its certification, despite opening its doors in 2013. Stone34 will pursue certification for certain aspects of the challenge sometime next year.
While the emphasis on performance ensures the environmental and societal benefits of green buildings are real, it also piles on additional risk for building owners and developers—and requires buy-in from building tenants.
If, after two years of occupancy, a building falls short of performance targets, the developer may face a fine of up to 10 percent of construction costs (increased by the City Council last year from up to 5 percent). That’s on top of the lost savings that were embedded into the building’s financial projections.
If a building fails to meet energy and water conservation goals later in its life, it would be subject to the same kind of code enforcement actions as any commercial building that falls out of compliance with its permit requirements, Pennucci says.
She adds that building owners can avoid penalties by making changes to the building and submitting a new report on building performance. “Our goal is to see these projects succeed and perform as planned,” she says.
Skanska’s Picard says this still amounts to a cost increase, because developers have to make provisions for the potential penalty. And Hayes, who advocates for some penalty to prevent developers from gaming the system, says a 10 percent penalty is too high. “It’s stopping people from doing it,” he says.
Penalties aside, Hayes asserts that with a good team of architects, engineers, and contractors “concerned with doing real craftsmanship,” the technology risks impacting building energy performance can be minimized.
But technology only takes you so far.
“You can get 50 percent reduction of what a normal building uses by just throwing a heck of a lot of technology and cost at a building,” Picard says, noting Stone34 features including a salt-filled tank that acts as a heat sink, eliminating the need to run a chiller to cool the building. “But to get the other 25 or 50 percent reduction in a building, you have to actually convince the occupant to change their behavior, and that’s always been the challenge with commercial office buildings.”
She says it’s easy to make the case to a tenant that the slightly higher rent they’re charged for an ultra-energy efficient building will pay off over the course of a seven- to 10-year lease through lower utility bills. She says Skanska expects tenant operating expenses at Stone34 to be roughly $1 per square foot less per year than a standard building, a 20 to 30 percent savings.
But that potential return on investment may lose some luster if the tenant also has to buy new equipment, turn off printers and lights, and configure office layouts to maximize daylight into the center of the building—all measures to help meet building operational goals.
Anchor Tenants
Running-shoe maker Brooks got on board early with Skanska for the Stone34 project. Brooks saw the building’s deep green amenities as a fit with its sustainability goals, and as a way to attract and retain customers and employees. The location, across the street from the busy Burke-Gilman Trail—a popular running and cycling route connecting several Seattle neighborhoods—was also a natural fit.
Brooks committed to the behavior changes necessary for the building to meet its efficiency goals, Picard says, though not without some trepidation: lease negotiations took “probably six months longer” than normal. But so far, “performance-wise, they’re rockin’ it,” Picard says. Since moving into the building last fall, Brooks has been beating its building performance targets by better than 50 percent, Picard says.
In the case of the Bullitt Center, tenants have an annual energy budget, measured through sensors in every wall socket and keycards that monitor use of shared resources such as the elevator—and made public via a real-time dashboard. (The beautiful, glass-enclosed staircase rewards those who eschew the lift with great city views; Stone34 has a similar “active stair.”) If tenants stay within their energy budget, the building management pays the energy bills for them. And so far, they’ve been so frugal that the building could get by with a smaller solar array, pointing the way toward even lower costs for the next Living Building.
“It’s in their economic interest to do this and they’ve performed pretty spectacularly,” Hayes says. “But that requires a degree of engagement in the operations of the building. Overwhelmingly, developers build things on spec and they intend to be out of the building in three to five years.”
Picard argues that more incentives are needed not just for developers, but for businesses—the tenants themselves—to motivate them to move into high-performance buildings. Developers will build these buildings, she says, if there’s a clear demand for them.
Next Steps
But have the Bullitt Center and Stone34 blazed a clear enough trail for other developers to follow?
An office development at 15th and Market in Ballard has started the design review process under the city’s pilot program. Four or five other projects, including commercial offices, a hotel, and a residential development, have expressed interest, but are still assessing the feasibility, Pennucci says.
The pilot program is meant to help refine the permitting process further, identifying areas where it’s working and where it needs improvement. It’s currently set to expire at the end of the year or when 12 projects have enrolled. Pennucci says the city is developing legislation to modify the program further and extend the time horizon. “We do want to see more projects come through the pilot,” she says.
The program was tweaked last year in an effort to tie it more directly to the Living Building Challenge, particularly for projects that aim for something less than the full challenge. Developers can still obtain some of the incentives—all in the form of favorable departures from the city building code—by achieving at least three of the seven petals that make up the Living Building Challenge, while reducing energy usage by at least 25 percent and water usage by 75 percent compared to a normal building, and capturing at least half of stormwater runoff from the site.
Pennucci says other cities are contacting Seattle to learn more about the pilot program. The Bullitt Center and Stone34 were hot topics at the recent American Planning Association national conference held in Seattle. “I think it’s really gaining momentum now that people are seeing projects,” Pennucci says.
“We’re still really at the beginning of the Living Building Challenge,” says Combe, of the 2030 District. “It’s introducing developers who wouldn’t necessarily have thought about this previously to the challenge itself, and as they become more comfortable with it… it will definitely start to ramp up the adoption of the challenge.”
