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PNC Bank and the Paradox of Green Retail

PNC Bank has seven bank branches that are either LEED-certified or in the application process, despite the added time and cost of filing for LEED credentials. By Eric Brill and Gary Saulson

Since the U.S. Green Building Council's LEED (Leadership in Energy and Environmental Design) certification can only be earned on a single building basis today, a significant sector of building in the U.S. has been all but absent in the green movement: retail roll-out. Each year approximately 21,300 new stores, or 23 percent of all new structures excluding homes, are built in the U.S. Yet retail stores represent less than 10% of buildings that apply for certification by the USGBC.

Why the poor retail turn-out? It's not that green construction is more expensive—sustainable building often competes favorably with or even provides savings over traditional strategies. Rather it's that retailers are faced with the substantial time and cost of filing for LEED credentials for each store in a roll-out portfolio.

There's already much controversy over the amount of documentation required for individual buildings filing for LEED certification. For retailers, this process can be multiplied many times over—some companies roll-out up to 100 new stores a year—making LEED certification simply unfeasible. Moreover, roll-outs are forever variable: municipal design requirements can vary from location to location; and retailers frequently remodel, reposition, and rebuild their stores to attract shoppers' attention. The small margins and abbreviated schedules that tend to drive retail projects compound the challenge.

At the same time, sustainability can be an important strategy for retailers. "Retailers want to have their stores registered with the USGBC," says Brendan Owens, RDC staff liaison and LEED program manager for technical support for the USGBC. "They know that building environmentally saves them money and helps promote their image as good corporate citizens."

On the other hand, green design needs the retail industry's involvement. With their geographical reach, bulk-purchasing power, and exposure to the public, as well as to multiple players in the building industry, retail roll-outs, (or 'volume-build' projects) have an incredible potential to help push sustainable design into the mainstream.

Getting from Here to There

PNC Financial Services Group first began building green in 2000 with the Firstside Center, a PNC operations facility in Pittsburgh that was the first silver-level LEED 2.0 building in the U.S. This was followed by the gold-level PFPC Headquarters in Delaware and recently, we "deconstructed" Pittsburgh's Public Safety Building to create PNC Firstside Park, a 1.5 acre park for our employees and the public. Additionally, PNC has seven bank branches that are either LEED-certified or in the application process. So, with plans for 90 new branches in the Eastern U.S. over the next few years, we were determined to find a way to efficiently certify all our new branches.

For the past few years, the USGBC's Retail Development Committee (RDC) has been focused on developing a streamlined LEED process for volume-build projects. It has gathered input from major retailers such as Starbucks and Target to establish new standards correlative to bulk building, as well as to rethink and simplify the documentation process for certification. To help advance this new process, PNC and Gensler worked closely with the RDC to build-out and certify its bank branches using a Gensler-designed prototype as the test case for a streamlined approval system.

PNC and the RDC have proposed that the USGBC evaluate and certify the bank’s prototype design to guide the building of all the new PNC branches. This would eliminate the need for PNC to file documentation for every branch we seek to certify. One approach suggested by the RDC to maintain the integrity of the LEED system is for the USGBC to undertake random audits of branches - not unlike the IRS’ audit of income tax - to verify that construction meets the standards established by the certified prototype design.

The USGBC is in the course of developing a volume-build review process. It’s anticipated that it will propose a requirement that retailers provide complete documentation for an initial building of a roll-out project, with further documentation required for each additional retail outlet that deviates from the original certified project design.

"This response by the USGBC doesn’t exactly align with the PNC/RDC request, but it’s an important first step," said Teresa Burrelsman, a consultant at Paladino & Company, which serves as the RDC’s technical consultants. "It’s clear that the USGBC needs to uphold the integrity of LEED, but anyone building multiple projects each year will want more of a portfolio-based review process." Owens expects a pilot program for LEED Retail to be available this summer, and retail certification is projected for the first quarter of 2006.

To be sure, a building need not be LEED-certified to be sustainable, and many builders regularly pursue sustainable practices and features independently. But by providing a framework for assessing building performance and measuring sustainability goals, LEED certification provides an invaluable set of guidelines that have helped to standardize green practices whether or not builders register with the USGBC.

Incentives and regulations from local, state, and federal governments, are furthering to help LEED become more 'market-driven.’ Owens feels that scrutiny from corporate shareholders is a big driver for LEED certification. "Shareholders are reading the corporate sustainability reports and they want to see claims backed up by a credible third-party organization," he said. "They’re interested in seeing commitment on behalf of a corporation’s entire environmental footprint." Many retailers are beginning to find that, if available, the LEED imprimatur is the best option.

"If there’s a viable way, retailers will register for LEED," claims Owens.

A Green Retail Prototype

In addition to the challenges of LEED documentation for volume-build, the PNC prototype involved developing a new delivery approach to ensure high performance standards in a cost-effective and replicable way. The emphasis that LEED places on respecting local environmental surroundings required a highly-engineered prototype that had to be even more adaptable than the conventional roll-out model. CJL Engineering helped to develop a system that would accommodate the myriad conditions where the branches will be sited. “We took the worst-case conditions as the basis of our plans,” says Alan Traugott, principal, CJL Engineering. “So one challenge was for Gensler to design a building where natural lighting would be guaranteed everywhere, even if the entrance had to face south or southwest.” The plan can also be flipped without changing the appearance of the building.

A variety of alternatives were explored to increase green attributes without impacting on the budget. Among the brick and glass buildings’ breakthrough features are energy-efficient windows that maintain a comfortable interior temperature no matter the external conditions. Besides insulating the structure, the windows stream available daylight into the interiors, creating a visible connection to the outside while minimizing lighting costs. Pre-assembled masonry walls install easily, and because they’re manufactured off-site, contribute less construction waste.

Sustainable interior materials include countertops composed of recycled paper content and sustainable wood, as well as cabinetry that employ wheat board (a rapidly renewable material) instead of plywood. Recycled content can also be found in carpeting, flooring, wall coverings, and furniture fabrics.

Since green design for volume-build lacks precedent, the prototype depended on innovation and collaborative thinking. Thinking of the roll-out as a green system, Clemens Construction, PNC’s project contractor, devised a program to effectively recycle three quarters of the construction waste by gathering it from multiple sites and recycling in mass.

The prototype design reduces construction time by four to six weeks, taking 3.5 to 4.5 months to build; and the building’s materials allow construction to continue during adverse winter weather. Each new 3,650-square-foot branch costs from $1.3 to $1.4 million — $150,000 less than what competitors are paying for their branches. Additionally, an energy model for the prototype produced a savings of 40 percent compared with baseline code requirements.

The Multiplier Effect

Assuming that LEED certification for retail will soon be a viable process, not only will it have an exponential impact on the number of LEED buildings, but it could also create a manifold increase in the awareness of green design. “It’s one thing to say you’re going to build green and quite another to understand at the field level what that really means. When you think about how many people come into the PNC job-site in three months-that's 180 different people who will become educated,” said Clemens’ Project Superintendent, Mike Kaminski.

Paladino associate consultant Brad Pease has seen many team members become green advocates after his company introduced a training program to educate the project managers, contractors, and subcontractors on the team as to the different practices required of green design and delivery projects. “We give people a list of adhesives and paints that conform to USGBC standards, but we also teach them how these substances react with construction materials. They learn how to prevent them from being absorbed by other materials, which might cause an unhealthy interior environment,” he explains.

While green education is common to most LEED projects, expand this experience many times over—given the size and scope of retailers’ real estate portfolios—and you get a glimpse of the potential for sustainable building expertise and practices to spread within communities across the country. In many cases, these will be communities with little exposure to sustainable buildings. “What is really groundbreaking about the PNC retail effort,” says Traugott, “is that we are bringing a green building to 'a neighborhood near you.’ Developers, contractors, retailers, municipalities, states, and the public will all become familiar with green buildings and people will understand that 'green’ can be accomplished…and that it makes good business sense.”

When more retailers get on board with green volume building, we’ll have the ability to impact markets due to our bulk purchasing power. Furthering the exponential impact of volume-build, demand for green products and services will increase and create new incentives for vendors, contractors, and manufacturers.

The first Gensler-designed bank branch opened in East Bradford, Penn. in March 2005. It’s just the beginning for PNC’s green roll-out program, and, hopefully, for other retailers too.

This article has been reprinted courtesy of Environmental Design + Construction. It was first published in the July/August 2005 edition of that publication.

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