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Business Observer Thursday, Jun. 25, 2009 12 years ago

Green Scene

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The going green debate lives on in the construction industry. Many tout its environmental benefits, but how does it impact the bottom line?
by: Mark Gordon Managing Editor

The going green debate lives on in the construction industry. Many tout its environmental benefits, but how does it impact the bottom line?


Dave Sessions picked an expensive way, and a tough economy, to go play scientist: The construction executive turned his $52 million company's quest for a new headquarters into a $4 million green building experiment.

“With all the green questions we get from our clients, we thought this would be the right thing to do,” says Sessions, president of Sarasota-based Willis A. Smith Construction. “We wanted to be a leader in the community.”

The company's new 18,000-square-foot headquarters, in an office park on the Sarasota side of Lakewood Ranch, is green galore. Its multitude of green construction features include windows made up of low-emission glass, which are two pieces of glass with dead air in between that reflect light back to the source, and a “cool roof system” with solar photovoltaic panels, which is the big trend in green building.

Willis Smith plans on submitting the building, which cost $2.75 million to build in addition to another $1.2 million for the land, for Leadership in Energy and Environmental Design (LEED) certification through the U.S. Green Building Council.

But Sessions isn't a total green convert — yet. While he beams with pride when giving tours of the new building (he gave at least 100 in the first month) he's not totally convinced that everything the company did will have a significant return on the investment. Overall, says Sessions, Willis Smith paid a 7% premium in building its new headquarters.

Some features, such as using smaller but more efficient high-end air conditioning systems, are sure to save the company money long-term, says Sessions. Other facets, such as rainwater harvesting, which is a system of collecting rainwater into a pair of 3,000-gallon drums for reuse in bathrooms, so far are more environmentally friendly than cost efficient.

The economics of the building, combined with the economy itself, led Sessions to a somewhat surprising conclusion given the all out go-green movement that is permeating the Gulf Coast construction industry. Says Sessions: “If
I had known how bad [the economy] would be, I might not have done it.”

Sessions made the decision to build a new headquarters for Willis Smith in 2006, after the company outgrew its Sarasota offices for the sixth time. The company had been in its original location since the 1970s, when it began growing into one of the area's bellwether construction firms, building everything from schools to churches to corporate headquarters.

But after meeting with more than a dozen employees in 2006, Sessions says his mind was greened up. The unanimous feeling inside the company was that if the industry was going green, Willis Smith should be a leader in that movement.

Of course, adds Sessions, he had no idea the economy would collapse so deep and for so long.

Many of Willis Smith's peers and competitors also are struggling amid the recession. Sessions says one client called him last month to say he was pulling the plug on building a $5 million office project — a situation not uncommon on the Gulf Coast these days.

Willis Smith's annual revenues have bounced like a yo-yo for the past three years. The figure was as high as $56 million in 2006 and as low as $47 million in 2007. In 2008, the company reported $52.3 million in revenues, while in 2009, it's projecting it could have something in the low $40-million range.

Still, Sessions says building a green headquarters was worth the cost in intangibles, as now the company knows a lot more about green building. He and his staff plan to use that knowledge when working with and recruiting clients.

“It isn't worth spending one, two or even 7% more if you can't save operating costs on the overall lifetime of the building,” Sessions says. “When you could make the economics work, it's a home run.”

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