They can design skyscrapers to withstand earthquakes, devise highways through mountains and make water flow uphill.
Yet for all the modern-day magic engineers can conjure, nothing they dream up could insulate them from the economic storm stubbornly hovering over Nevada and its development community.
“What we have done is got lean and mean,” says Michael Holloway of Poggemeyer Engineers. “We’ve cut our expenses. We have to make money in every aspect of our work now. Our rose colored glasses are less tinted than they used to be.”
As reality sets in, many engineers are weathering the recession and even starting to look forward through green and sustainable design. Once a niche within the engineering field, sustainability continues to move into the mainstream through growing public and political awareness of the effort, falling materials and labor costs in construction, and heightened desire for cost savings through improved energy efficiency.
“The economic downturn has put more emphasis on green,” said Ken Welden, Director of Engineering for Martin & Martin Civil Engineers. “People are looking at improving what they have, trying to make them more efficient.”
They have to in a Nevada economy that refuses to come out of hibernation. The Southern Nevada Index of Leading Economic Indicators fell again in October, even while the U.S. Leading Economic Index began to trend upward.
In surveying Nevada engineers from a variety of disciplines, most said business is down sharply in the past year. This shows up largely in the dearth of private work, from small office buildings to enormous Strip projects, which fed the market during the state’s salad days.
“Significant is an understatement,” said Brent Wright, CEO and Chief Engineer of Wright Engineers. “I would guess work is down for most engineers and any design professionals more than 50 percent. That’s just a reflection of what’s going on.”
That’s coming from an experienced engineer positioned to take on a variety of work. Wright and Daniel Bartlett founded their firm in Las Vegas in 1998 and the company provides engineering services across a range of disciplines, including sustainable design.
“There’s very, very fierce competition because there’s more demand than supply (of work,)” Wright said.
Welden concurred, noting that some public projects which used to draw just a handful of bids from a Request for Proposal (RFP) look like chum in the water in this climate.
“Now you’re getting 40 or 50 companies going after them,” Welden said. “The competition is just crazy.”
That number looks even more daunting when you consider just 24 commercial building permits were pulled in August 2009 in Southern Nevada. What’s left for engineers comes mainly from public projects that still have funding from tax dollars, as well as retrofits and rehabilitations of existing buildings for either aesthetic or sustainable purposes. It’s a situation that implores creativity from a group of professionals known for just such thinking.
Engineers cited any number of ways they are surviving, from back-to-business basics like leaning on client relationships developed in better times, bidding on projects they wouldn’t have considered before and adjusting to the developing market shift to sustainable design and Leadership in Energy and Environmental, or LEED, certification.
“The business model hasn’t switched, just the client type and the type of projects,” said Mike McGettigan, Managing Engineer for Langan Engineering. “You just don’t have big mega-casino projects coming down the pipe every single day.”
Holloway notes that they have shifted to more government projects. “We have seen a little bit of a bright spot,” he says. “Recently, we’ve seen a fair amount of department of defense projects coming out. There’s just not a whole bunch of money out there. Most of the private projects are gone now. Public works projects have dried up also.”
Engineers are also moving to more sustainable practices with the downturn. So just what is green or sustainable design? For starters, they aren’t necessarily the same thing. They are certainly not mutually exclusive, engineers say, but they should not be used interchangeably either. “Going green” might be the most common term thrown around in public discussion, but engineers generally refer to sustainable design when talking about the work they do today in the field.
“Sustainable is more holistic,” McGettigan said.
Whether for cost savings, marketing or corporate responsibility, green and sustainable appear to have great momentum both in public sentiment and political awareness, even if the concepts behind them have been in play for many engineers for decades. The green market was 2 percent of non-residential construction starts in 2005, 10-12 percent in 2008 and will grow to 20-25 percent by 2013, according to the United States Green Building Council (USGBC), the federal entity that oversees the LEED certification process, as well as the credentialing of engineering and other professionals certified in LEED principles.
By the USGBC’s definition, LEED certification means “a building or community was designed and built using strategies aimed at improving performance across all the metrics that matter most: energy savings, water efficiency, carbon-dioxide emissions reduction, improved indoor environmental quality, and stewardship of resources and sensitivity to their impacts.”
LEED certification comes in four levels: Certified, Silver, Gold and Platinum. The level attained is based on a scoring system that awards points for a wide-ranging set of criteria, taking local environmental situations into consideration. Earning LEED points can come from improvements as small as installing energy-efficient lighting and lighting controls or as big as designing heating and cooling systems to use energy more efficiently. Many LEED improvements involve the inclusion of “smart” systems that reduce energy consumption in parts of buildings that are not being used, primarily heating, cooling and lighting.
“Our mechanical and electrical, that’s part of what makes engineers valuable is they can design a system that’s efficient and sustainable,” Wright said.
Through the end of 2008, USGBC shows 29 LEED-certified facilities in Nevada. That list will soon include the highest-profile LEED project in the state, CityCenter.
The growth potential for engineers really shows up in the list of projects registered to seek certification, though. At least 168 projects throughout the state are registered with USGBC through December 2008, which obviously doesn’t factor in this year’s uptick.
“We’re doing more LEED projects than we used to,” said Brad Geinzer, Vice President of Engineering for JBA Consulting Engineers. “Most of (our clients) know about LEED and they’re very into in it. They’re interested in the incremental cost associated with doing it. If they can obtain LEED certification for a limited increase in cost, they’re more willing to do that. It’s a more marketable building.”
The USGBC estimates the total cost of obtaining LEED certification at $2,000 per project, but that only covers the paperwork. The upfront investment in sustainable design can present a difference in cost, though the Nevada engineers surveyed could not attach an average cost or percentage increase per project. The Natural Resources Defense Council estimates a 2 percent average increase in upfront costs.
Proponents of sustainable design contend that upfront costs are recouped in lower energy bills and increased long-term value of green buildings when they are sold or rented. While sustainable implies a larger scope, the biggest benefit driving its popularity is energy efficiency. The international consulting firm McKinsey & Company released a report this year estimating that a comprehensive strategy of energy efficiency executed fully in the United States could save more than $1 trillion in gross energy savings by 2020.
The caveat in the McKinsey report, however, is the initial cost: more than $520 billion in upfront investment would be required in the McKinsey scenario, which extends well beyond just the sustainable design field.
McGettigan said some local clients still are not sure they will recover their upfront costs within the time horizon they need.
“There’s people that don’t see the cost savings, even now,” McGettigan said. “There are still some people who haven’t drank the Kool-Aid.”
Potential clients consider a range of options: do they want to go all the way for LEED certification or implement some green cost-cutting measures and LEED elements without the seal of approval?
“Everyone’s interested in it. The thing the private clients have to weigh more than the public clients is, ‘Is this economically viable for me?’” Wright said.
If the end product is the right side of the sustainable design equation, then the left side is engineers certified in LEED principles. USGBC oversees the national certification process, which requires engineers to pass a comprehensive exam to become an LEED Accredited Professional (LEED AP). The new LEED 3.0 system requires engineers to show a significant amount of time logged working on a LEED-accredited project before they are allowed to take the exam, and they are then required to take ongoing education classes to stay up on the latest developments in green and sustainable design.
Local firms see the value in having their engineers become LEED AP certified. McGettigan said more than 20 percent of the 500 employees of Langan throughout the county have LEED AP credentials.
“That’s the commitment we made to it and we’re still getting people certified,” McGettigan said. “That’s how seriously we’re taking it.”
Geinzer, a LEED AP, has dozens of certified professionals on staff. He sees value for his company, as well as clients benefitting from that certification.
“You had to promote yourself as being energy efficient and sustainable to compete in the market,” Geinzer said. “It’s very popular. It’s a popular marketing effort. If you’re sustainable and you’re green, your business is viewed differently.”
“We look at it as not only being important for marketing but also for what the trend is out there,” says Holloway. “We have 18 accredited professionals and we are the civil [engineer] on the new City of Las Vegas City Hall which will be, at a minimum, Silver certified,” he adds.
Wright warns, though, that passing a test cannot substitute for real-world experience.
“Just because a person is a LEED AP doesn’t mean they know what they’re doing,” Wright said. “It’s a good qualification and it’s necessary these days, but you still need the experience to have the practical application necessary to do a successful LEED project.”
The local, state and federal governments are spurring the sustainable design effort as well, albeit with varying results.
With increasing frequency, municipalities throughout the state require in RFPs that bids not only include LEED-certifiable elements, but give projects enough of them to seek certification. Only the City of Las Vegas requires that all new buildings be built to LEED standards, while the City of Henderson established a goal for new capital improvement projects to be LEED Silver certifiable. Clark County passed a resolution in 2007 that sets a goal of designing all new buildings over 20,000 square feet to meet LEED certification standards of Silver or higher.
In Northern Nevada, the City of Reno and Washoe County both make it a goal to build to LEED-certifiable standards.
“LEED principles help reduce overall life cycle costs, and create a more healthy and productive workplace,” said Dave Solaro, an architect with Washoe County’s public works department.
In any emerging field, sometimes it takes one step forward and two steps back to get anywhere. Such was the case for the Nevada State Legislature in 2005 with Assembly Bill 3, which provided up to 50 percent property tax abatements for new or existing buildings meeting LEED standards, as well as sales tax breaks. The bill passed with nearly unanimous support from the Democratic-controlled Assembly and Republican-controlled Senate before being signed into law by Governor Jim Gibbons, showing the broad backing for the green and sustainable movement among politicians.
The design of the law made it so popular that by the 2007 Legislature, the state realized it might lose as much as $900 million in sales and property taxes. It passed Assembly Bill 621 in that session to undo some of the unintended harmful effects of AB3. For a time, the tax incentives spurred green and sustainable development throughout Nevada, though that period also coincided with the tail end of the growth boom in the state.
The current climate is ripening to set sustainable design into place on its own as costs decrease and familiarity among architects, engineers and contractors increase.
“I think it’s here now,” Welden said. “I think it’s here to stay. In five or 10 years, it’s not even going to be a discussion. They’re just going to do it.”
As the Nevada economy continues to kick its feet in search of the bottom of the pool, sustainable design and LEED elements are taking hold as the norm as the market moves toward it, Geinzer said.
“Now, it’s starting to becoming more of a standard. If you don’t do it, why didn’t you?”