Past Is Prologue

How the Merchandise Mart transformed itself from a relic into a certified energy-efficient marveland a model for other outdated buildings around the U.S.

With today's focus on "green" buildings, it's no wonder that so many of the new towers scraping the Chicago sky are heralded for their benign impact on the environment. But what about the thousands of other high-rises and humbler structures already here? Improving the energy profile of older buildings is a much harder feat. Before virtuous materials and systems can be installed, the old stuff has to be ripped out and hauled off. Managers of existing buildings also have to keep operations humming so as not to disrupt rent-paying tenants. "It can be like performing surgery while the patient is still awake," says Mark Bettin.

Bettin has never performed in an operating room. But as engineering vice-president at Merchandise Mart Properties, he has just finished a three-year, multimillion-dollar odyssey to cut the massive structure's consumption of energy, water, and materials. The effort required overhauling decades-old practices and technology, from replacing most of the Mart's 4,000-plus windows and upgrading rusty motors deep in its subbasements to taking better care of dust mops. The reward: At 78 years of age, the Merchandise Mart is now the biggest green building in the world.

It's hard to overstate the scale of this undertaking. Straddling two full blocks and reaching up 24 stories, the complex contains 4.2 million square feet—about 400,000 more rentable space than the Sears Tower—and enough to qualify for its own Zip Code (60654). Behind its limestone exterior are 380 miles of electrical wiring and 40 miles of piping and ductwork. The Mart requires 400 employees just to keep the place functioning. With more than 700 tenants, the building's daytime population numbers 15,000 to 20,000. Every year, 3 million visitors stop in for trade shows and conferences.

The new and improved Mart may inspire other building owners to retrofit their properties, in Chicago and elsewhere. Fast-multiplying local and national goals to lower greenhouse gas emissions and energy use are putting existing buildings under greater scrutiny. Commercial buildings consume about 40% of the nation's energy and generate about the same share of the gases blamed for global warming. Yet new structures, where almost all green construction is happening today, add less than 2% to the total building stock each year. Thus, the only way to hurry along savings is to update the nation's 4.9 million older commercial structures.

The rush to go green isn't only due to government mandates. If owners of pre-21st century structures want to draw tenants who'll pay top dollar, their properties must be as inviting as new places. That means installing not only the latest technology, but also green features, such as healthier workspaces stocked with nontoxic furnishings, carpets, and cleaning agents, plus plenty of natural light and ready access to public transportation.

Still, upfront expenses—and inertia—often hold landlords back. "Big existing buildings are a great opportunity, but they're harder to get to," notes Sadhu A. Johnston, the City of Chicago's chief environmental officer. "They rarely go through major retrofits, and they're not coming in for permits, so there just aren't as many openings for us to point out how to do things differently. They have to go out of their way to go green."

To remake the Mart, Bettin turned to the U.S. Green Building Council in 2005. A nonprofit standards-setting body, the council provides the imprimatur for green real estate, thanks to its Leadership in Engineering & Environmental Design (LEED) designation for new structures and LEED-EB certificate for existing buildings. Think of an application for approval as a multiyear beauty pageant—but instead of points for swimsuits and talent, building managers get points for operational excellence, ranging from how much water they save to how clean they keep the air.

To win LEED-EB certification, more than a dozen Mart managers met weekly, together with outside consultants from the Delta Institute, a not-for-profit green advisory group based in Chicago. The team worked through the phone-book sized self-evaluation that does more than ask questions; it also offers meticulous guidance to improve a building's performance. Eighteen months into the project, they had a fix-it plan, funded largely out of its operating and maintenance budgets.

Last fall the green council awarded the Mart silver LEED-EB certification, making it one of fewer than 80 facilities to earn the award so far. The return has been quick: Thanks to the upgrades, utility bills last year fell about 10%, and occupancy rates climbed to 96%, from 77% a decade ago. "We've had a wave of interest," says Christopher G. Kennedy, president of Merchandise Mart Properties and an heir to former building owner Joseph P. Kennedy. "One prospective tenant, who had passed us over, came back because they require a LEED space."

Bettin says that despite the award, the search for savings continues. But refits are becoming more costly and complex because a lot of the cheapest improvements have already been made. Next on his to-do list, for instance, is replacing a pair of one-speed electric motors, which pump water and drive parts of the cooling system, with variable-speed upgrades. That should shave $50,000 a year from the Mart's power bill. The project's estimated price tag: $350,000.

Douglas R. Gatlin, the council's vice-president for business development, sees another task: "Having the management discipline to execute, and selling tenants on the benefits of a process that can take years. The bigger the building," he says, "the harder that gets." Here's how the biggest of them all made it happen.


One of the Mart's best weapons against waste is a meter. Many commercial buildings rely on "master" meters, which track consumption of water, electricity, and other utilities for the entire structure. Landlords then apportion utility charges based on the space each tenant occupies. Thus, two offices of similar size may have the same bill even if one leaves the AC, lights, and computers running all night while the other shuts off everything. The Mart was ahead of the curve: It already had individual meters that billed tenants for their actual consumption. "You can't make them change to high-efficiency bulbs, but the minute we start passing on the true costs," notes Bettin, "the savings start."

Still, the Mart found it could use even more meters. It put in dozens to track lighting and cooling gear in common areas to pinpoint waste. A $16,000 sensor, for instance, helped identify numerous leaks in the cooling system that were causing air compressors to work overtime. Since maintenance workers sealed the leaks, the compressor uses about $4,000 less energy per year. The repairs also allowed the Mart to forego the purchase of a replacement compressor that would have cost many times more than the meter.

Old efficiency measures count, too, in how the council judges a building. For instance, the Mart's energy use was already benefitting from a 1980s ice-storage cooling system installed by its previous owners, the Kennedy family, who bought the building in 1945 and sold it to Vornado Realty Trust in 1998. The system freezes tons of water overnight, even in winter months when the Mart's cooling needs are minimal. The ice is then brought up to 34 degrees and pumped into the air conditioning system during the day. The setup shifts power consumption to lower-price, off-peak periods.


As detailed as the green council's rules are, they can't foresee everything. A by-the-book approach to cutting water usage would have guided the Mart to replace every old-fashioned, water-guzzling toilet and faucet. But in a building with an estimated 2,000 toilets, the cost and wasted materials from such an all-out effort would have been mountainous—and contrary to the spirit of LEED-EB.

To come up with the savings they needed, the Mart's green team treated the water challenge as traffic planners would. They tallied the water usage in every washroom fixture to produce a 24-page spreadsheet that documents where practically every drop in the building flowed. Because of all the trade shows the Mart hosts, only a small number of restrooms turned out to account for a huge share of water. All of these had been improved earlier. This helped make clear that upgrading low-traffic, less-efficient toilets and sinks elsewhere in the building wouldn't be worthwhile.

So the team had to look deeper. They discovered that a big heat exchanger used to chill a computer facility was drawing fresh tap water, using it once, and sending it down the drain. By simply recycling the cooling water in this one room, says Bettin, the Mart was able to reduce water usage by 10%. Elise Zelechowski, associate director at the Delta Institute, tips her hat to the council for helping the Mart find better means to reach its goals. "They asked us to go through a detailed evaluation process," she says, "to understand the potentially complicated water usage project we had on our hands."

Overall, the Mart has cut its water consumption about 35%, or some 20 million gallons a year, since 2001. That means a smaller water bill—more than $100,000 less per year—but also lower electricity charges, because pumping water into a building's upper floors is a big consumer of energy.


For the Mart's tenants and workers, the most visible changes have been in the building's day-to-day operations. Take the dreary task of dust-mopping the Mart's seven entryways and miles of common areas. Done wrong—say, by using a mophead already loaded with grime—dry dusting only swirls the particulates around, a no-no given LEED-EB's stringent air-quality standards. What's more, a bad dust mop can force a janitor to repeat the job more often, encouraging the use of more aerosol antidust agents. More spray means more chemicals into the air, another no-no.

Avoiding waste, and sending it to the right place, also became a mission. Home to hundreds of furnishing and fixture showrooms, as well as a series of trade shows, floor space at the Mart is refitted with fashion-show frequency: Every year, more than 700,000 square feet of renovations take place—a space about 35 times larger than the average commercial building in the U.S. To encourage the use of green products in new construction, the Mart opened its own building-supply shop in the basement, stocked with discount-priced, sustainably harvested wood, low-vapor paints, and a menagerie of high-efficiency bulbs.

To keep this river of construction debris from flooding landfills, the Mart turned another part of its basement into an enormous recycling operation. In the loading bay, a full-time recycling supervisor guides a steady parade of workers hauling debris to a row of truck-size blue containers marked for practically every conceivable species of waste: cardboard, metals, construction materials, recyclables, and electronics.

In one corner, a $3,800 "Bulb Eater" sits atop a 55-gallon drum. When fluorescent tubes are fed into its maw, a spinning grinder reduces them to dust, and hospital-grade filters keep any toxins from escaping. For $360 per drum, Fluorecycle, of suburban Ingleside, hauls the drums to a plant where it recovers and recycles the glass, aluminum, copper, phosphor, and toxic mercury. Altogether, the share of refuse sent to landfills has fallen to roughly 35% today, from 45% in 2005.


The race to earn points for a LEED award has its limits, of course. The Mart chose not to install a green roof or solar panels. A rooftop garden, in principal, helps a building stay cooler in the summer and warmer in the winter by adding a layer of insulation. It also absorbs rainwater, reducing the flow into overtaxed sewers. The Mart, with superstrong, 10-inch cement floors, could easily support such a roof. But the concrete already provides as much or more insulation than plantings would. And in overcast Chicago, solar panels would cost too much for the power they'd generate.

Still, Bettin considers environmentalism to be one of those never-ending pursuits: Good as you are, you can always be better. Plus, a building as gargantuan as the Mart simply cannot be retrofitted all at once. For instance, while about 3,000 of its more than 4,000 windows have been replaced with high-efficiency upgrades, at $3,000 a pop, it will take another few years to switch out the rest.

The Mart is also planning to buy 5,000 square yards of carpet for public and trade-show areas. A top priority was to make sure the flooring contained as much recycled and recyclable materials as possible. But the choice came down to something less obvious: color. Why? Brighter carpets reflect more light back into the room, which would allow the Mart to use fewer bulbs. Fewer bulbs, in turn, would cut power consumption directly—and indirectly, too, since they give off less heat, which reduces demand for air conditioning. "You start to see purchasing guys thinking through long chains of implications to make the best decision," says Kennedy. "Everyone is beginning to think in long, connected ways."

And not just inside the Mart. Bettin's team is advising senior operations executives at Vornado on ways to save energy at its huge portfolio of commercial buildings. Locally, the transfer of skills happens by doing, because all the contractors, designers, and show exhibitors who come to the Mart have to follow its new green guidelines. Already, Chicago has four other LEED-EB buildings and more than 250 pending projects, more than any other U.S. city. After all, if a building as big and old as the Merchandise Mart can meet 21st century environmental standards, why can't others?

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