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 S.W. First Ave. The unassuming brick-clad structure generates its own power, collects and treats its own water, and composts its waste.
On top of that, it’s privately financed by a lender and private investors, just like most commercial buildings.
This is “one of the only office buildings in the world to be powered entirely by the sun and get all of its water from the rain that falls on its roof while simultaneously providing a financial return for its investors,” said Paul Schwer, president of PAE and the driving force behind the building.
The PAE building offers a shred of good news to a downtown beset with more than its share of challenges. PAE is seeking the coveted “Living Building” certification for its headquarters, the most stringent and demanding environmental performance standard for buildings. The Seattle-based International Living Future Institute administers the program and has certified just 30 structures worldwide as fully living buildings.
To get its dream-building done, PAE enlisted some of the biggest names in Portland business, first among them prominent real estate developer Edlen & Co.
Jill Sherman, a partner at Edlen, had worked closely with the city of Portland when it tried and failed to build the Oregon Sustainability Center a decade ago.
This time, there would be no federal grants, no state revenue bonds and, as it turned out, no high-level city officials throwing their clout behind the project.
“We didn’t really know whether it could be done,” Sherman said. “We had a huge and lofty goal. We wanted to use the traditional real estate financing model — debt and equity — but also to build the most sustainable building in the city, 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 return 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 equity as part of its fee, as did ZGF Architects, the high-profile Portland design company.
Walsh Construction agreed to serve as general contractor and invest in the building. Bob Walsh, the company’s 78-year-old chair and co-founder, said his motivation was not financial gain.
“Somebody’s got to wake up to global warming and be able to put the environment ahead of profits or our world is going to burn up,” he said.
The team got a few lucky breaks.
Their pitch to investors got stronger after new federal tax rules unexpectedly made all of downtown Portland an “opportunity zone.”
Investors in opportunity zones — nominally “economically distressed” areas in need of economic development and jobs — can get significant tax advantages.
The team also managed to avoid the enormous run up in timber costs by buying and locking down prices early. The building’s interior features mass timber components from a British Columbia supplier.
Plus, the project managed to close on its bank loan on April 1, 2020, just days before COVID-19 mandatory lockdowns took effect in much of the region. Had the bank considered the loan weeks or even days later, it might never have been approved, Schwer and Sherman said.
The good fortune ended at that point.
Construction crews dealt with ice storms, heat domes, social unrest in the streets of downtown, and wildfire smoke so thick you couldn’t see across the street. The pandemic was a constant worry.
“It was like the plagues,” Sherman said.
But Walsh managed to adhere to the 16-month construction schedule.
On a recent walk-through, Schwer shows off a popular feature of the building’s ventilation system. He opens the window. Few modern office towers have operable windows, eschewing fresh air for the benefit of mechanical heating and cooling.
Outside, tomatoes grow on the window ledges, each pot with its own tiny drip line.
Most of the rest of the building’s green 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 convert the building’s waste products into fertilizer.
- 0 use of so-called “Red-List” materials — substances that may be legal but are deemed to be unhealthy or bad for the environment.
- 5 operable 12.5-by-10.5-foot windows that will provide 70% of the fifth floor’s ventilation and cooling.
- 90,000 locally sourced bricks make up the building’s exterior. The Living Building challenge requires the use of local materials — 20% of materials must be sourced from within 311 miles of the building site. The bricks were manufactured by Mutual Materials at its plant in Mica, a small Washington town south of Spokane.
- 83% leased. A bank and two nonprofits have leased space in the building, joining PAE and Edlen, bringing occupancy to 83%. That’s enough for the building to earn a profit.
The under-the-radar approach of the PAE building team is a dramatic contrast to Portland’s last big drive toward a living building.
The Oregon Sustainability Center was huge in its ambition and its price. It was to be the first high-rise in the world that would comply with all the 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. Architects produced a stunning design of a cylindrical tower topped with a leaf-shaped array of solar panels.
Then-Mayor Sam Adams went to bat repeatedly for the building, predicting it would secure Portland’s image as a sustainability leader.
The city pledged $6.7 million in urban renewal money. It also agreed to become of the building’s tenants.
Critics balked at the price and questioned the rationale behind the project. The crash of the housing market and related recession made it a harder 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 got built, and it is working.
In the end, that may be the structure’s lasting significance — it could democratize green building. The building provides a proof of concept that a relatively small company can pull off this kind of project without enormous public assistance, said Mark Perepelitza, an architect and director of sustainability at the Portland design company SERA.
“If this is just a high-end boutiquey thing, then we’re not going to save the world,” he said. “PAE shows that we can scale it up and make it attainable.”