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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
flatter. 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,
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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
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Consider the changes already under way.
Smart traffic 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.
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IBM, the IBM logo and ibm.com are trademarks of International Business Machines Corporation, registered in many jurisdictions worldwide.
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,
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The list is long, and the transformation is just beginning.
Its benefits will be reaped not only by large enterprises,
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Imagine how a smarter planet will transform all the
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The opportunity is before us, and the moment will not
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 build to suit lease for LEED
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managers of sustainable
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preservation of agriculture
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preservation of 116,000 acres

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Invest In your busIness and your future

2009 ULI Fall Meeting

& Urban Land Expo
November 3–6, 2009
SaN FraNciSco, cal iForNia
ConneCt with the right people
l 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 SkillS

l 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 them
l 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 budget
l Choose a one-day ticket or attend the full meeting. Select
tracks, interactive sessions on a wide variety of topics, work-
RegisteR Now
shops, tours, and networking events that will give you the most www.uli.org/Fall2009
value and make this meeting worth your time and money.
Interested in sponsorship, exhibiting, or advertising?
See San franCiSCo Contact JB Rauch, VP for Development,
l Experience innovative projects firsthand and stay to at jb.rauch@uli.org or call 202.624.7135.
explore the city.

1025 thomas Jefferson street, Nw

suite 500 west
washington, DC 20007-5201
 august 09
mainstreaming Green
New sustainable design strategies, materials, and
modeling tools are enabling the mainstreaming of
green development projects.
42 a New Shade
of Green
Mat t c a n t e r b ury
New design strategies,
energy-efficient materials,
and innovative building
technologies are helping
take green mainstream.
48 regenerative
Design
JaSo n K i n g a n d
S cot t e . th aye r
Sustainable design and
planning strategies are
setting new standards
for green development
projects that integrate
the social, economic,
and environmental
needs of communities.
48
Vo l u m e 6 8 , N u m b e r 8
42
51
51 modeling
High-Performance
buildings
ro bert bo Li n
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.
urbanland ®
w w w. u l i .o r g / u r b a N l a N d
58 The race to
Clean energy
Patr icia L. Kir K
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
Jer ry W. Szata n
In recent years, the use of
wind power has grown rapidly 58
in the United States—and
is poised for greater growth
if transmission and political
challenges can be met.
66 Developing
biofuel research
Facilities
r ob Lyn ch a n d
r a Lf eLSa e SSer
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 leaders
c ha r LeS LocKWood 63
“Worldwide, we will see
more nations forming green
building councils, and millions
of buildings constructed or
retrofitted to green standards. O n t h e C O v e r : t h i n F l at s,
The financial and environmental t wO - s t O r y s ta C k e d d u p l e x e s
n e a r d Ow n t Ow n p h i l a d e l p h i a ,
benefits are too compelling for i n C l u d e a g r e e n r O O F, s O l a r
t h e r m a l pa n e l s, a s t O r m w at e r
this not to happen.” COlleCtiOn system, radiant
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 pa g e 4 0 . )
phOtO: marikO reed
august 2009 u r b a N la N D 11
 august 2009
20 Developments
U.K. Approves Only One-Quarter of
Ecotowns; Proposes Zero-Carbon
Standard by 2016
20
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?
12 U R B A N LA N D august 2009
urbanland®
70 Land Writes
70 The Greening
of Egypt
Sam al 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.
26 Dialogues
26 Dialogue: Policy
Climate Change: The Good,
the Bad, and Obama
edwaR d t. m cma hon
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
Solutions
ch and Ra n n a iR
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 Trade
Ro n 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.
72 China’s New Real
Estate Opportunities
ma lcolm R 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.
34 Dialogue: Energy
Renewable Communities
Su Sa n Fin e a n d
ca R olin e G. ha R R iS
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 ULX
Residential Green
R on n yR en
Ten multifamily housing
developments give high-density
living an even greener spin.
76 ProActive
76 Capital Markets
Applying Responsible Investing
to Green Building
KiR K Sy KeS
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 Issue
Initiatives to Set Up
Cap-and-Trade Programs
JeR Ry w. Szata n
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.
74 Global Investing:
Keep it Simple
Pau l Phil l 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.
82 In Practice
Sustainable Development
at the Graduate Level
Joa n ca Pel in
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 Energy
PeteR l. G Ray
The 2009 economic stimulus
package has changed the
ground rules for investors.
Projects considered unthinkable
a year ago are now underway.
Departments
16 Publisher Note
19 This Issue
95 Regional
Spotlight:
New York/
Massachusetts
108 Advertisers Index
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First Aid for Ailing
Real Estate Projects
Do 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 interdisciplinary
team of members, assembled by UlI to address your specific
issues. our Deal Doctors provide:
l In depth, project specific, pragmatic advice
l Interdisciplinary team of practitioners in the land use
and real estate professions
l Intimate, conversational format for creative thinking
ApplicAtions 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.
Advisory Services Program
14 u r b a N la N D august 2009
ULAUG09 VRT advis-srv.indd 1
urbanland®
w w w. u l i .o r g / u r b a N l a N d
Vo l u m e 6 8 , N u m b e r 8
Publisher
Rachelle L. Levitt
rlevitt@uli.org
e d i to r i N C h i e f
Kristina Kessler
kkessler@uli.org
m a N ag i N g e d i to r
Karen Schaar
kschaar@uli.org
C o P y e d i to r s
James A. Mulligan
jmulligan@uli.org
David James Rose
drose@uli.org
a r t d i r e C to r
Betsy VanBuskirk
bvanbusk@uli.org
graPhiC desigNers
Anne Morgan
amorgan@uli.org
Byron Holly
bholly@uli.org
P r o d u C t i o N m a N ag e r
Craig Chapman
cchapman@uli.org
P r o d u C t i o N C o o r d i N ato r
Colleen DiPietro
cdipietro@uli.org
s e N i o r a dV e r t i s i N g m a N ag e r
Carmela Acampora
202-624-7042/carmelaa@uli.org
N at i o N a l s a l e s m a N ag e r s
(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.
8/10/09 2:31:40 PM
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 publishernote
Moving Cooler a Challenge to
the Land Use Community
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
Moving
Cooler
is of TrAn
sporTATio
n Land use changes that increase density
An AnAlys s for redu
cing
sTrATegie
gree nhou se gAs emiss
ions
Cambridge
Systematics,
Inc.
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-
16 U r b a n La n D august 2009
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.
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. Levitt
Publisher
Moving Cooler is available
for purchase from ULI’s
Web site, www.uli.org.
W h o ’ s W h o at U L I
a n d t h e U L I f o U n dat I o n
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, Chairman
Randall Bone, Vice Chairman
Joseph E. Brown, Vice Chairman, Policy and Practice
Daryl J. Carter, Vice Chairman
James J. Curtis, III, Vice Chairman, Councils
Michael D. Fascitelli, Vice Chairman
Patricia R. Healy, Vice Chairman, District Councils
Keith G. Kerr, Vice Chairman
Scott D. Malkin, Vice Chairman
Alexander Otto, Vice Chairman
Peter S. Rummell, Vice Chairman
Lynn Thurber, Vice Chairman and Treasurer
Daniel C. Van Epp, Vice Chairman
Bret R. Wilkerson, Vice Chairman and Secretary
Todd W. Mansfield, Immediate Past Chairman
Marilyn Jordan Taylor, Past Chairman
James D. Klingbeil, ULI Foundation Chairman
Richard M. Rosan, Chief Executive Officer
ULI trUstees
Douglas 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
U L I f o U n dat I o n
James D. Klingbeil, Chairman
Richard M. Rosan, Chief Executive Officer
Joseph E. Brown, Secretary
Harry H. Frampton III, Treasurer
Peter S. Rummell, Past Chairman
U L I s e n I o r s ta f f
Richard M. Rosan, Chief Executive Officer
Cheryl G. Cummins, President, The Americas
William P. Kistler, President, EMEA
(Europe/Middle East/Africa)/India
Michael Terseck, Chief Financial Officer/
Chief Administrative Officer
David Howard, Executive Vice President,
Development/ULI Foundation
Maureen McAvey, Executive Vice President, Initiatives
U L I f e L LoW s
Stephen R. Blank, Senior Resident Fellow, Real Estate Finance
Michael Horst, Senior Resident Fellow, Leadership
Tom Murphy, Senior Resident Fellow and
ULI/Klingbeil Family Chair for Urban Development
John K. McIlwain, Senior Resident Fellow and
ULI/J. Ronald Terwilliger Chair for Housing
Edward T. McMahon, Senior Resident Fellow and
ULI/Charles Fraser Chair for Sustainable Development
 thisissue
A Low-Carbon Future
The 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.
m+a arChiteCts
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 Kessler
Editor in Chief
august 2009 u r b a N la N D 19
 develop
AECOM
E DAW /
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.
20 U r b a n La n D August 2009
U.K. Approves Only
One-Quarter of
Ecotowns; Proposes
Zero-Carbon Standard
by 2016
The 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-
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.
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.
ments
Patrick 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 designed
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
Patrick L. Phillips
years of involvement with the Institute,
both as a volunteer member since
1990 and a ULI staff member in the organizations,” notes Mansfield, CEO
policy research program during the of Crosland LLC in Charlotte, North
mid-1980s. In recent years, Phillips Carolina. “The various perspectives
served on such high-profile ULI advi- he has gained from his experience in
sory service panels as those following the industry and with ULI will serve
Hurricane Katrina in New Orleans and Patrick well as the new CEO.”
the 9/11 attacks in lower Manhattan. Rosan will be shifting full time
He was a juror on the ULI Hines Stu- into the role of president of the ULI
dent Urban Design Competition, and a Foundation, a position he has held
member of the Urban Development/ simultaneously while serving as
Mixed-Use Council, the Program Com- ULI’s CEO. (See “Succession Plan-
mittee, and the ULI J.C. Nichols Prize ning at ULI,” March, page 29.)
Management Committee.
“Patrick truly understands the im- Trish riggs is vice president,
portance of active member engage- communications, ULI.
ment and the need to encourage the
information exchange that distin-
guishes ULI from other professional
Wind Turbine as arT
“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
August 2009 U r b a n La n D 21
 developments
BREEAM Introduces
New Rating System
for Sustainable
Communities;
Pilot Tests with
MediaCityUK in
Manchester
The 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
Assessment 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
22 U r b a n La n D August 2009
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.
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 decen-
tralize 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.
ULI Energy Efficiency
Exchange Set for
Launch on Web
The 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
MediaCityUK will rely on sustain-
comprise the following:
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,
l A home page that explains the
and cooling. Through the use of
goals of the site and how visitors
the heat byproduct, the power gen-
can get the most out of it.
eration will be 70 percent efficient,
l A knowledge center of information
compared with 30 percent efficiency
relevant to practitioners, where visi-
for power from the U.K.’s national
tors can filter information according
grid; similar systems have reduced
to their profession, location, type of
costs and CO2 emissions.
project, and design stage to ensure
In the tri-generation scheme, elec-
the most useful results.
tricity is produced by a large engine
l A learning zone that includes
powered by natural gas or biofuel.
best-practice case studies, and high-
The waste heat generated is captured
lighted articles from Urban Land
and used to heat water, which is cir-
magazine, ULI senior fellows, part-
culated in arterial pipes buried deep
ners, and industry leadership.
underground. This system supplies
l Policy summaries of pan-European
heat to each building connected to the
and national regulation, commen-
pipe circuit, and any excess heat pro-
tary by leading experts, etc.
duced by the engines is used to drive
l Short examples of research into
absorption chillers. The chilled water is
energy efficiency and retrofitting from
used for cooling, which is distributed
Arup, including the top five interven-
in the same manner as the heat.
tions for each featured sector, such
MediaCityUK is expected to pro-
as office, retail, and hotel.
vide a significant economic and
l A venue for practitioners to con-
image boost for the community, as
tribute their data to develop a shared
well as for its investors. Further
business case for the financial in-
development will depend on
vestment in energy efficiency and
the success of its first phase.
retrofitting. A data amnesty is being
Charles loCkwood is a green real estate
developed to allow post-occupancy
authority and consultant in southern California and data to be provided anonymously.
New York City. The second phase of the project
will go into development in October—
contingent on funding—and will
include:
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 Design
Located 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
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.
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.
August 2009 U r b a n La n D 23
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.
 developments
“Our program will demonstrate
that demand-side resources, such ULI Releases R e a l e s TaT e R e T u R n s ?
as our commercial buildings, can
provide operating reserves, fre-
Recommendations for “We are now looking at one of those rare opportunities to invest
quency regulation, and capacity Transportation Reform in commercial real estate.”
in wholesale grid markets,” says
The upcoming reauthorization —Hessam Nadji, managing director, Marcus & Millichap, a commercial real estate investment
Michael Cornicelli, executive vice
of federal surface transportation adviser based in Encino, California, referring to properties that are located in places where
president of BOMA/Chicago.
legislation—the current legislation supply is constrained—otherwise solid properties now on sale because losses elsewhere are
expires in September—presents forcing owners to raise money.

First U.S. Solar a historic opportunity to funda-

mentally rethink how the United From “There’s Value in Real Estate, If You Find Your Florida,” by Paul Sullivan, New York Times,
Highway Installed States plans, funds, and builds its
transportation networks. A new ULI
August 8, page B7.

in Oregon report, Transportation for a New Era:

Growing More Sustainable Commu- ULI receives support for the ULI
The first U.S. solar highway installation
nities, lays out recommendations for National Transportation Policy Dia-
—covering about 8,000 square feet
transportation policy reform. logue from the Rockefeller Founda-
(740 sq m) and roughly the length
A number of proposals for reform tion and ULI trustee James Curtis.
of two football fields—has begun
are on the table as Congress, the
operating in Tualatin, Oregon. The
Obama Administration, and others raChel macCleery is managing director of
104-kilowatt solar photovoltaic system ULI’s infrastructure initiative group.
work to forge a path forward, and
is producing about 112,000 kilowatt-
the connections among land use,
hours per year, 28 percent of the Transportation for a New Era is available for download
infrastructure, and sustainability
400,000 kilowatt-hours used to light at the ULI Web site, www.uli.org.
are being considered as they have
the Interstate 5/Interstate 205 inter-
never been before. To contribute
change. (See “Solar Power along the
to this conversation, the Urban
Highway,” October 2008, page 214.)
Land Institute, through its National Real-Time Carbon
Transportation Policy Dialogue pro-
gram, brought together leading real
Counter Launched
P G E / O r E G O n D E PA r t M E n t O f t r A n s P O r tAt i O n

estate and transportation thinkers in New York City

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,
The first solar highway in the United States is
supplying renewable power to help light the including the following:
l Create a national vision for trans-
way for drivers at a major freeway interchange
in Tualatin, Oregon. portation and infrastructure.
l Support the metropolitan areas
The $1.3 million solar photo-
that drive U.S. prosperity.
voltaic demonstration project is a
l Recognize the role of land use in
public/private partnership involv-
linking infrastructure, housing, and
ing Portland General Electric (PGE),
sustainability.
US Bank, and the Oregon Depart-
l Foster and encourage more com-
ment of Transportation (ODOT). The
pact development.
solar panels produce electricity
l Channel funding through the
during the day, supplying power
“three Bs”—use base formula funds
to the PGE grid, and PGE returns
to maintain the system; provide a
an equivalent amount of power at
bonus pool to create incentives for
night to light the interchange.
sustainable investment; and create
an infrastructure bank, to invest in
For more information on the project, visit
www.oregonsolarhighway.com. infrastructure.
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 climate change in the news around
Madison Square Garden and Penn the world, it is useful to have an up-
Station in New York City. The number to-date estimate of a single integrat-
on the carbon counter is based on ing number. . . . This number can
measurements developed by scien- help convey how fast these green-
tists at the Massachusetts Institute house gases are increasing, and the
of Technology that include all long- progress, or lack thereof, in slowing
lived greenhouse gases covered the rate of increase.”
under the Kyoto and Montreal pro-
tocols—24 gases excluding ozone The Carbon Counter Number is available at
and aerosols. www.know­the­number.com; updates will be
“The carbon counter is a bold available at http://twitter.com/knowthenumber.
new experiment in communicat-
ing climate science to the public,”
says Ronald Prinn, professor of
atmospheric science at MIT. “With

24 U r b a n La n D August 2009
 r e c e s s i o n wat c h
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 down­
turn during the early 1990s. Stresses
associated with the ongoing reces­
sion, including large­scale deleverag­
ing, limited financing options, and
declining net operating income, are
putting downward pressure on both
property values and market funda­
mentals. Because the performance
of real estate markets is a deriva­
tive 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 dis­
cussion lately about “green shoots
of recovery” in the economy. While
a variety of indicators continues to
present a mixed message, some eco­
nomic data suggest that the recession
is running out of steam, including
smaller­than­expected declines in
gross domestic product and employ­
ment. 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 fixed­
income 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 bil­
lion 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 Facil­
ity (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 com­
mercial mortgage–backed securities
were deemed acceptable collateral.
This could help restart the securiti­
zation 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 anom­
aly, 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 prob­
ably will not peak until early 2010.
l Housing. Prices likely will con­
tinue to fall through the end of this
year at the national level, though
the change in prices will vary signifi­
cantly by metropolitan area. Histori­
cally, 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 hous­
ing 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 sta­
bility. 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, stabi­
lization 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
August 2009 U r b a n La n D
result in some unintended risks
and consequences, with the cur­
rent high level of federal spending
raising worries about higher taxes,
a declining dollar, and inflationary
pressures in the future. Rising long­
term Treasury yields will inevitably
put upward pressure on lending
costs for mortgages and business
borrowings, which could temper the
economic recovery process, particu­
larly 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 develop­
ment 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 oppor­
tunities 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.
25
dialoguepolicy
Climate Change: The Good, the Bad, and Obama
Recently, there was some
The recently passed good news—and some bad news—
U.S. economic stimulus on climate change. The good news
is that the United States reduced
plan includes numerous energy-related carbon emissions in
2008 by 2.8 percent while the gross
provisions—and billions domestic product (GDP) increased
of dollars—aimed at by 1.1 percent. According to the U.S.
Department of Energy’s Energy
advancing the energy and Information Administration, the
transportation and industry sec-
climate change agenda. 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
Edward T. McMahon is the
Charles E. Fraser Chair for Sustainable greenhouse gas emissions, 21st-
Development and Environmental Policy century climate change may be far
and a senior resident fellow at ULI. more significant than previous cli-
26 U r b a n La n D August 2009
E Dwa r D T. M c M a h o n
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-
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.
Automobile 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-
August 2009 U r b a n La n D
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.
27
dialogueclimatechange
Betting on Market-Driven Solutions
How to expand the global econ-
The global public good omy without depleting the planet’s
should not be placed on resources is a challenge that has
been ignored for far too long. The
the sacrificial altar of financial meltdown has now come
as a stark reminder of the grave con-
the private interests of sequences of the world’s failure to
unregulated financiers. strive for sustainable development.
Humanity faces an urgent chal-
Governments, not solely lenge: climate change, largely brought
about by human activity and excess.
the market, should be As few as five years ago, many
governments, politicians, and cor-
involved in alternative porations were in denial, refusing
energy industries. 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
Chandran nair is founder
and CEO of Hong Kong’s nonprofit think planet’s resources, but their heat-
tank Global Institute for Tomorrow. ing and cooling needs also gobble
up energy.
28 U r b a n La n D August 2009
ChanDran nair
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
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
FOCUS:
Contact: Kim Morque • 203-354-1554 • kim@spinrep.com
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-
BUILDING PLACES OF VALUE
Retrofits / EE Projects
Redevelopment / Compact Development / TOD
Green Infrastructure Projects
Norwalk, CT - St Louis, MO - Portland, OR
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
August 2009 U r b a n La n D 29
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.
dialogueenvironment
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.
ron nyrEn is a freelance
architecture and urban design writer
based in the San Francisco Bay Area.
30 U r b a n La n D August 2009
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-
ron nyrEn
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
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 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?
32 U r b a n La n D August 2009
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-
als, such as fly ash, we can reduce
carbon dioxide emissions.
There are structural insulated
panels available to build homes—
PARKING...
THE PROJECT & PROFIT KILLER
these are prefabricated panels, a
sandwich of insulating foam and
fiberboard that uses far less energy Use our secret weapon to put parking in its place.
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 Boomerang’s patent-pending RoboticValet™ system saves
of the challenges of developing the
transmission infrastructure to bring valuable real estate by parking twice the cars in the same
renewable energy to the places that amount of space as a conventional ramp garage.
need it most?
We need to identify corridors where Unlike steel “rack & rail” systems, Boomerang’s revolutionary
we can safely put in new transmis-
sion lines. Our Texas office has
RoboticValet™ system utilizes traditional concrete decks -
worked closely with the Southwest allowing for easy approvals, increased throughput, maximum
Power Pool Electric Energy Network, design flexibility, and the comfort of knowing your car is
a regional transmission organization
based in Little Rock, Arkansas, to never parked more than one inch off solid concrete.
push legislation to create what are
called competitive renewable energy
Pick up the phone now, while it’s on your mind, and
zones (CREZs) for new transmission
lines in places where renewable call (800) 250-2412.
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 U.S. Made www.boomerangsystems.com
and say what is good. UL

August 2009 U r b a n La n D 33
dialogueenergy
Renewable Communities
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.
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.
34 U r b a n La n D August 2009
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.
S U S a n F i n e a n D
CaroLine G. HarriS
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
Stimulating the Economy through Energy Retrofits
The 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.
August 2009 U r b a n La n D 35
 ulx Residential Green
ron nyren

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

1. Accordia Housing
CambriDge, engLanD, UniteD KingDom
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.

36 U r b a n La n D au g u s t 2 0 0 9
2. Carabanchel 19
maDriD, 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

Dennis gilberT
extra-thick roofs to moderate temperatures. Rooftop solar thermal panels heat
the building’s water. The project was completed in 2006.

3. Cave Avenue Homes

banff, 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
William mCDonough + ParTners

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.

4. Elleven
LoS angeLeS, 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
©2009 laWrenCe anDerson/esTo

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.

august 2009 U r b a n La n D 37
 ulx
5. Gish Family Apartments
San JoSe, 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
bernarD anDre

Gish Family Apartments were completed in 2007 and

received LEED Gold certification.

6. Intervale Green
bronx, new yorK
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
Tom ligamari

storefronts, while a public sculpture garden

displays work by local artists.

38 U r b a n La n D au g u s t 2 0 0 9
7. Pine Ridge Townhomes
KetChUm, 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
living arChiTeCTure

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.

8. RiverClay
Denver, 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
ZoCalo DeveloPmenT

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.

august 2009 U r b a n La n D 39
 ulx
9. Thin Flats
phiLaDeLphia, 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

mariko reeD
and is awaiting LEED Platinum certification.

10. Vento Residences

CaLgary, 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
busby Perkins+Will

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
busby Perkins+Will

40 U r b a n La n D au g u s t 2 0 0 9
 C ommitted to making a difference

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A New Shade
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U r b a n La n D
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august 2009
 urbanland

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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

n
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
istoCKphoto.CoM

grown to nearly 20,000 organizations from across

the development industry.

august 2009 U r b a n La n D 43
 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.
44 U r b a n La n D august 2009
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
 mainstreaming
Green

M+a arChiteCts
M+a arChiteCts
M+a arChiteCts

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.

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.

august 2009 U r b a n La n D 45
 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–
Gr een 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.
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
46 U r b a n La n D august 2009
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,
 mainstreaming
Green

M+a arChiteCts
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.

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 Can terb ury 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.

august 2009 U r b a n La n D 47
 Jason KinG anD sCott e. thayer
Regenerative
Design
sustainable design and planning strategies are setting new standards
for green development projects that integrate the social, economic,
and environmental needs of communities.
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
48 U r b a n La n D august 2009
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
 mainstreaming
Green

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 blackwater Independence
Station in Portland,
waste treatment bioreactor, and natural wastewater Oregon, will integrate ite
Cts
r Ch
n a
treatment ponds. Organic-production greenhouses and a range of strategies to M ois
a
oM
tilapia farming will add to the project’s net-benefit capa- achieve net-zero energy, nt/
an
Kr
e
pM
including a combined veL
o
bility by producing food for the community. De
photovoltaic and ecoroof array. aLD
eia

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-
greenWorKs/MiKe Faha

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 solutions—flow-through planters, rain gardens, green In Portland, Oregon,
the Headwaters at Tryon
planned for completion next year. streets, ecoroofs, and permeable pavement—work in
Creek balances mixed-use
Another regenerative development project in the tandem to protect the newly restored natural resource residential development
Portland area is the Headwaters at Tryon Creek, a and to create the nexus for watershed regeneration. with restoration of a key
residential project that incorporates market-rate con- Tanner Springs Park, in Portland’s Pearl District, is urban watershed.

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
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

august 2009 U r b a n La n D 49
 greenWorKs/Jason King

Modeled after a wetland

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

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.
Jaso n K in g , 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. s C o t t e .
thayer , a principal with Portland-based Ankrom Moisan Architects

Aside from the major improvements it provides for the and co-leader of the firm’s sustainable design initiatives, has been
health of the river and for the benefit of endangered involved with a number of projects that have obtained or are
aquatic species such as salmon, the park has become seeking LEED or Living Building Challenge certification.
a draw for urban naturalists, as well as great blue
herons, mallard ducks, and red-winged blackbirds. (Independence Station was designed by an interdisciplinary
team including Ankrom Moisan Architects and GreenWorks PC.
Every new sustainable project helps shift the devel-
Headwaters at Tryon Creek was designed by GreenWorks PC.
opment community a bit closer to a holistic regenera-
Tanner Springs Park was designed by GreenWorks and Atelier
tive strategy. But rather than get there incrementally, it
Dreiseitl, based in Überlingen, Germany.)
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

50 U r b a n La n D august 2009

r o b e r t b o L i n
Modeling
High-
Performance
Buildings
sustainability and modeling tools, which enable multiple energy-
efficient design strategies to be evaluated in a short period, are building in Santa Monica,
driving today’s high-performance buildings.
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.
mainstreaming
Green
©toM Bonner photography
The Natural Resources
Defense Council’s office
California, includes an
integrated light well on the
second floor that provides
natural light and a path for
Since then, the desire to reduce energy consump- air to exit the building.
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
august 2009 U r b a n La n D 51
 A 7.5-kilowatt rooftop
©sysKa hennessy group
photovoltaic array meets
10 percent of the NRDC
facility’s electricity demand;
the rest is met by green
power resources through
clean energy contracts.
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.
52 U r b a n La n D august 2009
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.
 mainstreaming
Green

©roBert CranFieLD/ZiMMer gunsuL FrasCa arChiteCts LLp

©roBert CranFieLD/ZiMMer gunsuL FrasCa arChiteCts LLp

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.

Using the Right Tools

Choosing the appropriate modeling or simu- transfer, contaminant transport, and thermal com-
lation tool can be a challenge for any designer. fort. With CFD modeling, designers can obtain and
While software like Integrated Environmental Solu- compare the environmental implications of their
tions’ (IES) Virtual Environment is a suite of perfor- designs. CFD tools include AirPak, Fluent, and IES
mance tools, others are function specific, perform- Virtual Environment.
ing focused analysis on a single building element. l Daylighting simulation software provides en-
The following is a short list of widely employed vironmental analysis for a variety of lighting and
tools and how they are putting designs to the test. daylighting applications. Some programs include
l Energy simulation software analyzes building ray-tracing that predicts light levels and how a
designs and technologies in an effort to predict particular space will appear under varying levels of
energy use and cost. Using building layouts, op- natural illumination. Tools include Ecotect, IES Vir-
erating schedules, utility rates, local weather, and tual Environment, AGI32, and Radiance.
measurements of the building’s lighting, water, and l Climate/solar modeling software helps designers
heating, venting, and air-conditioning systems as evaluate the potential energy production and sav-
input, the software simulates a variety of possible ings, costs, emission reductions, financial viability,
design scenarios. Programs range from those that and risk involved in use of different renewable
are simple and easy to use with a graphic interface energy sources. Simulating the amount of energy
to those that provide stand-alone simulation, read- produced by these technologies within a climate-
ing input and writing output as text files. These specific framework will help designers evaluate
tools include eQUEST/DOE-2, IES Virtual Environ- potential scenarios. Most programs also include
ment, EnergyPlus, and Trace 700. climate databases. Tools include Ecotect, IES Vir-
l Computational fluid dynamic (CFD) modeling tual Environment, PVWatts, RETscreen, and Climate
software allows designers to model air flow, heat Consultant.—r.b .

august 2009 U r b a n La n D 53
 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-
©roBert CranFieLD/ZiMMer gunsuL FrasCa arChiteCts LLp

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.

54 U r b a n La n D august 2009

Power Packed with Net-Zero Energy
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.
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
mainstreaming
Green
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.
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
ro b ert b o lin , 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.
august 2009 U r b a n La n D 55
 Buying, selling or just
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Pat r i C i a L . K i r K
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.
58 U r b a n La n D august 2009
The Race to
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.
Energy Policy Power
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
hok
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
 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.
hok

Clean Energy
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.
tapping Mother nature
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

august 2009 U r b a n La n D 59
 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
60 U r b a n La n D august 2009
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.
Cleaning Up Coal
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.
Safer nuclear Energy
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

Going for the Green
in the Pacific Northwest
President 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-
OregOn Wind
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.
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.
august 2009 U r b a n La n D 61
 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-Changing Science
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,
62 U r b a n La n D august 2009
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. K irK is a freelance writer based in
Austin, Texas.
Sustainable Development: Navigating the New
World of Green Regulations and Incentives, a ULI
book available this fall, and Energy and Real Estate,
an InfoPacket, can be purchased at www.uli.org/
bookstore, or call 800-321-5011.
HarNessiNGJ E r r y W. S z ata n

In recent years, the use of

wind power has grown rapidly in
the United States—and is poised
for greater growth if transmission
the
WInd
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 The Maple Ridge Wind
projects—has been renewed through Decem- Farm northeast of
ber 31, 2012. The legislation also allows wind Syracuse is the largest
wind farm in the state of
energy developers to choose between the PTC
New York, providing up
and a 30 percent investment tax credit, con- to 322 MW of electricity
vertible to a grant from the U.S. Treasury, en- toward the state’s goal of
obtaining 25 percent of
hancing the ability to monetize renewable
its power from renewable
energy tax credits. Other provisions include energy by 2013.
PPM energy

financing for planning and building

new transmission lines.

august 2009 U r b a n La n D 63
 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
64 U r b a n La n D august 2009
percent of U.S. electricity without major tech-
top ten states’ total
nological breakthroughs, though it would re-
Installed WInd poWer
CapaCIty (MW) (as of June 27) quire significant capital and transmission in-
vestment. (Denmark and parts of Spain and
State Ranked by Under Germany already get 20 percent of their elec-
Existing Capacity Existing Construction tricity from wind.) While there is opportunity
Texas 7,907 1,102 for growth, there also are barriers.
Iowa 2,883 210
First, a potential wind farm site has to be
California 2,653 125
windy. Generally, wind speed of 15.7 to 16.8
Minnesota 1,803 0
miles per hour (25.1 to 26.9 km per hour) 164
Washington 1,479 0
Oregon 1,363 126 feet (50 m) above ground (class 4 on a 1-to-7
New York 1,261 21 scale) or higher is necessary for viable com-
Colorado 1,068 0 mercial-scale wind farms with current technol-
Kansas 1,014 0 ogy. Preferred sites are hilltops, ridge crests,
Illinois 915 312 mountain summits, large clearings, and other
locations free of local obstruction and with
Source: AWEA.
less surface roughness.
Windmills are tall—rotor diameters can be
providing power to a single user such as a 262 to 295 feet (80 to 90 m) and towers can
business or home) wind generation facilities. be just as tall—and getting taller, and wind
Texas, the leading state by far in total installed farms sprawl as individual towers are spaced
wind power capacity, again led the country in to avoid each other’s wind shadows. Wind
new installations in 2008, adding 2,671 MW is stronger higher up, and the energy output
(see table above). Iowa vaulted past Califor- of wind increases proportionally to the cube
nia into second place in 2008. Minnesota and of wind speed; e.g., doubling wind speed in-
Iowa rely most on wind-generated electricity, creases energy potential eightfold. Offshore
obtaining about 7.5 and 7.1 percent, respec- windmills are bigger still, in part because it
tively, of their electricity from wind, followed by is easier to transport larger blades over wa-
Colorado, North Dakota, and New Mexico. ter. While it is difficult to cite average wind
Only three of the top ten states in installed farm size since some cover flat rectangular
wind energy capacity are among the top ten sites and others follow mountain ridge-tops,
for wind energy potential: Texas (2), Minne- they are getting bigger. The 137-turbine Fen-
sota (9), and Iowa (10). The other top ten ton Wind Project in southwest Minnesota, for
states for annual wind energy potential are as instance, covers a seven-by-seven-mile (11-by-
follows: North Dakota (1), Kansas (3), South 11-km) span of farm fields in two counties.
Dakota (4), Montana (5), Nebraska (6), Wyo- It takes about 18 to 24 months to develop a
ming (7), and Oklahoma (8). wind farm, with six months for construction
Wind energy proponents tout its economic and the rest for approvals.
impact. Wind farms provide income for rural Wind alone is not enough for an ideal site,
landowners, ranging from $3,000 to $5,000 however. Environmental issues, protecting mi-
per turbine, according to the AWEA, while al- grating birds and endangered species, avoid-
lowing farming or ranching to continue, and ing radar interference, and concerns about noise
create construction and maintenance jobs. and aesthetics all factor into site selection, but
Since the turbines do not require water for perhaps the biggest barrier is access to the elec-
steam to produce electricity, as do fossil-fuel trical grid. The DoE notes: “While access to
and nuclear plants, they suit the often-arid nearby transmission lines is a key requirement
Plains. Windmill component manufacturers for large renewable power facilities, the first step
announced more than 55 new or expanded for developing many renewable resources is for
facilities in 24 states last year. someone to actually build a transmission line.”
In May 2008, a DoE report, “20 percent Wind farms in wide-open spaces, where there
Wind Energy by 2030: Increasing Wind Ener- are few conflicting uses or few residents to raise
gy’s Contribution to U.S. Electricity Supply,” objections, also are often far from the demand
concluded that wind energy could provide 20 for electricity and from transmission lines. The
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

d e Pa r t M e n t o f e n e r g y n at i o n a l r e n e W a b l e e n e r g y l a b o r at o r y
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 Wind resource and energy
potential is abundant in
financing for new transmission lines. the Great Plains area of
Wind’s variability presents another chal- the United States.
lenge: wind generates power 65 to 80 per-
cent of the time and on average generates at States they have proven particularly contro- also is potential in urban areas. Architects have
30 to 35 percent of rated capacity annually— versial, with residents and vacationers argu- designed buildings now under construction
challenging grid operators to balance supply ing that they mar ocean views and may inter- with integral wind energy generators. Mayor
and demand and avoid blackouts. Traditional fere with fishing or navigation, notably in the Michael Bloomberg of New York City advo-
power plants also have downtime. Adding proposed 130-turbine Cape Wind project in cates exploring the feasibility of installing wind
more wind farms to a larger grid would pro- Nantucket Sound. In May, the Massachusetts turbines and other renewable energy genera-
vide diversification and reduce variability con- Energy Facilities Siting Board granted environ- tors on the city’s bridges, buildings, and water-
cerns. “Improvements in wind forecasting mental approval to the project, though federal front. The city of Chicago is experimenting with
are a key advance that can be used to better approvals remain and opponents have vowed roof-mounted windmills designed for urban
schedule wind power into the market, easing to appeal the commonwealth’s decision. areas, where the wind is typically too turbu-
a lot of [variability-related] issues,” Christine Offshore wind may offer particular potential lent for rural-style windmills, on several build-
Real de Azua, AWEA’s assistant director of in the Northeast, where electricity costs are high, ings near downtown. These compact cylindrical
communications, says. demand is growing, and scarce land makes on- structures resemble the cage and blades of an
Efforts to maximize energy potential from shore development expensive. In the first con- old-fashioned push lawn mower and can be
wind include collocation with other energy tract for offshore wind power in the United mounted horizontally or vertically.
sources. In November 2007, Puget Sound En- States, Delaware-based utility Delmarva Power In the last few years, demand for wind
ergy began a demonstration project producing signed a 25-year contract in June 2008 with power has grown measurably as more states
electricity from a 450-kilowatt solar facility lo- wind farm developer Bluewater Wind Delaware, have adopted renewable standards, tax cred-
cated within the company’s Wild Horse Wind LLC, for up to 200 MW from Bluewater’s pro- its have become available, and prices have
Facility in Washington. Also in 2007, a $2 mil- posed wind farm more than 11 miles (17.6 km) come down. Concern about climate change
lion wind-to-hydrogen project was dedicated off Rehoboth Beach. The U.S. Minerals Manage- and enacting a national RES would further
in Minot, North Dakota, to research using ment Service issued final regulations on Earth boost demand. The wind industry has re-
electricity generated by wind to separate hy- Day, April 22, guiding wind power development sponded by adding capacity at a record pace,
drogen from water, which then could be used on the outer continental shelf, which should but challenges remain, including building
to power hydrogen-fueled vehicles. add predictability to the process. In a first for transmission capacity and access. UL
Offshore wind farms are common in Eu- freshwater, also on Earth Day, the New York
rope and technically attractive for their strong Power Authority asked for expressions of interest Jerry W. Szatan is a Chicago-based consultant
and steady winds—NREL estimates that off- for projects in Lake Erie and Lake Ontario. and writer on corporate site selection and community
shore wind farms could supply up to 5 percent While the iconic wind farm image may be economic and real estate development.
of U.S. electricity by 2030. But in the United of huge pinwheel towers in rural areas, there

august 2009 U r b a n La n D 65
 r o b Ly n c h a n D r a L f E L s a E s s E r

Developing

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

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

66 U r b a n La n D August 2009
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
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.
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
Ro b Lyn ch is chief operating officer and
RaLf ELsaEssER is project manager/biotech
focus group leader at Dome Construction Corporation
in San Francisco, California.
August 2009 U r b a n La n D 67
 The Green Quotient
Q&a with Green Leaders
Thomas mUELLEr , chiLin chEnG, mario sEnEviraTnE , founder,
president/CEO, founder/CEO,
Canada Green Building Council Taiwan Green Building Council
“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.”
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
68 U r b a n La n D August 2009
Emirates Green Building Council
(GBC)]
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.
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 Lo ck wo o d 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.
August 2009 U r b a n La n D 69
 landwri
The Greening
of Egypt
S a m a L i implementing sustainable measures. Egypt to­
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.
70 U r b a n La n D august 2009
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
day faces daunting challenges: a rapidly grow­
ing population; water and energy shortages;
soil, water, and air contamination; and a se­
vere 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 in­
evitable in the face of such rapid growth.
Most Egyptians live in two regions that ac­
count 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 infra­
structure, water pipelines, and roads to criss­
cross the desert to connect the new develop­
ment 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 na­
tion’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 reach­
ing critical levels. Soil contamination in Egypt
is severe due to sewage system leakage, use
of pesticides and chemicals, factory dump­
ing, and garbage disposal. The air is contam­
inated by emissions from vehicles, factories,
and crop burning. The contamination of the
Nile has increased in recent years due to fac­
tory 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 cre­
ated even more environmental problems be­
cause of the lack of sanitary infrastructure to
support slums in the new development areas.
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.
 tes
Given the stark reality of the challenges
facing the country, sustainable solutions be­
come even more important. This January, a
group of international experts in sustainabil­
ity traveled to Cairo for the kickoff meeting
of the Egypt Green Building Council—a gath­
ering seen as a signal of the country’s deter­
mination to move forward in initiating green
building standards. More than 100 engineers
and architects attended the conference, which
was sponsored by the Housing and Build­
ing Research Center, an arm of the Minis­
try of Housing, Utilities, and Community De­
velopment. 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
needed for professionals, in the schools, and Egypt faces a rapidly growing population, water
scratch in establishing green building codes, and energy shortages, and soil, water, and air
for the general public.
and significant obstacles exist. During the contamination. The Nile River, shown here in a
To move forward, the Egyptians are creat­ northeastern Egyptian city near the Suez Canal,
three­day conference, the international partici­
ing their own version of the U.S. Green Build­ is the nation’s major water source.
pants emphasized a number of challenges
ing Council’s Leadership in Energy and Envi­
that need to be addressed to ensure success
ronmental Design (LEED) certification program, planners, architects, and builders. Implemen­
of the fledgling effort:
which they call the Green Pyramid. Officials tation of sustainable measures should help
l The critical need for private sector involve­ effect major improvements in sanitation, es­
are creating their own green building codes,
ment. As is the norm in most developing na­
choosing what they want to implement from pecially for the poor. Use of renewable energy,
tions, the Egyptian government is not ac­
the LEED palette. Because tourism is a ma­ such as solar and wind power, to replace cur­
customed to involvement of a volunteer­run
jor revenue generator for Egypt, the ministry rent fuel sources will help reduce long­term air
organization in setting rules and regulations. The
plans to establish the first green design pilot pollution and energy costs.
U.S. team strongly encouraged the inclusion of
project at a high­profile archeological site in With this effort, it is possible that the
private consultants, planners, engineers, archi­
order to not only help protect the site’s trea­ Egyptians, builders of the pyramids—the first
tects, and contractors in this process.
sures, but also provide a showcase for tour­ sustainable structures—will be able to set an
l The perception among Egyptian technocrats example for developing nations worldwide. UL
ists, demonstrating Egypt’s commitment to
that green design applies solely to expensive
sustainability.
projects for the wealthy. Sam ali is an engineering consultant. Recently, as a
The rewards for adopting green building
l The need for education at all levels con­ vice president of civil engineering services and a LEED
principles are expected to be significant for
cerning the principles underlying sustainabil­ coordinator at Los Angeles–based engineering firm
Egypt. With more than 3 million residential
ity. Many of those attending the conference Psomas, he traveled to Cairo to assist with formation
units planned in the Egyptian desert, the con­
did not understand the concept of sustainabil­ of the Egypt Green Building Council.
cepts underlying community building embed­
ity, thinking it pertained to measures to keep
ded in the LEED for New Development pro­
a building running. An education campaign
gram should be valuable for the country’s
to promote green building concepts will be

august 2009 U r b a n La n D 71
 landwrites
China’s new
real Estate ernment’s swift and effective actions. Besides
Opportunities
m a LC O L m r i D D E L L
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.
72 U r b a n La n D august 2009
China’s real estate market is recovering
quickly, due in large part to the Chinese gov­
a $586 billion stimulus package, it has loos­
ened many restrictions on home purchases
and on land sales and development. It also
has ordered banks to lend heavily to real es­
tate 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 buy­
ing land to replenish their land banks. Un­
derlying 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 mar­
ket, 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, dur­
ing 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 estab­
lished offshore companies with complex hold­
ing 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 Chi­
nese taxes and problems of capital repatria­
tion. In addition, they could increase returns
through leverage by adding on more debt off­
shore than was allowed onshore in China.
Those who exited their investments, held ei­
ther directly or through offshore companies, be­
fore 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.
l Those who invested heavily in Chinese devel­
opers, 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 for­
eign investment to a halt—but, perhaps, not
for long. “The period of standstill in foreign in­
vestment 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 becom­
ing easier as the Chinese government loosens
restrictions on foreign investment and stream­
lines the investment process. “Serious long­
term foreign investors will find that the trans­
action approval process has become easier,”
points out Jianbo Lou, director of the Center
for Real Estate Law at Peking University. “For­
get the restrictions,” adds Brad Markoff, part­
ner at the DLA Piper law firm in Hong Kong.
“With the right partner, right deal, right struc­
ture, 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 invest­
ment. But note that while many foreign com­
petitors have retreated, new domestic com­
petitors 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
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 Chi­
nese side needs and lacks,” advises David
Hand, international director, head of China
Property Investment, at Jones Lang LaSalle.
“He must leverage his expertise in develop­
ment, management, strategic planning, de­
sign, 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 de­
velopers who then failed to go public. Also, as
the industry consolidates, high­quality, cash­
strapped developers have become acquisi­
tion targets of the large, cash­rich develop­
ers. Many of these targeted developers would
prefer an equity infusion from a foreign inves­
tor 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 under­
lying 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 at­
tractive terms.
At the same time, in a dramatic reversal of
capital flows, the Chinese are poised to make
investments in overseas real estate, both resi­
dential and commercial. “The Chinese have an
affinity for investment in real estate as an as­
set class. So when they look abroad for invest­
ments, they look at real estate,” Hand says.
Yet, “because China’s outbound real es­
tate investment relies not only on the mar­
ket 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 invest­
ment management company. But, there ap­
pear 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
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 Consult­
ing 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 pack­
age tours—so popular that they are over­
subscribed, and operators have had to put
hundreds on waiting lists.
l The “America for Sale” expo of U.S. residen­
tial 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 consis­
tently attract large audiences.
The Chinese have also begun competing
for U.S. commercial real estate. “Now interna­
tional markets are open to Chinese investors
to pick commercial properties in prime loca­
tions with a good history of performance, fa­
mous addresses, some at ‘once in a lifetime’
prices. They can diversify their portfolios over­
night,” 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. Chi­
nese see an opportunity in London, for exam­
ple, because prices have fallen and the cur­
rency has weakened,” adds Hand.
Furthermore, in a recent policy reversal,
the Chinese government has begun encour­
aging Chinese companies to establish off­
shore enterprises and to invest in or buy over­
seas 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 bil­
lion under management and another $200 bil­
lion 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 in­
ternational 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 in­
vestment and accurately assessing the new
mood and needs of Chinese developers. For
sellers to the Chinese, this means understand­
ing, according to Hand, that “Chinese inves­
tors are looking for a certain type of seller. A
seller they can communicate with, but not just
in terms of language; someone who under­
stands 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
malco lm 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.
august 2009 U r b a n La n D 73
 landwrites
Global
investing: tants, advisers, and investors commiserate
Keep it Simple
Pa U L P h i L L i P S
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.
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.
74 U r b a n La n D august 2009
There is a pall shrouding property in­
vestment conferences these days as consul­
and deal with the decline of global real es­
tate markets. Tom Barrack, chairman of Los
Angeles–based Colony Capital and investment
real estate guru, has graphically described eq­
uity 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 re­
turn to fundamentals must be sought.
So, what are the fundamentals of real es­
tate investment? Those who gain the courage
to recommence their investment activities will
have the luxury of using the framework of val­
uation, 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 cap­
ital has diminished the role of leverage in de­
termining total returns and, thankfully, has re­
duced bloated expectations. Current returns
from most property sectors are adequate to
meet benchmark actuarial return requirements
for institutional portfolios.
Replacement cost is an important assess­
ment of fundamental value. Significant discounts
to replacement cost for hard­to­access properties
should not be ignored. In the inflationary econ­
omies that are likely to emerge in the interme­
diate term, real estate should perform well. As
commodity prices escalate, those properties ac­
quired at significant discounts to replacement
cost ought to perform even better.
Scarcity is the foundation of value. In a re­
turn to a fundamentally sound longer­term view,
investors can focus on traditionally hard­to­get
properties in hard­to­access markets. These
kinds of investments can be viewed as founda­
tion 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 strate­
gies that depend upon leverage, high rates of
 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 benefi­
ciaries of short­term strategies have been the
brokers and bankers who managed the place­
ment of debt and equity at formation, exit,
and redeployment.
At present, there is no need to take exces­
sive risk to get core­plus to value­added real
estate returns. Keep it simple. Return to fun­
damentals. Take advantage of the supply of
properties that were not available or accessi­
ble in the past.
While capital is likely to be in short supply
for some time, it must still be allocated in a log­
ical way—or in a completely different manner
than what has been seen in the past few years.
While global diversification will still drive long­
term 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 mar­
kets 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 oc­
casionally include Latin America and the Mid­
dle East/North Africa. Analysts customarily are
prone to simplify and categorize risk by geog­
raphy. 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 geo­
graphical boundaries. Allocations need to be
focused by country, and investors must try to
understand inherent limitations to transpar­
ency, liquidity, and the rule of law for each.
In choosing countries for allocations, it is fun­
damentally important to first grade individ­
ual country risk, followed by individual mar­
ket risk, and then individual property risk. If a
country risk measurement does not grade high
enough, do not go there. Not all countries de­
serve capital allocations, so always think stra­
tegically when making these decisions.
LW.indd 75
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 rep­
resentation of investment advisers on the com­
mittees and boards of their investment vehi­
cles. 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 stan­
dards 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. Oper­
ator managers are the entrepreneurial univer­
sal 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 rel­
ative 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 domes­
tic consumption in developing economies and,
most notably, China, will be key drivers for in­
vestment decision making.
But while the long­term strengths of re­
gional economies may not be clear, the short­
term reality of pricing core opportunities at
value­added prices is clear. Investments in
technology and infrastructure to promote
world supply chains have been made. Stra­
tegic core investment opportunities in logis­
tics and industrial properties along the sup­
ply chains of world markets are compelling
and should include Shanghai, Amsterdam/
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.
Rotterdam, Dubai, Los Angeles, Dallas,
Chicago, Singapore, and Frankfurt.
Likewise, strategic opportunities in tradi­
tional world financial centers should not be
overlooked. Given current pricing relative to
historic pricing and replacement cost, London,
New York, Singapore, and Sydney are compel­
ling prospects.
Lastly, middle­income strategies for retail
and residential investment in emerging econ­
omies should perform well for many years.
Middle­market strategies for retail in Sin­
gapore, Kuala Lumpur, Sao Paolo, and Rio
de Janeiro are worthy considerations as are
middle­income residential properties in Bei­
jing, Shanghai, Rio de Janeiro, and Sao Paolo.
The big question on everyone’s mind is
market timing. People ask, “Are we at the bot­
tom?” 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 bot­
tom of the market are fictitious as finite points
of value defined by capitalization rates. They
are spans of time during which the predom­
inant flow of capital either leaves or enters
the market. The “top” or “bottom” of the mar­
ket 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 P hilliPS 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.
august 2009 U r b a n La n D 75
8/11/09 12:45:40 PM
 proactive
capital markets
Applying Responsible Investing to Green Building
Last October at the Urban Land
A recent real estate Institute’s annual fall meeting, ULI’s
investment strategy Responsible Property Investing
Council made an official entrance
emerging out of with the purpose of providing a
forum for industry leaders to dis-
the smart growth cuss responsible property invest-
and sustainability ment (RPI) and how growth can be
catalyzed in today’s market. Shortly
movements takes afterward, the economic climate
changed significantly. Now more
green to the next than ever, the investment commu-
nity’s goal is to get higher returns
level by marrying on their investments while using
business interests RPI fundamentals that minimize
operating expenses. [See “Respon-
with environmental sible Investing,” Urban Land Green,
Spring 2007, page 108.]
and social goals. 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-
76 U r b a n La n D August 2009
ULAug09_p76 pa.indd 76
KirK SyKeS
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
8/10/09 2:49:26 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
riddelltseng-ad-rev.ai or other2:43:00fundamentals
7/31/09
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
(,--.//01.23
a boutique
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advising leading
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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
PM 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.
China’s
New Real Estate
Opportunities
by Malcolm Riddell
in this issue of
URBANLAND
(,--.//01.23
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
August 2009 U r b a n La n D 77
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.
!"#$%#&'()**+##
Principal,'(,--.//01.23
,nvestment banker and
lawyer with 20 years’
experience in China real
estate and financial
services
Senior Visiting Fellow,
Center for Real Estate Law,
Peking University
Academic Leader for China
real estate exec programs,
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1.941.330.9998
malcolm.riddell@
riddell-tseng.com
 proactive
at issue
Initiatives to Set Up Cap-and-Trade Programs
A number of states and prov-
While federal legislation inces have created or are planning
is being debated, three regional cap-and-trade pro-
grams. These work by capping the
coalitions of states maximum emissions allowed and
auctioning or distributing emission
and provinces have allowances equal to the cap, and
been developing then creating a market for auctions
and trades to determine prices for
and implementing emission allowances. If an emitting
entity’s emissions exceed its allow-
regional cap-and- ances, it has to buy more allow-
ances; if it has been efficient in
trade programs to reducing emissions and has excess
control greenhouse allowances, it can sell them.
Proponents of cap-and-trade
gas emissions. 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.]
78 U r b a n La n D August 2009
J e r r y W. S z aTa n
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.
The regional Greenhouse lower than 2009 by year-end 2018.
Gas initiative
The 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
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
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 at issue

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.
The Western Climate tricity generation, industrial combus-
initiative
The 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-
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.
Midwestern Greenhouse including a national greenhouse
Gas reduction accord gas cap-and-trade system. The bill
(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
Energy and Security Act (ACES, or
the Waxman-Markey Act), providing
wide-ranging renewable energy, effi-
ciency and climate control measures,
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

Regional Cap-and-Trade Program Members Governments. The governors and pre-

miers recognize that carbon-burning
and Observers business as usual is not sustain-
able, want to find ways to use green
The Regional Greenhouse Gas Initiative (RGGI) energy development to transform the
MeMbers: Connecticut, Delaware, Maine, Maryland, Massachusetts, regional economy, and want to be
New Hampshire, New Jersey, New York, rhode Island, and Vermont. at the table when federal policy is
ObserVer: Pennsylvania. debated, according to Heier.
Western Climate Initiative The ACCORD advisory group’s
MeMbers: Arizona, California, Montana, New Mexico, Oregon, recommendations issued in July
call for reducing, beginning in 2012,
Washington, Utah, and british Columbia, Manitoba, Ontario, and
emissions of the six major GHGs 20
Quebec, Canada.
percent below 2005 levels by 2020,
ObserVers: United states: Alaska, Colorado, Idaho, Kansas, Nevada, and 80 percent by 2050. They also
and Wyoming. recommend that allowance value be
MexICO: baja California, Chihuahua, Coahuila, Nuevo Leon, sonora, put toward climate-related purposes
and Tamaulipas.
in transformational investment such
CANADA: saskatchewan. as low-carbon technology, mitigat-
Midwestern Greenhouse Gas Reduction Accord (MGGRA) ing adverse transitional impacts,
and addressing harmful impacts
MeMbers: Iowa, Illinois, Kansas, Michigan, Minnesota, Wisconsin, and
due to climate change.
Manitoba, Canada.
On June 26, the U.S. House
ObserVers: Indiana, Ohio, south Dakota, and Ontario, Canada.
passed 219-212, the American Clean
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

80 U r b a n La n D August 2009
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 proactive
in practice JOan CapeLin

Sustainable Development at the Graduate Level

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

Oxford University and the Prince’s Foundation for the Built Environment
to Offer a New Master’s Program in Sustainable Urban Development
A 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.

82 U r b a n La n D August 2009
nyu’s
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The NYU Schack Institute: Sustainable Design, Construction, and Development

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.

graduate programs professional certificates: continuing education: scps.nyu.edu/realestate 1-888-998-7204

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The Master of Real Estate Development and Urbanism (MRED+U) at the University of Miami

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 in practice
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
development 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
University of Colorado at Boulder
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
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

Leeds School of Business Working on fourth element at the Maryland

program’s spring 2009 symposium,
New Green Development Standards which focused on the complexi-
ties of “Sustainable Development:
Research, along with Vail Resorts Smart, Adaptive, and Green.” Carl
The University of Colorado at boulder Leeds school of Bovill, a professor from Maryland’s
architecture school, teaches a sus-
business and Vail resorts, Inc., are partnering on research that
tainable architecture course. James
will create new green development standards. Faculty and gradu-
Cohen, a professor of planning,
ate student leaders from the real estate Center at Leeds will col- teaches growth management, which
laborate with the Initiative for sustainable Development and the has been a required course for the
school of engineering and Applied science on the project. The MRED students. Maryland’s MRED
research collaboration is expected to provide a comprehensive will offer a new course this fall titled,
resource for integrating green design and sustainable building “Practical Issues in Sustainability for
methods into both residential and commercial developments, Business, Finance, and Real Estate,”
and create a more holistic approach to internal green building taught by Dan Winters, a member of
codes for all stakeholders such as developers. the USGBC financing committee.
Development teams, executives, and managers across the Clemson students visit develop-
ments in Atlanta, Charlotte, and
development industry will have access to resources from the
Savannah. Farris also accompanies
research including a searchable database that will provide access
his first-year students on a two-
to advanced real estate development solutions. These research
week trip to the South Carolina
materials will cover all aspects of development, giving designers coast, where they visit an array of
and builders the framework to plan and execute green projects smart growth developments and
from initial due diligence to operations. some of the first modern planned
Dennis Ahlburg, dean of the business school, says the project communities in the country.
is an avenue for educating students about emerging sustainable Students in Maryland’s MRED
practices. “Our students will have a firsthand look at current program also have the chance to
and emerging best practices in sustainability in the real estate participate in the Solar Decathlon,
development industry. They will have a hand in creating the com- a competition staged in Wash-
prehensive resources to be made available to all development ington, D.C., in which university
students compete to design, build,
professionals; this takes them way beyond the classroom.”
and operate the best solar-powered
Information about the Colorado University Real Estate Center at the Leeds house. Maryland’s MRED students
School of Business, University of Colorado at Boulder, can be found at who want to participate in the
http://leeds.colorado.edu/realestate.
competition can take the energy
University of Colorado’s Leeds School of Business also has a newly estab- policy and practice course taught
lished Initiative for Sustainable Development that operates within the Real by Matthew Ferguson, head of
Estate Center, with the intent of crossing disciplines to pull together ideas in the energy practice at the Reznick
sustainable land use and real estate. For information, visit www.cufund.org.
Group, a national accounting and
consulting practice headquartered
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 a n La n D August 2009
???? ?????? ??????????? ?? M Th F
???? ?? ?h? University of Maryland ??? ????????
The
F?????????? V?????
??????????????? ??????tf??
???????? ???????????
??????????? ????????
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What we offer?
? ??????? ?? ???? ?????? ???????????
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? ????????????? ??? ??????????????? ?????????
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? ????????????????? ??????? ??? ??????????
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 in practice

2008, launched Green Street De- able practices and integrated urban

MacArthur Foundation to Support New velopment, which provides devel-

Master’s in Development Practice Programs
Grants 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; and
l University of Ibadan, Ibadan, Nigeria.
Additional information at www.macfund.org.
ODU-CollegeBusinessAdmin-AUG09:Layout 1 8/6/09
opment and consulting services for
planning solutions.
Whether through green train-
green building, and built the third
LEED-certified home in the country.
ing, networking opportunities with
developers, or the outcome of a final
He is currently working on a 50-unit thesis, students in real estate devel-
sustainable community in Phoenix. opment programs are learning how
Bambi Tran, UMD MRED 2008, has to be effective participants in green
started a consulting firm of her development. UL
own. “Doing it Green” works with
developers to teach them how to Joan Capelin is a New York–based public
“do it [green building] right.” Before relations consultant to real estate developers;
construction, architecture, and design firms.
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
5:25 PM Page
create 1new value through sustain-

College of Business and Public Administration

Innovation in Real Estate Education and Research

Building Bright Minds and

Exceptional Industry Leaders • E.V. Williams Center for Real
Old Dominion University's College of Business and Public Administration Estate and Economic Development
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2124 Constant Hall | Norfolk, Virginia 23529
NASPAA Accredited

86 U r b a n La n D August 2009
proactive
solution file
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
W i L L i a M p. M aC h T
electrode via an external circuit. These
electrons meet the hydrogen and
The largest California craft
push charged ions across the electro- brewer cogenerates power
lyte and cause hydrogen and oxygen
to combine to form water. The direct and heat for its brewery
current (DC) charge then passes
through an inverter to become alter- from stationary gas-fueled
nating current (AC), and is routed hydrogen fuel cells.
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 The production of beer requires large
have invested heavily in proton amounts of uninterruptible heat
and power. The need for continuous
exchange membrane (PEM) fuel power at the Sierra Nevada Brewery in
cells, which operate at a low tem- Chico, California, ruled out both solar
perature but require pure hydrogen photovoltaic and wind power, which
and expensive metals, like platinum. require a steady source of sun or wind
to maintain full power, or large battery
Carbonate cells are able to achieve
arrays for storage. Stationary fuel cells
higher efficiencies with cheaper provide continuous power and heat.
August 2009 U r b a n La n D 87
 solution file
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
88 U r b a n La n D August 2009
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.
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.)
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© 2009 Wells Fargo Bank, N.A. All rights reserved.
 Urban Land InstItUte bookstore
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An Analysis of Transportation Strategies
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Cambridge Systematics, Inc.
The Urban Land Institute
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l Considers nine categories including land use, and the effectiveness of
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UL0809 half MCool.indd 1 8/10/09 2:41:40 PM

Making a Visible Difference in the

Real Estate and Land Use Industry
The 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.
The ULI Foundation is able to provide meaningful support only because of the generosity of ULI members, other
foundations, and industry firms. Please consider a contribution in 2009 to the ULI Foundation. For additional
information, please visit the ULI Foundation online at www.foundation.uli.org

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proactive
in print,etc.
Why your World is about tic salmon is a case in point. Cheap
to Get a Whole Lot shipping and Asian labor changed
Smaller: Oil and the end salmon from a local seafood to
of Globalization
JeFF rUbIN
rANDOM HOUse, 1745 brOADWAY,
NeW YOrK, NY 10019;
www.randomhouse.com
2009. 287 pages. $26.
Jeff Rubin, the energy expert and
former chief economist at CIBC World
Markets—a subsidiary of the Cana-
dian Imperial Bank of Commerce—
was among the first economists
to predict soaring oil prices due to
peak oil. In Why Your World Is About
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-
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
August 2009 U r b a n La n D 91
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.
hungry City: how Food
Shapes Our Lives
CArOLYN sTeeL
CHATTO & WINDUs/rANDOM HOUse
20 VAUxHALL brIDGe rOAD, LONDON
sW1V 2sA; www.rbooks.co.uk
2008. 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
 in print, etc.

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.

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92 U r b a n La n D August 2009
proactive
trustee profile
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
rOberT KrUeGer
exists. There is more talent packed
into ULI over a broad set of real
Being fortunate enough
estate activities than any other to have run a school and
organization in the United States,”
he confides. “Not only is it the best worked for James Rouse
place to learn about all of the facets
of the real estate business, but prepared Charles Kendrick
over time it gives you time to build for leadership in real estate.
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 communicate 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 Charles Kendrick, Jr., is founder and senior
like being a mentor,” he says. “In vice president of Boston-based Clarion
the real estate business, people Ventures, LLC. He has spent more than 30
are driven by the physical part and years as a developer, investment banker,
changing the landscape. However, and strategic adviser specializing in urban
redevelopment projects and portfolios.
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.
August 2009 U r b a n La n D 93
urbanland Coming in
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 Regional Spotlight
New York/Massachusetts by Mike SheriDan

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.

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.
PhiPPs houses, Jonathan Rose ComPanies, DattneR aRChiteCts, GRimshaw

a
auug
guusstt 22000089 UUrrbbaann La
LannDD 95
95
 Spotlight/New York/Massachusetts
Further north, codevelopers Jonathan Rose Companies “Many developers and designers are rethinking their proj-
(JRCo) and Phipps Houses, in partnership with Datt- ects and changing them in scope and size as dictated
ner architects and grimshaw architects, hope to break by current projected market needs,” Madden continues.
ground later this year on Via Verde, an affordable hous- “the developments are not going to be the same as
ing development in the south Bronx that was the win- when they were initially conceived a couple of years ago.
ning entry in New York City’s first juried design competi- Certain projects will move forward, but we’ll probably
tion for affordable, sustainable housing, the New Housing not see the same pace of development as we’ve seen
New York Legacy Project (NHNY). Comprising traditional in the recent past. Even in this economic environment,
apartments, duplexes, and live/work units, the $100 mil- there are places that need to be developed and people
lion, 294,000-square-foot (27,313-sq-m) mixed-use devel- who would love to develop them.”
opment will serve residents with a range of incomes. Paul Freitag, a regional director of development at
and in Queens, Vornado Realty trust has begun Jonathan Rose Companies, the New York City–head-
construction on the $550 million Rego Park Center, a quartered mission-based, multidisciplinary real estate
mixed-use development that is one of the first attempts development, planning, consulting, and investment firm,
to bring big-box retail to an urban infill location. three emphasizes that there is always a need for affordable
floors of retail space—694,000 square feet (64,474 sq housing in New York City. JRCo and its partners won
m)—will supplement the existing malls in the area; a an international design competition for the Via Vende
pedestrian promenade will link the Rego retail with sur- site last year. “We were asked to create a model for the
rounding residential streets. next generation of green affordable housing on a narrow,
to paraphrase Mark twain, the reports of the death brownfield site that used to be a railroad right-of-way,”
of New York City’s real estate market may be exagger- he explains. “It is an extremely challenging site, but we
ated. Real estate development is still occurring in the Big have been able to hold true to our competition proposal.
apple, notes Paul Madden, an associate and director of We expect to close on the Via Verde development later
projects for New York City–based Kenneth Park archi- in the fall and complete construction in two years.”
tects. the difference nowadays, he adds, is more caution. Via Vende’s stepped design is intended to integrate city
and nature, with connected green rooftops that will be
used to harvest rainwater, grow fruits and vegetables, and
provide open space for residents, he adds. “Within their
own development, Via Verde residents will be able to
have a wonderful connection back to nature in this very
dense setting,” Freitag says. “Via Vende is designed to
exceed LEED gold standards for environmentally respon-
sible and energy-efficient design and will demonstrate
New York City’s commitment to innovative development.”
While the current real estate market is challenging,
says Eric Fang, an associate principal at New York’s
Ehrenkrantz Eckstut & Kuhn architects, it is provid-
ing opportunities for well-thought-out development
by builders who have confidence in the city’s future.
“We’ve always found this is the most opportune time for
planning—a time to take a step back and make strategic
decisions in preparation for the upturn,” he continues.
“Rockefeller Center was developed in the middle of

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.
VoRnaDo Realty tRust

96 U r b a n La n D august 2009
CBS HalfPgHoriz_V2:CBS HalfPgHoriz_V2 7/30/09 11:49 AM Page 1

The Paul Milstein Center for Real Estate and Columbia Business School
express their appreciation to the following individuals and companies
for the preparation of teaching cases prepared for
Columbia CaseWorks, 2008–09:

Jeffrey T. Blau, The Related Companies, LP David Hodes, Hodes Weill & Associates

Tavis Cannell ’06, Goldman Sachs Nancy Lashine ’81, Park Madison Partners LLC

Brian Carr, Morgan Stanley Thomas McDonald, Equity International

Michael Coster, Lazard Freres Paul Pariser ’78, Taconic Investment Partners LLC

Michael Fascitelli, Vornado Realty Trust Glenn J. Rufrano, Centro Properties Group

Michelle Felman, Vornado Realty Trust Edward Shugrue, Guggenheim Partners, LLC

Gary R. Garrabrant, Equity International Brian R. Steinwurtzel ’04, Newmark Knight Frank

MaryAnne Gilmartin, Forest City Ratner Companies Christopher Taube ’03, Aetos Capital, LLC

Patricia Goldstein, Emigrant Bank

 Spotlight/New York/Massachusetts
Funding for development remains tight, but that is
changing. Joshua Kahr, founder and principal of New
York City–based Kahr Real Estate group, says that while
the real estate credit markets for the most part remain
frozen, there appears to be a slight thaw. “Money is
available for multifamily because Fannie Mae and Freddie
Mac are financing it,” he says. “But most of the banks are
not really lending. It seems a little more positive, though,
with people willing to have discussions about lending
they weren’t having before. the tone of phone calls with
financiers and developers has changed, becoming a little
more friendly, so that’s a good, positive sign.”
In New York City, he adds, there has been only one
major office building sale—1540 Broadway—this year. “It
involved 68 percent seller financing and reports said it
was sold for 40 percent of what [New York real estate

ehRenkRantz eCkstut & kuhn aRChiteCts

developer Harry] Macklowe paid for it three years ago,”
Kahr continues. “When valuations drop that much, it’s
not a good sign.”
the u.s. treasury Department’s plans to stabilize the
real estate financial markets—between $75 billion and
$100 billion is anticipated to be funneled into the Public-
Private Investment Program (PPIP) while the term asset
Loan Facility (taLF) may eventually buy up to $1 trillion
in financial assets including commercial and residential
Milstein Properties is building two green residential towers— mortgages—is expected to have some positive effect
Liberty Green and Liberty Lux—in lower Manhattan’s Battery on the market, says Kahr. “there are a lot of people still
Park City. The buildings were designed by Ehrenkrantz Eckstut &
trying to get cash together to buy buildings,” he says.
Kuhn Architects of New York.
“We’re seeing lenders starting to sell off commercial
assets to some extent, but as of yet, there have not been
the great Depression. Battery Park City, which EE&K a lot of transactions. at some point, this will have to
designed, was planned during a dark period in NYC his- change. the banks can’t just ride this out.”
tory and it turned out, like Rockefeller Center, to be a Commercial tenants in the Big apple are waiting as
very good investment.” long as they can before signing on the dotted line, says
sustainability is also becoming a good investment, Raymond a. sanseverino, a partner in the New York
Fang adds, noting that EE&K’s final two buildings in Bat- office of international law firm Loeb & Loeb LLP. “Earlier
tery Park City are green structures that attest to the this year, many brokers believed the market was con-
staying power of sustainability. Designed to LEED gold tinuing to decline and lower rents or better concessions
certification standards, the towers will include photo- could be had in the months ahead,” he adds. “But within
voltaic panels on the bulkheads as well as a blackwater the last couple of weeks, leasing activity is starting to
system to collect water from the buildings and reuse it increase very modestly. this may be because companies
for toilet flushing and the cooling tower. believe the market has hit bottom or firms that intend to
Developers are also seeking flexibility in starting new stay in business can no longer defer their decisions.”
developments in case market conditions change. there sanseverino sees fewer transactions and slower devel-
are plans for Vornado’s mixed-use Rego project to have opment in the sector in the near term, since the need
a residential tower that could be built when demand for additional office space in the region has lessened. “I
returns, Fang says. “We provided for a residential core, believe we will see a trend to greener projects, in part
so it would fit neatly with the rest of the retail center to provide a competitive advantage to those marketing
when the time is right to build it,” he says. their space,” he adds.
While federal stimulus money is also expected to Fang of EE&K says that many large-scale develop-
benefit the New York real estate industry, says Madden, ments planned for New York will be needed over time,
most developers are waiting to see when the economy adding that sustainability will remain as strong in the
improves. “there is not as much movement going on future as it is now. “I believe that developers who take
now as there was 18 months ago,” he says. “Develop- the initiative now to lay the groundwork will be in
ers of some large projects that will be delivered several the best position when downturn heads up,” he says.
years down the road are proceeding, but even retailers “Remember, Rockefeller Plaza was built in the middle of
have become more cautious. KPa is working on several the great Depression.”—M.S.
projects that are in the preliminary stages, but develop-
ment is exceedingly slow and being undertaken with
utmost caution.”

98 U r b a n La n D august 2009
 Research and training for policy and practice

OConnell_ULI_halfpg:Layout 1 8/5/09 8:05 AM Page 1

Books, reports, and Land Lines magazine Workshops, conferences, and online courses

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See us at EACUBO, October 11-13, 2009, Atlanta, GA

 Spotlight/New York/Massachusetts Old Colony Square, a mixed-use, retail-anchored
project outside Boston designed by Cubellis, is
expected to be completed by next spring.

Cubellis
bay State builders adjusting to the new Market
T h a n k s T o n i m b l e e n T r e p r e n e u r s adjusting quickly lion from several state and federal affordable housing
to the market by offering products that are needed and programs and tax credits to support 39 affordable rental
designers and architects who continue to stress sustain- housing projects with over 2,000 units. “He made the
ability, Massachusetts is experiencing real estate devel- announcement at the site of spencer Row, a proposed
opment. some agile developers have managed to stay 32-unit development of the nonprofit Chelsea Neighbor-
ahead of the pack by surveying the industry and quickly hood Developers,” Heikin says. “the project is one of five
changing their plans, says steven a. Heikin, vice presi- projects funded through these awards for which ICON
dent and senior principal at Boston-based ICON architec- architecture, inc., which specializes in affordable housing
ture, inc. “avenir, a transit-oriented development [tOD] design, is serving as architect.”
directly above the MBta’s North station rapid transit ICON is also serving as architect and planner on two
station—across the street from the tD Banknorth garden more trinity Financial projects. the Hamilton Canal Dis-
and North station commuter rail terminal—was repo- trict, a 15-acre (6-ha) mixed-use development site in
sitioned at the beginning of the real estate downtown Lowell, has received stimulus dollars to facilitate initial
from a condominium development to rental without infrastructure design and construction, as well as tax
skipping a beat in the planned construction schedule,” credits to help finance the restoration of the historic
he says. “the fully permitted project was sold by the appleton Mills into affordable artists’ live/work units,
original developer, trinity Financial of Boston, to arch- Heikin adds. similarly, the 206-unit Washington Beech
stone, while trinity remained on the project to manage HOPE VI development in Boston’s Roslindale neighbor-
construction. the 242-unit structure, which includes hood received both tax credits and stimulus dollars. “One
30,000 square feet [2,787-sq-m] of ground-floor retail, of only five HOPE VI developments nationally to receive
was completed in June.” substantial HuD grants in the last year of the Bush
In fact, the market for rental housing—which was administration, the new Washington Beech is already
never overbuilt in Massachusetts—seems to be regain- under construction,” he says.
ing strength. “this is particularly true of affordable and art stadig, vice president of Walker Parking Consul-
workforce housing, which, in a high-cost area like Boston, tants in Boston, a full-service engineering and architec-
remains in demand,” he continues. Earlier this year, ture firm, says Massachusetts developers, designers, and
governor Deval Patrick announced awards of $108 mil- architects are more optimistic now compared to the
past several months. “People are breathing a little easier
and emotions are getting a little bit better in terms of
ICON is the architect and planner for the actual activity,” he explains. “It has been slow in coming,
Hamilton Canal District, a 15-acre (6-ha)
but many believe we’re at or near the bottom, so we’re
mixed-use development in Lowell.
looking toward slow, steady growth this year—nothing
rapid—but hopefully by this time next year, we’ll feel an
improvement in the development sector.”
Boston remains a “pretty solid” real estate market
because forward-thinking entrepreneurs saw the drop-
off in demand and adjusted the pace of development,
stadig says. “a lot of people hit the pause button on
building and slowed or stopped work on a lot of oppor-
tunities that had been out there,” he says. “Everyone
bonDy stuDio

thinks it will come back; probably by the end of next

year, we’ll see an uptick and move forward again. Down-
town Boston looks pretty solid. We’ve been hit by the

100 U r b a n La n D august 2009

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 Spotlight/New York/Massachusetts
tive optimism out there, and things may start to improve
toward end of this year or the beginning of 2010, if
credit markets loosen.”
the state capital is experiencing leasing activity,
although the velocity—signed lease activity—is modest,
says Ronald K. Perry, executive vice president of Boston-
based brokerage firm Colliers Meredith & grew. He notes
that annual lease velocity for each of the past three
years has been roughly 5 million square feet (464,515
sq m), and was well below that pace through the first
half of 2009. the bulk of leasing activity has come from
small to mid-sized tenants (under 25,000 square feet
[2,322 sq m]) or renewals, such as Deloitte & touche’s
first-quarter renewal for 190,000 square feet (17,651 sq

GReGG shuPe
m) at 200 Berkeley street.
tenants are seeking value with respect to rents and
relocation alternatives, Perry adds. “the downward pres-
Avenir, a recently completed transit-oriented development sure on rents will continue until the addition of sublease
directly above the MBTA’s North Station rapid transit station in inventory subsides,” he says. “the development pipeline
Boston, was designed by ICON architecture, inc. for any sizable construction projects will be stalled until
economy just as badly as anyone else, but it hasn’t been a sense of confidence and stability returns to the capital
as devastating here yet.” markets.”
Overall, the Massachusetts economy appears to be One of the hottest emerging trends in the Massachu-
stabilizing, agrees Richard W. Rankin, principal at Boston- setts real estate marketplace is acquiring mortgage debt
based Cubellis, a national architecture, interior design, from lenders at discounted prices, says andrew H. Kara,
and engineering services firm. He adds that many strong an attorney in the Boston office of full-service law firm of
retail real estate investment trusts (REIts) are raising Hinckley, allen & snyder LLP. “Buyers of discounted debt
capital and seeking opportunities to capitalize on the dis- can potentially achieve very high rates of return through
tressed market and position themselves for the expected either foreclosing a mortgage and obtaining ownership
development uptick. “Firms are positioning themselves of the mortgaged property, collecting monthly mortgage
for the future,” he says. “Currently, we’re seeing more payments at a default rate of interest, or being paid off at
repositioning of existing centers and many owners are the original principal amount of the mortgage loan when
spending dollars now to upgrade tired properties.” it was purchased at a substantial discount,” he continues.
Connell Cohasset greenbush LLC has broken ground While purchasing commercial mortgage loans at
on Old Colony square at Cohasset station, a mixed-use, discounted prices seems like a great opportunity for
retail-anchored project in the heart of a tOD district, he investors, there are a number of legal issues to be con-
points out. the development includes a two-story build- sidered, he cautions. “Buyers of commercial real estate
ing with 32,000 square feet (2,972 sq m) of retail space mortgages are granted very short periods of time—
on the ground and 16 luxury apartments above as well as sometimes as little as five to seven days—to conduct
a freestanding 3,400-square-foot (316-sq-m) retail pad. their due diligence,” he says. “In addition, lenders will
the site was formerly home to a boat storage yard and provide only very limited due diligence information to
a small retail center. Old Colony square is expected to prospective buyers and often will not let buyers visit the
be completed by next spring. “New development is just properties. Finally, lender liability under state laws and
inching along,” Rankin says. “there may be some tenta- potential bankruptcy filings by the borrower can create
other issues.”
Spencer Row is a proposed 32-unit development of the nonprofit Kara says he isn’t worried about the future of real
Chelsea Neighborhood Developers outside Boston. ICON estate in the Bay state. “While the Massachusetts mar-
architecture, inc., is the architect. ketplace, like other marketplaces around the country, is
currently challenged, Massachusetts possesses a number
of unique attributes including historically limited new con-
struction because of a stringent permitting process, one
of the best college and university systems in the world,
and a host of the top-tier hospitals, biotech companies,
and pharmaceutical companies that will allow it to recover
[more quickly] than other markets when the economy
iCon aRChiteCtuRe, inC.

stops contracting and starts to grow again,” he says.

Mike SheriDan , who studied real estate in Japan as a

Fulbright Scholar, is a freelance writer in Parsippany, New
Jersey.

102 U r b a n La n D august 2009

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CopleyWolff_ULI_Ad_F.indd 1 8/5/09 2:34:32 PM

 ULI Ad:Layout 1 8/7/2009 10:51 AM Page 1
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 energy consULtants interior Designers
URBANLAND/Green Experts Resource Guide

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LanD pLanners

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LanDscape architects sUstainabiLity consULtants

URBANLAND/Green Experts Resource Guide

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renewabLe energy consULtants sUstainabLe Design consULting

urbanland coming in
october 2009
magazine

best Lenders, attorneys, accountants,

consultants, brokers and investors guide
Showcase your firm to the members of Urban Land, the leaders
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***This Guide will be included in the October issue of Urban Land
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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

green experts resourc

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 Business Card or
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Card in Color
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108 U r b a n La n D august 2009

 Business Card Pages

august 2009 U r b a n La n D 109

Business Card Pages

110 U r b a n La n D august 2009

 urbanland
Why Advertise in the

Business Card Pages

business card pages?
THIS IS WHErE bUSInESS STarTS!

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registry
A.D. Makepeace. . . . . . . . . . . . . . . . . . . . . . . . . .101
www.admakepeace.com
Akerman Senterfitt . . . . . . . . . .Inside Back Cover
www.akerman.com
Ameron International . . . . . . . . . . . . . . . . . . . . . .81
www.ameronpoles.com
Arrowstreet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
www.arrowstreet.com
Bank of America Merrill Lynch . . . . . . . . . . . . . . . 1
BartonPartners. . . . . . . . . . . . . . . . . . . . . . . . . . . .18
www.bartonpartners.com
Boomerang Automated Parking Systems . . . . . 33
www.boomerangsystems.com
Bostonia Partners LLC . . . . . . . . . . . . . . . . . . . .103
www.bostonia.com
The Business Card Pages . . . . . . . . . . . . . 108-110
Carol Johnson Associates . . . . . . . . . . . . . . . . . .27
www.crja.com
Clemson University . . . . . . . . . . . . . . . . . . . . . . . 85
www.clemson.edu/mred/
Columbia Business School . . . . . . . . . . . . . . . . .97
Copley Wolff Design Group . . . . . . . . . . . . . . . .103
www.copley-wolff.com
The Cordish Company . . . . . . . . . . . . . . . . . . . . . .5
www.cordish.com
EDSA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
www.edsaplan.com
Goulston & Storrs . . . . . . . . . . . . . . . . . . . . . . . . . .7
www.goulstonstorrs.com
Green Experts Resource Guide . . . . . . . . . 104-107
of advertisers
Greenhaus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
www.greenhaus.com
Group RCI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
www.theregistrycollection.com
IBM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
www.ibm.com/think
Kenneth Park Architects. . . . . . . . Inside Front Cover
www.kennethpark.com
Lifescapes International, Inc. . . . . . . . . . . . . . . .81
www.lifescapesintl.com
Lincoln Institute of Land Policy. . . . . . . . . . . . . 99
www.lincolninst.edu
LSG Landscape Architecture . . . . . . . . . . . . . . . 32
www.lsginc.com
Mansfield, Texas . . . . . . . . . . . . . . . . . . . . . . . . . .18
www.Mansfield-Texas.com
MassHousing . . . . . . . . . . . . . . . . . . . . . . . . . . . .101
www.masshousing.com
Moffat & Nichol . . . . . . . . . . . . . . . . . . . . . . . . . . .79
www.moffattnichol.com
New York University School of Continuing
and Professional Studies. . . . . . . . . . . . . . . . . . 83
www.scps.nyu.edu/realestate
OBM International. . . . . . . . . . . . . . . . . . . . . . . . .79
www.obmi.com
O’Connell Development Group . . . . . . . . . . . . . 99
Old Dominion University . . . . . . . . . . . . . . . . . . 86
www.bpa.odu.edu/bpa/departments/finance.shtml
PNC . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Back Cover
www.pnc.com/realestate
Reznick Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
www.reznickgroup.com
Riddell Tseng . . . . . . . . . . . . . . . . . . . . . . . . . . . . .77
SK&I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
www.skiarch.com
Spinnaker Real Estate Partners . . . . . . . . . . . . 29
Stantec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
www.stantec.com
Steven Kratchman Architects, P.C.. . . . . . . . . . .97
www.KratchmanArchitects.com
Syska Hennessy Group . . . . . . . . . . . . . . . . . . . .31
www.Syska.com/WateringCan
Torti Gallas and Partners . . . . . . . . . . . . . . . . . . 89
www.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. . . . . . . . . . . . . . . . .57
www.usrealco.com
Victor Stanley, Inc. . . . . . . . . . . . . . . . . . . . . . . . .17
www.victorstanley.com
The Wall Street Journal. . . . . . . . . . . . . . . . . . 6, 56
WSJ.com/CommercialRealEstate
WSJ.com/RealEstate
Wells Fargo. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
www.wellsfargo.com/realestate
WLS Lighting Systems . . . . . . . . . . . . . . . . . . . . .15

august 2009 U r b a n La n D 111

 backpage
peter L. gray
Stimulus Much has been written about how the
American Recovery and Investment Act of
Package 2009—the economic stimulus package—will
create green jobs, particularly in the renew-
Recharges able energy sector. Whether that happens
remains to be seen. Clearly, when the gov-
Renewable ernment provides an economic incentive
that closes the cost gap between renewable
Energy and conventional energy, the use of renew-
able energy grows. Germany’s solar industry
offers a good example.
The 2009 economic stimulus Germany is hardly the sunniest place in
package has changed the ground the world. Yet in 2005, it overtook Japan as
the world’s leading producer of photovoltaic
rules for investors. projects (PV) electricity, with 39 percent of global
capacity, compared with Japan’s 38 percent.
considered unthinkable a year Germany also became the fastest-growing
market for PV products, like PV cells. Its PV
ago are now underway. 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
PPM EnErgy (Big Horn Wind PoWEr ProjEct nEar BickElton, WasHington)
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.
Peter L. Gray is a partner with the Washington, D.C., office
l Renews the production tax credit, which
of McKenna long & aldridge llp, where he is chair of the environment,
energy, and product regulation department. His climate change blog provides a 2.1-cents-per-kilowatt-hour benefit
is posted at www.climatechangeinsights.com. for the first ten years of a renewable energy
112 U r b a n La n D august 2009
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
Akerman
Helping 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.

Richard Bezold DALLAS

305.982.5657 DENVER
richard.bezold@akerman.com FT. LAUDERDALE
JACKSONVILLE
LOS ANGELES
mADISON
mIAmI
NEW YORK
ORLANDO
TALLAHASSEE
TAmPA
TYSONS CORNER
WASHINGTON, D.C.
WEST PALm BEACH

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* Green Building Certification Institute 2009.
 RESULTS. *Why our clients keep relying on us.

Now more than ever, you’re seeking results. Despite today’s challenging
environment, we continue to find ways to help our clients achieve their
goals. Some solutions are straightforward. Some require a bit more
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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
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