionsinpreparationfortheupturn,”hecontinues.

“RockefellerCenterwasdevelopedinthemiddleof

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Construction has begun on the $550 million Rego Park Center, a mixed-use development in Queens designed by Ehrenkrantz Eckstut & Kuhn Architects. It is one of the first attempts to bring big-box retail to an urban infill location.

Spotlight/New York/Massachusetts

96 U r b a n La n D augu s t 2 0 0 9

Jeffrey T. Blau, The Related Companies, LP

Tavis Cannell ’06, Goldman Sachs

Brian Carr, Morgan Stanley

Michael Coster, Lazard Freres

Michael Fascitelli, Vornado Realty Trust

Michelle Felman, Vornado Realty Trust

Gary R. Garrabrant, Equity International

MaryAnne Gilmartin, Forest City Ratner Companies

Patricia Goldstein, Emigrant Bank

David Hodes, Hodes Weill & Associates

Nancy Lashine ’81, Park Madison Partners LLC

Thomas McDonald, Equity International

Paul Pariser ’78, Taconic Investment Partners LLC

Glenn J. Rufrano, Centro Properties Group

Edward Shugrue, Guggenheim Partners, LLC

Brian R. Steinwurtzel ’04, Newmark Knight Frank

Christopher Taube ’03, Aetos Capital, LLC

The Paul Milstein Center for Real Estate and Columbia Business Schoolexpress their appreciation to the following individuals and companies

for the preparation of teaching cases prepared for Columbia CaseWorks, 2008–09:

CBS HalfPgHoriz_V2:CBS HalfPgHoriz_V2 7/30/09 11:49 AM Page 1

thegreatDepression.BatteryParkCity,whichEE&K

designed,wasplannedduringadarkperiodinNYChis-

toryanditturnedout,likeRockefellerCenter,tobea

verygoodinvestment.”

sustainabilityisalsobecomingagoodinvestment,

Fangadds,notingthatEE&K’sfinaltwobuildingsinBat-

teryParkCityaregreenstructuresthatattesttothe

stayingpowerofsustainability.DesignedtoLEEDgold

certificationstandards,thetowerswillincludephoto-

voltaicpanelsonthebulkheadsaswellasablackwater

systemtocollectwaterfromthebuildingsandreuseit

fortoiletflushingandthecoolingtower.

Developersarealsoseekingflexibilityinstartingnew

developmentsincasemarketconditionschange.there

areplansforVornado’smixed-useRegoprojecttohave

aresidentialtowerthatcouldbebuiltwhendemand

returns,Fangsays.“Weprovidedforaresidentialcore,

soitwouldfitneatlywiththerestoftheretailcenter

whenthetimeisrighttobuildit,”hesays.

Whilefederalstimulusmoneyisalsoexpectedto

benefittheNewYorkrealestateindustry,saysMadden,

mostdevelopersarewaitingtoseewhentheeconomy

improves.“thereisnotasmuchmovementgoingon

nowastherewas18monthsago,”hesays.“Develop-

ersofsomelargeprojectsthatwillbedeliveredseveral

yearsdowntheroadareproceeding,butevenretailers

havebecomemorecautious.KPaisworkingonseveral

projectsthatareinthepreliminarystages,butdevelop-

mentisexceedinglyslowandbeingundertakenwith

utmostcaution.”

Fundingfordevelopmentremainstight,butthatis

changing.JoshuaKahr,founderandprincipalofNew

YorkCity–basedKahrRealEstategroup,saysthatwhile

therealestatecreditmarketsforthemostpartremain

frozen,thereappearstobeaslightthaw.“Moneyis

availableformultifamilybecauseFannieMaeandFreddie

Macarefinancingit,”hesays.“Butmostofthebanksare

notreallylending.Itseemsalittlemorepositive,though,

withpeoplewillingtohavediscussionsaboutlending

theyweren’thavingbefore.thetoneofphonecallswith

financiersanddevelopershaschanged,becomingalittle

morefriendly,sothat’sagood,positivesign.”

InNewYorkCity,headds,therehasbeenonlyone

majorofficebuildingsale—1540Broadway—thisyear.“It

involved68percentsellerfinancingandreportssaidit

wassoldfor40percentofwhat[NewYorkrealestate

developerHarry]Macklowepaidforitthreeyearsago,”

Kahrcontinues.“Whenvaluationsdropthatmuch,it’s

notagoodsign.”

theu.s.treasuryDepartment’splanstostabilizethe

realestatefinancialmarkets—between$75billionand

$100billionisanticipatedtobefunneledintothePublic-

PrivateInvestmentProgram(PPIP)whilethetermasset

LoanFacility(taLF)mayeventuallybuyupto$1trillion

infinancialassetsincludingcommercialandresidential

mortgages—isexpectedtohavesomepositiveeffect

onthemarket,saysKahr.“therearealotofpeoplestill

tryingtogetcashtogethertobuybuildings,”hesays.

“We’reseeinglendersstartingtoselloffcommercial

assetstosomeextent,butasofyet,therehavenotbeen

alotoftransactions.atsomepoint,thiswillhaveto

change.thebankscan’tjustridethisout.”

CommercialtenantsintheBigapplearewaitingas

longastheycanbeforesigningonthedottedline,says

Raymonda.sanseverino,apartnerintheNewYork

officeofinternationallawfirmLoeb&LoebLLP.“Earlier

thisyear,manybrokersbelievedthemarketwascon-

tinuingtodeclineandlowerrentsorbetterconcessions

couldbehadinthemonthsahead,”headds.“Butwithin

thelastcoupleofweeks,leasingactivityisstartingto

increaseverymodestly.thismaybebecausecompanies

believethemarkethashitbottomorfirmsthatintendto

stayinbusinesscannolongerdefertheirdecisions.”

sanseverinoseesfewertransactionsandslowerdevel-

opmentinthesectorinthenearterm,sincetheneed

foradditionalofficespaceintheregionhaslessened.“I

believewewillseeatrendtogreenerprojects,inpart

toprovideacompetitiveadvantagetothosemarketing

theirspace,”headds.

FangofEE&Ksaysthatmanylarge-scaledevelop-

mentsplannedforNewYorkwillbeneededovertime,

addingthatsustainabilitywillremainasstronginthe

futureasitisnow.“Ibelievethatdeveloperswhotake

theinitiativenowtolaythegroundworkwillbein

thebestpositionwhendownturnheadsup,”hesays.

“Remember,RockefellerPlazawasbuiltinthemiddleof

thegreatDepression.”—M.S.

98 U r b a n La n D augu s t 2 0 0 9

Spotlight/New York/Massachusetts

Milstein Properties is building two green residential towers—Liberty Green and Liberty Lux—in lower Manhattan’s Battery Park City. The buildings were designed by Ehrenkrantz Eckstut & Kuhn Architects of New York.

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480 HAMPDEN STREET HOLYOKE, MA 01040

Contact ANDREW CRYSTAL or FRANCESCA MALTESE at 413.534.0243or email: clientservices@oconnells.com

See us at EACUBO, October 11-13, 2009, Atlanta, GA

Left: Village Commons, South Hadley, MA Above: Naismith Memorial Basketball Hall of Fame, Springfield, MA

HELPING CORPORATE, EDUCATIONAL, and INSTITUTIONAL CLIENTS

DEFINE, DESIGN, and REALIZE their REAL ESTATE GOALS.

OConnell_ULI_halfpg:Layout 1 8/5/09 8:05 AM Page 1

Research and training for policy and practice

www.lincolninst.edu | 113 Brattle Street, Cambridge MA 02138 | 617-661-3016

Workshops, conferences, and online coursesBooks, reports, and Land Lines magazine

Thanks To nimble enTrepreneursadjustingquickly

tothemarketbyofferingproductsthatareneededand

designersandarchitectswhocontinuetostresssustain-

ability,Massachusettsisexperiencingrealestatedevel-

opment.someagiledevelopershavemanagedtostay

aheadofthepackbysurveyingtheindustryandquickly

changingtheirplans,saysstevena.Heikin,vicepresi-

dentandseniorprincipalatBoston-basedICONarchitec-

ture,inc.“avenir,atransit-orienteddevelopment[tOD]

directlyabovetheMBta’sNorthstationrapidtransit

station—acrossthestreetfromthetDBanknorthgarden

andNorthstationcommuterrailterminal—wasrepo-

sitionedatthebeginningoftherealestatedowntown

fromacondominiumdevelopmenttorentalwithout

skippingabeatintheplannedconstructionschedule,”

hesays.“thefullypermittedprojectwassoldbythe

originaldeveloper,trinityFinancialofBoston,toarch-

stone,whiletrinityremainedontheprojecttomanage

construction.the242-unitstructure,whichincludes

30,000squarefeet[2,787-sq-m]ofground-floorretail,

wascompletedinJune.”

Infact,themarketforrentalhousing—whichwas

neveroverbuiltinMassachusetts—seemstoberegain-

ingstrength.“thisisparticularlytrueofaffordableand

workforcehousing,which,inahigh-costarealikeBoston,

remainsindemand,”hecontinues.Earlierthisyear,

governorDevalPatrickannouncedawardsof$108mil-

lionfromseveralstateandfederalaffordablehousing

programsandtaxcreditstosupport39affordablerental

housingprojectswithover2,000units.“Hemadethe

announcementatthesiteofspencerRow,aproposed

32-unitdevelopmentofthenonprofitChelseaNeighbor-

hoodDevelopers,”Heikinsays.“theprojectisoneoffive

projectsfundedthroughtheseawardsforwhichICON

architecture,inc.,whichspecializesinaffordablehousing

design,isservingasarchitect.”

ICONisalsoservingasarchitectandplannerontwo

moretrinityFinancialprojects.theHamiltonCanalDis-

trict,a15-acre(6-ha)mixed-usedevelopmentsitein

Lowell,hasreceivedstimulusdollarstofacilitateinitial

infrastructuredesignandconstruction,aswellastax

creditstohelpfinancetherestorationofthehistoric

appletonMillsintoaffordableartists’live/workunits,

Heikinadds.similarly,the206-unitWashingtonBeech

HOPEVIdevelopmentinBoston’sRoslindaleneighbor-

hoodreceivedbothtaxcreditsandstimulusdollars.“One

ofonlyfiveHOPEVIdevelopmentsnationallytoreceive

substantialHuDgrantsinthelastyearoftheBush

administration,thenewWashingtonBeechisalready

underconstruction,”hesays.

artstadig,vicepresidentofWalkerParkingConsul-

tantsinBoston,afull-serviceengineeringandarchitec-

turefirm,saysMassachusettsdevelopers,designers,and

architectsaremoreoptimisticnowcomparedtothe

pastseveralmonths.“Peoplearebreathingalittleeasier

andemotionsaregettingalittlebitbetterintermsof

actualactivity,”heexplains.“Ithasbeenslowincoming,

butmanybelievewe’reatornearthebottom,sowe’re

lookingtowardslow,steadygrowththisyear—nothing

rapid—buthopefullybythistimenextyear,we’llfeelan

improvementinthedevelopmentsector.”

Bostonremainsa“prettysolid”realestatemarket

becauseforward-thinkingentrepreneurssawthedrop-

offindemandandadjustedthepaceofdevelopment,

stadigsays.“alotofpeoplehitthepausebuttonon

buildingandslowedorstoppedworkonalotofoppor-

tunitiesthathadbeenoutthere,”hesays.“Everyone

thinksitwillcomeback;probablybytheendofnext

year,we’llseeanuptickandmoveforwardagain.Down-

townBostonlooksprettysolid.We’vebeenhitbythe

100 U r b a n La n D augu s t 2 0 0 9

Cu

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Spotlight/New York/Massachusetts

ICON is the architect and planner for the Hamilton Canal District, a 15-acre (6-ha) mixed-use development in Lowell.

bay State builders adjusting to the new Market

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Old Colony Square, a mixed-use, retail-anchored project outside Boston designed by Cubellis, is expected to be completed by next spring.

RS.indd 100 8/11/09 12:57:06 PM

MassHousing is the leading provider of financing for affordable housing in Massachusetts. Learn more about our commitment to environmentally sustainable affordable housing in urban areas by visiting our website at

www.masshousing.com.

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Our commercial development plans are a responsible combination of nature and economic growth. Use of green building techniques protect the environment and our location protects a proud farming industry. All of which offer unique views of the local commute. Go to admakepeace.com to learn more.

economyjustasbadlyasanyoneelse,butithasn’tbeen

asdevastatinghereyet.”

Overall,theMassachusettseconomyappearstobe

stabilizing,agreesRichardW.Rankin,principalatBoston-

basedCubellis,anationalarchitecture,interiordesign,

andengineeringservicesfirm.Headdsthatmanystrong

retailrealestateinvestmenttrusts(REIts)areraising

capitalandseekingopportunitiestocapitalizeonthedis-

tressedmarketandpositionthemselvesfortheexpected

developmentuptick.“Firmsarepositioningthemselves

forthefuture,”hesays.“Currently,we’reseeingmore

repositioningofexistingcentersandmanyownersare

spendingdollarsnowtoupgradetiredproperties.”

ConnellCohassetgreenbushLLChasbrokenground

onOldColonysquareatCohassetstation,amixed-use,

retail-anchoredprojectintheheartofatODdistrict,he

pointsout.thedevelopmentincludesatwo-storybuild-

ingwith32,000squarefeet(2,972sqm)ofretailspace

onthegroundand16luxuryapartmentsaboveaswellas

afreestanding3,400-square-foot(316-sq-m)retailpad.

thesitewasformerlyhometoaboatstorageyardand

asmallretailcenter.OldColonysquareisexpectedto

becompletedbynextspring.“Newdevelopmentisjust

inchingalong,”Rankinsays.“theremaybesometenta-

tiveoptimismoutthere,andthingsmaystarttoimprove

towardendofthisyearorthebeginningof2010,if

creditmarketsloosen.”

thestatecapitalisexperiencingleasingactivity,

althoughthevelocity—signedleaseactivity—ismodest,

saysRonaldK.Perry,executivevicepresidentofBoston-

basedbrokeragefirmColliersMeredith&grew.Henotes

thatannualleasevelocityforeachofthepastthree

yearshasbeenroughly5millionsquarefeet(464,515

sqm),andwaswellbelowthatpacethroughthefirst

halfof2009.thebulkofleasingactivityhascomefrom

smalltomid-sizedtenants(under25,000squarefeet

[2,322sqm])orrenewals,suchasDeloitte&touche’s

first-quarterrenewalfor190,000squarefeet(17,651sq

m)at200Berkeleystreet.

tenantsareseekingvaluewithrespecttorentsand

relocationalternatives,Perryadds.“thedownwardpres-

sureonrentswillcontinueuntiltheadditionofsublease

inventorysubsides,”hesays.“thedevelopmentpipeline

foranysizableconstructionprojectswillbestalleduntil

asenseofconfidenceandstabilityreturnstothecapital

markets.”

OneofthehottestemergingtrendsintheMassachu-

settsrealestatemarketplaceisacquiringmortgagedebt

fromlendersatdiscountedprices,saysandrewH.Kara,

anattorneyintheBostonofficeoffull-servicelawfirmof

Hinckley,allen&snyderLLP.“Buyersofdiscounteddebt

canpotentiallyachieveveryhighratesofreturnthrough

eitherforeclosingamortgageandobtainingownership

ofthemortgagedproperty,collectingmonthlymortgage

paymentsatadefaultrateofinterest,orbeingpaidoffat

theoriginalprincipalamountofthemortgageloanwhen

itwaspurchasedatasubstantialdiscount,”hecontinues.

Whilepurchasingcommercialmortgageloansat

discountedpricesseemslikeagreatopportunityfor

investors,thereareanumberoflegalissuestobecon-

sidered,hecautions.“Buyersofcommercialrealestate

mortgagesaregrantedveryshortperiodsoftime—

sometimesaslittleasfivetosevendays—toconduct

theirduediligence,”hesays.“Inaddition,lenderswill

provideonlyverylimitedduediligenceinformationto

prospectivebuyersandoftenwillnotletbuyersvisitthe

properties.Finally,lenderliabilityunderstatelawsand

potentialbankruptcyfilingsbytheborrowercancreate

otherissues.”

Karasaysheisn’tworriedaboutthefutureofreal

estateintheBaystate.“WhiletheMassachusettsmar-

ketplace,likeothermarketplacesaroundthecountry,is

currentlychallenged,Massachusettspossessesanumber

ofuniqueattributesincludinghistoricallylimitednewcon-

structionbecauseofastringentpermittingprocess,one

ofthebestcollegeanduniversitysystemsintheworld,

andahostofthetop-tierhospitals,biotechcompanies,

andpharmaceuticalcompaniesthatwillallowittorecover

[morequickly]thanothermarketswhentheeconomy

stopscontractingandstartstogrowagain,”hesays.

Mike SheriDan, who studied real estate in Japan as a

Fulbright Scholar, is a freelance writer in Parsippany, New

Jersey.

Avenir, a recently completed transit-oriented development directly above the MBTA’s North Station rapid transit station in Boston, was designed by ICON architecture, inc.

Spencer Row is a proposed 32-unit development of the nonprofit Chelsea Neighborhood Developers outside Boston. ICON architecture, inc., is the architect.

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102 U r b a n La n D augu s t 2 0 0 9

Spotlight/New York/Massachusetts

264 Beacon Street (p) 617.437.0150 Boston, MA 02116 (f) 617.437.7080 www.bostonia.com

Bostonia Partners LLC is a financial services firm with vast experience in developing creative financing structures including project finance, corporate and real estate finance, and asset securitizations. We have a considerable market presence in the single tenant, credit tenant lease arena with a concentration in federal government tenanted properties. Even with the ongoing difficulties experienced in the credit market, we con-tinue to originate new deals and have successfully completed several hundred million dollars in credit tenant lease financings over the past year. We design winning financial and strategic solutions to enhance our clients' ability to compete in an increasingly competitive marketplace.

SOLUTIONS

Innovative Financing

Advertising Report from Copley Wolff Design Group

Copley Wolff Design Group produced this advertising report and is wholly responsible for its contents.

WHAT MAKES A PLACE MEMORABLE?Copley Wolff Design Group excels in the design of open spaces that create such memorable places in the urban landscape. The Boston-based firm specializes in parks, streetscapes, therapeutic and children’s discovery gardens, pedestrian amenities, public plazas, green roofs and sustainability for all real estate markets.

In every project, CWDG’s staff of LEED-certified landscape architects, designers and planners considers all aspects to ensure and enhance active use. CWDG utilizes the integration of art and cultural and historic interpretation, environmental education, place-making and community participation to create landmark open space destinations.

From the fountain at the First Church of Christ to the iconic Frog Pond in Boston Common, Copley Wolff tackles design challenges of all magnitudes to create the vision, and solve technical installations while cooperating with all involved to create a place that people feel compelled to come and enjoy.

Copley Wolff Design Group’s ability to work with communities to make cities livable is most apparent in the Rose Kennedy Greenway project, the mile-long stretch reuniting Boston’s wharves, neighborhoods and downtown long separated by an elevated central artery. Participating in the design of the Wharf District Parks, Copley Wolff Design Group facilitated local input from 150 meetings for the $16 million, four-acre design covering four city blocks.

The result? An outside great room for gathering, nooks for picnicking and reading, four-season plantings of native species, water features including a centerpiece interactive fountain, historic teachable moments corresponding to the adjacent neighborhoods, and pathway connections east to west and north to south that truly bring the city together.

For more information about Copley Wolff Design Group, visit www.copley-wolff.com or call Tracy Smith at 617.654.9000.

Copley Wolff Design Group making places memorable

What is it about open space that makes a city truly livable – improving the quality of life for residents and visitors alike? Is it:

g the diversity of people you encounter?g the freedom to walk, sit, and gather in a safe and secure

environment?g the year-round activities that flexible outdoor space sup-

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g the walkable and accessible streetscapes?g the nearby neighborhood parks and playgrounds? g finding a place to sit quietly or join in a group activity?g that place that you always want to walk through, sit in or

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Is it a place that you discover, experience and remember?

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As members of the US Green Building Council,Hurt & Proffi�’s LEED Accredited Professionalsprovide energy efficient, environmentally-responsible designs. In our ongoing effort tointegrate sustainable design into our everydayprac�ces, our LEED Accredited Professionals,demonstrate knowledge of green buildingprac�ces and principles. Call us today to findout more about how we can help on yournext project.

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urbanland magazine

cominginoctober2009

bestLenders,attorneys,accountants,consultants,brokersandinvestorsguideShowcase your firm to the members of Urban Land, the leaders in real estate development……..the development firms who are initiating and developing new projects all over the world.

ratesstartatonLy$495!***This Guide will be included in the October issue of Urban Land magazine which will be distributed at ULI’s Fall Meeting in November in San Francisco.***

To receive an advertising form and to find out more information on advertising in this Guide, call 202-624-7042; Email: carmelaa@uli.org

UL Aug 09 Cal&BP.indd 107 8/11/09 1:56:28 PM

Business Card or(NEW) Informational

Card in Color

SpECIal OffEr New Size and Color

Now advertise your Business Card …. or Informational Card in a larger size….

and color at a special rate!

For more information on this “Special Offer” and to reserve your space, call: 202-624-7042;

Email: carmelaa@uli.org

Business C

ard Pages

108 U r b an La nD a u g u s t 2 0 0 9

Business C

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a u g u s t 2 0 0 9 U r ban La nD 109

Business C

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Business C

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r e g i s t r y o f a d v e r t i s e r sA.D. Makepeace. . . . . . . . . . . . . . . . . . . . . . . . . .101www.admakepeace.com

Akerman Senterfitt . . . . . . . . . . Inside Back Coverwww.akerman.com

Ameron International . . . . . . . . . . . . . . . . . . . . . .81www.ameronpoles.com

Arrowstreet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10www.arrowstreet.com

Bank of America Merrill Lynch . . . . . . . . . . . . . . . 1

BartonPartners. . . . . . . . . . . . . . . . . . . . . . . . . . . .18www.bartonpartners.com

Boomerang Automated Parking Systems . . . . . 33www.boomerangsystems.com

Bostonia Partners LLC . . . . . . . . . . . . . . . . . . . .103www.bostonia.com

The Business Card Pages . . . . . . . . . . . . . 108-110

Carol Johnson Associates . . . . . . . . . . . . . . . . . .27www.crja.com

Clemson University . . . . . . . . . . . . . . . . . . . . . . . 85www.clemson.edu/mred/

Columbia Business School . . . . . . . . . . . . . . . . .97

Copley Wolff Design Group . . . . . . . . . . . . . . . .103www.copley-wolff.com

The Cordish Company . . . . . . . . . . . . . . . . . . . . . .5www.cordish.com

EDSA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41www.edsaplan.com

Goulston & Storrs . . . . . . . . . . . . . . . . . . . . . . . . . .7www.goulstonstorrs.com

Green Experts Resource Guide . . . . . . . . . 104-107

Greenhaus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41www.greenhaus.com

Group RCI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 www.theregistrycollection.com

IBM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2www.ibm.com/think

Kenneth Park Architects. . . . . . . . Inside Front Coverwww.kennethpark.com

Lifescapes International, Inc. . . . . . . . . . . . . . . .81www.lifescapesintl.com

Lincoln Institute of Land Policy. . . . . . . . . . . . . 99www.lincolninst.edu

LSG Landscape Architecture . . . . . . . . . . . . . . . 32www.lsginc.com

Mansfield, Texas . . . . . . . . . . . . . . . . . . . . . . . . . .18www.Mansfield-Texas.com

MassHousing . . . . . . . . . . . . . . . . . . . . . . . . . . . .101www.masshousing.com

Moffat & Nichol . . . . . . . . . . . . . . . . . . . . . . . . . . .79www.moffattnichol.com

New York University School of Continuing and Professional Studies. . . . . . . . . . . . . . . . . . 83www.scps.nyu.edu/realestate

OBM International. . . . . . . . . . . . . . . . . . . . . . . . .79www.obmi.com

O’Connell Development Group . . . . . . . . . . . . . 99

Old Dominion University . . . . . . . . . . . . . . . . . . 86www.bpa.odu.edu/bpa/departments/finance.shtml

PNC . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Back Coverwww.pnc.com/realestate

Reznick Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3www.reznickgroup.com

Riddell Tseng . . . . . . . . . . . . . . . . . . . . . . . . . . . . .77

SK&I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15www.skiarch.com

Spinnaker Real Estate Partners . . . . . . . . . . . . 29

Stantec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9www.stantec.com

Steven Kratchman Architects, P.C.. . . . . . . . . . .97www.KratchmanArchitects.com

Syska Hennessy Group . . . . . . . . . . . . . . . . . . . .31www.Syska.com/WateringCan

Torti Gallas and Partners . . . . . . . . . . . . . . . . . . 89www.tortigallas.com

ULI Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

University of Maryland. . . . . . . . . . . . . . . . . . . . 85

University of Miami School of Architecture. . . . . . .83 http://mredu.arc.miami.edu/

USAA Real Estate Company. . . . . . . . . . . . . . . . .57www.usrealco.com

Victor Stanley, Inc. . . . . . . . . . . . . . . . . . . . . . . . .17www.victorstanley.com

The Wall Street Journal. . . . . . . . . . . . . . . . . . 6, 56WSJ.com/CommercialRealEstateWSJ.com/RealEstate

Wells Fargo. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89www.wellsfargo.com/realestate

WLS Lighting Systems . . . . . . . . . . . . . . . . . . . . .15

augu s t 2 0 0 9 U r b a n La n D 111

urbanlandbusiness card pages?

Why Advertise in the

Now more than ever, it is the RIGHT time. Showcasing your firm in the Business Card

Pages is an affordable and effective way to highlight your firm’s services to ULI’s global

membership. Especially at this time, marketing tools need to be effective, yet economical.

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THIS IS WHErE bUSInESS STarTS!

Put color in your business card! Business Card Ad Packages are offered in increments of 6 consecutive months or 12 consecutive

months, with color or B&W. The size of each business card is 2-1/4” x 1-1/2”; Informational Card:

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top tier decision makers. For more information on rates call: 202-624-7042; Fax: 202-624-7140;

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For “early bird” advertisers who place their business card before October 28, 2009,

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UL Aug 09 Cal&BP.indd 111 8/12/09 3:55:40 PM

112 U r b an La nD a u g u s t 2 0 0 9

akerman.com©2009 Akerman Senterfitt. All rights reserved. Prior results do not guarantee a similar outcome.* Green Building Certification Institute 2009.

DALLASDENVER

FT. LAUDERDALEJACKSONVILLELOS ANGELES

mADISON mIAmI

NEW YORKORLANDO

TALLAHASSEE TAmPA

TYSONS CORNER WASHINGTON, D.C. WEST PALm BEACH

Richard Bezold305.982.5657richard.bezold@akerman.com

AkermanHelping our clients better understand climate change risks and new energy opportunities, gets us all one step closer to a sustainable future. Akerman is proud to be one of the top 5* legal teams in the U.S. in number of LEED® accredited lawyers. With more than 140 real estate, land use, construction, environmental, and energy professionals, our team offers experience in development and redevelopment projects, public-private initiatives, complex real estate transactions, development incentives, green energy, Brownfields redevelopment, public policy, and dispute resolution.

Building a sustainable America.

2234•ULI.indd 1 8/4/09 5:13:29 PM

Much has been written about how the American Recovery and Investment Act of 2009—the economic stimulus package—will create green jobs, particularly in the renew-able energy sector. Whether that happens remains to be seen. Clearly, when the gov-ernment provides an economic incentive that closes the cost gap between renewable and conventional energy, the use of renew-able energy grows. Germany’s solar industry offers a good example.

Germany is hardly the sunniest place in the world. Yet in 2005, it overtook Japan as the world’s leading producer of photovoltaic (PV) electricity, with 39 percent of global capacity, compared with Japan’s 38 percent. Germany also became the fastest-growing market for PV products, like PV cells. Its PV industry generates more than 10,000 jobs in production, distribution, and installation. How did this happen?

In 2000, Germany passed legislation requiring grid system operators to buy renewable energy at a fixed fee for 20 years from people who produce energy in their own homes. Although this “feed-in tariff” was designed to accelerate all forms of renewable energy, the solar power industry is by far the biggest beneficiary. Given the promise of a guaranteed return on their investment, tens of thousands of home-owners and businesses installed PV cells. As a result, demand for the cells climbed dramatically and margins on PV production costs dropped. Consequently, the cost per kilowatt of solar energy can compete favor-ably with conventional power.

The 2009 stimulus package does not con-tain a feed-in tariff provision, but it does con-tain significant incentives to stimulate the growth and cost-competitiveness of renew-able energy. For example, the legislation:l Establishes a 30 percent investment tax credit for projects that reequip, expand, or create a facility manufacturing equipment used in generating renewable energy, such as solar panels and wind turbines. l Renews the production tax credit, which provides a 2.1-cents-per-kilowatt-hour benefit for the first ten years of a renewable energy

facility’s operation. Project developers can use this or the 30 percent investment tax credit or they can forgo these tax credits and apply for a Treasury Department grant representing 30 percent of the cost of eligible energy projects.l Authorizes $1.6 billion in clean renew-able energy bonds to finance facilities that generate electricity from various specified sources of renewable energy. l Establishes a $6 billion loan guarantee program for leading-edge biofuels projects that use pilot or demonstration-scale tech-nologies to produce fuels with reduced life-cycle greenhouse gas emissions compared with conventional transportation fuels.l Funnels $3.2 billion to states and local governments for energy efficiency and con-servation block grants to fund projects to develop, implement, and install renewable energy technology, such as for solar energy, in government buildings.

Whether these incentives lead to the kind of growth in renewable energy in the United States that Germany experienced remains to be seen, but the new sources of funding can only help.

Last year, dozens of U.S. renewable energy projects were shelved as liquidity reserves dried up and many institutional investors left the sector for more lucrative investment opportunities. Project developers were unable to use the attractive tax credits because they lacked profits against which to apply them. The stimulus package has changed the ground rules for investors. Projects considered unthinkable a year ago are now underway. For example, in April, Invenergy LLC and GE Energy announced a wind project in LaSalle County, Illinois, using stimulus funds. GE Energy is supplying 74 1.5-megawatt wind tur-bines to begin the Grand Ridge Energy Center expansion, which, when completed, will increase the country’s wind power capacity by over 110 megawatts—enough clean energy to power 30,000 U.S. households.

More renewable energy projects are sure to follow. No disrespect to Gordon Gecko’s credo from the 1987 film Wall Street, “Greed is good,” but perhaps the new slogan on Wall Street should be “Green is good.” UL

p e t e r L . g r a y

b a c k p a g e

Stimulus Package Recharges Renewable Energy The 2009 economic stimulus

package has changed the ground

rules for investors. projects

considered unthinkable a year

ago are now underway.

Peter L. Gray is a partner with the Washington, D.C., office of McKenna long & aldridge llp, where he is chair of the environment, energy, and product regulation department. His climate change blog is posted at www.climatechangeinsights.com.

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akerman.com©2009 Akerman Senterfitt. All rights reserved. Prior results do not guarantee a similar outcome.* Green Building Certification Institute 2009.

DALLASDENVER

FT. LAUDERDALEJACKSONVILLELOS ANGELES

mADISON mIAmI

NEW YORKORLANDO

TALLAHASSEE TAmPA

TYSONS CORNER WASHINGTON, D.C. WEST PALm BEACH

Richard Bezold305.982.5657richard.bezold@akerman.com

AkermanHelping our clients better understand climate change risks and new energy opportunities, gets us all one step closer to a sustainable future. Akerman is proud to be one of the top 5* legal teams in the U.S. in number of LEED® accredited lawyers. With more than 140 real estate, land use, construction, environmental, and energy professionals, our team offers experience in development and redevelopment projects, public-private initiatives, complex real estate transactions, development incentives, green energy, Brownfields redevelopment, public policy, and dispute resolution.

Building a sustainable America.

2234•ULI.indd 1 8/4/09 5:13:29 PM

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PNC is a registered service mark of The PNC Financial Services Group, Inc. (“PNC”). Lending products and services require credit approval and are provided by PNC Bank, National Association and PNC Bank, Delaware. ©2009 The PNC Financial Services Group, Inc. All rights reserved.

RESULTS.*Why our clients keep relying on us.

WE ARE PNC REAL ESTATE

Now more than ever, you’re seeking results. Despite today’s challenging environment, we continue to fi nd ways to help our clients achieve their goals. Some solutions are straightforward. Some require a bit more ingenuity. But all refl ect the resourcefulness of our experienced team of experts. And with the addition of RED CAPITAL GROUP, we have even more resources available. To discover how we can help you get results, call 1-877-762-7775 or visit pnc.com/realestate. We’re ready to get started.

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