February 19, 2013 - From the January/February, 2013 issue

VX2013/FutureBuild: Bogaard & Caruso Address Sustainability

Pasadena Mayor Bill Bogaard and California real estate developer Rick Caruso, CEO of Caruso Affiliated, leant their respective public and private sector perspectives to a discussion of sustainable cities at the 6th VerdeXchange conference, held this February in Downtown LA. Bogaard focuses his remarks on Pasadena’s sustainability efforts since the mid 2000s, while Caruso describes how his company achieves environmental responsibility, and urges business-government collaboration in facilitating sustainability. See VERDEXCHANGE for more information on this year's VX2013 conference.

Bill Bogaard

“In formulating sustainability goals, we were guided by our own best judgment of what we could and should do, and also by a number of state laws that many of you know better than I.” -Mayor Bill Bogaard

Mayor Bill Bogaard: I want to spend a few moments describing the policies that Pasadena has adopted since 2005/6 and admit some of the advantages that Pasadena had during that period that boosted our commitment to sustainability and allowed us to pursue the goal in the timeframe in question more successfully than we might have otherwise. I want to showcase some of the products of our sustainability effort, such as LEED-certified buildings that have been built in the last ten years, and then mention a couple of issues that are challenging Pasadena and other cities in terms of moving sustainability forward in the years ahead.

Pasadena is a city of about 140,000 residents with a daytime population of 200,000. We offer employment to about 100,000 people from the region surrounding the city. I estimate there are about 750,000 people from various communities that look to Pasadena as a metropolitan center. Pasadena is famous for its great institutions like Caltech and JPL—the latter has been featured prominently across the world since last August when Curiosity Rover landed on Mars. We’re blessed with other great companies as well. Some of the recognizable companies are East West Bank, Parsons, and Avery Dennison. We are also home to newer entrepreneurial companies that are working in the high-tech field. 

In 2006 Pasadena decided to join with the US Conference of Mayors in an urban accords commitment pertaining to sustainability. It was in the wake of the failure of the United States to join the Kyoto Accord, and the US Conference of Mayors stepped up and said, “The cities of the US should be a part of this.” Our Green City Action Plan was comprehensive and customized to our particular needs. It identified the areas—energy, waste reduction, urban design, transportation, environmental health, and water—where we would pursue sustainability practices, try to quantify those goals, and try to account for them. 

But I mentioned that Pasadena has advantages as a city and in pursuing sustainability since this plan was adopted. Number one, we have water and power utilities with 60,000 customers, and because a lot of the sustainability or climate control policies have been imposed on utilities, we’ve had the responsibility to formulate plans that comply with our own goals and the goals established by state law. 

The last ten years before the recession in 2008 marked a time of strong economic performance for Pasadena. At the same time, developers took a great interest in the city. For example, during the first ten years of this century, Pasadena developed four times as much housing as in the ten years that ended the prior century from 1990 to 2000, which we all recognize and remember, maybe painfully, as a slow economic period. So Pasadena had lots of development, and it hand the utilities a challenge and responsibility to pursue sustainability. 

We additionally had the arrival of the Gold Line, which started operating from Union Station to Pasadena in July 2003. There are six stations in the city, and that in itself was a strong motivation for developers to come to Pasadena because they were confident of what was possible. A final advantage, I would mention, is our general plan, in place since 1994, which addresses land use and mobility and reflects a strong commitment to smart growth and transit-oriented development. 

I mentioned all the homes that were built in Pasadena during the first ten years, the bulk of those homes—75 to 80 percent—were built in the Central Business District along the corridor of the light rail system. So the concept that Pasadena developed in the mid 90s, for TOD and smart growth, had a chance to be implemented in the years since 2000.

In formulating our sustainability goals, we were guided by our own best judgment of what we could and should do, and also by a number of state laws that many of you know better than I do. In 2006, Governor Schwarzenegger signed AB32, and Assembly Bill 2021 also went into affect, requiring ten-year energy efficiency plans. Those bills have guided what Pasadena has done since. We’ve committed ourselves to energy efficiency along the lines of AB2021, and studies show that our commitment is stronger than many cities in Southern California. 

In terms of the source of energy that we are delivering to the customers of the City of Pasadena Department of Water and Power, presently, 56 percent is coal power from a plant in Utah, and 24 percent is renewable, which is double what it was when we started our commitment to sustainability. So we’re moving; we have our commitment to reduce our reliance on coal, which is certainly the demand of many environmentalists. We have tried to respond to that, but we are also facing the economics of giving up lower-cost fuels for generating electricity.

Pasadena has a wide variety of recycling programs. In the year 2011, we adopted a plastic bag ban that prohibits the use of plastic bags in major retail outlets, allowing the use of paper bags if a small charge is used by the store to fund the expenses of their program for sustainability. The ban also de-motivates the use of paper. 

We have a number of buildings that have achieved LEED status over the last ten years. There’s Westridge School’s science building, the Tricom building, and South Lake Avenue Corporate Plaza, which was it was refurbished along green building standards to meet the new standards. Mothers’ Club, a nonprofit in Northwest Pasadena with a solar commitment, took over an existing building and restructured it to their use. There are two buildings at Caltech—the first is a contemporary building that was completed about five years ago. It’s a Thom Mayne creation and is LEED certified. The second is a historic structure that was restored not only in accordance with sustainability principals, but its operation of heating through the sun in a tower that goes through the base of the building was recreated in the way that it originally was. So it’s a wonderful combination of sustainability and historic preservation projects. Art Center College of Design established a second satellite campus on South Raymond Avenue near the Pasadena Power Plant, achieving a LEED-certified building and converting a fifty to sixty-year-old aerospace jet-engine testing facility into a classroom and laboratory. Pasadena City Hall has been restored and achieved LEED status; it was completed about five years ago. The convention center was significantly expanded and achieved LEED status. 


In closing, going forward, as we complete and update our general plan, the intention is to think ‘sustainability’ and ‘environmental responsibility’. I want to mention very briefly a village concept relying extensively on the Metro Gold Line stations and other retail centers to give people the opportunity to live close to and walk to those stores. The other commitment to sustainability: we to support companies that work in new fields such as solar energy and other sustainability fields. We all know Idealab is heavy into energy, particularly solar. We have the resident institute at Caltech that’s working very hard on research and future power. CALSTART is a wonderful organization based in Pasadena that focuses on electric vehicles; they just celebrated their twentieth anniversary. We celebrate Earth Day with a festival in the city, and we generally attempt to promote the culture and ethos of sustainability in any way that we can. 

The issues that we’re facing are always economic. The cost of moving to renewable energy, which continues to be more costly than coal or natural gas, is creating some strains for us in achieving the goal that we’ve established, which is a 30 percent renewable portfolio by 2020. When it comes to our water system and conservation, we’re finding diminished revenues for capital improvements because water consumption is down. So we’re considering a restructuring of our rates so that we can continue to reinvest in our system even though we’re encouraging more water conservation. I would say, in general, that the challenges to sustainability are economic at their base, and we’re working hard to figure out how to balance those economics with our sustainability goals. Let me now step aside so that Mr. Caruso can step forward and provide the private sector point of view. 

Rick Caruso: Mr. Mayor, thank you for your comments. I am delighted to be here. As all of you know, events like this are important because they bring together the best and brightest minds from a variety of fields to focus on a single topic. My comments will be brief, but I want to begin with a little history. 

Meetings to talk about urban sustainability are nothing new; in fact, the first international conference to discuss environmental issues was held in New York in 1898. Experts at that time from around the world had gathered to discuss the most pressing problem for large cities. They weren’t there to talk about creating jobs, alleviating property, or improving transportation; at the turn of the century, the most difficult urban problem was horse manure. At that time, believe it or not, in London it was estimated that by 1950, every street would be covered by nine feet of filth. In New York it was predicted that by 1930, horse droppings would rise to Manhattan’s third-story windows. 

Today, it’s easy to look back on the first conference with amusement. But we must remember that it has taken a major shift in perspectives to advance from horse tech, to high tech, to clean tech. In the end, the solutions did not come from the first conference, but in the form of advanced technology. Within the next decades, manure disappeared from city streets because the horse was replaced with the horseless carriage, and the automobile emerged as the preferred means of transportation. At the time, people praised the car as the savior of cities, but we know now that the new technology brought with it a new set of environmental challenges. We live with those challenges every day in Los Angeles, and as you all know, we’re experiencing a new technology revolution that is creating a shift in our society perhaps more seismic than the shift from horse to car. 

As a real estate developer, I believe strongly that all real estate companies should not only reshape the skylines of cities but should also shape the future of sustainability. That’s why at Caruso Affiliated we’re committed to using clean and green technologies and techniques wherever possible. But to do so, I have to ask two very important questions: what are the most innovative and sustainable options available? Which of these options makes the most financial sense for the project’s economic sustainability? Now, that’s the reality. 

Of the green options that we’ve put in our projects, about 85 percent are smart or bottom-line and sustainable. It’s the other 15 percent that are not financially feasible. I am encouraged to see that the top-of-the-line technology is becoming more reasonable and makes more sense for our bottom line and those of my fellow developers. For all our projects, we are committed to being LEED compliant, even if we chose not to pay for the official certification. However, I will tell you that I am very proud of the fact that the new USC-Caruso Catholic Center in our Savior Parish at USC is LEED certified. We also recently opened 8500 Burton Way, one of the nation’s most talked-about luxury apartment buildings and a model for innovative methods of construction. The backbone of the building was created from recycled metal. It was a zero-waste project that conserved resources and reduced the burden on the local environment. We used solar power to generate light in the lobby, parking lot, and common areas. At all of our properties, the fixtures and appliances are energy efficient. If you walk into the newly renovated lobby of The Grove, you will find that the colors are richer thanks to our use of LED lighting, which, we know, will become the standard in a few years. 

As a business, Caruso Affiliated welcomes prosperity, but we’re also looking out for the future. My wife and I have four children, and it’s very important to us that as a company we develop properties that both create inviting spaces and leave the world a better place. However, for clean and green technologies to go from cutting-edge to mainstream, we must ensure that making a building sustainable is financially attainable. For example, for some years we had tried to put solar panels on the roof of a parking structure at The Grove. The technology is available and getting better every year. However, so far, what makes perfect ecological sense does not make economic sense. But we believe in it, we think it’s the right thing to do, and we’ll continue to take the steps necessary to bring solar to The Grove in the future. I want it to happen and believe it’s only a matter of time. But we need to get smarter as a government and as an industry to make sure those incentives are in place. This illustrates the fact that we need to continue to strengthen the financial incentives that will in turn make good ideas into affordable solutions. 

The way it’s going to work is that we have to work together. The public sector and private businesses have to be on the same page, moving in the same direction, pursuing the same goals. One goal must be to improve the regulatory barriers to sustainability. Ironically, CEQA has become one such barrier. It adds time and cost to projects that could otherwise be invested into clean and green technologies. What was intended to be a shield has become a sword, and we must change that. 

There’s a reason that this movement is the turning point for sustainability. The Mackenzie Global Institute predicts that by 2025, 600 urban centers will be home to 2 billion people and responsible for 60 percent of the world’s entire GDP. There is no question that the future of civilization is the city. The question is: how will we respond to the environmental challenges that will inevitably arise? Like the people of the past, we will be forced to make a major leap in innovation in order to find solutions that will work not just for today, but for tomorrow. We will have to share ideas, information, and resources, but if we work together, I am convinced that we will not only face those challenges, but we will solve them. We are proud of the fact that as a company, our projects can be used as a laboratory for real-time testing to see what is actually practical in the world today. 


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