All that Jazz

Once known as the city’s jazz district, San Francisco’s Fillmore neighborhood became the first redevelopment area in the country. A razed four-block area sat vacant for years and was approved for development in 1986. Today, after an extensive renovation by The Laramar Group LLC, the 97 percent-occupied Fillmore Center, comprised of 10 rental buildings—including high-, mid- and low-rise—and 1,114 units is awaiting its LEED (Leadership in Energy and Environmental Design) EBOM (Existing Buildings: Operations and Maintenance) certification.

A painful history

While it may be easier to remember the good old days of the Fillmore neighborhood and its renowned Auditorium (think Grateful Dead, Janis Joplin and Jefferson Airplane), the neighborhood struggled greatly, and not just because of the Black Panther riots or Jim Jones’ Peoples Temple.

In 1906, an earthquake left the city in shambles. The first shops to reopen were located in the heart of the district. Many single-family homes were converted into boarding houses, creating a densely populated neighborhood that attracted an influx of Filipino, Mexican, African-American, Japanese, Russian and Jewish immigrants.

During World War II, though, a large number of the city’s Japanese residents were sent to internment camps, and African Americans moved into the vacant housing left behind. Consequently, the district began to open a number of jazz clubs, many of which the neighborhood is still known for today. After the war, much of the neighborhood’s longtime residents began to move to outlying suburbs, though they continued to own shops and apartments in the district.

After President Harry Truman signed the 1949 Housing Act, allocating federal money to reconstruct the nation’s cities, rebuilding San Francisco’s Western Addition—hundreds of square blocks west of Larkin Street—became the San Francisco Redevelopment Agency’s top priority, and in 1960, the Agency began to force families out of their homes. In 1967, the Western Addition Community Organization (WACO) formed to fight against the displacement of residents, with the resulting “Certificates of Preference” issued to those owning the displaced businesses. These Certificates were meant to provide owners with the first opportunities to return after the Western Addition was finally rebuilt. But because it took the Redevelopment Agency almost 20 years to rebuild the area, the certificates proved unpopular, with only 4 percent of the certificates used by 1999.

Meanwhile, during the mid-’80s, while the Western Addition north of Geary Blvd. began to thrive, the area to the south experienced rampant crime, making the huge community now known as the Fillmore Center difficult to lease to its intended residents.

An intervention—and its payback

When the Fillmore Center was first constructed, “the design and construction were largely deficient,” notes Steve Boyack, vice president of asset management, The Laramar Group LLC. The first building was slated for delivery in 1989, just as the Loma Prieta Earthquake, or the World Series Earthquake, one of the worst in the Bay Area’s history (reportedly a 6.9 on the Richter scale), struck, causing about $3 billion worth of damage, according to the Virtual Museum of the City of San Francisco. Building codes were consequently updated to accommodate earthquake threats—which may have been obvious to any passerby who could easily observe different building techniques used to construct the 10 buildings. Within the first years after completion, 200 units were taken offline due to severe water infiltration.

In 1996, Laramar came into the picture, purchasing the distressed property two years later. (Laramar sold the development to Prudential in 2004, but still maintains management of the asset.) The company started its $46 million retrofit, which included replacing all the mechanical systems and installing variable frequency drivers on the elevators, in addition to replacing roofs, windows and exterior coatings. Elastomeric building coatings—essentially rubberized coatings—were put into place because many of the buildings’ seals and joints weren’t constructed properly originally, explains Boyack.

While the work would eventually result in LEED EBOM certification, the Laramar Group did not set out with this goal in mind, however. In fact, the standard didn’t exist when the company began its retrofit, and it wasn’t until 2002, when Boyack became involved, that efficiency, at least from a sustainability perspective, was considered a part of the project. “A lot was just looking at what was in place being inefficient, not even considering the whole green concept. At the time, green didn’t exist or was an afterthought,” he recalls.

What today is considered a sustainable success began as a purely economic motivation. “A lot was started with no LEED in mind; it just started with trying to be sustainable and to improve our bottom line,” Boyack recalls. “As we got further into it, we realized we could take it to the next level. For us, the effort was learning the process—which is cumbersome but doable.”

Lighting and water retrofits were the first steps, and as they provided a significant payback, the company decided to pursue more programs. “To sell it to the executives of the company, my arguments were financially driven,” Boyack recalls. “Ultimately, this kind of green became more sexy, and as we were able to do more and more of these projects and actually produce, a year or two later, the results and start to prove out the financial returns, it became easier to do these projects.”

In order to determine the payback, Boyack applied the savings on a dollar basis to current rates, rather than the new rates, so his estimated savings were likely intensified. While it’s common to focus on the dollar amount spent and saved, it’s especially crucial to focus on a building’s usage since rates constantly change, he advises. (See accompanying sidebar for a cost-savings analysis of the Fillmore Center.)

“When you’re analyzing the success of a project, you should be looking at the effect you’ve had on the usage, whether it’s gas, electric or water,” Boyack asserts. “When you pro forma one of these you throw a softball and say you’ll pay [it] off in a certain amount of time, but we had payback in nine months.”

Testers of innovation

One of the biggest challenges of the retrofit was the moment in time, as Laramar was at the forefront of much of the new technology being employed at the Fillmore Center. Because of this, before even implementing any of the technology, Boyack needed to get executive buy-in.

“I think, all things considered, if I walked into any of their offices today and pitched a program, and they had never done it before, they would [at least] know something about it” from reading the newspaper or talking about such projects with others who have gone through the experience.

But because Laramar was interested in the savings behind the new technology, the company “managed to be big testers of new technology,” Boyack reports. “It became interesting to keep peeling layers of the onion to see how much more efficient we could make the buildings. … Much of it involved looking at the capital budget and everything that would be replaced [anyway] and saying, ‘You’re replacing this roof; let’s look at a new material for it. You’re about to replace the boiler; lets look at the new technology for that,’” explains Boyack.

Additionally, some of the company’s programs were designed “as hedges against future legislation that were being discussed at the time,” says Boyack, recalling a moratorium on the increase of water and sewer bills that was supposed to burn off in 2004 or 2005. The local public utility commission initiated a program to retrofit homes with low-flow toilets—a fixture that was not nearly as popular five years ago as it is today.

Boyack partnered with the commission, at first replacing 300 of the project’s 1,488 toilets with dual-flush fixtures (Boyack had to go to Canada to source the product, and negotiated with the PUC to apply a higher rebate rate). While this alternative cost more upfront, it paid off in the long run, and the utility commission agreed to offset the cost of replacing the remaining toilets within the development.

Laramar also installed aerators and replaced showerheads—at the time, a 2.0 gpm showerhead was considered efficient—but the company continues to look for higher efficiency fixtures as new technology arises and unit replacements become necessary.

In addition, because San Francisco at the time applied a flow rate to buildings’ irrigation/water bills, the city would say, for example, “‘you use 100 percent of water but we’ll charge for 95 percent of sewer.’ When you have irrigation, now you have water going out that doesn’t come back, so they apply a flow rate,” Boyack explains. Because Laramar installed drip irrigation, rain sensors and lower-flow heads for irrigation, Boyack argued for adjusting the flow rates and eventually decided to utilize d-meters, which read only water usage.

The company also partnered with the inventor of dual-bulb fixtures—what was at the time a new product—for the back-of-house stairwells and midway landings. In total, 2,000 fixtures were replaced, with another 500 retrofitted. All exit signs were switched to LED lights, and elevators feature three-watt LEDs. “We became a place for PG&E (the utility provider), as well as vendors, to bring building owners to our property to see the products in action,” Boyack notes.

The greatest lesson learned from the project, though, was the importance of tracking the building’s performance, and Boyack continues to track the Fillmore’s performance on a monthly basis. “If I notice that anything has spiked [one month], there’s a drill-down mechanism to see why something happened,” he explains, which can catch a potential problem early on.

“On the back end, a lot of people have problems proving out the success of their programs,” Boyack observes. “I think if there were better tracking mechanisms out there for building owners, it would be paid for a lot quicker. If there were more, and easier, tools to track the significance of your savings, owners would be convincing each other to do it.”

And, of course, getting residents interested in such a project is also crucial. “It comes down to smart marketing,” Boyack asserts. (See “Marketing to the Green Consumer,” Page 36, for more tips on green marketing.) “We need to educate our residents to create a net cost of living (including utilities and rent) that is less than that of our competitors.”

To comment, e-mail Erika Schnitzer at [email protected].