The Burnside Blog

Posted By Mike Thelin on 02/26/2008

Here’s something that every Portlander ought to know. Our own Gerding Edlen Development is responsible for more LEED-certified that any developer in the United States, which also helps to explain why PDX has far more LEED builings per capita than any city in the country.

Within Gerding Edlen, principal and real estate veteran Dennis Wilde is considered to be one of the most prominent voices of the green building movement on the planet. While most in PDX wouldn’t recognize his name, Wilde is routinely invited to speak all over the globe, representing his company and Portland, where Wilde says the expertise on green building and renewable energy is so specialized and advanced, it could propel our livelihood and our economy to levels never before reached. Will we take advantage of it?

Did Gerding Edlen begin with the intention of being a green company?

We started with a clear standard making sure we gave back to the community by creating buildings that had lasting value. It was founded on a strong personal environmental ethic both on the part of Bob Gerding and Mark Edlen. So it was pretty easy migration to start pursuing green building. So, the first building that we ever did that was the genesis for the creation of the company was the Pacific Gas Transmission Building we did at Riverplace, which is now the headquarters of David Evans. There, the client came to us and said it really wanted to create a benchmark building in terms of energy performance. That was the marching orders of the client.

Didn’t that building set a record a couple years ago for office sales per square foot? Yes.

And your company recently set another sales-per-square-foot record when Gerding sold the Brewery Blocks. Is that proof to detractors that it pays to be green?

There is clearly is now a demonstrated track record for improved value to the property as time goes on. And we think that will continue to manifest. We think that you’re going to continue to see significant value appreciation for properties that are higher performing. You’re starting to see both the brokerage community and the appraisal community starting to take notice of building performance and operation. There’s a whole movement within that community to set green appraisal standards to use building performance as one of the metrics when they’re doing commercial valuations.

A lot of people don’t know that Gerding Edlen has more LEED-certified projects than any development firm in the entire country.

That’s scary isn’t it? I don’t think it’s going to last for very long. There are a lot of players who bigger than we are who are starting to take notice.

But your company is growing too?

We have offices in Seattle, Los Angeles and Portland. We’re West Coast. We’ve looked at a couple of opportunities east of the Rockies, but so far we’ve stayed West Coast. Portland and Seattle have the highest number of green buildings in the country.

Why has the Northwest been so seminal in the green movement?

The green movement was really nurtured here in the Northwest. The Cascadia chapter of the US Green Building Council is now headquartered in Seattle, but once was headquartered in Portland. Oregon, Washington, BC and Alaska make up the chapter, so you have this cross-border, very large, and very aggressive organization within the Green Building Council that’s been pushing the agenda and educating. There’s a huge resource of latent knowledge within the design community of the Northwest. That has significantly pushed the agenda.

So, what sparked it?

In Oregon, it was clearly the Business Energy Tax Credit that paved the way and established an incentive base that really accelerated the movement in the market. The Business Energy Tax Credits came into being in the early to middle 1990s. Originally, it gave developers a tax credit to offset the cost increase of energy-efficient measures, which were costly to implement. Then in 2002, it changed. You could still claim the individual measures, or could you use the LEED-certification pathway and get credits based on your LEED-based overall performance. At the minimum Silver, you get an X number of dollars per square foot. At LEED Gold, you get Y number of dollars per square foot. And at LEED Platinum, which is the highest, you get X plus Y. These are huge incentives to pursue green building strategies.

The Civic is Silver and the Casey is Platinum? Yes. The South Waterfront Towers are Silver or Gold. Our newest project, Cyan, is projected to be LEED Gold as well. (Read Randy Gragg’s interview with Mark Edlen regarding Cyan here.)

Aren’t a lot of the green measures achieved by simply applying common sense?

Absolutely. Applying best practices doesn’t necessarily cost a lot of money. We feel confident in saying that you can get a LEED Silver building without spending a dime in terms of hard construction costs. In terms of Gold, you have to spend a little bit more. At Platinum, you have to spend more. But still, the difference is between one-and-a-half and two percent for a Platinum building.

What types of things are we talking about for Silver?

Tuning the glazing system, being smart about the building-orientation system. That’s number one. If you orient a building so that the long face of the building is north-south, it’s going to be much more energy efficient than if it’s facing east-west because of the late-afternoon sun. That’s where you get a lot of your heating load, and you have to condition accordingly by increasing the size of the HVAC plant and increasing the size of the electrical system in the buildings to handle the periodic load that you get just by having a poor orientation of the building. You can do simple things, and save tremendous amounts of energy consumption in a building.

A lot of people seem use “LEED-certified” and “green” interchangeably. Are the two words synonymous?

LEED is simply a metric. It’s not a perfect tool, but I think it’s the best we’ve got. It has become an industry standard and it’s something that more and more people understand what it is. We don’t use it as a design tool. We use it as a metric for determining how well we’re doing. And you have to be really careful about that. As a design tool, it’s getting to what William McDonough calls “less bad.”

How so?

The problem with LEED is that there are some embedded costs that don’t change depending on the size or cost of the building. So, for a company like us who does 30, 50 or $100 million-dollar projects, to absorb a couple hundred thousand dollars is not a deal breaker. But if you’re doing a ten million-dollar job and you have the same $200,000 in fixed costs, that’s real money. So yes, it penalizes the smaller projects inordinately, and that’s one of the problems with it.

Obviously you guys are in the business of selling a lifestyle? We talk a lot about the 20-minute lifestyle, which is to have everything you need within 20 minutes walking distance. At the Civic, you can do that. We’ve got to get people out their cars and support transportation options like the Streetcar, MAX and Flexcar. These are much more congenial with creating a successful urban environment and lifestyle than everybody driving a damn car.

Los Angeles is often deemed the nemesis of eco-living and poster child for sprawl. It’s often blamed for exporting its freeway culture. Whether those distinctions are fair or not, Gerding Edlen has been exporting Portland-style developments to downtown Los Angeles. How is that going?

It has been very successful. We have three towers that are either up, sold or underway, and we have two more projects that are about to break ground in Downtown LA.

Are local developers in LA following suit?

Most developers have shunned downtown LA for 20 years. We built the first new high-rise residential product in Downtown LA in 23 years. Developers noticed there was a market, property values skyrocketed, and more developers starting to come into that market.

Would you call it a renaissance for Downtown LA?

In parts. We’re in the area just south of downtown near the Staples Center, and that area has seen quite a renaissance. There are a lot of residential towers going up.

And in Seattle, you did the Belleview towers?

Yes. We’ve also done projects in Salt Lake City and Phoenix; we’ve looked at stuff in Denver. We’ve looked back East, but nothing has materialized.

So that means what’s happening here with green building is exportable?

Absolutely. We were able to export our ideas to Los Angeles. Renee (Worme) on our staff has been very successful working with the City of Los Angeles and the mayor’s office getting them to adopt some environmentally responsible permitting practices and other incentives within the city of Los Angeles. I think it’s eminently exportable.

What about mid-sized American markets?

I think so, but that’s sometimes a little more challenging. It all depends on how embedded the Laissez-faire ideas are and how open they are to change. Still, it’s amazing the groups that come to Portland to look at what we’re doing here to see if it’s applicable in their community. We have a group coming from Cincinnati. There’s a developer from China who has been touring our products to see what we’re doing. There are huge opportunities for traction in exporting our expertise. We’re seeing that with the design community. The architects and engineers here are so familiar with how to create high-performance buildings that they’re finding work all over the world because they come from Portland, Oregon.

So how could that affect the local economy in the next decade?

It’s the greatest economic opportunity that Oregon has ever faced. I think we’re entering, if not already in, a major sea change in terms of economic drivers. The whole issue of global warming and finding clean, green industry and commerce is the next great economic wave. And we need to either take advantage of it, or we’re going to get passed by.

How can we avoid getting passed by?

By not being complacent and by continuing to push the envelop but not assuming we’re just these poor little folks who live in little old Oregon, and we don’t have a place on the national or international stage. The part that I find so frustrating is I’ve been invited to speak all over the planet. Everybody looks to Oregon as the trendsetter, as the place where this is really being defined and developed as practical applications of how we can create our built environment. And, we don’t the sense here locally to really understand the power of the potential we’re sitting on top of. It frustrates me.

Beyond buildings, what other potential is there in Oregon?

I think the whole movement toward renewable energy. I think there are huge opportunities in the State of Oregon. We have all of the resources within our borders. We have biomass, we have geothermal, we have solar, we have wind, we have wave. We have the whole spectrum right here in this state. There are tremendous opportunities. We demonstrated in the last session of the legislature that we’re willing to do some provocative things at the state level in terms of setting policy and a public agenda to pursue this stuff with improved credits for renewables and adopting the most rigorous renewable energy initiatives in the nation.

And your company will harness that energy and grow larger?

We fully intend to.

Wilde also walks the walk. He and his wife live in a condominium tower in the South Waterfront neighborhood where they share one car—a Toyota Prius. Wilde usually takes the streetcar or bikes to his Pearl District office, which probably explains why the 67-year-old looks to be in better shape than most guys half his age. Wilde is quick to point out that a green lifestyle is healthy too.