Regency Centers: Greening the Bottom LineSustainability efforts save money and natural resourcesApril 2010By Fiona Soltes Stores |
| A couple of years ago, Mark Peternell, then the new vice president of sustainability for Regency Centers, was certain that demand for all things "green" would soon be a primary driver for retailers. But the economic landscape has changed, and leaner times mean that sustainability efforts may be taking a back seat to survival tactics. For some, green still equates to "more expensive" or "luxury." Not so at Regency. While all this happened around him, Peternell began to notice that, even though he may have overestimated demand for green efforts and LEED spaces on the retail side, he underestimated it on the capital side. "That's not to say we're gaining or losing shareholders," he says. "But they're certainly paying closer attention. That's based on the fact that we get both formal and informal inquiries from shareholders and analysts about what we're doing." That, in turn, has given Peternell added encouragement to stay the course and stick to the commitments and goals that began with a green task force study group in late 2006. Using input from construction, development, operations and marketing, that group set its sights on establishing and incorporating higher environmental standards. Smart water Visit the shopping center developer's website (www. regencycenters.com) and it's hard to miss: The button for the company's "greengenuity" program immediately catches the eye. The list of strategies runs the gamut from high-efficiency outdoor lighting to innovative storm water management. What's been making news for the company of late, though, is a pilot water conservation program that uses high-efficiency "smart" irrigation controllers to adjust watering schedules based on local weather conditions and other parameters. The product of choice was HydroPoint Data Systems' WeatherTRAK. Sharon Thompson, vice president of marketing for Petaluma, Calif.-based HydroPoint, says that within the real estate investment trust arena, Regency Centers "leads the nation" in embracing conservation, and that the company has done well to systematically develop efforts that "truly make a difference. "What we've found in working with Mark is that Regency is focused on creating initiatives, but also on identifying whole programs around those initiatives to measure, manage, monitor and report the progress," Thompson says. "Take water, for example. It's about the amount being used, the amount being saved and how that's being reported out as ROI. It's not only acres saved but money, as well. And finally, taking the money saved and applying it to other infrastructure projects. It's very forward-thinking." Peternell says Regency's pilot effort at 36 properties saved some $130,000 in its first year; with 90 properties now using the system, those savings are expected to jump to between $300,000 and $350,000 this year. "This is all very calculated," Thompson says. "There's no smoke and mirrors. It's truly fact-based." Other practices have been implemented along with the controllers to make it all run more smoothly, and Regency will continue to make changes at more of its 409 retail properties "as opportunities present themselves." Green, yellow and red A practice that is highly beneficial at one property may not have the same impact at another. In some regions, Peternell says, water is still inexpensive, so the economic return may not be as great. Tariffs, rebates and tiered rates may all play a part. Regency Centers makes its decisions by rating each property "green" (good candidates), "yellow" (potentially good candidates) or "red" (not good candidates for economic or technical reasons). A site may land in the red category, for example, when there's not a strong cellular signal in the area, since the irrigation systems rely on transmission of data from the National Oceanic and Atmospheric Administration (NOAA). But those sites are still considered for other initiatives. Peternell has been looking into possibilities like induction lighting (a new, still-expensive technology) and other "little things" like setting outdoor lights to come on 30 minutes before dark rather than 90 minutes. Regency has also spent significant time investigating solar power. The concern there, Peternell says, is whether being tied to a long-term contract "encumbers the asset. Even through solar is economically beneficial, the question is whether it would hinder our opportunity to sell the property in the future." One area in which the company has moved ahead is LEED certification. Regency Centers recently announced that its Jefferson Square shopping center in La Quinta, Calif., has become the first LEED-certified project in the city. In addition to a design that conserves energy and water and reduces greenhouse gas emissions, the property will also boast lower operating costs and a "healthier environment" for retailers and customers. The La Quinta property is not alone; Regency has six other shopping center projects currently seeking LEED certification – and the undertaking is not as expensive as some would think, Peternell says. "For a relatively modest investment, we can do some really great things. Whether these buildings are LEED [certified] or not, we think the modest cost differential is worth the return." And the indirect benefits are not to be underestimated, either. "Regency has a reputation of being a quality partner," Peternell says, "and having a sustainability initiative is an extension of that brand of quality. We're taking the extra time and steps to make sure that we're using good materials, to see that things are built in a certain way" and that construction debris is recycled. "These are not major changes to a business model," he says, "but again, taking steps toward being good stewards of the environment." The company is considering erecting kiosks at the LEED-certified properties to inform shoppers about its efforts. "It tells customers what they want to hear," Peternell says. "It's a good strong message." |
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