Green Builders Awaiting the Green: Distribution of Billions of Dollars in Stimulus Aid Could Take Months Amid Long Lead Times

By CHRISTINA S.N. LEWIS
The nation's green-building industry is awaiting billions of dollars in economic-stimulus funding earmarked to make government buildings more energy efficient. But based on the slow pace of allocations thus far, it could take months or years for spending to trickle down to contractors.
The General Services Administration, which oversees the federal government's property, was allocated $5.5 billion as part of the American Recovery and Reinvestment Act passed by Congress in February, of which $2 billion should be allocated before Dec. 31. The initiative is designed to create jobs and to pioneer cutting-edge technology in construction that is environmentally friendly.
At a time when construction on private projects has stalled, advocates of green building hope the GSA, which is America's largest landlord with a 1,500-building portfolio, can use its purchasing power and nationwide reach to lower costs, test emerging products and educate the industry.
The value of having the government lead the industry on such projects "is priceless," said Jason Hartke, vice president of national policy for the U.S. Green Building Council, a nonprofit advocacy organization.

But so far, the agency has allocated just $1.5 billion, or 75%, of the funds it was appropriated for 2009 and is racing to allot an additional $500 million by the end of the year, just two weeks away. The agency said bids for work are coming in under budget, a good thing, but one that slows them down from meeting its benchmark.
In addition, the GSA has paid out only $89 million. "What we've got now is a lot of architects working overtime to get the work done," said Bob Peck, the agency's commissioner of public buildings. Mr. Peck said the delay in spending reflects the long lead time required to draw up building plans, which can take a minimum of six to nine months.
Economists said the delays in putting the funds to work illustrate the challenges of trying to quickly create new jobs in an industry that traditionally moves slowly. And government planners tend to move more slowly than private industry, according to developers.
"Obviously, [the funds] would have to be outlaid for it to create jobs," said Kermit Baker, chief economist for the American Institute of Architects. "But once [companies] feel that money is coming through the pipeline, it'll have a dramatic effect."
The projects that are furthest along are those that already were in the works, but on hold due to lack of funding. For example, the agency broke ground on a federal courthouse in Austin, Texas, in September. Planning began eight years ago.
Some projects also are complex, requiring long planning periods. The central federal office in Portland, Ore., the Edith Green-Wendell Wyatt Building, was allocated $133 million to modernize the 30-year-old, 510,000-square-foot building, including a daylight-adaptive lighting system that will reduce consumption 50%; and new mechanical, electrical and elevator systems. The GSA plans to hire a construction manager to begin drawing up blueprints in the next few weeks.
The design plan also calls for a new exterior "skin" that will have as many as 20,000 solar cells on the roof and a series of vegetation fins along the building's western side, which is meant to provide a natural solution to the problem of overheating from sunlight. The vegetation will grow lush in the summer, cooling the building. In the winter, the plants will shrink, allowing sun to filter in, Mr. Peck said. The technique has been used in Washington by the Finnish Embassy, he said.
Energy efficiency is in the spotlight this week as world leaders meet in Copenhagen to discuss climate change. Meanwhile, local governments are tackling the issue as well. Last week, New York, with the backing of Mayor Michael Bloomberg, passed rules requiring large commercial landlords to take steps to make existing buildings more energy efficient.
Green retrofits are gaining ground in the private sector as well, as companies realize they can save money long term. For example, Adobe Systems Inc. spent $1.4 million upgrading its San Jose, Calif., headquarters in 2006 and saved $1.2 million a year. Moreover, $400,000 in tax rebates allowed the company to make back its investment in just 9½ months, according to Buildings magazine. New York landlord Anthony Malkin, who is engaged in a retrofit of the Empire State Building, is set to give a presentation on energy efficiency in San Francisco next year.
A commercial retrofit should lower a building's energy costs by at least 15% in order to be financially viable for a landlord, some observers said. Typically, investors make back their money within four years, due to tax incentives and reduced maintenance costs. Commercial real estate accounts for about 30% of the nation's electricity usage.
Meanwhile, construction firms and architects suffering amid the dearth of private construction, hope to snag some of the government's business.
Emcor Group Inc., a $5.5 billion building-systems construction company, said it has managed to replace the roughly 15% to 30% of lost private construction business with public-sector spending on government buildings, transportation, schools and health care, according to Frank MacInnis, Emcor's chairman and chief executive.
Write to Christina S.N. Lewis at christina.lewis@wsj.com