Oregon’s first “living building” is in downtown Portland

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With virtually no fanfare, no ribbon-cutting, no politicians and little public money, one of the most environmentally advanced buildings on the planet opened its doors last fall in downtown Portland.

Portland-based PAE Consulting Engineers spent four years planning, designing and constructing the five-story building at 151 SW First Ave. The modest brick-clad structure generates its own electricity, collects and treats its own water, and composts its waste.

On top of that, it is privately financed by a private lender and investors, just like most commercial buildings.

It is “one of the only office buildings in the world to be powered entirely by the sun and to derive all of its water from the rain that falls on its roof while simultaneously providing a financial return to its investors,” Paul said. Schwer, president of PAE and the driving force behind the building.

The PAE building offers an ounce of good news to a downtown beset with more than its fair share of challenges. PAE is seeking the coveted “Living Building” certification for its headquarters, the strictest and most demanding environmental performance standard for buildings. The Seattle-based International Living Future Institute administers the program and has certified only 30 structures worldwide as fully living buildings.

To achieve its dream build, PAE enlisted some of the biggest names in Portland business, foremost among them prominent real estate developer Edlen & Co.

Jill Sherman, Edlen’s partner, had worked closely with the city of Portland when it unsuccessfully attempted to build the Oregon Sustainability Center a decade ago.

This time, there would be no federal grants, no state tax obligations, and ultimately no high-level city officials would throw their weight behind the project.

“We didn’t really know if it could be done,” Sherman said. “We had a huge and noble goal. We wanted to use the traditional building finance model – debt and equity – but also build the most sustainable building in town, by far.

First, they needed a site. Their broker, Apex Real Estate Partners, suggested a quarter block at Southwest First Avenue and Pine Street.

It was a surface parking lot owned by the Goodman family. To Sherman’s surprise, the Goodmans were eager to participate. They accepted equity in the building in exchange for the land. “This is the largest net zero building in the country,” said Greg Goodman. “It’s a huge deal.”

A similar dynamic played out with other companies. Apex took shares as part of its fee, as did ZGF Architects, Portland’s top design firm.

Walsh Construction agreed to serve as the general contractor and to invest in the building. Bob Walsh, the company’s 78-year-old president and co-founder, said his motivation was not financial gain.

“Someone has to wake up to global warming and be able to put the environment before profits or our world will go up in flames,” he said.

The team had a few strokes of luck.

Their pitch to investors grew stronger after new federal tax rules unexpectedly made all of downtown Portland an “opportunity zone.”

Investors in Opportunity Zones – nominally “economically distressed” areas that need economic development and jobs – can obtain significant tax advantages.

The team also managed to avoid the huge increase in timber costs by buying and pricing early. The interior of the building features solid wood elements sourced from a BC supplier.

Additionally, the project managed to close its bank loan on April 1, 2020, just days before the mandatory COVID-19 shutdowns came into effect in much of the region. If the bank had considered the loan weeks or even days later, it may never have been approved, Schwer and Sherman said.

The good fortune ended at that time.

Construction crews had to contend with ice storms, heat domes, social unrest on downtown streets, and wildfire smoke so thick you couldn’t see other side of the street. The pandemic was a constant concern.

“It was like the plague,” Sherman said.

But Walsh managed to stick to the 16-month construction schedule.

During a recent visit, Schwer demonstrates a popular feature of the building’s ventilation system. He opens the window. Few modern office towers have operable windows, shunning cool air in favor of mechanical heating and cooling.

Outside, tomatoes grow on the windowsills, each pot with its own little drip line.

Most of the rest of the green building technology is decidedly more complicated.

The numbers tell the story.

  • 72,000 gallons of rainwater can be stored in two giant cisterns on the ground floor. An on-site treatment system makes the water safe for human consumption.
  • 20 compost bins transform building waste into fertilizer.
  • 0 the use of so-called “red list” materials – substances that may be legal but are deemed unhealthy or bad for the environment.
  • 5 operable windows 12.5 feet by 10.5 feet which will provide 70% of the fifth floor ventilation and cooling.
  • 90,000 locally sourced bricks make up the exterior of the building. The Living Building challenge requires the use of local materials – 20% of materials must come from within 311 miles of the construction site. The bricks were made by Mutual Materials at its plant in Mica, a small Washington town south of Spokane.
  • 83% rented. A bank and two nonprofits have leased space in the building, joining PAE and Edlen, bringing occupancy to 83%. This is enough for the building to make a profit.

The PAE construction team’s under-the-radar approach is a dramatic contrast to Portland’s last big move toward a living building.

The Oregon Sustainability Center was huge in ambition and price. It was to be the first skyscraper in the world that would meet all Living Building standards. Initial estimates pegged the price at $120 million.

The effort was led by the city of Portland and the now defunct Oregon University System. The architects produced a stunning design of a cylindrical tower topped with an array of leaf-shaped solar panels.

Then-Mayor Sam Adams repeatedly fought for the building, predicting it would secure Portland’s image as a leader in sustainability.

The city has pledged $6.7 million in urban renewal funds. He also agreed to become one of the building’s tenants.

Critics balked at the price and questioned the rationale for the project. The housing market slump and related recession made it a tougher sell. Adams finally pulled the plug in October 2012.

The PAE building may not match the Oregon Sustainability Center in size or flash. But it was built and it works.

Ultimately, it may be the enduring importance of the structure – it could democratize green building. The building provides proof of concept that a relatively small company can do this kind of project without huge public assistance, said Mark Perepelitza, architect and director of sustainability at Portland design firm SERA.

“If it’s just a high-end boutique thing, then we’re not going to save the world,” he said. “PAE shows we can scale it up and make it achievable.”

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