When it comes to the most energy-efficient buildings, deep pockets are still needed

Tech companies are creating demand for green buildings in the high-end market, but the added costs mean few can follow their lead.

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Bakery Square - Nabisco Building, home to Google, is LEED platinum certified. (Photo by Terry Clark/PublicSource)

The Bakery Square-Nabisco Building, home to Google, is LEED platinum certified. (Photo by Terry Clark/PublicSource)

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In Pittsburgh, the number of buildings with high energy-efficiency ratings is on the rise. It’s tech companies, like Google, that have opted to pay more for less of a carbon footprint, said Brandon Mendoza, executive director of the Pittsburgh chapter of NAIOP, a business association of commercial developers.

In 2010, Google’s current home in the Bakery Square-Nabisco Building was certified LEED Platinum, the highest rating established by the U.S. Green Building Council, a Washington-based nonprofit. Riverfront West, an office development in the Strip District that houses Pittsburgh-based Argo AI, earned LEED Gold certification earlier this year.

“The top companies, you know, who are occupying the Class A office space, they’re willing to pay a little bit of a premium in a better building and a more energy-efficient building,” Mendoza said.

In his view, the energy efficiency of office space for tech companies serves as a recruitment tool for top tech-sector talent, who have the power in the job market to make such demands.

“The top talent wants to be in an environment where they feel like they have a low footprint on the environment,” he said. “So there’s not a lot of folks who want to spend millions of dollars on a location that the top talent does not want to locate to.”

Overall, buildings produce 81% of carbon emissions in Pittsburgh, according to the city’s climate action plan. Most of it comes from the use of electricity and natural gas. About half of those emissions come from commercial buildings, such as offices, hospitals, schools and churches.

Nationwide, buildings account for 70% of the country’s total electricity load, according to the U.S. Green Building Council.

Larger local initiatives to curb emissions from buildings are also taking root, targeted mainly at major institutions that occupy large offices downtown.

The Pittsburgh-based Green Building Alliance [GBA], a nonprofit focused on improving energy standards for buildings, has led action on Pittsburgh’s 2030 District since 2012. The initiative, which involves commercial property managers and building owners, aims to cut energy usage and water consumption in an area that covers parts of Downtown, North Side, Uptown and Oakland.

Encompassing 84 million square feet, the district is the largest out of 22 U.S. cities that have also adopted the model. The GBA reported that last year the district had reduced energy usage by 23% from a baseline determined by a national 2003 survey of commercial space consumption. The organization also reported an 18% drop in water usage compared to averages between 2009 and 2012.

Absent stricter government regulations and requirements, the GBA has focused on energy-efficient practices like installation of triple-paned windows and comprehensive insulation that can save money for developers and property managers by reducing energy costs over time.

“A business case has to be made,” said, Angelica Ciranni, vice president of strategy & innovation at GBA.

Historically, green building advocates zeroed in on buildings’ mechanical systems to reduce energy usage, Ciranni said — things like heating and cooling systems and lighting. But GBA has recently emphasized how developers can increase conservation by increasing the efficiency of a building’s envelope — the roof, walls, windows and doors that keep interiors shielded from the elements.

A quarter of the building’s energy usage is determined by how well it’s sealed from the outdoors, Ciranni said. And materials used during initial construction can have lasting consequences.

“How often do people replace windows and insulation? Not really that often,” Ciranni said. Meanwhile, property managers usually have to replace mechanical systems, like boilers and heaters, every 15 or 20 years, she said.

From a developer’s perspective, “You’re actually going to get a lot of bang for your buck with the building envelope,” Ciranni said.

But new construction for high-end commercial space is a small fraction of Pittsburgh’s building stock. In an older city, many homes and businesses are maintaining buildings with porous walls and roofs that leak out heated air in the winter and cooled air in the summer.

Some housing developers are trying to incorporate energy efficiency practices when it’s financially feasible, said Derrick Tillman, president and CEO of Pittsburgh-based Bridging the Gap Development.

Even on smaller projects that have little room for added costs, Tillman said better insulated walls and windows can be incorporated.

But larger goals, like passive house construction or net-zero emissions standards usually require larger projects with government subsidies or other outside financial support.

Passive houses use practices in a building’s envelope, airflow and mechanical systems that require little to no power from the grid.

Most contractors in the area don’t have the necessary expertise and training for specialized installations of products like solar panels or geothermal heating pumps, said Tillman, which adds to the cost of doing them.

“For construction companies that are versed in it, it’s a 3% to 5% percent increase in construction costs” overall, Tillman said. From less qualified contractors, Tillman said he’s seen greener building practices raise construction costs by as much as 25%.

On the local government side, city officials have focused on creating incentives for developers to build more environmentally friendly buildings.

In Pittsburgh’s zoning code, Riverfront districts, which snake along much of the shoreline of the three rivers, offer “bonus points” to developers who incorporate more energy-efficient or public transit-oriented designs. Parts of the Strip District, South Side Flats and the North Shore fall into Riverfront zoning, and developers, for instance, might be permitted to build at greater heights if they incorporate energy-efficient or transit oriented features.

The same bonus point system was incorporated in the Uptown Eco Innovation District, a special part of the zoning code that applies to the neighborhood east of Downtown. Andrew Dash, acting director of the Department of City Planning, said the incentives came from community input in those areas.

For the rest of the city, the zoning incentive structure does not apply, but Dash said Pittsburgh’s Planning Commission has encouraged developers to work with city planning staff to incorporate as much energy efficiency and sustainability practices as possible.

UPMC worked with city planners to reduce energy usage at the forthcoming Vision and Rehabilitation center. (Photo by Terry Clark/PublicSource)

UPMC worked with city planners to reduce energy usage at the forthcoming Vision and Rehabilitation center. (Photo by Terry Clark/PublicSource)

“It’s really a pilot project at this point for larger developments,” Dash said. The strategy, he said is “to have developers meet with our sustainability team ––getting all those folks in the room at the same time with the developers to look at how we can make improvements on mobility, on energy, rainwater, on a lot of those issues.”

Dash pointed to a recent success with UPMC’s Vision and Rehabilitation center at UPMC Mercy in Uptown, the $400 million, 410,000-square-foot facility. UPMC worked with Pittsbugh’s planning staff and came up with a design that reduced expected energy usage by 60%, compared to early designs.

While the recent progress of sustainability standards in Pittsburgh are largely voluntary or test cases, Ciranni said things are going in the right direction.

She also said it’s even more important for the entire region, not just Pittsburgh, to consider ways to reduce energy usage in buildings.

“Pittsburgh — even though it feels big — it’s a very small part of what the total impact can look like,” Ciranni said. “So we can’t forget about our friends outside the city boundaries.”

Tom Lisi is PublicSource's Develop PGH reporter. You can reach him at 412-368-6480 or by email at tom@publicsource.org.

Develop PGH has been made possible with funding from The Heinz Endowments.

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