How unusual is it for a construction firm to generate 90 percent of its revenues – half a billion dollars worth – from LEED projects? After all even though green construction is growing exponentially it’s still a small segment of the overall market: The green market was two percent of non-residential construction starts in 2005 10-12 percent in 2008 will be 20-25 percent by 2013 according to McGraw Hill Construction.
So it seems it would be a rare thing for an individual firm to generate nearly all its substantial revenue from building LEED projects. But that’s what Sellen Construction did in 2009.
Ninety percent impresses even the US Green Building Council (USGBC). “Given the growing popularity of LEED Sellen took advantage of a great business opportunity” says Marie Coleman spokesperson for USGBC in Washington DC. “For Sellen to work almost solely on LEED sounds like a wise business decision and of course USGBC is thrilled to learn of their success with their LEED portfolio.”
According to Dan Barrett and Yancy Wright with Sellen two internal decisions in addition to growing client interest in LEED helped push Sellen to the 90 percent mark. First in the spirit of that which is measured gets done Sellen began tracking the percent of LEED projects within its overall volume. “We went from seven percent in 2006 then jumped to 15 percent in 2007 53 percent in 2008 and 90 percent last year” says Wright. Sellen’s LEED projects include the Bill & Melinda Gates Foundation headquarters part of the Amazon.com headquarters campus Seattle Children’s Hospital in Bellevue and the UW School of Business.
Another key internal decision was to make Wright’s job a dedicated position focused on sustainability. Wright began his career with Sellen as a project engineer but over the past four years he has been focused exclusively on sustainability. Among his initial goals was to get everyone at the company on the same page with regard to what it costs to build a LEED project. The industry-wide rule of thumb was to estimate high to cover the unknown resulting in people quoting an 8 to 12 percent premium to build a LEED project.
“A few years ago some owners were inquiring about LEED but ultimately saying no because they assumed it was going to cost too much money” Wright says. “But the reality is the premium changes depending on the size of the project and once I started collecting the data and analyzing it from the few LEED projects we had done in 2004-5 it became apparent that the extra cost for LEED was much lower ranging from a tenth of a percent to 1.5 percent depending on the size of the project. Getting everyone recognizing the actual cost was critical and having a single point person to manage oversee and implement a standard approach to these projects helped as well.”
Through streamlining and standardization Sellen developed a growing set of best management practices (BMPs) regarding sustainable building practices and LEED documentation. These BMPs in turn helped keep the marginal cost of a LEED building low added to Sellen Construction’s expertise attracted more clients seeking to build LEED projects and led to a recent major business decision by the company: Create a new separate but wholly-owned firm called Sellen Sustainability.
“One of the impetuses to start Sellen Sustainability was this realization that so much of our revenue was from LEED projects” says Barrett. “It was recognition that this is not a trend that’s going away and we’re very fortunate to be working with clients that really take that to heart and believe sustainability is an important part of their portfolio. Here in the Pacific Northwest the sustainability movement is farther along than in much of the rest of the country. We’re in a position to learn from our project experiences and felt it put us in a unique position to be able to share our BMPs for sustainable practices and LEED projects with others.”
Sellen Sustainability was launched in May of this year. Barrett is Principal with overall responsibility for its strategy and business plan and he is also Vice President of Operations and Business Development for Sellen Construction. Wright is Director of Sellen Sustainability overseeing day-to-day operations.
Sellen Sustainability (www.sellensustainability.com) provides in-depth training programs and consulting services custom-designed for owners designers and contractors to help them integrate sustainable building practices. While Sellen Construction will remain primarily regionally-focused Sellen Sustainability is working with clients across the country through a partnership with Energy and Environmental Solutions (e2) which has offices in Las Vegas and Pittsburgh.
“We’re hired to help facilitate the process of achieving whatever the client’s sustainability goals are” says Barrett. “For example that may be working with a project team to define those goals assisting an organization to integrate sustainability through the creation of a strategic plan or helping contractors achieve a project’s goal through training that delivers the product as intended.”
A recent example of its consulting services is work for a St. Louis contractor for whom Sellen Sustainability helped establish and implement green BMPs for the company’s own business practices. With regard to training Sellen Sustainability is working with for example local union trades to help them define a “green collar job” appreciate how a sustainable building perspective might shift how a particular job is preformed and integrate sustainable thinking into curriculum provided to journeyman apprentice and pre-apprenticeship programs.
Another training example involves LEED accreditation workshops. “We customize training with real-world examples from our own projects making the training more applicable through discussions about cost schedule and lessons learned so the training has a higher level of relevance to their day to day tasks” says Wright.
“Locally we’re known as Sellen Construction” says Barrett. “Nationally we’re doing something different. Sellen Sustainability provides consulting and training with a very pragmatic real world general contractor perspective.” Wright explains “Our goal is to help evolve and transform our industry. We can only do this by sharing and pushing harder for strategic and significant innovations that reduce environmental impacts.”