Real Estate Developer Sets New Standard for Shopping Excellence

Ballantyne Village’s connected real estate solution creates an unforgettable experience for visitors and tenants

BUSINESS CHALLENGE

Ballantyne Village offers upscale retail shops, restaurants, an independent movie theater, and luxury condominiums in an 800,000-square food development in Charlotte, North Carolina. When completed, the development will also feature a hotel and office spaces. From the beginning of the project, it was the goal of Robert B. Bruner, Developer, Ballantyne Village, to create a unique memorable visitor experience that also delivered high value to tenants and residents. And unlike typical shopping centers, Ballantyne Village is designed to be a place where people live and have easy access to everything that they need –from fresh bread at the bakery, to the latest movies, to a daily workout at the YMCA.

“We knew that we wanted to use technology to differentiate the property from other mixed-use developments” says Bruner. “At the same time, we had to show a return on our investment. With fiber-optic cable adjacent to the property, we had an opportunity to add tremendous value to our tenants by providing their telephone, data, security, music, and Internet access services.”

One important part of managing the visitor experience is controlling ambient features of the property. From controlling heating, cooling, humidity, and lights on the fountains, to monitoring restroom supplies, providing digital signage, and offering interactive directions— Bruner and his team wanted to use technology for operating the Village as efficiently, and invisibly, as possible.

To achieve its vision and a profitable return, Bruner and his team worked with Intelligent BuildingsTM, a Cisco® Systems partner that uses Cisco® technology to deliver information throughout commercial real estate developments. Intelligent Buildings’ Fourth Utility infrastructure offering delivers high tenant value, creates new revenue streams, and increases operational efficiency.

NETWORK SOLUTION

Intelligent Buildings recommended a networking solution based on the innovative Cisco Connected Real Estate (CCRE) framework. Designed for customers in the construction, real estate, and property services industries, CCRE uses the power of the network to deploy building intelligence, deliver collaboration and mobility services, and allow building owners and operators to develop new services, revenue streams, and business models.

Working with Bruner’s team, Intelligent Buildings designed the network infrastructure using the Cisco Service-Oriented Network Architecture framework. The result is a powerful networking platform that enables Ballantyne Village to deliver a wide range of services, including voice, wireless, security, and video services, which in turn support many innovative applications.

The network connects all retail tenants, outdoor spaces, and Ballantyne Village management offices. As the development expands to include luxury condominiums, premier office space, and a hotel, all locations will be connected over the same network. The property’s fiber-optic connections terminate in a main data center, which also functions as a management and operations hub. Cisco switching equipment forms the network backbone and distribution layer, enabling Ballantyne Village to create numerous virtual LANs (VLANs). Each tenant operates on a secure, separate VLAN, and voice traffic is carried on a separate VLAN as well.

Cisco Unified Wireless solutions are deployed using more than 100 Cisco Aironet Wireless Access points, providing coverage everywhere on the property. Ballantyne Village employees and tenants use Cisco Unified IP Phones to make and receive calls wirelessly throughout the property. Cisco Virtual Private Network (VPN) Concentrators enable tenants and Ballantyne Village staff to connect to the network remotely.

Cisco partners Stalwart Systems and the Signature Group worked with Intelligent Buildings to deploy Cisco Unified Communications solutions, which provide IP calling features and unified voice mail and e-mail. Connections to the public telephone network and the Internet are enabled using Cisco 2800 Series Routers.

“Having the Cisco Connected Real Estate solution has changed the way that we think about developing our properties. Being able to package services for tenants and using the technology to create a unique experience set us apart. The positive feedback from tenants and visitors had been overwhelming.”–Robert B. Bruner, Developer, Ballantyne Village

The entire network deployment features redundant systems to help ensure high service availability and performance. Today Ballantyne Village uses approximately 6 Mbps of fiber-optic bandwidth; it can scale to a full gigabit of capacity as condominiums, offices, and the hotel are added to the network.

BUSINESS RESULTS

“Having the Cisco Connected Real Estate solution has changed the way that we think about developing our properties,” says Bruner. “Previously we had not considered the business implications of running music or security or information systems over our network. Being able to package services for tenants and using the technology to create a unique experience set us apart. The positive feedback from tenants and visitors has been overwhelming.”

Creating a Distinctive Experience

Digital signage and more than 30 large plasma screens create the “face” of Ballantyne Village. Visitors obtain ticket prices from the movie theater’s digital price list. Videos present appetizing food and drink promotions and run movie previews. Visitors can touch interactive digital screens to find out movie times, see a list of Village events, or locate a retail store. Tenants can change information on their screens themselves by logging onto a secure Web page.

“We log onto a Web page from anywhere and control 550 lights on the property,” says Bruner. “We light the property’s architectural features, program light shows, and change lighting on the fountains or signage right from our laptops. Visitors clearly feel the difference between Ballantyne Village’s presentation and every other shopping center in Charlotte.”

Helping Ensure Efficient Operations

The two most common causes of complaints in commercial real estate developments are temperature and bathrooms. While neither directly generates revenue, both are integral to the visitor’s experience. Being able to monitor and precisely control these two features translates into increased revenue per square foot and lower operating costs. In addition to controlling temperatures, the Village plans to install carbon dioxide (CO2) monitoring sensors, which will deliver CO2 data over the network. Using CO2 data, managers can count the number of people in a room and control air refreshment precisely, saving considerable amounts of energy.

In restrooms, the automatic toilets and toilet paper, paper towel, and soap dispensers all communicate information such as, “I’m out of paper,” or “the toilet is clogged” over e-mail. Facilities managers can attend to the problem immediately, which helps maintain a high- quality experience.

Delivering Value to Tenants

Space at Ballantyne Village is being absorbed by tenants at a much higher rate than usual, which Bruner attributes to the high-quality experience. Tenants can select the telecommunication services that they want from a list of offerings at lease signing. They no longer need to coordinate multiple third-party vendors, manage complex technology installations, or lose valuable time-to-revenue—and they receive more capabilities than they would be able to otherwise afford.

Providing Enhanced Security

Security monitoring is performed using IP cameras, and managers can log onto the network and monitor any camera on the property. Most tenants also use IP-based security systems, which trigger alarms that are sent to local police. If a security event occurs, staff can use their Cisco 7970 IP phones to immediately publish frames from security video onto the large screens, helping police apprehend suspects quickly.

Forming Beneficial Partnerships

Ballantyne Village has formed beneficial partnerships with several companies. Each tenant space includes a meter that enables the property manager to bill for utilities. Typically, these meters are installed on a separate network, which is maintained by the meter company. At Ballantyne Village, the meter company simply connected meters to the network, eliminating the need for a separate infrastructure and a significant capital expense.

“At the beginning of the project, we had not thought about delivering music,” says Bruner. “When we realized that Muzak wanted to sell its service to every tenant, we said that we would deliver it over CCRE. They were delighted.” By delivering Muzak over the network, Muzak only had to install one satellite dish and one music server. When a tenant wants to subscribe, it is as easy as typing a few keystrokes.

Creating New Revenue Streams

The network also provides a new revenue source per square foot for Ballantyne Village. For example, if a luxury car company wants to promote a new model, it can park a car in the Village Center and promote it on all of the digital screens, generating advertising revenue. Other products and services can be advertised as well.

NEXT STEPS

The Village will begin to educate tenants about the possibilities that the network offers for their businesses. Retailers will be able to show inventory from multiple stores at the Ballantyne Village location—over the network. Customers can invite friends’ or spouses’ opinions about an item by having them log onto a Web page to view it.

We want to encourage these kinds of new business opportunities for our tenants because that assistance further distinguishes Ballantyne Village as the high-end place to be,” says Bruner. “Treating information as a utility completely changed how we think about projects. Ballantyne Village will be able to do things that no other development can do.”

FOR MORE INFORMATION

 To find out more about Cisco Solutions and Services, visit: http://www.cisco.com
 To find out more about Cisco Service-Oriented Network Architecture, visit: http://www.cisco.com/go/sona
 To find out more about Cisco Unified Communications, visit: http://www.cisco.com/go/voice
 To find out more about Cisco Wireless Solutions, visit: http://www.cisco.com/go/wireless
 To find out more about Ballantyne Village visit: http://www.ballantynevillage.com
 To find out more about Intelligent Buildings visit: https://www.intelligentbuildings.com

 

This customer story is based on information provided by Ballantyne Village and describes how that particular organization benefits from the deployment of Cisco products. Many factors may have contributed to the results and benefits described; Cisco does not guarantee comparable results elsewhere.

CISCO PROVIDES THIS PUBLICATION AS IS WITHOUT WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some jurisdictions do not allow disclaimer of express or implied warranties, therefore this disclaimer may not apply to you.

At one time, security cameras capturing an entire building’s entrances on a single wall of monitors elicited “oohs and aahs.” Today, a skyscraper’s every system—including HVAC, signage, elevators, light and temperature control, and yes, even security—can be monitored on a single video wall by a single person.

Intelligent buildings are nothing new. Long embraced and now commonplace in new developments in Asia and the Middle East, these smart buildings with their high-tech networks and business systems are not just gee-wiz things of the future, experts say. Rather, they are becoming an inevitable part of the global real estate market. Increased pressures on connectivity, energy efficiency and marketplace competition now force developers, leasing agents and real estate managers to consider investing in intelligent buildings to differentiate themselves—or even to stay in the game.

“People have been dying to learn about this technology, but they require return on investment proof before they begin,” said Tom Shircliff, co-founder of Intelligent Buildings Group, a Charlotte, N.C.-based consultancy that creates ROI investment modeling for commercial properties. “As technology becomes more mainstream, advanced, and more common sense and obvious, people take it more seriously.”

IT’S INTELLIGENT DESIGN, STUPID      While intelligent buildings are nothing new, neither is the confusion surrounding their ambiguous definition, said Paul Ehrlich, founder and president of Building Intelligence Group, a Minneapolis-based intelligent buildings consultancy.

“I’m not sure people know what intelligent buildings are,” Ehrlich said. “It means many things to many people.”

To some, intelligent buildings—also referred to as smart buildings or integrated buildings—are defined by energy efficient or environmentally friendly technologies. Others define them by way of high-tech tenant amenitites like digital signage and directories, broadband and wireless services, and building automation, In the most basic sense, intelligent buildings require one or more of their systems to be automated and interconnected. Ballantyne Village, in Charlotte, N.C., is one such building with an integrated system. The 800,000-square-foot mixed-use entertainment, retail and condominium property’s HVAC systems, security, signage, lights and fountain controls are operated via a central location.

Ballantyne has sensors that monitor carbon dioxide, and as a result can count the number of people in a room and automatically adjust climate control. Dispensers for restroom soap, toilet paper and paper towels automatically communicate with facility managers when empty. Swiping an access pass opens doors for tenants, while concurrently turning on the lights and heating system.Despite examples like Ballantyne Village, however, the lack of concrete parameters defining smart buildings has stunted their growth in the United States. Their value—as it relates to energy efficiency, tenant satisfaction, reduced labor and long-term cost savings—is misunderstood. Ehrlich said.

He said because the technology is largely untested in the states, convincing profitable U.S. developers, investors and real estate managers of its value is difficult. Converting to integrated building technology almost exclusively would require the re-education of nearly every level of the industry—from architects to developers to leasing agents and property managers.

Once builders become acquainted with smart building technology and see its potentially positive impact on their bottom line, Ehrlich said they will warm to integration. “It’s all about the investment on return. The returns on these investments are ridiculous—in the hundreds of percents.”

JUSTIFIABLY SMART      While U.S. developers are merely warming to smart build- ings, places like Seoul, Tokyo, Singapore, Hong Kong and Dubai have moved full-speed ahead with integrating systems in their new developments. Well-funded smart buildings have been sprouting up in record numbers, well outpacing the number of large-scale, ground-up commer- cial projects in the United States.

Jim Young, founding partner of Realcomm, a research firm specializing in the intersection of real estate and technology, said because intelligent buildings have become mainstream in Asia, developers there no longer have to cost-justify such projects. That makes getting them up and running easier.

“These are new benchmarks for building construction, so it’s not like business developers are forcing designers and engineers to cost-justify every aspect of a project,” he said. “There, [integrating systems] is mainstream. It’s like asking someone here to cost-justify an elevator.”

He said integrated systems have been paying off in Asia with cost savings for property owners and managers as well as giving them a competitive edge in an increasingly global real estate marketplace.

U.S. developers, however, have been reluctant to develop smart buildings because of the expense involved and the training required—and because developing high-tech buildings simply wasn’t necessary. The strong U.S real estate market during the past several years allowed developers to turn a profit by merely flipping properties even in mediocre loca- tions. Little innovation or competitive edge was required.

“Builders were not looking at long-term investments,” Ehrlich said. “It was all turn and burn.”

Further, despite rising fuel costs, oil and electricity contin- ue to be extremely affordable in the United States compared with other countries—giving U.S. builders and consumers less incentive to invest in energy-saving technologies.Still, smart buildings are beginning to have a presence in the U.S. market, and more projects are on the horizon. Lakeside Hospital in Omaha, Neb, which opened just over two years ago, routinely makes “most wired” lists thanks to multiple integrated systems enhancing its patients’ experiences, improving accuracy in care and billing, and saving the facility money in the process.

Lakeside Hospital uses centralized, digital patient data, allowing doctors, nurses and administrators to access and update medical and billing information from anywhere in the hospital system, Further, a secure patient portal allows individuals to go online to make appointments, check test results, receive coaching for smoking or obesity and apply for financial assistance. These features increase patient access to information and decrease demands on hospital personnel.

THE ROI FACTOR

Before intelligent buildings can take off in the United States, real estate professionals across the country must be convinced of their efficiency with some hard numbers. Realcomm managing partner Darlene Pope said Realcomm’s customers look for returns on investment in 18 months or less, though some technologies require more than that.

Shircliff said builders save about $2 per square foot right away by employing basic cable infrastructure efficiencies that reduce the number of cable pathways from 9 or 10, to two or three. He said the leaner networks save the owner $1 per square foot per year thereafter. They also serve as the framework on which more elaborate intelligent systems can be built as the owner or tenant requires—at a cost lower than if a less efficient network were in place.

“This is common-sense construction planning,” Shircliff said. “Something more organized and efficient is always better than something that is spaghetti.”

Ehrlich said the technology in one of the smart projects he worked on paid for itself in 18 months. The 700,000-square-foot project included integrated HVAC, lighting, security, card access and fire alarm systems. During off-hours, the integrated system recognizes individual workers and adjusts lighting, security and climate control specific to that person’s workspace—not the whole building or floor.

Retrofitted systems are more expensive because they require replacing systems in an existing building, as opposed to including them in a new construction. Still, they can ultimately have big payoffs.

Software maker Adobe invested $650,000 in energy and environmental retrofits to its San Jose, Calif., headquarters in 2001. Some improvements included an irrigation system that automatically adjusts to real-time weather condition and sensors that adjust exhaust fans to carbon monoxide levels to improve air quality. Five years later the company reported 115-percent savings of $728,000. However, even as companies start to track their dollars saved, the return on investment can be a nebulous figure, Ehrlich said. He said  a tenant might pay per square foot—on average–$25 for rent, $1.50 for energy and $150 for employee expenses.

An intelligent building could provide a benefit of $1 to $3 per square foot in reduced expenses and increases productivity, including 1 percent increased employee productivity, or 3.5 minutes per day, stemming from a more comfortable work environment. This trickles down to the developer and property manager in tenant satisfaction, rent premiums and improved occupancy rates—as well as the potential for increased revenue from services and reduced operating expenses.“The purpose is to increase occupant comfort and productivity, while at the same time reducing both energy usage and operating staff expense,” Ehrlich said.

PRESSURE COOKER      If the return on investment doesn’t spur action in the United States, pressures on the horizon will likely incite developers to make new properties—if not existing buildings—intelligent. Real estate professionals of all kinds are feeling the pinch from a slowing market.

As the marketplace becomes more global and multinationals expand their overseas operations, commercial real estate in different hemispheres will be compared side-by-side. International Finance Center II, an intelligent building in Hong Kong, is populated by flush financial service firms from around the globe that are beginning to consider state-of-the-art properties like the finance center as the new standard. “As the world gets more global, people will look at New York and it will look very 20th century,” Young said.

Intelligent buildings might also alleviate profit pressures inherent in the proliferating real estate investment trusts. Ehrlich said the pressure from REITs to develop smart buildings comes from Chief Investment Officers and “bean counters” who say attracting top tenants means providing the latest technology and the cost efficiencies integrated systems can offer.Additionally, although rising energy costs aren’t as high in the states as they are abroad, investors still want to cut costs—causing developers to seek out energy- saving measures.

Smart building technology can reduce energy bills by 20 percent.Finally, commercial properties lag behind the residential market in the ever-booming surge of consumer technology. Consumers have come to expect technology like wi-fi access and integrated business operations at work because such systems are commonplace at home, Realcomm’s Pope said. “People expect the same amount of technology where they work as where they live,” she said. “At home they have a wireless system, but at work their cell phones don’t work.”stems are commonplace at home, Realcomm’s Pope said. Despite the U.S. real estate industry lagging behind other countries in developing integrated buildings, experts said interest in smart buildings is on the rise. Ten years ago if you didn’t add fiber to your building, that was OK, but today if you don’t have high-speed Internet access, you’re not going be able to lease office space,” Pope said. “Five years from now if you don’t have wireless in your buildings you’re not going to be competitive.”

For a number of years many industry leaders and manufactures have been advocating a converged and “intelligent” approach to procuring and managing building systems. The reasons are well documented and include the IT-state of most controls systems, ubiquity of the Internet Protocol (IP) and networks in general, reduction of capital and operating expenses, centralization of property management and the link between sustainability and IT. The latter is part of the more recent trend that Thomas Friedman says is part of IT (Information Technology) meeting ET (Energy Technology). The Economist refers to the “Energy Internet”.

This is not just advocacy but fact-based reasoning that is supported by most system architectures and even the M&A path of world-leader Cisco Systems. In the real estate space alone, Cisco has pushed from networking into access controls, video surveillance, digital signage media management, building automation middleware and now the smart electrical grid. This not only shows a continuous and “connected” path for these elements but also makes clear that building systems procurement and management is driven more and more by networking and IP from the core of the building all the way to and past the meters. Those in the A&E and real estate vendor community that cling to a silo system mentality will have an increasingly difficult time as developers and managers in all types of real estate build strategies around networking , sustainability and the grid.

While the technical makeup of systems is important the key factor has been the financial benefits because the early market is driven by economic buyers. It doesn’t matter that you can buy and converge intelligent systems until you can answer the “so what” for the strategic decision maker. However, there are a growing number of case studies for intelligent systems such as lighting controls, fault detection and diagnostics (FDD), security, parking etc. that show hard dollar return on investment with short and compelling payback periods. Forexample Power over Ethernet (PoE) is exciting technology but the real benefits to the owner are lower capital expense because there are fewer electrical outlets requiring conduit, labor etc. and lower operating expenses because of the more efficient use of energy and MAC (move, add and change) flexibility as well as operations and maintenance leverage. This makes it real for those in control of the purse strings and changes mere advocacy into actual movement in the marketplace. This has been gradual so far and those that make the move are held up as shining examples of innovation, and risk/reward pioneers.

However, the risk/reward equation is changing. Sure, the technical soundness and financial benefits are still there but now the risks of doing nothing different may be even greater than rewards of being progressive. If you do nothing different with your development and operational strategies you stand to lose capital incentives, building improvement opportunities, operational cost savings and future flexibility. Additionally, you may be reactionary and on the defensive with potentially expensive retrofit requirements.

There are financial incentives from all levels of government in the form or grants, tax rebates and other vehicles that are now big enough to matter to any pro forma and the strong potential of regulation and legislation could mean longer permitting, retrofit requirements and increased monitoring and control needs. All of this combined with the aforementioned financial and technical reasons should provide ample motivation for owners and managers to develop a strategy and standards for more intelligent real estate. A progressive strategy should be built on sound business fundamentals, the operational impact of technology and risk mitigation. Risk mitigation should limit the impact of governmental requirements and contribute to operational efficiency and sustainability.

In a very short time government at various levels has created a “carrot and stick” approach that has immediate and future impact on procurement and management of buildings.

We see “carrot” examples in recent legislation and programs such as:

Federal: The American Recovery and Reinvestment Act of 2009 (ARRA) of 2009 includes funding to support energy independence and modernize infrastructure that provides $4.5 billion for smart grid and billions more for energy efficiency and conservation. Buildings will be directly and indirectly affected by these large investments and incentives.

State: New York’s Green Building Tax Credit Program (Corporate) that allows up to $2 MM per building. We recently read about the Empire State Building’s renovation that is expected to reduce the skyscraper’s energy use by 38 percent a year by 2013, at an annual savings of $4.4 million according to the NY Times.

Local: Municipalities have various incentives for sustainability including Seattle-King County City LEED Grants Program and the Santa Monica, CA LEED Grant Program offering tens of thousands of dollars per building in grants. There are many other cities that have such plans or are developing them.

Additionally, the government incentives, especially those in the smart grid have caused a flood of “who’s who” companies to invest and develop, including Cisco, GE, Google, Oracle, SAP and many others. The resulting benefits of this investment and development such as demand response incentives and real time pricing are greatly leveraged by more efficient, “intelligent” buildings and the associated improvements that are required. Incentives and pricing efficiency can directly help fund such building improvements. Duke Energy even calls this demand side energy efficiency “The Fifth Fuel”.

There is also evidence of “sticks” such as:

The Environmental Protection Agency (EPA) declared Carbon dioxide is a “major hazard” to Americans’ health. This means that either there will be legislation to deal with it or the EPA will regulate it according to Sen. Barbara Boxer, D-Calif., who chairs the Senate committee dealing with climate legislation. Buildings use about half of all the energy we consume and produce correspondingly half of the GHG, according to data from the US Energy Information Administration, which is obviously going to have a functional impact on commercial buildings (17% of the US total) to comply with legislation or regulation.

We might take a hint from the United Kingdom where since October 2008 all properties – homes, commercial and public buildings – when bought, sold, built or rented need an Energy Performance Certificate (EPC). Larger public buildings also need to display an energy certificate.

Renewable Energy and Energy Efficiency Portfolio Standards (REPS) laws arecurrently in a majority of states. North Carolina’s Renewable Energy and Energy Efficiency Portfolio Standard (REPS), enacted by Senate Bill 3 in August 2007, requires all investor-owned utilities in the state to supply 12.5% of 2020 retail electricity sales (in North Carolina) from eligible energy resources by 2021. HOWEVER, up to 25% of the requirements may be met through energy efficiency technologies, including combined heat-and-power (CHP) systems powered by non-renewable fuels. After 2021, up to 40% of the standard may be met through energy efficiency. This is anticipated to drive significant incentive programs from the utilities in order to meet the requirement and maximize the allowance from the demand side

In summary, there are coincidental changes taking place both in and around the real estate industry that include technology, energy and regulatory aspects. These changes promise profound and continuing impact on the way buildings are built and managed. The magnitude of the impact and associated risks have created the “tipping point” for building owners and managers to embrace an intelligent, converged strategy for building and managing real estate.

THE GOVERNMENT’S LANDLORD SMARTENS UP AND GOES GREEN

By now you’ve heard plenty about smarter cities but what about a smarter courthouse? Or a smarter federal building?

Despite the flurry of deals signed by cities and even non-profits with the likes of IBM and Cisco (which announced a new pilot project around Akron, Ohio this week), the biggest score in the smarter sweepstakes is a government agency you’ve likely never heard of, the General Services Administration, and its real estate arm, the Public Buildings Service. The PBS is the federal government’s landlord and superintendent, charging rent, making repairs, and otherwise doing the utmost to cover its $8.6 billion annual budget and return a profit to Congress. It’s also been charged with going green in a big way — meaning it will have to retrofit and smarten up its aging buildings.

It won’t be cheap.

The PBS owns or leases 9,600 buildings across all 50 states, totaling enough square footage to fill every office building in Manhattan below Central Park. At the Realcomm “connected real estate” conference in Las Vegas last month, PBS officials were the belles of the ball, courted ardently by tech heavyweights and niche players alike as a potential gusher of contracts. They announced the PBS would become a “green proving ground” for smarter buildings, using its clout and its cash to make the technology companies play nice and create interoperable standards. They hoped to kick broad adoption into high gear. “This isn’t just the flavor of the month; this isn’t just a pilot,” GSA assistant commissioner Larry Melton told me afterwards. “This is the future of facilities, really. We have the ability to change the platform.”

He doesn’t have much choice. The Energy Independence and Security Act of 2007, coupled with Executive Orders issued by President Obama, dictate the GSA cut its energy use by 30% (compared to 2003 levels) by 2015. The agency has responded by targeting the 200 worst offenders for total overhauls — buildings like the Edith Green-Wendell Wyatt Federal Building in Portland, Oregon, which is scheduled to undergo a $133 million retrofit that will essentially rebuild it from the inside out. The new enhancements include a fiber backbone for the entire building, and networked smart meters, HVAC, and lighting controls.

“But to hit that 30% target, we need to change behavior, too,” said Frank Santella, the agency’s director of smart buildings. In an experiment that would make Cass Sunstein proud, the PBS is working with designers at IDEO and researchers at Lawrence Berkeley National Laboratory to install a giant screen in the lobby of the San Francisco Federal Building displaying its real-time levels of energy use. The assumption is that if you give people the information, they’ll take steps to rein in their consumption. “We want to see if we can change the behavior of people,” Santella said. Down the road, he hopes to stick a widget on employees’ screens depicting their personal usage. “We want to bring this down to human scale.”

In addition to the 200 buildings slated for gut renovation, by the end of the year another 50 will be identified for outfitting with simpler measures such smart meters and stand-alone applications. But the long-term vision is to link all 9,600 buildings on a single network, with regional command centers controlling energy output and a national one “spotting trends and opportunities and writing policies around them,” as Melton put it. It would be the prototype for the nation-wide smart grid touted by everyone from GE to IBM to Google — although the agency isn’t about to hand over the keys to just one. “We’re trying to test as many different technologies as possible,” Melton said. “Our strategy isn’t to buy one, walk away and let it run. Others have done that, and let’s just say they didn’t work so well. Initially, a lot of companies were surprised by this, but considering we have an inventory of 360 million square feet, we have the ability to be leading customers.”

In practice, this means being able to dictate the terms: open protocols; nothing proprietary; seamless interoperability, and shared data. “We’re looking for the total solution, not just someone to sell us the middleware boxes, but also the analytics and the engineering,” said Santella, all of which means no one can go it alone. The result is that practical partnerships are starting to form, rather than everyone touting their own technology as the only one you’ll ever need.

“We know the technology is changing, and we’re making the case for change,” said Melton. “A lot of people think we’re this big bureaucratic arm, but we’re really no different than the private sector other than the fact we work for the government. We knew we had to be a leader in this — we feel like we’re making the market.”

Link to article:

http://www.fastcompany.com/1673603/governments-landlord-smartens-and-goes-green

by Tom Shircliff and Rob Murchison

Originally published at AutomatedBuildings.com

 Cyber theme present throughout

Sinclair: Well it’s that time of year again for the Realcomm/IBCon Conferences. Attendance was up and so was the energy. To what do you guys attribute that?

Shircliff and Murchison: Thanks Ken. We think there are several factors here. First of all the industry continues to mature making “smart buildings” more like “current buildings”. So, if you are not up to speed or you are trying to continue to refine your strategy Realcomm/IBCon is the place to do that. Another factor is the continued adoption of analytics which seems to be on everyone’s mind as a low cost high value tool. Finally, this may mark the year that the industry awoke to the issue of cyber security in building controls and that was evident in the education sessions, exhibitor products and services and the talk in the hallways.

Sinclair: Before we get to cyber, which I agree seems to be an emerging and big topic, let me ask what you mean about “current buildings”?

Shircliff and Murchison: The inertia of information technology in facility related systems has been building for years starting with the fact that nearly all monitor and control systems work on computers and networks. Add to that the importance of software, remote access, interoperability and then big data and analytics. You really can’t have a “low tech” building even if you wanted. Technology has been thrust upon us and it is now a bigger risk to maintain the status quo than it is to adopt a “smart” strategy.

Sinclair: What kind of risks are there to the status quo?

Shircliff and Murchison: There are several including rising cost structure of capital and operational expenditures, increased down time and occupant expectations gaps. This can be caused by proprietary, disparate systems, lack of access to data, skills gaps with your FM, PM and O&M staff and contractors and competitor differentiation.

Sinclair: And you say analytics remained a hot topic at the conference?

Shircliff and Murchison: Indeed. There were a number of sessions and case studies about analytics and the topic of big data and analytics has shifted from “what is it?” to “how do I do it?”. Additionally, the phrase “big data” was woven through many different seasons and conversations indicating that data driven decision making is finally becoming the logical approach for front of house.

Sinclair: You mentioned the questions of “how do I do it?”. Is there a short answer to that?

Shircliff and Murchison: The short answer to “how do I do it” is really all about two things: 1) Organizational commitment (since analytics don’t fix anything by themselves) and 2) Solution and customer matching (fit is more important than who has the most scientific approach). We have divided the industry into back quadrants on an X/Y axis to help building owners and managers get to the best fit.

Sinclair: One of your first answers about this year’s conference included cyber security. We all see that bubbling in real estate trade publications and of course in the general media – so where are we in the industry and how was that reflected at Realcomm/IBCon?

Shircliff and Murchison: It is really hard to believe it has taken this long for cyber security to become a big deal. We say that because, as noted earlier it has been many years since monitor and controls systems have been built on servers, software, protocols, networking and remote access. This is just how they work. Add to that that you have many different vendors and contractors putting in all these different IT components who are not IT experts, nor are they cyber security experts, and you can see the risk beginning to rise. We don’t fault the contractors because they have to do what they have to do for their systems to connect and work. However, it’s time for owners and managers to take the reins.

Sinclair: What would they do to “take the reins”?

Score CardShircliff and Murchison: With so many systems, by so many vendors over so many years owners and managers have to start with assessing what their specific situation is. Our solution to this is that we offer a quick and easy cyber assessment with a score card based on industry standards built around standards and principles from NIST, IOS and DHS. This will give you a risk profile on the score card along with a remediation plan. We think the visibility of this is very important but it’s also important not to over complicate this from the start. This image shows an example of this.

Sinclair: The topic of cyber security is inherently complex to many people. What is the best way to demystify this for the real estate community, who are not typically IT experts?

Shircliff and Murchison: We have struggled at times with how to communicate these basic issues, so we developed a “Cyber Security Primer Video” that is done in the style of the animated white board drawing along with narration. It’s very basic and fun to watch. We have feedback that it helps establish the core issues. You can find it HERE.

Sinclair: Thank you for telling our audience about your take on Realcomm/IBCon and these hot topics. I will add that your interview at “Conference Live” can be found HERE and it talks about the conference and more about cyber security.

Shircliff and Murchison: Thank you Ken, we appreciate your coverage of the industry.

by Becky Ham

Original Post: November 1, 2011

The city of Phoenix, Arizona has doubled its population in the past 20 years without increasing its water consumption—a minor miracle in a region that receives less than 10 inches of rainfall each year.

The city held water usage down with a variety of initiatives, from leveling agricultural fields to avoid runoff to encouraging citizens to do their laundry at night. “Technology was part of that,” said Matt Fraser, a professor of sustainability at Arizona State University, but “the biggest part was actually changing people’s behavior.”

It’s an approach that Phoenix—and cities around the globe—hope to duplicate in energy, transportation, and other urban systems. At a recent symposium held at AAAS, urban leaders and scholars said cities are encouraging cultural shifts toward sustainability that will meet the urgent economic and quality-of-life concerns of their residents.

Practical challenges from water delivery to traffic congestion are pushing the concept of urban sustainability beyond a focus on pollution and natural resource protection. Cities battered by a weak economy, the experts suggested, see sustainability efforts as a way to attract new residents and boost their economic standing.

“As you rebuild urban centers, that creates jobs,” said U.S. Secretary of Energy Steven Chu in his keynote speech at the 6 October event. “As you create better living and building infrastructure and spend less time in a traffic jam, the productivity increases as well as your quality of life.

“All of these things are opportunities not only in job growth,” Chu noted, “but also in having a much more efficient society and much more efficient economy which makes us more economically competitive.”

“More than half of the world’s population now lives in urban areas, and the percentage is still growing,” said Al Teich, senior policy adviser at AAAS and a member of the organizing committee for the event. “If the global environment is to be sustainable, cities must play a major role.”

The sustainable cities forum was the third in a series sponsored annually by Hitachi Ltd., with panels organized by the Brookings Institution and AAAS’s Science and Policy Programs and International Office. Policymakers, researchers, and city managers from cities including Boston, Phoenix, and Charlotte, along with Mayor Dwight Jones from Richmond, Virginia, and Mayor Roy Buol from Dubuque, Iowa, kept the discussions focused on practical initiatives already in place across the United States and globally.

Sustainability makes sense when cities face tight budgets and need to lower operational costs, said Tom Shircliff, co-founder of Intelligent Buildings, LLC and the chairman of the steering committee for Envision Charlotte, a public-private collaboration to develop sustainability programs in Charlotte, North Carolina. With less money to spend, he said, cities need to emphasize “soft changes” like encouraging business districts to conserve energy and altering leases to encourage green retrofitting of older buildings.

Shircliff and others at the event also pointed to the importance of programs that help city residents change the way they use water and energy resources. In Phoenix, for example, the water services department offers free advice on desert landscaping, and the city was the pilot region for the U.S. Environmental Protection Agency’s “Fix A Leak Week” educational campaign.

In Dubuque, Buol said, the city has partnered with IBM to root out inefficiencies in its water, energy, and transportation systems. Its pilot water program led to a 6.6% reduction in water usage, and an eight-fold improvement in leak detection and repair. The program used “smart” water meters, online games, and real-time water-consumption reports to show residents how to scale back their use. “We have to come up with ways of giving people information so that they’ll make a conscious decision to reduce their usage,” Buol noted.

For Dwight Jones, a sustainable city is more than a place where carbon emissions are low and businesses are green. When the mayor considers sustainability, he thinks of his visit to the home of a school teacher, re-insulated with the help of a city program, “where the heating bill was only $80 a month in the dead of winter.” Richmond’s sustainability initiatives, from tele-work programs and energy-efficient stop lights to cycling paths, he said, improve the lives of its citizens.

Jones also suggested that cities that emphasize sustainability are primed to compete for new businesses. He said corporations considering a move to Richmond “want to know if they’re moving into a progressive city that is sensitized to these kinds of issues rather than a city that’s doing business as usual.”

“We see it as an economic development opportunity,” agreed James Hunt, chief of environment and energy for Boston, who talked about city sustainability efforts that include LED lighting in public places and a pilot program for electric car charging stations.

Although the sustainability challenges differ among American cities, city planners are finding that many issues can resolved with off-the-shelf products that are “eminently deployable” and don’t always require a significant investment in cutting-edge technology, said Robert Puentes, senior metropolitan policy program fellow at Brookings. He and other speakers encouraged Americans to look globally for inspiration in rebuilding their urban areas.

The panelists also urged more cooperation between local, state, and federal governments to fund projects that cross traditional boundaries, such as a project that promotes walking to reduce traffic and improve health. Cities that “connect infrastructure intelligently may also be more resilient during natural disasters,” said Michinaga Kohno, senior chief engineer for Hitachi’s Smart City Business Management division.

“We have 21st century ideas about how to make cities sustainable, and how to make the country sustainable,” Buol said, “but we’re dealing with 20th century funding streams.”

Chu agreed that new funding schemes could help cities minimize “cost, congestion, and carbon emissions.” Among several innovative programs he described, one was a leasing program for residential solar panels in Phoenix, supported by a partnership of local banks, private companies, the city, and Arizona’s largest electric utility.

“The old thinking is that you just need lots of tax dollars to help this go along…,” Chu said. “But there are many examples coming out that demonstrate you may need far less than you thought you needed.”

Brookings Institution President Strobe Talbott encouraged cities to pursue a variety of technological, cultural, and financial innovations. Now that a majority of the world population lives in cities, he said, urban sustainability programs will have “real implications for our environment, energy security, and for economic productivity.”

Sustainability is a global problem, Buol acknowledged, but he thinks cities may hold the key to a global solution. “We deal with people at that local level. If we can get them to buy in, we’re going to move the conversation forward.”

 

Link to  article on AAAS:

http://www.aaas.org/news/beyond-environmental-benefits-cities-seek-green-initiatives-improve-economy-and-urban-living

Originally published at Charlotte Business Journal

Kevin Elkins, Senior Staff Writer Charlotte Business Journal

A Carolinas utility trade association is calling for fundamental changes in the industry.

The N.C. Utility of the Future Steering Team issued its report after two years of work saying it’s “time to evolve” to allow for such things as customers selling privately generated electricity to the grid.

There’s a new report out that calls for changes in power generation in North Carolina.THINKSTOCK.COM

Sponsored by E4 Carolinas and the Energy Production and Infrastructure Center at UNC Charlotte, the steering team wants a large-scale change in the way N.C. utilities are regulated. The idea is to move toward a more efficient and equitable system that allows for better use of all energy sources.

David Doctor, CEO of E4 Carolinas, says the “Shared Perspectives of the North Carolina Electric Utility of the Future Steering Team “white paper” calls for the first changes in power system rules in about the last decade.

The report is “the most significant comprehensive thought process toward evolving North Carolina’s electric utility industry since development of the Renewable Energy and Energy Efficiency Portfolio Standard concluding in 2007,” Doctor says.

The way power is regulated, distributed and paid for is out of date, the report says. Those policies and practices were created in the 20th century when utilities were struggling to keep up with increasing power demand.

Now that technology and green energy have entered the arena, the state needs to move toward a 21st century model.

“Significant improvement in the economics of generating technologies such as solar, microturbines, and fuel cells have made bi-directional power flows a practical reality, potentially creating grid integration challenges for these distributed energy resources,” the report states.

The report also calls for a slide scale of power pricing that depends on the time of day that the electricity is consumed. That price would depend on the cost of actually producing the kilowatts of power.

“The incremental cost of electric service is highly variable depending on the place and time the energy is generated or consumed,” the report says.

A spokesman for Duke Energy Corp. acknowledges that customers want “more options and convenience” while depending on the company to provide “reliable and affordable” services.

“We agree that new technologies will enable a smarter energy future, and look forward to continuing our work with all stakeholders to advance those approaches in the Carolinas and across the other states we serve,” the spokesman says.