Hoping to nudge the net-zero movement forward in the Twin Cities, the St. Paul Port Authority recently unveiled a design for a warehouse offering high-performance energy efficiency and enough solar energy to power its operations. There’s no site yet for the proposed warehouse, so at this point the Port Authority is marketing the net-zero idea more than anything else.
Monte Hilleman, senior vice president for real estate, is leading the Port Authority’s warehouse initiative because he sees buildings as a big part of the greenhouse gas emission problem. Buildings emit 44 percent of the nation’s carbon, more than transportation or industry, he said.
Make them more efficient and tied to renewable energy, and carbon from commercial real estate will certainly drop. Hilleman’s concern is shared internationally, as seen in the emergence of Architecture 2030, a movement proposing that by 2030 all new buildings should be net-zero and existing structures upgraded.
“I was struck by the rationale of Architecture 2030: We cannot solve irreversible climate change without addressing carbon coming from our buildings,” he said. “That was huge. There is a whole world out there trying to use energy efficiency and sustainable design to solve climate change.”
The Port Authority has led before on sustainability by building a district energy system at Energy Park in the 1980s, by cleaning and redeveloping brownfields and by promoting smart growth two decades ago, he said. By 2003, advanced energy modeling was conducted on every building constructed on Port Authority brownfields to further green development and sustainable design.
The organization recently collaborated with Bloomington-based United Properties on the 189,000-square-foot Midway Business Center, a multitenant industrial building at 1771 Energy Park Drive in St. Paul that received a Silver LEED (Leadership in Energy and Environmental Design) certification from the Washington, D.C.-based U.S. Green Building Council. That’s the highest designation of any industrial building in Minnesota. And it operates two energy-efficiency finance programs for businesses.
The next step is developing net-zero properties.
“We want to provide good information to our buyers, so they can make the business case to their organizations as to why they should do this,” Hilleman said. “We’re at the point where the level of sophistication is there to not just get to energy efficiency and being less bad, but also being truly sustainable and not adding to what is an unsustainable level of carbon in our atmosphere.”
The pitch
Building a net-zero structure is easier said than done. Only 67 buildings in the entire country are verified net-zero, and Minnesota has just one, the Science House located in the garden area behind the Science Museum of Minnesota, said Rick Carter, vice president of the Minneapolis architecture firm LHB Inc.
“Net-zero buildings are projects mainly done by public institutions and nonprofits,” he said. “There are very few net-zero warehouses.”
The Port Authority’s warehouse proposal would not be all that different from the hundreds of office warehouses in the Twin Cities. It would have a 50-foot-by-50-foot structural bay, 24-foot clear ceilings, a slab-on-grade floor, precast concrete panels and a flat membrane roof.
With an energy-efficient design and approach, the power required to operate the building can drop significantly, Carter said. Key to this reduction is the “energy use intensity,” (EUI) a number assigned after the energy used per square foot is configured for a building. In the Midwest, unrefrigerated warehouses have EUIs of 47; the baseline for the new Port Authority warehouse would be 36.
Optimizing the building envelope and the HVAC system and adding high-performance design lowers a warehouse EUI to 14. But that’s still not net-zero. To reduce the 14 EUI to zero requires a 335-kilowatt solar array that would take up one-third of the roof. More solar panels would allow the building owners to cash checks by selling excess electricity to Xcel Energy, Carter said.
The building pencils in at $4.5 million, with a bit more than $1 million going to pay for that solar array. But Carter believes the solar portion of the project’s cost could be substantially reduced, perhaps even to nothing, based on financing tools available.
The net-zero cost of the warehouse is $61.82 per square foot, versus $48 for a typical warehouse. “With the renewable energy it’s an eight-year payback on investment,” he said. “We’re not talking about a crazy amount of time.”
One issue the Port Authority will have to address is how the market judges “spec” warehouse costs. Builders sell projects on a net square foot basis, which considers only the cost of construction and not utility charges, he said.
Gross net rent, on the other hand, takes into account energy costs and would better represent the true value of net-zero buildings. “We need to work on communicating how to value these types of properties from the gross net scenario because we’re reducing operating expenses,” Carter said.
Hilleman sees the challenge the same way. When businesses look at warehouse space, a mere 25-cents-per-square-foot difference in net lease rates could be the deciding factor. Since warehouses are commodity properties, he figures the net-zero building will be owner-occupied, a build-to-suit or, even more likely, a partnership initiative with the Port Authority. Midway Business Center and other projects came to fruition as collaborations with developers, he pointed out.
One of the few examples of what the Port Authority is attempting to do is the 126,000-square-foot manufacturing, distribution and assembly warehouse for the commercial furniture company Humanscale. The Philadelphia-based Sheward Partnership’s Chloe Bendistis explained the warehouse was built in the 1990s in Piscataway, New Jersey, and over the decades the company has made energy-efficiency improvements.
The company installed “Solatubes,” which transfer daylight from rooftops through light tunnels, to illuminate the manufacturing area. LEDs and lighting controls were installed to reduce energy use, said Bendistis, who lives in the Twin Cities and spoke at a recent Port Authority event announcing the project. Humanscale painted the roof white to reduce the heat-island effect and added 775 kilowatts of solar panels that power 92 percent of its energy needs.
The building comes close to net-zero, she said, and its performance is well-monitored. “The first step for any energy-efficiency program is to benchmark annual utility usage through a program like Energy Star Portfolio Manager,” she said in an email. “You can’t save if you don’t measure.”
What happened in New Jersey would be a bit easier in Minnesota because the proposed warehouse would be new. The Port Authority still faces a few roadblocks in moving forward, however, outside of a lack of a client. The location is still undetermined because the agency must buy the land.
Will the warehouse be the start of a net-zero revolution in construction and development globally and in Minnesota?
“We’re seeing solar PV [photovoltaic] coming down at staggering rate,” Hilleman said. “The design industry — architectures and engineers — are there. The commercial real estate world and users are catching up to the curve. They’re all going to get there. We’re just helping chart the path.