Conservation: Coming to a Mall Near You
RealEstateJournal.com
July 2, 2007

In the early 1990s, executives at Target Corp. began what they playfully describe as “dumpster diving.” The company sought to analyze what sorts of items -- and how many of them -- its stores were throwing out. Its research pointed to a clear conclusion, says Pat Perry, Target’s senior group manager for environmental services: “There was a lot of recyclable material in that trash.”

Today, the Minneapolis-based retailer has a centralized recycling program that last year diverted 911 million pounds of cardboard and 4.3 million pounds of shrink-wrap and other plastic from the waste stream.

Target’s environmental focus is increasingly shared by retailers and shopping center owners. Motivated by cost savings, public relations -- and yes, because it’s the right thing to do -- more and more of them are recycling, using environmentally friendly building materials and installing energy efficient heating, air-conditioning and lighting systems.

RECYCLING SETS THE PACE

“The speed with which this has gained traction in the industry has surprised a lot of people,” says Michael Kercheval, president and chief executive of the International Council of Shopping Centers (ICSC).

Not surprisingly, many of today’s most prominent sustainability efforts stretch back far longer than a couple of years. San Francisco’s Pier 39 “festival marketplace” recycled 10% of its waste stream in 1990. It now recycles or reuses 45% of its waste -- from food waste to wooden pallets to grass clippings.

“Initially we didn’t know where our effort was going,” says Joseph Smith, senior vice president of operations for Pier 39. “It’s just grown every year.”

The business even has a foodcomposting program that’s a go-to source of rich compost for local nurseries.

In New York City, the Staten Island Mall’s recycling program is robust despite being just three years old. Each year, in conjunction with the city’s sanitation department, the mall transforms its 65-acre parking lot into a drop-off point for the community’s old electronic equipment.

Last year the event netted 196 tons of televisions, computers, cell phones and other electronics—and kept their hazardous components, such as mercury, arsenic and cadmium, from being put in the ground.

“The mall is across from a huge, closed landfill,” says Lisa Loweth, vice president for sustainability with General Growth Properties, the mall’s Chicago-based owner. “It was highly visible to the team how fast a landfill can fill up, and that in and of itself provided motivation.”

BUILDING IN GREEN

But recycling is one half of the sustainability equation. Malls, shopping centers and their tenants are creating more environmentally friendly buildings.

Last year, Melaver, Inc.’s newly enlarged and renovated Abercorn Common shopping center, in Savannah, Ga., became the country’s fi rst retail core and shell project to receive LEED designation from the U.S. Green Building Council. LEED -- which stands for Leadership in Energy and Environmental Design -- is a green building rating system.

Not only does the project have LEED certification, but it also includes the world’s first LEED-certifi ed McDonald’s. Early this year, the second-phase development at Abercorn Common, dubbed Shops 600, gained LEED status as well.

Abercorn features everything from solar water heaters to an experimental vegetative roof designed to provide a natural habitat and insulate the building during hot weather.

“The initial impetus was an extension of our core values,” says Colin Coyne, Abercorn’s chief operating officer. “But we’re also very much unapologetic profit seekers.”

The profit argument for green buildings encompasses not just meeting consumer demand, but saving on utility costs. One example: By capturing and reusing water, Abercorn stands to save 5.5 million gallons annually.

What’s more, the green buildings’ energy savings are as much as 40% compared with conventional buildings, and that savings is passed along to tenants, Coyne says.

INVOLVING TENANTS IN THE PROCESS

Yet many tenants are wary of having to comply with green building standards. At Northfield Stapleton, an open-air town center within a larger mixed-use project in Denver, Colo., Forest City Enterprises, Inc., made compliance mandatory. But it worked closely with tenants to smooth the process, says Brian Levitt, project developer for Northfield.

The company provided tenants with clear build-out guidelines and backed them up with lists of suggested materials, such as low-emission glass, and paint that’s low in volatile organic compounds.

A handbook included diagrams, supplier Web sites and a description of how to calculate compliance costs and benefits. Finally, Forest City designated a graduate school intern as liaison to the tenants and their contractors.

Projects such as Northfi eld should serve as a challenge to non-green shopping centers, says ICSC’s Kercheval.

“Consumers are threatening to vote with their feet,” he said. “They have choices now -- they have options.”