COVER STORY, FEBRUARY 2010

RECYCLING BUILDINGS
Adaptive reuse is one of the most obvious, yet often overlooked, green building techniques.
By Coleman Wood

The House of Blues in Dallas used to be the White Swan Coffee Company building.

Most everything in this day and age is sustainable. When companies complete their newest projects, all of the windows are glazed, none of the landscaping needs irrigation (and if it does, it is with reclaimed rainwater) and everything from the HVAC system to the sinks in the bathrooms is high-efficiency. The green features of today’s construction projects can be overwhelming, so much, in fact, that the term “green washing” has been created to describe when companies tout otherwise normal building practices or features as sustainable.

In the midst of all this, one of the most significant ways a company can reduce its environmental impact is often lost — reusing an existing building. Mention this to some, and the negatives of adaptive reuse will often come up first. But adaptive reuse has huge environmental and economic advantages that cannot be overlooked.

The green reasons for adaptive reuse seem obvious at first but have far-reaching implications. Reusing a building keeps a greenfield site from being developed and uses less construction materials than a new building. Simple, right? However, maintaining the natural state of a site means that the plants located on that site are free to absorb carbon dioxide and free to maintain a cooling canopy over the land below — both of which help offset the greenhouse effect. The remaining plant life also provide homes for the animal life that will be allowed to remain on these sites, which will contribute to the overall health of the local ecosystem and allow more plant life to emerge, and so on.

The lower amount of construction materials needed for a project means that less raw materials such as wood, metal ore and rock need to be mined. Also, less pollution is produced, since not as much material needs to be manufactured and transported. All of these positive environmental steps resulted from a single decision to reuse an existing building.

While there are certainly easier ways to gather points for LEED certification, adaptive reuse is covered under the guidelines. According to the new LEED 3.0 guidelines for new construction, adaptive reuse could garner a developer up to six points within the Materials and Resources category. Up to three points are awarded for maintaining the structure and envelope of an existing building. One point is awarded for reusing 55 percent of the building (aside from hazardous materials that need to be remediated), two points are awarded for reusing 75 percent and three points are awarded for reusing 95 percent of the building. This gives contractors the leeway to reuse as much of the building as possible while upgrading things such as windows and fixtures that would contribute to increased efficiency.

An additional point is awarded for reusing at least 50 percent of the interior of an existing building. This could include interior walls, doors, floor coverings and ceilings. Finally, up to two points are awarded for reusing existing building materials in the construction of the project. One point is awarded for reusing 5 percent (by total cost) of the building materials, and two points are awarded for reusing 10 percent of the materials. Possible materials to reuse include beams and posts, flooring, paneling, doors and frames, cabinetry and other furniture, brick and decorative items. 

Outside of the Materials and Resources category, a point is awarded for a brownfield redevelopment project. Not all sites would qualify for this, since it would have to be documented as a brownfield by a government entity, but credit is given for remediating a site. While seven points may not seem like a lot when it takes a minimum of 40 points to be LEED-certified, those points could mean the difference between Silver (50-59 points) and Gold (60-79 points). For more minor redevelopment projects, LEED 3.0 also contains a LEED for Existing Buildings - Operations & Maintenance certification that provides credits for various types of reuse.

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For all of the environmental benefits of adaptive reuse, it is seldom the primary reason companies choose to do it. The more common explanation is an economic one. While there is some variance on a project-by-project basis, adaptive reuse is a cheaper alternative to new construction, by and large.

“Steel and concrete continue to be something that everyone tracks the price of...[So,] the structure of a building is a very valuable element, even if you’re tearing almost everything else out of it,” says Lindsay Wilson, vice president of Corgan Interiors, the interior design division of Dallas-based architecture firm Corgan Associates. Corgan has had a hand in the revitalization of Dallas’ West End, a formerly industrial part of town that is seeing a second life as a residential, retail and entertainment destination.

In the nearby Dallas suburb of Hurst, AUI Contractors recently completed an adaptive reuse project for the city itself. “[The green benefits] never came up,” says Matt Wylie, director of commercial construction for the Fort Worth-based company. “It was strictly an economic issue.” AUI took an existing 60,000-square-foot retail building vacated by a boot store, demolished half of it and converted the remaining space into a senior citizens activity center. With cities across the country seeing decreased tax revenues brought on by the recession, saving money wherever possible has become a priority, and practices such as this are a way to achieve that.

The recession has also resulted in the bankruptcy of several large national retailers over the past couple of years, which has had the unfortunate effect of creating large, vacant boxes in markets across the country. Rather than remain empty, these boxes are quickly being snatched up by a variety of users, retail and non-retail alike.

In a recent deal, New York Life Insurance Co. sold three former Circuit City boxes located in Little Rock, Arkansas; Nashville, Tennessee; and Humble, Texas. The Little Rock property was bought by Starlite Hotel Group, which plans to convert it into a hotel. The Tennessee property was bought by Cross Point Community Church, with the intention of creating a new worship center. The Humble property was purchased by a retail user who planned to keep the property as retail but had a unique way of repositioning it.

According to Matthew Keener, a senior vice president of retail services with CB Richard Ellis and one of the brokers involved in the deal, the buyer, Robert’s Carpets, typically purchases larger retail sites with the intention of anchoring its business in them. Then, the company subdivides a portion of the property for smaller retail tenants that often serve as complements to its home improvement business, including lighting and fixtures retailers. To Keener, the reason to do this is obvious — to save money.

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“The clear negative is that, typically, the final product is less energy-efficient than a new building,” Keener says, adding that new building design techniques are far more efficient than ones from just a few years ago. The need to replace the building’s mechanical systems and windows in an effort to bring the project up to even minimum efficiency standards for today’s buildings can quickly eat away at the savings reusing a building provides. The tide is changing on cost, though.

“I think we are just now getting to the point where the construction costs of going green and the benefits you get with it, as far as savings over time, are now putting them on a competitive page with so-called ‘regular’ construction,” says Steve Wolford, a principal with Terracon Consultants, an engineering and environmental consulting firm.

Wilson agrees that adaptive reuse presents more benefits than drawbacks, but it also present challenges from an interior standpoint. The need to bring an older building up to modern codes often means more renovations need to take place and more of the interior needs to be demolished, sometimes to the point of taking the building back to structure. In addition, older building interiors were not designed with efficiency in mind like modern projects. More columns, less contiguous space and more mechanical rooms are things designers have to deal with when working with an older building.

Finally, there is the drawback of tradition. Wylie says that most people in the real estate industry have been raised to think that if you want a building, you build a new one. Also, the financial incentives of reuse in a place like Texas have not been as pronounced as in other parts of the country.

“The good thing about [the Texas] economy is, even in the worst of times, land and construction are fairly inexpensive compared to other regions,” Wylie says. “Yes, we do have a lot of land, and that turns into sprawl. Financially, there has never been a motivation for someone to go into a reuse project when they can get property in a better part of town and build new on it. We haven’t reached the point where there has been a motivation to go and redevelop urban areas.”

That may be changing, though, and it is beginning from the tenant side. “There is a lot of interest by owners to be sustainable, because of various tenants and other people that write leases wanting to know or see that they are writing a lease for a building that has a [sustainability] plan,” says Jeff Miller, senior associate and senior mechanical engineer with Terracon Consultants. Wolford adds that owners are also seeing the demand, due to company shareholders demanding sustainability and company heads who see that green buildings can command higher rents.

New Urbanism is also doing its part to make adaptive reuse more common. Developers are looking at underutilized sites in urban cores for new development. Sites near public transportation are also drawing attention, especially in places like Dallas-Fort Worth, where the city is making a sizable investment in upgrading the public transportation infrastructure. Community groups looking to maintain the neighborhood’s character will exert pressure on developers to reuse rather than raze, and other developers will exert pressure on each other, as they try to design the most unique project — which often involves adapting things such as old warehouses and train stations into housing and entertainment venues.

The recent building boom in DFW means that there are a lot of buildings sitting half-occupied or vacant throughout the Metroplex, especially in the submarkets of Uptown and Legacy. At the time, everyone had to have new product. Now, the pricing on these buildings has made them attractive to investors, who are going to have to redevelop or otherwise reposition them to stabilize the asset.

The ever-expanding Houston area is also seeing a similar push toward the core. To Miller, developers in this metropolis are looking for sites, but decades of sprawl have caused the nearest greenfield sites to be located almost as much as an hour from the urban core. This is causing them to look closer in, which is increasing the likelihood of a reuse project.

“I think during the last 3 to 4 years, [infill development] in Houston is not necessarily driven by mass transit being available, but by being in a position where people want to live and work closer inside the Loop,” Miller says.

The cultural shift toward sustainability has been gaining steam over the past few years and it shows no signs of stopping anytime soon. This means that companies that are not already on board with sustainability efforts face the risk of missing the boat when it comes to future projects or assignments.

“The concept of sustainability, energy efficiency, and refit and reuse of properties is something that is here to stay,” Miller says. “It’s something that we have to do as a country. We have a tremendous amount of property that has certainly undergone some economic stress during this recession. I think that our company and a lot of similar companies are positioning themselves and acknowledging that this concept is something that is here to stay and it is going to, if anything, increase. And market pressures are going to drive that.”

Adaptive reuse can play a perfect role in the creation of a green project because it is one of the most easy to understand concepts. Reflective roofs and low-VOC paints have to be explained to someone, but the idea of reusing a building that is already there is simple to understand and immediately noticeable when someone sees the building. It is also a textbook case of resource conservation, which is becoming more important in the real estate industry. 

“There is no better story of recycling than recycling the actual building,” Wilson says.

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