Sustaining Change

John Scott is a big believer in sustainable building management. He's practically a national champion of it. He just doesn't want a bunch of business-killing rules coming out of Tallahassee or Washington that mandate sustainability that the market won't support.

Scott, recently lured from Cushman and Wakefield to Colliers International as executive vice president for property management, believes in taking energy-efficient technologies and driving them straight to the marketplace by demonstrating their value to commercial building owners and tenants; let the numbers make the pitch.

“Sustainability provides a triple bottom in effect: reduce costs, provide the same or superior service and provide a better environment for people to work in,” he says. The case is a business and marketing one, not a legislative one. Basically, to Scott, it just makes good business sense.

There is growing momentum to retrofit older buildings with energy-saving upgrades. Improved technology and rising fuel prices make it increasingly attractive. Some upgrades are as simple and inexpensive as changing lighting and putting in motion sensors. These changes that provide a one- to three-year payback are the most common upgrades.

From there, it goes up to larger capital investments, such as energy-efficient rooftop air-conditioning units, high-efficiency motors and water pumps, and certain solar panel structures. Those are in the four- to seven-year payback range for the initial capital investment.

And finally, the largest and least common retrofits are building “envelopes” that include new tinted efficient windows and reflective surfaces and roofs. Those paybacks can take up to 20 years.

Investments in all of three categories generally depend on building ownership, Scott says. All types of owners are interested in the short-term payback category. Institutional owners who lease their buildings tend to be the most common for the middle category and owner-occupied -- companies that intend to be in the facilities they own for the long term — are the relatively few who opt for the most expensive upgrades.

Scott, who oversees Tampa Bay, Orlando, Jacksonville and Southwest Florida for Colliers — the largest property management company in Tampa Bay -- points out that most Tampa Bay office buildings were built in the 1980s and 1990s, when there was a long-running construction boom.

There have been just a small percentage built since 2000, so there is a growing need for them to be upgraded.

Sustaining momentum
There have been several high-profile sustainability upgrades in Tampa Bay.

The 36-story Park Tower in downtown Tampa (formerly the Lykes building) was bought by Sterling American Property and recently finished a major upgrade that included long-term sustainability retrofits to air-conditioning units and its electrical systems.

The neighboring 39-story Tampa City Center obtained LEED Gold certification in 2010 with across-the-board upgrades for water efficiency, energy, air atmosphere, materials, and resources and operations. The 22-story Wells Fargo Center in downtown Tampa also recently obtained the LEED Gold certification.

In one sense, the LEED certifications are a marketing ploy to gain the upper hand in attracting tenants. But it works as such because there is a slowly growing demand for both sustainability and cheaper building operations. “Someday it will become the norm,” he says.

Scott sees these and many more as examples of how sustainability works in the marketplace. More large building owners are retrofitting to more energy-efficient systems not only for savings but also for competitiveness. When other nearby buildings in a market can tell potential tenants about the energy saving features and the improved work environment, it becomes a competitive advantage.

But it can't be forced, not by the government and not by industry associations, Scott says.

Commercial building associations tried to get the commercial real estate industry to adopt “green leases” incorporating an agreement of responsibility for the capital required to upgrade and retrofit and specifying who would pay for it. But everyone resisted the green leases, and they were rarely used. Not everyone was ready to incorporate such a full-scale effort into leasing arrangements.

So Scott led an effort to create a “leasing library” of various lease documents and portions of the documents that included options for sustainability or green sections. Property owners and managers can cut and paste all or just portions from the library and then negotiate with tenants on the details.

This all-voluntary option has been much more warmly received, he says.

Among the problems with government's involvement is that it would inevitably get it wrong.

For instance, the Empire State Building in New York City underwent a complete and costly retrofit then resulted in a 38% energy savings. And yet it still did not meet a federal requirement to get financial aid after the fact. Scott says the threshold in that law is ridiculously high and obviously written by people who did not know the industry — a problem that can plague government regulations.

Personal passion
Scott admits to being passionate about living in a way that sustains the earth's resources. He attributes it to Depression-era parents who were cautious to re-use, and to the Seminole orphans his parents unofficially adopted. Growing up visiting the Seminoles on their reservations, he saw their ways of making use of everything around them and the concept became a part of him.

But Scott considers himself a political middle-of-the-roader. He is zealous about energy and resource sustainability, which is a higher priority of Democrats and those on the Left. But he wants the marketplace to deliver the changes, not government fiat, which is a method favored by Republicans and those on the Right.

He said much of it is simply getting facts out to building owners.

“You make more money, ROI, and you provide a better working environment and you cut costs,” he says. Once building owners or businesses run the numbers, at least the shorter-term retrofits are a relatively easy sale.

Retailers are tougher because the paybacks tend to be longer, but they are moving forward, also.

The Commercial Building Energy Association helped bring to the marketplace a highly efficient rooftop air-conditioning system that can save big box retailers 30% on their energy costs. And the new unit can use the same physical structure as the old — not the norm in such retrofits.

Walmart, Target and Best Buy are among several national retailers that are implementing the new unit in more than 400 sites right now. These units can also be in industrial buildings, retail buildings and some industrial/warehouse buildings, and demand is building for them, Scott says.

“This is driving the manufacturers to start creating energy-efficient tools,” he says.

About John Scott
John Scott is probably the top property management professional in the Tampa Bay area and perhaps the top one in Florida, with more than 30 years' experience in the field and over every major market outside of Southeast Florida.

In January, he moved to Colliers from Cushman and Wakefield, where he had oversight of more than 10 million square feet of commercial space throughout Florida. Before that he was with The Hogan Group, PWH Inc. and Lincoln Property Co.

Scott brings to Colliers and the industry considerable knowledge and passion for sustainable energy uses in commercial buildings. This shows in the national organizations he helps run.

Since 2010, Scott has been chairman of the Commercial Real Estate Energy Alliance (CREEA), a partnership of commercial real estate owners and operators working with the U.S. Department of Energy to reduce energy consumption.

He has also been chairman of the Building Owners and Managers Association's International Sustainability and Market Initiative Task Force.

Scott has four children and he says they are part of the reason he remains interested in energy sustainability.