2011 EcoDistricts Summit: Skanska’s Beth Heider on Building For 100 Years

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Skanska VP Beth Heider believes in building for the next 100 years—not just the next 10. It’s a strategic shift in thinking that challenges developers and builders to look at costs over time and consider the future—as much as the present—bottom line when making decisions that will affect occupants and owners, as well as city and neighborhood vitality. With energy prices currently soaring and expected to rise even higher, performance becomes a key component of both building valuation and operational costs over time. In our interview, Beth outlines how the LEED system, developed by the U.S. Green Building Council (USGBC), continues to help us make more informed decisions going forward.

EcoDistricts Summit: How do you see EcoDistricts playing a role in the planning of sustainable cities going forward?
Beth Heider: From where I sit—using insights gained working for Skanska and with the USGBC—I would say we need to look beyond the drip lines of our high performance buildings and—in the lexicon of the Living Building Challenge—scale jump. We need to look at how buildings act in a synergistic way with other buildings around them and how they work within the infrastructure that lays the basis for a community.

If you look at the statistics, people are moving toward cities and more densely populated communities. I think we have a unique opportunity to take a look at what we’re doing in our communities from a sustainability perspective in a broader way. If we take advantage of that opportunity, it should have wide-ranging effects. It’s going to demand that we look at things in a new light and create political, legal, financial and design infrastructures that are different than those we have now.

As you know, LEED has a number of rating systems. LEED for Neighborhood Development (ND) addresses a collection of buildings and the infrastructure that ties them together at the district scale. Perhaps the greatest impact the LEED ND program will have is how it informs the other rating systems. For instance, the number of credits available for choosing a site wisely has increased in LEED 2009.

EcoD: The LEED platform has been a significant driver of both the construction and mainstreaming of more sustainable buildings. But so much of the day-to-day benefit after a building is “finished” comes from behavior change and interactions with a structure. How do we take the energy that LEED brings to a project and carry it out over the long term—so that we’re not just creating technically sustainable structures, but also using them efficiently? 
BH: One of the things we’ve learned in the green building movement is the importance of using a consistent lexicon—a consistent way to benchmark the energy and environmental performance of buildings. The LEED platform gives structure to the dialogue.

When we started to look at the performance of buildings—it differed from the modeled performance. The notable New Buildings Institute (NBI) study that was done a few years ago on LEED buildings revealed anomalies – something that you can only do when you have a basis of comparison.

EcoD: What did the results show or prove? 
BH: What we found is that there are three key things that influence the performance of buildings—and now I’m not talking about ecodistricts, but rather the individual buildings.

One is how the building was designed. Was it designed thoughtfully in the LEED lexicon? Were the points pursued part of an integrated strategy and appropriate to what the building was intended to do? How was the building designed toward environmental and energy performance?

The second thing is how a building is used by its occupants. That speaks directly to your question. It’s the same with cars. If you drive your Prius like it’s a Maserati—you’re not going to get great gas mileage. It works the same for buildings. Fortunately with your Prius, you have a video game built into the dashboard that provides constant feedback on how your actions affect the car’s performance. Toyota puts you in a position to understand the direct relationship between what you do and how that changes energy consumption—which means you’re in an informed position to make decisions. If you want to drive your Prius like a Maserati—fine, but there are consequences that have to do with energy performance and the connected cost of fuel.

The third component is how a building is maintained and operated. Again, using a car analogy, it’s no different than making sure your tires are inflated properly and your oil has been changed recently. If you have all of those things in play, your building—like your car—will function as optimally as possible.

All three elements play into the performance of a project, but the great contribution that LEED makes is a lexicon that allows us to have this dialogue. And that conversation has, in turn, informed how LEED has evolved. As we move forward, the Building Performance Partnership Program is in place to capture electric and utility costs (as of LEED 2009). This new data management platform allows us (USGBC) to link performance of buildings to the decisions that were made or attributes of a project. We can provide owners feedback about the relationship between the points they have elected to pursue versus how their building is performaning on an actual basis (rather than a modeled basis). And this is a huge step between connecting building performance with the design intent reflected in the LEED points system.

EcoD: Do you think there is potential for a tool that—similar to LEED—allows cities to measure their building performance on a municipal scale that would be publically available and encourage friendly competition?
BH: Having reasonable data that is consistent and well-gathered, and feeding into a common metric for municipalities is a good idea—though there are all kinds of challenges around how you verify that the information reported is correct and making sure there is adequate education so people are able to understand how to participate.

There is also the issue of voluntary participation—which is what the LEED program is—versus legislated participation—which you see in places like Europe—that mandates a building’s grade be posted on the building. I think there is a balance there that we have to get right in terms of ensuring broad participation but not creating a mandate that is invasive. We want people to participate in a way that is righteous and consistent.

One of the great things we’re seeing come together at USGBC is that ability to aggregate information. If you get a chance, go check out the GBIG (Green Building Information Gateway) tool, which is available as an app on your iPad or iPhone. It takes the information loaded into the USGBC platform for buildings in a growing number of cities, and lets you click on a building (as long as it’s under the LEED certification umbrella) and view what LEED points were pursued and its carbon index. That tells you where the building stands on its own accord, but also how it stacks up against other buildings around it.

The GBIG analysis lets you see the landscape and when you’re planning subsequent buildings you can then decide whether you’re comfortable with where your building measures up in the marketplace or whether you want to take a stronger market leadership position. You can see what that might entail by comparing your ideas to what has been done within the country or your region. This tool very quickly calculates that information so you know how to plan your next project. It helps propel the market forward and accelerates the ability of developers or owners to make informed decisions. This is the mission of the USGBC: Market transformation.

Emboldened by our own research and feedback from tools like GBIG, at Skanska, our Commercial Development group has decided that LEED Gold will be the floor for all our development projects worldwide. In some markets, we are exploring LEED Platinum and recently, a Living Building, because we’re able to clearly see where our buildings need to be now, but also ask where they need to be in the future, so that people will be interested in leasing them and buyers will be interested in acquiring the buildings.

EcoD: What’s the vision in how stakeholders will use the GBIG tool? Can it help drive district scale sustainable development? 
BH: Owners, tenants and developers need to see where they’re going next and what their portfolio will need to look like in the future. That goes for new and existing buildings. Informed owners, lessees, brokerage houses, banks and insurance providers now have the ability to make a decision about where they want to be 20 years down the road. They can see which buildings match up, not only with their commitment to the environment, but also from a risk profile perspective. Assuming foreign oil and energy prices continue to go up or should some kind of carbon metric be established, GBIG provides the market with crucial information.

When you’re in a retracting market, sometimes you don’t want to think about the future, because the now is difficult enough to handle. But buildings last a long time, especially buildings constructed for institutional clients and in cities, which are designed to last 50 to 100 years or more.

We need to be thoughtful about where each buildings is going to be positioned in the future. Its value could easily erode if other buildings around it are performing at a much higher level. The cost of ownership or occupancy could be so high that people won’t want that energy hog over there when they can have this higher performing building over here. If you’re planning for 100 years you tend to make different decisions.

The ability to provide “buyer beware” information on our buildings will make it easier for people to make informed decisions. I think there is far more acuity in the market than we like to admit. The market is much savvier in regard to the connection between energy performance and long-term value now and growing more so every day. One of the reasons is that the LEED rating system has been around long enough that we are beginning to see performance over time. Banks can base building valuations on precedence rather than projections—which is huge. There is enough LEED stock on the market that we are beginning to see building valuations rewarding those who are doing the right thing from an energy and environmental standpoint. And that makes sustainable engineering/design a more scaleable and viable option for any development—including district scale development—then if you’re doing it just because it feels good or is consistent with a brand.

Beth Heider is Senior Vice President for Green Markets at Skanska and the Chair Elect of the US Green Building Council. She will be a featured speaker on the Leadership Panel at the 2011 EcoDistricts Summit, October 26-28 in Portland, Oregon. To learn more about the 2011 Summit or to register, visit: ecodistrictssummit.com. For 2011 Summit and Portland Sustainability Institute news and updates, follow @PDXInstitute on Twitter and Like facebook.com/ecodistrictssummit on Facebook. 

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