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July 22, 2014

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Going Green:

‘If anything gets built, it will have a green aspect’

The downturn in the economy and national credit crunch have slowed commercial construction in Las Vegas, but developers and advocates of green projects say that while building has slowed, the enthusiasm for pursuing green hasn’t.

“The only thing the economy is going to hurt is building projects going forward, and a lot less projects will be built, but the ones going forward are going to be green,” said Pam Vilkin, past president of the Nevada chapter of the Green Building Council, a nonprofit organization that promotes sustainable building practices. “While we have a major slowdown in buildings going vertical, the green movement isn’t slowing down at all. If anything gets built, it will have a green aspect to it. It makes so much sense. Why build a building to the old generation? The financial community loves it and so does the insurance industry.”

Rick Myers, president of Thomas & Mack Development Group, said while development has slowed considerably, his company is evaluating its next round of projects to include green features.

Thomas & Mack owns 100 acres at Interstate 15 and the Las Vegas Beltway, where it has the Northern Beltway Industrial Center

It has two industrial buildings totaling 410,000 square feet, but wants the next phase, 500,000 square feet in two buildings, to be green.

“We may not break ground because of the economy, but green is still on our mind,” Myers said. “And even in this downturn, others are doing evaluations, too. The concept of building better, more efficient buildings will not go away. Plus, it’s the right thing to do.”

The U.S. Green Building Council is updating its standards and some developers are waiting for those to be released before moving forward on projects.

Costs are coming down because the industry is much smarter about developing green buildings, Myers said. In the past, there was more concern about costs because it was so new, but that has changed with manufacturers creating equipment and materials that are more efficient, he said.

Developer Jeff LaPour said the commercial development industry has been hit so hard that green will probably trend down as well, but that doesn’t mean the demand won’t eventually be there and the desire to construct more of those types of buildings.

“The development industry has been hard hit by the financial crisis, but as the cycle recovers, you are going to see a lot being built and demand for that.”

LaPour has a 70,000-square-foot speculative office building that is 42 percent leased, and he credits its green features for helping attain that level in this economy. Companies like to identify with environmental responsibility and want their employees to work in that type of setting.

LaPour said he paid 5 percent more for going green, but rents are about the same

“When all conditions are equal in a competitive environment, green will carry the day,” LaPour said.

Vilkin maintains any cost differences between green and nongreen buildings are minimal today and most of those costs will be recovered quickly with lower energy bills. The reason: Architects; engineers and contractors are gaining so much more knowledge on how to build green, Vilkin said.

Sixteen buildings in Nevada have been certified as green and quite a few more will gain that designation in 2009, Vilkin said.

Kirk Boylston, regional director of EJM Development, the builder of the Arroyo mixed-use project in the southwest valley, said most of the focus of green has been on the higher-end office buildings because of the demand by tenants. Besides, the cost of those buildings is such that incorporating green features in them isn’t cost prohibitive, Boylston said.

For those constructing a more “vanilla” office building are not going to pay more to install the more elaborate heating and cooling systems, Boylston said.

“It would be too cost-prohibitive for them,” Boylston said.

The retail industry has yet to embrace the green building concept and hasn’t demanded it like office tenants, Boylston said. The reason is that offices are filled with employees who are there all day while retail stores have a smaller number of employees. Most of the people in the store are customers.

“The good things about green buildings are better air quality and better lighting, but they have less of an effect on customers who are in and out and not sitting there all day,” Boylston said.

The economic slowdown could push more people to a new trend in the industry. It won’t be the construction of new buildings to green standards, but the retrofitting of existing buildings to become greener, Vilkin said.

Building owners are upgrading lighting and mechanical systems. When they replace a roof, they consider options that reduce heat absorbed into the building.

“The idea of taking an old building and bringing it up to modern standards is the most untapped market there is,” Vilkin said. “It is the next wave of the future. If people are having a hard time getting a loan on a new project, it is time to retrofit older buildings in their portfolio.”

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