Green Retail: An Overview

A Report from Green For All’s Capital Access Program

Contents

I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
II. What Exactly Does It Mean to “Go Green”? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
LEED. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
The Green Globes Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Energy Star . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

III. Why Should Retailers Go Green? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

The Business Case for Green Building Certification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Additional Incentives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11

IV. Case Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

The Shops at Northfield Stapleton (Denver, Colorado) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Fairlane Green Retail Center (Allen Park, Michigan) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
REI (Boulder, Colorado) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

V. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

© 2009, Green For All.

Green For All is a national organization dedicated to improving the lives of all Americans through a
clean energy economy. Green For All works in collaboration with the business, government, labor, and
grassroots communities to create and implement programs that increase quality jobs and opportunities in
green industry – all while holding the most vulnerable people at the center of its agenda.

www.greenforall.org
Green Retail: An Overview Green For All

I. Introduction
The credit crisis and subsequent recession have made this a hard year for the U.S. retail
industry. Americans are saving more and spending less. Retail sales plummeted in
late 2008,1 and were still down 9.4% from 2008 levels as of July 2009.2 Meanwhile, the
national savings rate has climbed to 6.9% — its highest level since December 1993.3 This
has helped fuel widespread store closures in every retail sector. As many as 150,000
retail outlets will close up shop this year.4 Large chains are no exception, as 567 Circuit
Cities, 300 Starbucks, and 100 Gaps have closed their doors. The U.S. retail vacancy rate
is expected to reach 12.1% later this year, and possibly as high as 15.8% in 2010.5 This
adds up to big trouble for those ultimate retail hubs, shopping malls. As many as 300 of
the 1,300 malls in the country are in danger of going out of business or becoming some-
thing else.6

In such tough times, retailers often feel compelled to ignore infrastructure while focus-
ing on cutting costs and increasing revenue. But investing in green, energy-efficient
infrastructure may be greatly beneficial for retailers trying to steady the ship, in both the
short term and the long term.

The bias against such investment is a significant obstacle. Retail development gener-
ally tends to take a short-term view of financial returns. For developers who do not
expect to take ownership of a project, this leads to an aversion to sustainable design.
These developers perceive the up-front costs of sustainable design, often inaccurately,
as unwarranted and overpriced. They often leave it to the retailers who will use the
space to decide what building materials and systems they will use.7 Retailers, on the
other hand, are often reluctant to make improvements to commercial property that they

1 Retail sales fell 8% year over year in the fourth quarter of 2008. Retrieved from http://www.frbatlanta.org/
invoke.cfm?objectid=CBB1F211-5056-9F12-1243CE1DB3775B4A&method=display_body on September 9,
2009.
2 Retrieved from http://www.census.gov/retail/marts/www/marts_current.html on September 9, 2009.
3 Retrieved from http://www.nytimes.com/2009/06/27/business/economy/27econ.html?ref=business on
September 9, 2009.
4 Retrieved from http://www.newsweek.com/id/168753 on September 9, 2009.
5 Retrieved from http://www.property-investing.org/retail-market-forecast-may-2009.html on September 9,
2009.
6 In fact, the second-largest U.S. mall operator filed for bankruptcy protection after it was unable to refinance
its maturing loans. Retrieved from http://www.nuwireinvestor.com/articles/shopping-malls-struggling-
to-get-by-53072.aspx on September 9, 2009.
7 Retrieved from http://www.uli.org/sitecore/content/ULI2Home/ResearchAndPublications/Magazines/
UrbanLand/2002/November/Green%20Retail.aspx on September 9, 2009.

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Green Retail: An Overview Green For All

do not own. They cannot be sure they will get to enjoy those improvements and see a
return on their investment in infrastructure.

Nevertheless, “going green” with sustainable design makes good business sense in the
retail industry. By outlining various techniques, and subsequently highlighting several
successful case studies, this paper aims to demonstrate to retail developers, owners and
operators that green building holds tremendous opportunity in this tumultuous eco-
nomic environment.

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Green Retail: An Overview Green For All

II. What Exactly Does It Mean to “Go Green”?

Going green means making a business sustainable and/or energy efficient. Concretely,
it means earning one or more of the three primary green building-rating systems that
have developed in the United States: LEED, Green Globes and Energy Star. These certi-
fication programs quantify how “green” a commercial building is.

LEED
In 2000, the U.S. Green Building Council’s (USGBC) initiated its Leadership in Energy
and Environmental Design (LEED) certification. LEED is now the country’s most
widely recognized green building certification program.

Recognizing the unique nature of retail design and construction projects, and the par-
ticular needs of retail spaces, USGBC has recently developed the LEED for Retail Pilot.
USGBC is collaborating with 80 Pilot project teams to create two new rating systems:
LEED for Retail – New Construction, and LEED for Retail – Commercial Interiors.8
Together, these systems will provide the type of compliance standards that have guided
sustainable design in other areas of real estate. Retailers who earn these certifications
will send a signal, to real estate investors and shoppers alike, that they are concerned
with their impact on their surroundings and inhabitants.

To obtain a coveted Silver, Gold, or Platinum LEED certification, a new retail construc-
tion project must satisfy requirements in the following six areas:

1) Sustainable Sites

USGBC awards points for: developments in dense areas, with “community con-
nectivity,” meaning convenient access to public transportation; brownfield rede-
velopments; the provision of bicycle storage and changing areas for employees;
designated parking spaces for customers driving alternative fuel or fuel-efficient
vehicles; the protection or restoration of particular habitats; efficient stormwater
design; and a reduction in light pollution.

2) Water Efficiency

USGBC awards points for efficient landscaping that doesn’t use potable water or
irrigation, as well as significant water use reduction.

8 Retrieved from http://www.usgbc.org/DisplayPage.aspx?CMSPageID=1734 on September 9, 2009.

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Green Retail: An Overview Green For All

3) Energy & Atmosphere

Prerequisites in this category include a commissioning of the building energy

systems, a minimum energy performance threshold, and refrigerant manage-
ment. USGBC awards points for: optimized energy performance; on-site renew-
able energy production; enhanced commissioning and refrigerant management;
and usage of utility electricity provided from renewable energy sources.

4) Materials & Resource

Prerequisites include the storage and collection of recyclables. USGBC awards

points for: building reuse; construction waste management; materials reuse; and
usage of recycled content, regional materials, and rapidly renewable materials.

5) Indoor Environmental Quality

Prerequisites include a minimum indoor air quality performance and tobacco

smoke control. USGBC awards points for: increased ventilation; low emitting
materials (adhesives, paints, carpet, composite wood); indoor chemical and
pollutant source control; daylight in 75% of the space; and views for 90% of the
space.

6) Innovation & Design Process

USGBC awards one point for using a LEED accredited professional. Other cred-
its still have yet to be determined within this category.9

The USGBC also offers the aforementioned certifications for existing retail structures,
according to point totals accrued across the same six areas. Of course, obtaining a LEED
certification for a pre-existing building can be difficult. After all, several of the catego-
ries – such as site selection and building materials – cannot realistically be modified,
and must be addressed during the initial construction.

The Green Globes Certificate

In 2005, the Green Building Initiative (GBI) created the Green Globes certificate. New
and existing commercial buildings can earn between one and four “globes” for their
environmental achievements and sustainability. The four-globe rating is “reserved
for select buildings that serve as national or world leaders in reducing environmental

9 Retrieved from http://www.usgbc.org/ShowFile.aspx?DocumentID=3998 on September 9, 2009.

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Green Retail: An Overview Green For All

impacts and efficiency of buildings.”10 Green Globes certification is based on a 1000-

point evaluation that includes both an online self-assessment ($500) and third-party
verification ($4000 - $5000). This comprehensive evaluation covers seven categories:

• Energy (360 points): Performance, efficiency, demand reduction, energy efficient

features, use of renewable energy, transportation

• Indoor environment (200): Ventilation, lighting, thermal & acoustical comfort,

ventilation system

• Site (115): Ecological impact, development area, watershed features, enhance-

ment [For existing buildings, this category is excluded, and the point totals are all
adjusted slightly.]

• Resources (100): Low impact materials, re-use, demolition, durability, recycling

• Water (100): Performance, conservation, treatment

• Emissions and effluents (75): Air emissions, ozone depletion, water & sewer
protection, pollution controls

• Project management (50): Design process, environmental purchasing, commis-

sioning11

Green Globes certification has a lot in common with LEED certification, awarding
points for well-defined, environmentally preferable construction, design, and systems.
Still, the two are different in some key ways.12 The most important of these is that LEED
is significantly more expensive than Green Globes. Even so, Green Globes certification
carries a non-trivial price tag. Although there are a number of benefits associated with
Green Globes, it can be cost prohibitive for smaller retail establishments and chains.

Energy Star
The U.S. Environment Protection Agency’s (EPA) Energy Star rating system is much
more narrowly focused on a building’s energy efficiency. It evaluates a building’s
energy efficiency and awards it a percentile score on a scale of 1-100. A building that
scores a 75 or higher (placing its energy performance among the top 25% among similar

10 Retrieved from http://www.thegbi.org/green-globes-tools/ratings-and-certifications.asp on September 9,

2009.
11 Retrieved from http://www.thegbi.org/green-globes-tools/new-construction.asp on September 9, 2009.
12 Retrieved from http://www.copperwiki.org/index.php/Green_Globes on September 9, 2009.

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Green Retail: An Overview Green For All

buildings) earns an Energy Star label.13 The EPA has also outlined seven guidelines for
energy management that are meant to help retailers improve their energy (and subse-
quent financial) performance, while distinguishing the organization as an environmen-
tal leader.

1) Make a commitment: Form a dedicated team, and institute an energy policy.

2) Assess performance: Gather and track energy use data; establish baselines;
benchmark against similar facilities; analyze and evaluate the operating perfor-
mance.

3) Set goals: Determine the scope; estimate the potential for improvement; create
clear, measurable targets.

4) Create action plan: Define technical steps and targets; determine roles and
resources.

5) Implement action plan: Create a communication plan; raise organizational

awareness; build capacity; motivate, track, and monitor.

6) Evaluate progress: Measure results; review action plan.

7) Recognize achievements: Provide internal recognition; receive external recogni-

tion.

The Energy Star label’s focus on efficiency distinguishes from the more holistic LEED
and Green Globes certification programs. It is unconcerned with such considerations as
where the building was built or what materials were used. This narrower scope makes
the Energy Star label cheaper to obtain than the others. Also, retailers have much more
flexibility in complying with the EPA than they do in complying with USGBC or GBI.
All told, Energy Star is a more accessible certification for retailers than LEED or Green
Globes.

• • •

Earning any or all of these certifications certainly does not exhaust the possibilities for
sustainable and energy-efficient development. These programs do, however, provide
developers a number of different areas to consider when considering the sustainability
of their projects. Many of these measures seem like common sense; environmentalists

13 The rating system is accessible online as part of the EPA’s free Portfolio Manager tool. Retrieved from
http://www.energystar.gov/benchmark on September 9, 2009.

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Green Retail: An Overview Green For All

have focused on air quality, water conservation, and energy efficiency for quite some
time. Others, like proximity to public transportation, are established hallmarks of suc-
cessful real estate development. But for some measures — such as daylight, views,
bicycle storage, and preferred parking — the business case is not as obvious. But as we
discuss in the next section, even these less “common sense” measures are both environ-
mentally imperative and economically prudent.

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Green Retail: An Overview Green For All

III. Why Should Retailers Go Green?

If American retail went green, the country would find itself much closer to reaching its
goals of energy independence and curbing global warming. Nationally, our buildings
are responsible for 40% of our energy consumption and greenhouse gas emissions14 —
more than either transportation or industry. And a great deal of our building stock is
dedicated to retail. Consumption drives the American economy, accounting for approx-
imately 70% of our gross domestic product.15 America has developed nearly 6.85 billion
square feet of shopping center space since the first mall opened for business 90 years
ago. Much of that development took little to no account of the environment.16 By tak-
ing account of the environment now, we can reduce the energy consumption and pollu-
tion of that retail space, benefiting the country and world.

But it’s hard for businesses to spend money on improvements if the benefits flow
mostly to the country or the world rather than to the businesses themselves. Most busi-
nesspeople cannot afford to invest precious resources in altruism. This is especially true
at a time when retailers are struggling to stay in business. One estimate has the number
of vacant big box stores scattered throughout the country at upwards of 3,000. In such
an economic environment, retailers will be able to make environmental improvements
only if those improvements make sense for their bottom line.

Luckily, sustainable design does make sense for the bottom line.

The Business Case for Green Building Certification

An emerging body of research shows that sustainable design makes good business
sense. One obvious benefit of green certification is an increase in property value. A
comprehensive study by CoStar found that LEED certification significantly raises a
building’s value. LEED-certified buildings sell for an average of $171 per square foot
more than their ‘non-green’ peers. LEED buildings command rents $11.33 greater per
square foot than their non-LEED peers, and have 4.1% higher occupancy.17 That helps

14 Rogers, Joel. Seizing the Opportunity (for Climate, Jobs, and Equity) in Building Energy Efficiency. Center on
Wisconsin Strategy. December 2007. Retrieved from http://www.cows.org/pdf/STOIBEE%20120107.pdf
on September 9, 2009.
15 Retrieved from http://www.hoover.org/research/factsonpolicy/facts/4931661.html on September 9, 2009.
16 Retrieved from http://www.usgbc.org/DisplayPage.aspx?CMSPageID=1945 on September 9, 2009.
17 The study analyzed more than 1,300 LEED and Energy Star buildings representing about 351 million square
feet in CoStar’s commercial property database of roughly 44 billion square feet, and assessed those buildings
against non-green properties with similar size, location, class, tenancy and year-built characteristics to

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Green Retail: An Overview Green For All

explain why LEED certifications are on the rise, and look to continue climbing. In a
2008 survey from National Real Estate Investor, almost 90% of respondents expected to
own, lease, or manage some form of green building or real estate within the next five
years, whereas only 50%-60% do so now.18

Not only are green buildings worth more, but they also cost less — in energy and
money — to operate. A study done by the New Buildings Institute indicates that LEED-
certified buildings are, on average, performing 25-30% better than non-LEED buildings
in terms of energy use. That figure approaches 50% for Gold and Platinum LEED build-
ings.19 This translates into lower operating costs, higher net operating income, and a
higher valuation overall.

Cleaner, healthier workplaces also make for more productive workforces. Deloitte
& Touche surveyed a number of organizations that had undergone at least one
LEED-certified green building retrofit, and collected the following results amongst
respondents:

• 93% reported a greater ability to attract talent

• 81% saw greater employee retention

• 87% experienced an improvement in workforce productivity20

Other studies show that workers in green buildings report greater satisfaction with their
workplaces — specifically identifying sunlight, views of nature, and heightened thermal
and acoustic comfort.21 Responsible companies are also paying increased attention to
the health of their employees, particularly as absences and ailments begin to impact rev-
enues. Research from William Fisk shows that green buildings can add billions of dol-
lars in increased worker productivity every year.22 Together, these studies conclusively
demonstrate the link between a clean, green workforce environment, and the strength
and vitality of an employee workforce – itself a critical influence on any company’s bot-
tom line.

generate the results. Retrieved from http://www.costar.com/News/Article.aspx?id=D968F1E0DCF73712B0

3A099E0E99C679 on September 9, 2009.
18 Retrieved from http://nreionline.com/research/fighting-obsolescence/index.html on September 9, 2009.
19 Retrieved from http://www.newbuildings.org/downloads/Energy_Performance_of_LEED-NC_Buildings-
Final_3-4-08b.pdf on September 9, 2009.
20 Retrieved from http://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/Documents/us_re_
Dollars_Sense_Retrofits_190608_.pdf on September 9, 2009.
21 Retrieved from http://www.edcmag.com/CDA/Articles/Featured_Special_Sections/BNP_GUID_9-5-
2006_A_10000000000000367818 on September 9, 2009.
22 Retrieved from http://www.rand.org/scitech/stpi/Evision/Supplement/fisk.pdf on September 9, 2009.

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Green Retail: An Overview Green For All

Going green can also reduce a building’s tax burden. LEED projects can qualify for a
variety of financial incentives from state (in particular, Nevada, Oregon, and New York)
and local governments, including rebates from utilities, city rebates on investment costs,
expedited permitting, state and federal tax credits, and even federal grant programs.23
These carrots, particularly in the area of permitting, can be decisive for projects uncer-
tain about pursuing LEED certification.

Clearly, LEED certification has a number of tangible, quantitative benefits for commer-
cial spaces, including retail. A growing body of research shows that LEED buildings
command higher prices and rents, have lower vacancy rates and operating costs, and
enjoy significant employee and tax rewards.24 The question is, how much does it cost a
business to enjoy those benefits, and is that cost reasonable.

Sustainability consultant Jerry Yudelson conducted a study showing that incremental

“hard costs” in construction for LEED certification range from 2% for basic level certifi-
cation, 4-6% for Gold, and more than 6% for Platinum.25 Additionally, there are a num-
ber of “soft costs,” detailed below:

COST CATEGORY ESTIMATED COST

Sustainable design services 0%-10% more than standard design

costs (depending on experience)

Building energy modeling or prescrip- $15,000-$30,000

tive design analysis

Building commissioning $0.40-$0.70 per square foot; $20,000

minimum

LEED consultant / certification effort $25,000 (varies by project size)

LEED registration & certification fees $450 registration fee, plus $0.035 per
(USGBC members) square foot for certification review;
$17,500 maximum

23 Retrieved from http://www.sustainableindustries.com/greenbuilding/17364869.html on September 9,

2009.
24 Although none of this research has focused specifically on retail real estate, the findings still support the
assertion that green building has tangible, quantitative benefits for retail owners, operators, and developers.
25 Retrieved from http://www.greenbuildconsult.com/books/#icsc on September 9, 2009.

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Green Retail: An Overview Green For All

While this is one of the most comprehensive studies available, it is worth noting that
other studies have had different results.26 Davis Langdon found that “it is clear from the
substantial weight of evidence in the marketplace that reasonable levels of sustainable
design can be incorporated into most building types at little or no additional cost.”27
Deciding this debate is beyond the scope of this paper. It is sufficient here to note that,
while developers typically have to foot some up-front costs for sustainable design, those
costs should not be prohibitive when considered against such benefits as higher rents,
additional tenants, and a better disposition price.

Additional Incentives
Retail owners, operators and developers should consider three other factors when pon-
dering sustainable design.

First and perhaps most importantly, research shows a direct correlation between time
and money spent by customers, and increased levels of natural light through bigger
windows, skylights or products such as Solatubes.28 In fact, one study found that chain
stores would see a 40% increase in sales with the addition of skylights.29 Wal-Mart, for
example, has reported higher sales in stores with increased natural daylight.30

Second, neighborhood and urban retail centers — particularly those that have sprouted
up alongside sports stadiums, condominiums, and restaurants in revitalized downtown
communities — draw a high proportion of local residents who tend to visit frequently.
These locations allow retailers to benefit from an abundance of consumers looking for
dining, entertainment, and spur-of-the-moment purchases. Developers can make these
centers more appealing for pedestrians and bicyclists with amenities such as commu-
nity rooms and bike racks. This is likely to stimulate increased foot traffic and a more
communal atmosphere.31

26 Retrieved from http://www.uli.org/sitecore/content/ULI2Home/ResearchAndPublications/Magazines/

UrbanLandGreen/2007/Spring/Putting%20the%20Green%20Costs%20More%20Myth%20to%20Rest.aspx
on September 9, 2009.
27 Retrieved from http://www.davislangdon.com/upload/images/publications/USA/Morris%20Article.pdf
on September 9, 2009.
28 Retrieved from http://www.sustainableindustries.com/greenbuilding/17364869.html on September 9,
2009.
29 Retrieved from http://h-m-g.com/projects/daylighting/summaries%20on%20daylighting.
htm#Skylighting_and_%20Retail_Sales%20-%20PG&E%201999 on September 9, 2009.
30 Retrieved from http://anniegreenjeans.com/23/ on September 9, 2009.
31 Retrieved from http://www.uli.org/sitecore/content/ULI2Home/ResearchAndPublications/Magazines/
UrbanLand/2008/January/Greening%20Retail.aspx on September 9, 2009.

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Green Retail: An Overview Green For All

Third, as consumers become increasingly concerned about the environment, they will
expect their retailers to do the same. Going green will not only earn retailers public
relations perks and social goodwill, it could also help stimulate sales.32 Increasingly,
retailers are highlighting their corporate responsibility efforts.33 When done well, these
efforts may give businesses a competitive advantage in the marketplace.34 Sustainable
design could be just such a corporate responsibility effort. Retailers and developers can
use sustainable design to distinguish their retail operations in today’s tough market.

32 Retrieved from http://www.cudenver.edu/Academics/Colleges/SPA/CommunityOutreach/Centers/

WirthChair/publications/Documents/1996-2001/Sustainable%20Retail%20Development%20at%20REI%20
Denver.pdf on September 9, 2009.
33 For an example, see Target’s 2008 Corporate Responsibility Report. Retrieved from http://sites.target.com/
site/en/company/page.jsp?contentId=WCMP04-031084 on September 9, 2009.
34 Retrieved from http://www.fastcompany.com/blog/chris-jarvis/innovative-thinking-corporate-
volunteering/corporate-social-responsibility-competi on September 9, 2009.

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Green Retail: An Overview Green For All

IV. Case Studies

This section looks at three case studies of sustainable design. The first is an urban infill
shopping center located minutes from downtown Denver. The second is a shopping
center built on a landfill just outside Detroit. The third is a stand-alone, suburban store
in Boulder, Colorado.

The Shops at Northfield Stapleton (Denver, Colorado)

One of the first retail centers in the country to be built green, The Shops at Northfield
Stapleton just outside Denver earned Silver LEED certification in 2006. The sustainabil-
ity efforts of this $200 million, 1.2 million square foot center focus on “Main Street,” an
area of the development with dozens of smaller-format retailers and restaurants (both
national chains and local merchants).35 This area comprises about 25% of the entire proj-
ect. It intersects with larger-destination retailers to create a pedestrian-friendly, walk-
able retail combination, connected by plazas, landscaping, activated sidewalks, park
benches, and pedestrian lighting.

In order for this project to be successful, Forest City Enterprises (FCE) needed the par-
ticipation of the tenants – a group that typically doesn’t prioritize the owner’s needs
and interests. FCE was particularly innovative in helping tenants incorporate sustain-
able design features into their stores. The developer set basic, mandatory standards for
all tenants; provided financial incentives for heightened compliance; and showed retail-
ers how to implement the proper procedures. To assist this process, FCE developed the
Northfield Sustainability Tenant Incentive Program (NSTIP), a points-based system that
requires tenants to fulfill a minimum of 17 out of 51 criteria – but which also provides
economic encouragement for graduated levels of achievement. Retailers receive points
for incorporating daylighting design, energy-efficient HVAC systems, natural air ven-
tilation, recycled flooring material, flow sensors on all plumbing fixtures, no-smoking
areas, designated recycling spaces, nontoxic cleaning products, employee lockers and
showers, storefront bicycle racks, and reserved parking for fuel-efficient vehicles. The
guidebook also offers product recommendations, as well as lists of manufacturers that
provide things such as solar shading options and low-E glazing systems.

35 See http://www.northfieldstapleton.com/info/sustainability.cfm for a full list of participating retailers.

Retrieved on September 9, 2009.

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Green Retail: An Overview Green For All

Retailers get storefront window identification for participating in the program, whereas
high achievers get rewarded with advertising support in local and regional newspapers.
FCE also offers a $2-per-square-foot tenant allowance account credit, and has partnered
with the regional utility, Xcel Energy, to offer additional incentives. Tenants who utilize
Xcel’s Design Assistance Program to implement energy saving recommendations obtain
cash rewards ranging from $0.25 - $2.00 per square foot, splitting the reimbursement
with the clever developer.

According to Brian Levitt, the Northfield project developer for FCE, “Natural light, a
better aesthetic environment, better air quality, and enhanced finishes can make a retail
power center look and feel like a green, healthy space—a space that people want to lin-
ger in, and spend more time and money in.” By utilizing creative incentives and closely
collaborating with tenants, this project serves as a model for future shopping center
development.36

Fairlane Green Retail Center (Allen Park, Michigan)

Fairlane Green is a 243-acre retail and recreational center built over the Ford-owned
Allen Park Clay Mine Landfill. Sitting just 12 miles outside downtown Detroit, the
center boasts nearly one million square feet of retail space. Some of the nation’s biggest
retailers have stores in Fairlane Green, including Target, Best Buy, Home Depot, Bed
Bath & Beyond, Barnes & Noble, and Old Navy. It is the largest retail development in
the country to be built over a landfill, and was the first multi-tenant retail development
to earn gold-level LEED certification from the USGBC.37 The project also earned the
national Phoenix Award for excellence in brownfield redevelopment,38 and helped Ford
win the Energy Star Partner of the Year award in 2006.39

As noted above, building on brownfield sites earns developers points in the LEED
certification process. But it can also be expensive. The clean-up costs and collaboration
associated with Fairlane and its subsequent certification were overwhelming. The site
was originally a clay quarry used to make bricks for Ford’s regional construction proj-
ects during the 1920s. In the 1950s it became a landfill, serving as a repository for Ford’s

36 Retrieved from http://www.uli.org/sitecore/content/ULI2Home/ResearchAndPublications/Magazines/

UrbanLand/2006/September/Retail%20Goes%20Green%20at%20Stapleton.aspx on September 9, 2009.
37 Retrieved from http://media.ford.com/article_display.cfm?article_id=28193 on September 9, 2009.
38 Retrieved from http://www.aecdaily.net/en/1608788 on September 9, 2009.
39 Retrieved from http://goliath.ecnext.com/coms2/gi_0199-6181932/Ford-Land-takes-lean-road.html on
September 9, 2009.

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industrial waste disposal. It accepted non-organic waste such as steel by-products and
building debris until 2003. Turning this longtime landfill into a usable site for develop-
ment was not easy. It cost $30 million to reduce settlement through a preloading soil fill
program, and lightweight geofoam fill; to protect the landfill cap with an engineered fill
layer; to reinforce a 40-foot slope with a soil buttress; and to avoid methane gas migra-
tion.40 Fortunately, Ford was able to secure the necessary funds through tax increment
financing from the city of Allen Park and the Michigan Department of Environmental
Quality. But without such public subsidies, these heavy remediation costs are prohibi-
tive for most developers, necessitating the cooperation and support of various govern-
mental and environmental agencies.

Of course, these subsidies are not just a giveaway to the retail developer. Massive
sustainable developments like Fairlane Green have significant economic and environ-
mental benefits for the communities in which they’re located. For starters, this project
created 250 temporary construction jobs,41 as well as approximately 2,000 permanent
jobs.42 Second, the site added a valuable tax base, and is currently generating nearly $3
million in new tax revenues.43 Third, approximately two-thirds of the 243-acres will be
green, in this case meaning not covered by parking, roads, or rooftops. The project will
also incorporate recreational features such as a 43-acre park, 3.5 miles of trails, as well as
open spaces and ponds, all of which should enhance the site’s appeal to customers.44

Clearly, Ford took great care to make Fairlane Green as environmentally friendly as
possible. Other sustainable characteristics include: high-efficiency, CFC-free heating
and cooling equipment; white reflective roofing; low-emitting materials; water-efficient
plumbing fixtures; recycled and locally sourced building materials, windows and
skylights; and a roof cistern to capture and re-use rain water.45 And as at Northfield
Stapleton, Fairlane Green tenants are encouraged to pursue sustainability within their
buildings, and to seek LEED certification where possible. Supplied with interior and
exterior guidelines, Target was able to earn LEED certification for its stand-alone build-
ing by implementing many of the aforementioned measures.

40 Retrieved from http://www.michigan.gov/documents/deq/deq-ess-p2tas-fairlanegreen_231491_7.pdf on

September 9, 2009.
41 Retrieved from http://archives.heritage.com/nh/20030813/A01ILK1.htm on September 9, 2009.
42 Retrieved from http://www.aiami.com/green/popup_ford_fairlane_green.htm on September 9, 2009.
43 Retrieved from http://www.phoenixawards.org/factsheets/2007_Region_5_Fairlane_Green.pdf on
September 9, 2009.
44 Retrieved from http://www.michigan.gov/documents/deq/deq-ess-p2tas-fairlanegreen_231491_7.pdf on
September 9, 2009.
45 Retrieved from http://media.ford.com/article_display.cfm?article_id=28193 on September 9, 2009.

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Ford describes sustainable initiatives as those that are responsible environmentally,

socially and financially.46 Evidence seems to indicate that Fairlane Green is indeed
financially responsible and attractive. As Phase I of IV neared completion in 2005, Ford
Land (the subsidiary of Ford Motor Company responsible for Fairlane) was able to sell
a portion of the project to Archon Group (the real estate subsidiary of Goldman Sachs).
And in the context of the economic and retail woes plaguing Detroit, Phase I’s 87%
occupancy rate is an impressive testament to the strength of the project.47

REI (Boulder, Colorado)

Recreational Equipment, Inc. (REI) is a national outdoor gear and clothing retail coop-
erative that typically operates its stores on a stand-alone basis. Back in February 2009,
REI announced that its remodeled and expanded store in suburban Boulder, CO had
earned Gold LEED certification from the USGBC. This prototype store was designed
to improve the in-store experience for shoppers and employees, and to reduce its envi-
ronmental footprint by focusing on energy efficiency, water conservation, and the use of
recycled and renewable materials. In particular, green features include:

• Solatubes to channel natural light throughout the store, coupled with a control
system that automatically dims or turns off fluorescent lights during the day to
save energy;

• a building-integrated photovoltaic system that generates electricity through

imbedded silicon solar cells – the first installation of its kind in a retail environ-
ment;

• a solar hot-water system that meets 70% of the store’s hot water needs from bath-
rooms and employee showers;

• high-efficiency plumbing fixtures that reduce water use by more than 30%;

• ceramic metal halide fixtures (as opposed to incandescent bulbs) to improve

lighting, reduce energy use and last longer;

• materials made from rapidly renewable resources, and/or recycled, post-con-

sumer or post-production waste;

46 Retrieved from http://www.aiami.com/green/popup_ford_fairlane_green.htm on September 9, 2009.

47 Retrieved from http://www.cbre.com/USA/US/IL/Oak+Brook/Property/fairlanegreen.htm?pageid=1 on
September 9, 2009.

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Green Retail: An Overview Green For All

• more than 55% of construction waste diverted from landfills;

• shower facilities, bike storage and incentive programs, which encourage employ-
ees to use alternative means of transportation; and

• comprehensive operational initiatives, such as green cleaning and employee

waste management and recycling programs.48

The environment wasn’t the only consideration for REI. REI takes sustainable design
very seriously49 as a way of serving their customers, many of whom are environmen-
tally conscious outdoor enthusiasts. For the retail giant, going green makes good busi-
ness sense. According to Dean Iwata, REI’s director of Store Development:

From the store’s flooring to the solar installations on the roof, each of these
investments also had to show a realistic financial benefit. We considered
the softer benefits of how an improved in-store environment, with natural
daylight and comfortable flooring, will help us attract and retain the tal-
ent to deliver a great in-store experience. Ultimately, we expect that all of
these changes will result in a significant positive net financial benefit over
the expected life of the store.50

REI’s sustainable design efforts are succeeding in this respect. An initial survey showed
that 88% of customers felt they would be more encouraged to shop at REI Boulder as a
result of the new design.

48 Retrieved from http://www.csrwire.com/press/press_release/18142-REI-Boulder-Awarded-LEED-R-Gold-

Rating-by-the-U-S-Green-Building-Council on September 9, 2009.
49 The Boulder store joins REI Portland, which was the first retail store in the country to earn a LEED Gold
rating for Commercial Interiors. REI’s other LEED certified facilities include REI Pittsburgh (LEED Silver
rating for Commercial Interiors) and the co-op’s eastern region distribution center, located in Bedford,
Pennsylvania (LEED Silver rating for New Construction).
50 Retrieved from http://www.usgbc.org/DisplayPage.aspx?CMSPageID=1945 on September 9, 2009.

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V. Conclusion
A number of standards and certification programs have emerged in the Unites States to
help businesses and developers quantify their efforts to go green. LEED, Green Globes
and Energy Star all provide a variety of helpful standards for those looking to become
sustainable and energy efficient. Still, an environmentally conscious developer or
retailer does not have to follow these rigid guidelines in order to go green. For instance,
concentrating on any one of the six LEED certification focal areas will help reduce the
environmental impact of a retail establishment.

Such efforts are not just good for the environment. They are also good for business.
Going green increases property values and reduces operating costs. It also helps retail
businesses attract more customers, who in turn enjoy spending more time in their
stores. Such benefits should be very attractive at a time when retail has slowed consid-
erably. Up to 3,000 shopping centers are in danger of closing their doors this year, while
only one enclosed mall is slated to open in 2009.51 This historic pause offers developers
an opportunity to reorient their approach to shopping center development and force
retailers to strategically reposition their storefronts with a more respectful eye toward
customers, employees, and their collective surroundings.

51 Retrieved from http://www.time.com/time/business/article/0,8599,1883546,00.html on September 9, 2009.

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