Moving to Future States: From Today to Green and Beyond

NCSE 2010The New Green Economy

Leveraging Green Design & ConstructionO’Shei

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Where Green Value Creation Lies

• Infrastructure with “right” scale.

• High energy-consumption.

• Projects with best return on investment.

Returns on Investment

Systems and Infrastructure

EnergyConsumption

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The Lever: Green Design & Construction • Greening of buildings has more benefit in

resource consumption and environmental impact than any other industry sector.

• Leverage comes from incorporating design (using integrated architecture and engineering methods) with combined financing of construction and operating cost.

• Efforts are either supported by requirements,

tax code, tax credits and funding or they are ratcheted back by the same.

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Delivering Value from Green Solutions builds on existing conditions, systems and supporting infrastructure, and works with underlying financial conditions/ assets—to achieve economic returns

Solution

Innovation

Baseline

Case: A Green Growth Solution at Kripalu CenterA private alternative educational institution with growing demand for its programs, a beautiful but run-down campus, and very low margins (net operating income) developed a long-term, high ROI leveraged and GREEN solution to its growth.

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Baseline: Long Term Growing Demand Experienced steady growth from adults seeking both personal development and professional education – primarily in the growing LOHAS* market.

*LOHAS is Lifestyles of Health and Sustainability, a market segment focused on health and fitness, the environment, personal development, sustainable living, and social justice. In the U.S. LOHAS is estimated at 19% of the US population, including 43 million consumers who spent over $200 Billion in 2008. LOHAS is a trademark of the Natural Marketing Institute

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Actual Bookings as % of Bed Capacity (36 months)

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Baseline: Long Term Growing Demand LOHAS is Lifestyles of Health and Sustainability

Reduction LOHAS Market Share 2008 to 2009 is due to new definition of segments.

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Baseline: Complex Demand PatternsDemand varied by weekday as well as by Season

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Professional

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Weekday Demand Pattern by Student Type

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Baseline: Complex Demand PatternsDemand varied by weekday as well as by Season

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Seasonal Demand Pattern by Month

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Baseline: Existing Facility AntiquatedPrimary Facility:50 years old, est. $15M deferred maintenance. Master Plan renovation est. $40M.

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Actual DemandModel

Forecasting Prediction Model (as % of Capacity)

Innovation: Growth and Risk ModelingBalance sheet required a debt-funded solution.ROI, cash flow and risk were all mission critical.

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Innovation: Growth and Risk ModelingBalance sheet required a debt-funded solution.ROI, cash flow and risk were all mission critical.

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ActualProjectedLow GrowthDisrupted GrowthActual TrendLow Growth TrendDisrupted Trend

Risk Assessment for ROI and Cash FlowCurrent Trend vs Low Growth vs Disrupted Growth

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Innovation: Master Plan & Model ExpansionSite combined beauty, functionality & environment.

Expansion utilized current facility & future plan.

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Innovation: Master Plan & Model ExpansionSite combined beauty, functionality & environment.

Expansion utilized current facility & future plan.

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Innovation: Application of Green DesignSite, Orientation and Shape of Building

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Innovation: Application of Green DesignSite, Orientation and Shape of Building

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Solution: Design & Evaluate Options Evaluated alternate construction methods, facility

size/capacity and environmental footprints.

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Solution: Design & Evaluate Options Evaluated impact of options on margins.

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2005 2006 2007 2008 2009 2010 2011 2012

No Borrow

Traditional ($14M, 72 units)

Green ($18M, 80 units)

Projected Impact on Margins

Borrowing Estimates at Schematic Design (include infrastructure).

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Solution: Passive and Integrated GreenRadiant Heating/Cooling Cast in Concrete

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Solution: Passive and Integrated GreenGreen Roof on Connector and Wood Cladding/ Day Lighting System &Overhangs

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Solution: Economy, Efficiency, BeautyRooms 40% of a std. hotel, but filled with Natural Light. Natural Linoleum floors.

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Solution: Economy, Efficiency, BeautyUltra efficient Bath Fixtures. In-room Chilled Beam.

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Solution: Economy, Efficiency, BeautyRooms < ½ size of a std. hotel room but filled with Natural Light. Natural Linoleum floors. Ultra efficient Bath Fixtures. In-room Chilled Beam.

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An Ark to the Future:Beauty, Function, Green and Economically Justified

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Solution: New versus ExistingMaximize Deliverables Minimize Cost/Space/Impact• Building footprint 1/12th (approx 5,400 ft2)• Square footage 1/5th (34,500 ft2)• Housing Capacity 1/3rd (160 guests/80 rooms)• Revenue Potential 2/3rd (margins 80% higher)

Solution: Financial and Operational• Project Covers its entire cost ($16 M), required existing infrastructure

upgrades ($4 M) and contributes $ Millions for reinvestment ($2-3M/yr after year 3).

• Handles future growth for 7-10 years.• Allows renovation of existing facility on a larger scale and faster pace.

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In Conclusion: Combining Strategy and Analysis with Integrative Design and Systems Thinking Enables A Competitive Edge In Facilities Performance—and For The NationOwner, Project Oversight, Strategy, Analysis & Modeling: Patrick O’SheiAnnex Project Manager: Win WassenarInfrastructure Project Manager: John EdwardsArchitect: Rose + Partners, Peter Rose,William Bryant, Erkin OzayBuilder (CM): Barr and Barr: John Benzinger, Jeremy McLain, Mark FultonOwner: Kripalu Center

Photos Courtesy of Rose + Partners Studio, Cambridge, MA

For more info: poshei@teamcarbon.com – www.teamcarbon.com