Housing developers looking for a competitive edge are going green

Jim Buchta
Star Tribune
Published June 19, 2005

Bamboo floors. Grass roofs. Gray-water recycling.

With competition in the housing market heating up, a growing number of developers are going beyond granite countertops, hardwood floors and stainless steel appliances. They're embracing sustainable designs -- "green homes" -- that are good for the planet and help sell houses.

"At some point in time nobody can deny you're going to have to differentiate yourself from everyone else who is in the market," said Rick Carter, an architect with LHB Architects in Minneapolis who has been designing green buildings for more than a decade.

"And being able to say 'we've got a green or sustainable product and they don't' can make a difference," he said.

Sustainability is a catch-all term that represents a broad range of practices aimed at lowering a building's energy consumption and its impact on the environment. It includes everything from energy-efficient windows to recycled lumber, which are finding their way into houses and condominiums in all price ranges. By next year, for example, you'll be able to watch the grass grow on the roof of a luxury condo building overlooking Lake Calhoun in Minneapolis.

Most "green" developers, though, are like Michael Lander, who specializes in Twin Cities urban in-fill projects that incorporate a host of less radical ideas, including bamboo floors (bamboo grows faster than trees), high-efficiency furnaces (saves energy) and drought-resistant landscape plants (don't require frequent watering).

Lander, founder and president of the Lander Group, used those green techniques at the Midtown Lofts in south Minneapolis, and went beyond those features in one condo. That unit has rubber flooring made from recycled tires, partially recycled insulation and low-flow plumbing fixtures.

Preservation of green space is another popular approach these days. At Credit River Territory near Prior Lake, developers are touting their efforts to set aside half the land in this 700-acre luxury development for open space.

Still, the industry continues to soul-search over what it means to be green. Interpretations run the gamut from expensive imported wall tiles made of recycled glass to high-tech geothermal heat pump systems that can reduce the cost of heating and cooling even a small mansion to a fraction of what it might otherwise cost.

Their motives are manyfold. Many do it because they don't want to be known as a company that raped the land and helped poke a hole in the ozone layer, while others are doing it because it helps sell houses.

But are consumers willing to pay extra? Some research shows that while a growing number of consumers want to know where their wood floors came from, how much energy it takes to heat and cool their house and what kinds of chemicals were used during construction, few are willing to pay more for it, said Colleen Carey, who plans to transform an old industrial building into Machinery Lofts, which will meet the U.S. Green Building Council's highest standards.

Carey, president of the Cornerstone Group, said green features can add 3 to 5 percent to the total cost of a house or condominium. "It's like saying we want more fuel-efficient cars, but we buy SUVs."

Developers say most buyers would rather spend that extra money on exotic wood floors, commercial-quality appliances and ballroom-size living spaces than for less-visible improvements that increase the durability and function of the structure.

Nonetheless, a growing number of buyers do care about sustainability, said Paul Dincin, principal at Tandem Developers, which is developing a 252-unit high-rise condo building in Minneapolis that will have a grass roof that will reduce runoff into the city's over-burdened storm sewer system.

"When it's proven that they're reasonably priced or perform well, then given the choice, consumers and home buyers definitely will prefer that green, sustainable products are used rather than not," Dincin said.

And consumers are finding more options. Carey said there are already several buildings in the Twin Cities that meet the voluntary national Leadership in Energy and Environmental Design standards, but none have gone through the complicated process of getting certified.

"We think we need to raise the bar so it becomes the standard," she said. "Right now people say they're doing green development and they all have varying degrees and ways of doing that. What we need is something that's more universally standard that's better for the environment."

Minneapolis recently adopted an ordinance that provides incentives to developers and homeowners who can demonstrate that they're reducing the amount of rainwater that goes into the sewer system. But Carey said municipalities and the government need to do more to encourage developers to take the leap.

Until then, the promise of a competitive edge and higher sales is the driving force for most developers.

"In general it's not driven by a vision to do it better, it's driven by a vision to make more money out of it," developer Joel Shurke said. "I see most efforts responding to the bare minimum requirements, and if they do that they pat themselves on the back."

Minnesota's energy code, for example, is one of the most stringent in the nation, but builders and developers will often tout the energy efficiency of their projects even though they might only meet minimum code requirements.

"The code is there -- if you don't meet the code you're breaking the law," Shurke said. "So that's where the basic question becomes: how much better are you doing?"

Shurke said developers should push the boundaries of what the market already has to offer.

When he and two partners at Factor 10, a Twin Cities-based development company, bought an abandoned quarry on the shores of Lake Vermillion near Ely, Minn., they tried to create a model for sustainable lakefront development.

There's not an inch of pavement on the property (roads are lined with reclaimed mine tailings), the cabins are compact (large family gatherings happen in a shared community space) and they are built to accommodate extended family visits.

Still, as Shurke acknowledges, those features aren't the primary reason why units are selling. "The real decision will be based on whether the economics work out," he said. "For the people that have experience or interest [in environmental issues], it's just icing on the cake for them, but that's generally not the decision that drove them here."

Some developers, conversely, are concerned that the word "green" isn't appealing to every buyer.

John Dierbeck of Argus Homes in St. Paul said he's been a bit reluctant to call his Woodbury townhouse project, which has a grass roof over the parking garage, sustainable because the label might narrow the project's audience.

"If the preconceived notions are neutral, then it's okay," he said. "But if they're negative, then you have to fight the battle."

New Condo Development - Riverfront

Brighton Development Corp. has proposed a futuristic "boutique" condo development for the Minneapolis riverfront.

The 35-unit project, at Portland Avenue and Second Street, will feature two contemporary buildings, the Portland and the Nine. They were designed by noted Minneapolis architect James Dayton, the designer behind the Bookman Stacks in the Warehouse District, said Peggy Lucas, a Brighton principal.

The edgy design contrasts with Brighton's other riverfront lofts, which are renovations of historic mills. The project's site falls outside of a historic district.

"Even historians like counterpoints," Lucas said of the design.

The developer expects to start pre-sales in July and break ground by the end of the year. Prices will range between $300,000 and more than $1 million.

Post office move clears way for St. Paul redevelopment

Curt Brown
Star Tribune
Published June 7, 2005

The U.S. Postal Service submitted its own change-of-address form Monday, saying it will move more than 1,100 workers from its outdated downtown St. Paul headquarters to Eagan in 2009.

St. Paul officials were elated, saying the move will open up 12 pivotal acres for riverfront redevelopment and more than offset the loss of jobs. Transportation planners predict the decision will help rekindle the once-bustling St. Paul train depot adjacent to the downtown post office, creating a hub for high-speed Amtrak service, local and regional buses and possible light-rail and commuter-train connections.

"On the one hand, these jobs will be leaving," St. Paul Mayor Randy Kelly said. "On the other hand, this opens an enormous opportunity for further riverfront housing, retail and commercial development and I fully expect the opportunities to outweigh any of the challenges or negatives."

Eagan authorities welcome more workers, but they insist hundreds of additional postal trucks a day will require a new Interstate Hwy. 35E overpass at Denmark Avenue to ease congestion around Yankee Doodle and Pilot Knob Roads. St. Paul and Eagan plan to ask Congress and the Legislature to help finance the move's redevelopment and transportation costs.

Adding the downtown Minneapolis post office and a postal facility in northeast Minneapolis to the Eagan consolidation, once part of the discussion, wasn't mentioned in Monday's letter from Deputy Postmaster General Patrick Donahoe to U.S. Rep. Betty McCollum. Jim Stanley, a local postal spokesman, said while "the wheel is starting to turn" for the St. Paul relocation, Minneapolis is not part of the consolidation process.

Changing needs

St. Paul, like Kansas City, Philadelphia, Washington, D.C., and other cities, needed its main post office by key railroad lines in the early 1900s when letters moved by train. Those cities have recently redeveloped old postal properties with housing, retail and office centers. They have also helped the cash-strapped Postal Service make money by selling prime downtown land and moving to less costly suburban property.

Not only have the days of train delivery come and gone, but the 16-story St. Paul mail processing center is no longer as efficient as more modern and horizontal sorting setups.

Donahoe said he hopes to agree with St. Paul officials on a "reasonable price" for the property before a 2006 meeting of postal governors. Kelly said the city will conduct a study to see how much the property is worth.

"Just as important as the immediate property opening up, the value of nearby property will increase more dramatically than anyone can anticipate," said Patrick Seeb, president of the St. Paul Riverfront Corp., which has been instrumental in much of the development along and near the Mississippi River in recent years.

Pointing to the Science Museum of Minnesota, the Xcel Energy Center and Harriet Island regional park, St. Paul boosters often brag about reviving their Mississippi banks west of Robert Street. But redevelopment east of Robert has stalled awaiting the Postal Service's decision. Weiming Lu, president of the Lowertown Redevelopment Corp., has early sketches of potential condos and stores at the postal site, complete with a riverfront marina.

A long-scrutinized plan to relocate St. Paul postal operations to an former Army ammunition plant in Arden Hills eventually dissolved after years of study. St. Paul officials have been preparing for the Eagan announcement for more than a year.

"This was the one domino that needed to move," said Ramsey County Commissioner Rafael Ortega, who leads the Regional Rail Authority. "I'm delighted to see this piece fall into place."

McCollum, D-Minn., said revitalizing the area will "yield great benefits" for her district. U.S. Rep. John Kline, a Republican whose district includes Eagan, said he will make sure the move doesn't overburden his area's transportation system. And Sen. Norm Coleman, Kelly's predecessor as St. Paul mayor, said Monday's announcement was good news for St. Paul and Eagan. McCollum, Kline and Coleman will be key players in securing federal funds.

Eagan city administrator Tom Hedges said his city loves the prospect of 1,100 new jobs, but he insisted that love is conditional on improving roads near Eagan's bulk mail center, which sits in a 92-acre industrial area south of Lone Oak Road, east of I-35E and west of Lexington Avenue S.

"We've been asking since the beginning what this expansion means and until we understand their whole proposal, it's difficult to know what we're even planning for," Hedges said.

Seeb said about 400 trucks a day use the St. Paul facility. Some involved in the negotiations say it could take 10 years to complete the complex move. Kelly and Ortega insist it can be done in closer to five years.

In the meantime, Donahoe said the negotiations will include keeping a postmaster's office and a "retail presence" in downtown St. Paul. A two-person counter in the Hamm Building in downtown St. Paul currently handles some of the downtown postal demand, but the Postal Service would need a larger retail operation once the processing and distribution jobs move to Eagan.

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