Lee ding the grounds finding economic and sustainable returns - murphy - usgbc duluth conf - oct 24 - 2012 final

LEEDing The Grounds: Finding Economic & Sustainable Returns

USGBC Building Green Conference

Duluth, MN

October 24, 2012

Richard Murphy Jr. President & CEO

Murphy Warehouse Company www.murphywarehouse.com

&

Adjunct Professor of Landscape Architecture

College of Design, U of MN

and

Past Chair

Council of Supply Chain Management Professionals (CSCMP)

Center For Transportation Studies (CTS), U of MN

American Society of Landscape Architects – MN Chapter

E-mail: [email protected]

Web: www.murphywarehouse.com

Perspective

From an Industrial / Logistics View -

Strong Market for LEED Assistance

Presentation Flow

• Why We Went LEED

5 Strategies

• Where Do I Come From

Intro to Murphy

Intro to Logistics World

• Site Level - Green / Sustainable

Practices with ROIs

Native Prairie Planting – why plant & maintain,

economic ROI (return-on-investment) results.

Trees + Prairies Carbon Sequestration

Stormwater Management – how to be green and

economic at the same time.

Solar Power Generation – using state of art

technology, designed and manufactured in Bloomington, MN.

Impact of Solar on Mortgage Finance

LED Lighting & ROI Analysis / Decision –

350,000 sq. ft. case study in Eagan by Murphy

Carbon Neutrality – Murphy’s practices getting very

close at 12.83%

Sustainability Certification LEED Gold & Silver and Energy Star

2 LEED GOLD & 1 LEED Silver Certified

“Existing” Facilities (GOLD: July 2010 - built in 1994 and 1996; SILVER: Oct 2012 (pending) – built 1999)

Minneapolis Campus Spring 2013

Eagan Campus Spring 2013; Target level

Gold/Platinum

Energy Star Certification

Scored 99 & 98 on 100 point scale (Aug 2010).

Central Ave scored 87 (Jan 2012).

Minneapolis & Eagan review Winter 2012/3.

GOLD Top 1%

Sustainability Certification ISO 14001 and SLI Certification

ISO 14001 Certification

Environmental Performance & Management Certification; expected Oct. 2012.

Sustainable Logistics Initiative

International Warehouse Logistics Association sustainability certification for the 3PL Logistics Industry.

Why We Went LEED Especially at the Height of a Recession Put Another Way: Why Does Murphy Voluntarily Do Green Projects/Practices?

5 Part Strategy

1. Leader’s and Family’s Perspective on

Leadership

2. Doing most of the actions anyway so why not

get 3rd party recognition

3. Strategic Business Reasons

4. Green practices are showing positive

economic ROI results

5. Marketing and Branding

Why LEED

Why We Went LEED Leadership Strategy (Item 1)

• Leader a Landscape Architect “what can we say…..”

• 4th generation family business “in for the long haul”

• Family believes it is important to be a leader - being sustainable is important and will grow

Why LEED

Why We Went LEED Business Strategies (Items 2 & 3)

• Doing most of the actions anyway so why not get 3rd party recognition Client’s sustainability departments

don’t understand what we have been up to for years.

They do not readily understand where the rubber literally hits the pavement.

• We will discuss these under case studies

• Listening and responding to our client’s “future” needs Major corporations will have “Green”

initiatives and requirements – esp. once the recession in finally over!

They need assistance from their Carriers, 3PL’s, Suppliers, etc. to contribute to their “greenness” measures.

They cannot achieve their goals without the suppliers involvement and assistance.

Top 50 Green Supply Chain Partners List Murphy has been listed since list inception 4 years ago

Why LEED

Why We Went LEED Economic and Marketing / Branding Strategies (Items 4 & 5)

• Green practices showing financial paybacks & positive ROI In many cases must be willing to take longer

view than Wall Street ROI period of 2 - 4 yrs.

• Leveraging “Green” brand via marketing / PR Murphy gets far more “press” time

than a typical business its size – esp. at the national level.

Opens up a totally new avenue for marketing and sales penetration.

Why LEED

Why We Went LEED Branding Impact

World Trade 100 2012 Article Highlighting Murphy

“You can’t buy this kind of exposure”

Why We Went LEED Branding Impact

KARE 11 TV Richard Interviewed on Simply Science Feature Discussing Murphy’s Prairies and Stormwater

MN Pollution Control Agency Small Business Enterprise Newsletter Feature

Why LEED

Why We Went LEED Branding Impact

Business School Case Study on the Economics of Green Exploring Stormwater ROI Issue at Murphy

Why We Went LEED Branding Impact

Sierra Club Article 2,000+ word article for publication late 2012 Writer for the club contacted Richard based upon web research & networking and heard we were the company to contact!

Murphy Warehouse Company Has Long History with Green Initiatives

By Cassandra Hall

With over a century under its belt, the Murphy Warehouse Company has been a fixture of the Twin

Cities business scene for quite a while—and reinforces its commitment to stick around by investing time

and money into the latest green initiatives for their fleet of warehouses.

The Murphy Warehouse Company started in 1904 as a simple horse and buggy affair, hauling materials

off of paddle boats and barges; at one point they carried materials for building the St. Paul capitol.

Warehouses have always been part of, and grown with, the company. Now on their fourth and fifth

generations of family shareholders, and proud owners of five buildings out of their fleet of twelve

warehouses, the Murphy family continues to serve the Twin Cities area in third-party contract

logistics—that is, distributing people’s products when, how, and to whom they need them shipped. A

number of industries use Murphy Warehouse’s service, including the food, medical supply, paper,

industrial product, recycling, retail, beverage, and building material industries.

It is difficult to think of a thriving business taking the time to consider how their actions are impacting

the environment, especially when environmentally-conscious moves might cost money. On the

contrary, according to President and CEO Richard T. Murphy Jr., not only is Murphy Warehouse

dedicated to doing right by the community and the environment, doing so is not financially impractical

at all and actually makes a lot of business sense. To begin with, being environmentally-conscious is a big

part of listening and responding to clients’ needs for the future.

Where Do I Come From Supply Chain Logistics / Transportation

Why care About This Industry

Touches everything we do….

% of Economy:

8.9% Logistics $3.83 per person in U.S.

vs.

17.3% Healthcare $7.89 per person in U.S.

Where From

Where Do I Come From 3PL (3rd Party Logistics) Industry

Warehousing in Logistics

5 Billion Sq. Ft of warehousing in U.S.

Floor area equals a 4 foot walkway from here to the Moon…!!!

Industry has a massive impact on the Nation’s landscape

Where From

Who is Murphy Supply Chain Logistics Services / 3PL

We are a Service Company Warehousing, distribution, transportation, value-added,

fulfillment, international, etc.

We handle products throughout their life-cycle From raw materials to in-process goods to finished

products to returns for numerous industry segments.

Murphy Family, 4thGeneration (1904)

Square Feet Operated: 2,700,000

SKU’s Controlled: 31,000+

Truck Loads Handled / Year: 120,450

Rail Cars Handled / Year: 9,000 (equivalent to 31,500 TL’s)

3PL – “3rd Party Logistics Services Provider”

Companies Served: Fortune 100 to Small Entrepreneurs Domestic and Global

Industries Served: Retail / Catalogue / Consumer Medical / Health Care Grocery / Food Processing Beverage Plastics Recreational / Camping Industrial Forest Products (Paper/Packaging) International

Where From

Customer Returns Management Reverse Logistics

What happens to your clothes once they reach the final end of retail

Clothing – garments shipped overseas for fibers to

be separated and reused.

A local fashion designer has a clothing line made from

re-cycled threads.

Shoes – rubber soles are recycled; fabric used as

compost.

Leather Goods – reprocessed into other leather

items.

Mass Merchant Retail Support Store Backroom Logistics

Supply of 1500+ Stores with items to run stores

Supplies, training manuals, uniforms. Sales/promo

materials, bags, etc.

Full “pick-pack” operation..

Where From

Medical Support Logistics JIT Replenishment

Surgical Kits

Custom kits for various surgery operations Customized for teams of Doctors at every hospital.

Kit contains all the items needed for a surgery.

JIT delivery to hospital.

Hospital Supplies IV Solutions, Needles, Dressings, etc.

Manufacturing Support Logistics Component Customization, Pick & Sequencing

For Direct Shipment to Manufacturing Line on JIT

Where From

Global Sourcing – Domestic Production Multiple Concepts in Operation

Food Products – Raw, In-Process & Finished Import From Middle East & elsewhere Vendor Park (Global Consolidation Point)

North America Distribution

Inbound Flow - Raw Materials

Outbound Flow – Finished Goods

U.S. Distribution Recreation Industry

Canadian Company Covering Entire U.S. from One Central DC Operations Include:

Item Pick / “Pick-Pack” Case Pick Pallet pick Small-to-Large Order Custom Labeling Carrier Selection and Management

Murphy Rigging & Erecting, Inc. A Rigging / Millwright Contractor

From Very Precarious Handling….to Very Heavy Lifts ….to Fragile Works of Art….to Delicate and Expensive Medical Devices

Clients:

Manufacturers to Printers

Medical to High Tech.

Artists to Classified Military.

Sustainability / Green Practices A Fresh Perspective

Traditional Focus is Inward Looking

Lighting, HVAC, forklift & truck fuel, packaging,

recycling, green purchasing, etc.

Added Focus is Outward Looking - Site Level Green / Sustainable Practices In many cases these represent “low-hanging fruit” with short ROIs.

Native Prairie Planting – why plant & maintain,

economic ROI (return-on-investment) results.

Trees + Prairies Carbon Sequestration

Facility Design: Stormwater Management –

how to be green and economic at the same time.

Solar Power Generation – using state of art

technology, designed and manufactured in Bloomington, MN.

Impact of Solar on Mortgage Finance

LED Lighting & ROI Analysis / Decision –

350,000 sq. ft. case study in Eagan by Murphy

Carbon Neutrality – Murphy’s practices getting very close

at 12.83%

–

–

–

–

A Question We In Our Industry Must Ask:

Have you ever given much thought to your facilities?

Landscape?

Stormwater?

Site Level Green

….You Should…!!!

A Question We In Our Industry Must Ask:

Have you ever given much thought to your facilities?

Landscape?

Stormwater?

Site Level Green

Native Prairie vs. Lawn Three Questions

1. Is there a cost difference?

2. Is there an environmental difference?

3. Do they look OK?

Site Level Green

Northtown Logistics Campus 4700 & 4850 Main St NE, Fridley, MN 55421 Location of cost figures

Campus Specs: 500,000 sq. ft Warehouse; 6 Acres of Native Prairie; 4.2 Acres of Cut Lawn

Brown areas are native prairie Photo taken in early spring.

GOLD Top 1%

Site Level Green

Facility Design Native Prairie vs. Lawn

Is there a cost difference – YES Annual Maintenance Costs

Why have manicured lawn entirely surround large DC & manufacturing facilities?

Manicured lawn costs 7.3x move to maintain than native prairie plants!

Much more environmentally friendly and sustainable!

Site: 4700 & 4850 Main St NE, Fridley, MN 55421

Actual data from Murphy expense records

$4,240

$21,650

$-

$5,000

$10,000

$15,000

$20,000

$25,000

6 acresPraire Areas

4.2 acresLawn Areas

To

tal C

osts

Native Prairie vs. LawnTotal Cost Differences

Site Level Green

Native Prairie vs. Lawn Is there a cost difference – YES

Annual Maintenance Costs If all 10.2 acres is cut lawn: $52,652

Site: 4700 & 4850 Main St NE, Fridley, MN 55421

Actual data from Murphy expense records

$707

$5,167

$-

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$-

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

Praire Areas6 acres

Lawn Areas4.2 acres

If All Cut Lawn10.2 acres

Co

st

pe

r A

cre

To

tal C

os

ts

Native Prairie vs. Lawn Total Cost Differences

Total Costs Cost / Acre

Manicured Lawn costs 7.3x more to

maintain than native prairie plants!

Site Level Green

If all

Cut Lawn

Prairie Lawn Lawn

Areas Areas AreasAnnual Costs 6 acres 4.19 acres 10.19 acres

Maintenance 4,240$ -$ -$

Mowing - 12,015.00 29,220.25

Watering - 8,630.00 20,988.00

Fertilization - 1,005.00 2,444.14

Total Cost: 4,240$ 21,650$ 52,652$

Cost / Acre.: 707$ 5,167$ 5,167$

Existing Set-up

Native Prairie vs. Lawn Is there a cost difference – YES

Annual Maintenance Costs Component Costs

$ 4,240

$12,015

$8,630

$1,005

$-

$2,500

$5,000

$7,500

$10,000

$12,500

Native Prairie vs. LawnComponent Cost Differences

Praire Areas 6 acres

Lawn Areas 4.2 acres

Site Level Green Site: 4700 & 4850 Main St NE, Fridley, MN 55421

Actual data from Murphy expense records

Prairie Maintenance Key to success…!!!

Provided since day one by

Prairie Restorations of Princeton, MN www.prairieresto.com

Services include site visits 4-6 times per

growing season and burning every 3 years.

Brown areas are

Native Prairies

Native Prairie vs. Lawn Is cost difference significant - YES

Economic Impact

“Over the last 16 years we have saved over

$947,428 while being green by planting

native prairies on 2 logistics Campuses!!”

Maint. Cost

6 Acres

Lawn: 31,002$

Prairie Install Cost 34,320$ 1.28 Years

Prairie: 4,240$ Savings per Year 26,762$

of Prairie vs. Lawn

Cost Difference: 26,762$

Native Prairie vs. Lawn Is there a cost difference – YES

ROI of Prairie vs. Lawn Installation

* Does not include $30,000+ cost of sprinkler system.

Site: 4700 & 4850 Main St NE, Fridley, MN 55421

Actual data from Murphy expense records

Install Cost Install Cost

6 Acres vs. Prairie

Prairie 34,320$ -

Seeded Lawn* 48,000$ 1.4x

Sod* 111,000$ 3.3x

Site Level Green

Native Prairie vs. Lawn Is there an environmental difference - YES

Native plant materials selection.

No watering required, or significantly less in dryer climates.

No fertilization required.

Roots are deep and assist stormwater infiltration.

Large root systems sequester much more carbon.

Lawn Grass:

1-3 inches

Prairie Grass:

3-15 feet

Site Level Green

Native Prairies & Trees Environmental Metrics

Carbon Sequestration Annual Benefits 14 Acres of Native Prairie

24.93 MtCO2e/Year

732 Trees

275 Oaks, 274 Maples, 183 Spruce/Pines

117.1 MtCO2e/Year

Carbon Sequestered by Murphy’s Trees and Prairies over 14 years:

5,009,961 pounds

Site Level Green

Native Prairie vs. Lawn Do they look OK?

Neighbors love it…!!!

We run 37,000 trucks through the neighborhood yet the #1

thing I hear is…...“oh, you’re the guys with all the pretty flowers on Main St.”

Start-up Issue….

Prairie plants often do not meet city

lawn height ordinances!

Needed a variance in 1994 with 1st one.

Former Landscape Architecture student

of mine was Fridley’s Assistant City

Planner and understood what we

wanted to achieve and allowed us to

proceed - the rest is history!

Photos show native prairies at Murphy’s Campuses -

14 acres total at four facilities.

Prairies installed in 1994, 1996, 1999 and 2008.

Site Level Green

Edge Key Design Element

Much like a picture frame gives order to a busy painting, a cut lawn edge does the same for a prairie.

Site Level Green

Edge Key Design Element Without an edge prairies are very, very rough looking.

Note flowing line (“edge”) between prairie and lawn

Note straight line (“edge”)

Note flowing line / edge

between prairie & lawn

Native Prairie vs. Lawn Do they look OK?

Not only do neighbors love them We’ve been robbed twice!

One 4th of July a van was seen pulling away from the property with plants in back. Police arrested the individual.

Contacted Ron Bowen of Prairie Restorations

for a value per police request he responded:

“they’re priceless!”

These were 7 year old plants with deep roots.

Summer 2009 an elderly couple were seen digging up plants. Unfortunately not caught.

Site Level Green

Facility Design Stormwater Regulation Impacts

Changing facility design & management

Traditional Focus: get stormwater off-site fast

Today’s Focus: handle stormwater onsite and reuse

Few outside profession realize growing impact…!!!

EPA mandated cities to control their stormwater – quantity & quality

Regulations required cities to comply with no additional Federal Funds, thus local fees.

Stormwater fees growing 2000+ cities to date nationwide.

Minneapolis - $3,400 per acre (i.e. $0.12 per sq. ft. of warehouse). Most DC/warehouses use 20+ acres; cost is $68,000+/yr.

Site Level Green

Minneapolis Logistics Campus Stormwater Project 701 24th Ave SE, 55419

• 22 Acres, highly urban site

• Buildings dating from 1904 – 1980’s

• 24/7 busy logistics operation.

• 95% impervious before project

58% bldg., 37% pavement, 5% green

New suburban regulations often

require 25-40% green coverage

95% of Stormwater ran off site.

Kasota / Rollins Ave.

24th Ave SE still combined storm

/ sanitary line.

Site Level Green

Goal #1 – reduce or eliminate annual

stormwater fee of $68,000.

Goal #2 – we are here for the long haul,

therefore, be a good corporate citizen

and do the right thing.

Goal #3 – leverage environmental

leadership in our strategy.

Minneapolis Logistics Campus Stormwater Project

Two Solutions Explored

1. Underground Storage

Very expensive system – extra $300,000 for our

project & added 5 more years to ROI.

2. Permeable Pavements - Concrete, Asphalt & Pavers

Great idea – per respective industry associations: not capable today of withstanding the constant grinding & shear stress from truck’s turning while pulling back into docks.

Site Level Green

Minneapolis Logistics Campus

Stormwater Project

Basic Water Flow Design

Key:

Main Retention Pond

Bio Retention Basins

Surface and underground pipe flow

Underground only flow

Overflow release to area storm system

Prairie grass infiltration area

Key Person: Rebecca Kluckhohn, P.E. Email: [email protected]

Minneapolis Logistics Campus Stormwater Project

Net Result

100% stormwater fee credit

$68,000 annual savings

50% federal depreciation deduction*

* NOTE: not known till after completion.

NOTE: Original design generated 78% stormwater fee credit.

“As-built” drawings = 102% net credit.

Site: 22 acres

% impervious: 95%

Project Cost

(Design + Const.) 580,000$

Annual Storm water Fee 68,000$

Payback in Years: 8.53

+ Federal Stimulus Package

Immediate 50% Depreciation: 290,000$

7.0 yrs after Fed Credit & Tax Impact

8.5 yrs simple pre-tax basis

Minneapolis Logistics Campus Stormwater Project Major Retention Basin in photo

Site Level Green

Major Retention Basin NW Corner of Site

Photos Show 1st Year Growth

Site Level Green

Major Retention Basin NW Corner of Site

Photos Show 2nd Year Growth

Important to recognize that native prairie plantings will take 3 years to show maturity. One must be a bit patient.

Site Level Green

Facility Design Gray + Green Infrastructure

Cities starting to treat & regulate street trees like sewers and roads.

To handle urban heat, stormwater, and improve real estate values thus higher property tax values.

Only a matter of time before they look to private property to help in this cause.

Gray Infrastructure Green Infrastructure

Site Level Green

Green Urban Infrastructure Why Trees Will Be In Your Future

Trees and Stormwater Management

Mature trees hold nearly an acre-foot of stormwater…!!!

Mature tree’s leaves & branches hold 80% of 1” rain in 24 hrs. In Minneapolis this represents 90% of all storms!

Reducing stormwater prolongs life of sewers and pipes. Cities today can’t afford to replace current old and wearing out systems!

Site Level Green

Urban “Heat Island” Impacts From Trees

Urban Infrastructure

New planting technologies allow more: Tree root growth - thus bigger trees

Stormwater - holding & recycling

Gray Infrastructure - reducing stormwater prolongs life of sewers and pipes. Cities today can’t afford to replace current old and wearing out systems

Shade - more due to bigger tree growth reducing urban heat island impact

Increased property values

Silva Cell example in Minneapolis (http://www.deeproot.com)

Technique readily useable on Logistics / DC Campuses

Site Level Green

Energy Creation - Solar Power Roofs - Large available flat areas “just sit there” LEED Credit Points….

Commercial solutions include:

“Solar Energy Service Provider” - 100% responsibility to design,

build, own and operate the asset - including all upfront purchase

and installation costs….challenge in Midwest – utility rates too

low for economic models!!!

….to solutions where building owner owns the solar assets and

provider merely design-builds the system.

Staples Store, CA

2 Solar Providers:

Site Level Green

Energy Creation Solar Power

Myth: Solar PV better in hotter climates.

Fact: Solar PVs are more efficient the colder they get. Minnesota’s climate is perfect!

Site Level Green

Energy Creation By Murphy

4th Largest Solar Energy Producer in MN Ikea is #1 & other in top 10 are government entities

Murphy installed 8 systems 2010 - 2012 320KW total power

5 buildings

Fridley Logistics Campus: produces 50% of energy use on 2% of roof…!!! 2 LEED Gold site

5 Major Innovations (state of art in world today):

Run at low voltage – increases efficiency and solves fire department issues with live systems; system can be turned off when fire dept. shows up for fire!

Solved “shadow problem” – shading a portion of panel now doesn’t shut system down!

Can Utilize 3M Solar Reflector Tech – only solar manufacturer who can utilize this boasting power.

Smart Panel Technology – panels only produce power when asked by control device.

No Roof Penetrations – held in place by weight array (vs. attaching to roof with potential roof leaks!)

Site Level Green

Energy Creation ROI of Solar Power

1st Three Systems in 2010 Project Cost for 120KW power: $1,000,000

• Normal, non grant supported solar ROI period is 20-25 years.

• Murphy’s project ROI period is 4 years…!!!

4 Grants at work here:

1. Xcel Energy Grant (Utility Company)

2. Federal Stimulus

3. State Stimulus

4. State special grant for using MN solar tech.

Murphy paid $90,000 (of $1M system cost)

3M Solar Reflector Film

tenKsolar Panel

Site Level Green

Energy Creation 2012 Case Study in Eagan

350,000 sq. ft. Building Built 1978-80

Empty for 8 years

2012 Murphy purchase

$3.8M in upgrades • Lighting

• Fire System

• HVAC

• Dock equip.

• New access road

• Re-establish rail

• 90 trees

• 1.5 ac. Native prairie

LEED Platinum / Gold target

40 KW array - Nov. 2012 install

40 KW Solar PV

Energy Creation 2012 Case Study in Eagan

40 KW Solar PV Array Dakota Electric vs. Xcel ROI

Jon Kramer

NABCEP certified PV installer

Sundial Solar

office phone: 612-926-8506 cell phone: 240-463-3688 website: www.sundialsolarenergy.com

Dakota Electric Xcel

Site Level Green

Energy Creation Eagan ROI of Solar Power

Why Install with 11 Year ROI? SBA Mortgage Loan Impact

• Original finance goal was to secure an 80-20 loan structure (80% loan with 20% Murphy cash investment).

Market is closer to 70:30 to 75:25 structures

• Explored 5 different banks, 1 REIT, and the insurance market.

• Two of the banks suggested we explore SBA track as part of total mortgage package.

• Because Murphy, plus others in our industry, have large buildings with few employees per sq. ft. we never meet SBA criteria. This time it was no different.

• HOWEVER…..when the SBA saw on our application that we are installing solar power (i.e. renewable energy) we automatically became eligible!

• Result: 95:5 structure….unheard of today!!! 95% is mortgage with only 5% Murphy cash

Murphy Minneapolis Logistics Campus

1 of 4 solar arrays onsite

Site Level Green

Energy Creation Eagan ROI of Solar Power

SBA Loan PR Benefits From Murphy’s Education Effort National + Local Coverage

DC Velocity Dec. 2012 Issue Mitch Mac Donald Byline Will highlight the SBA loan to Murphy and how it represents the 1st time many have heard of direct benefits for being green esp. for mid-market sized companies.

The impetus for this article came from Richard’s sending Mitch a note re this interesting situation. Mitch also highlighted Murphy in 2010 as seen below – the 1st time he has ever used a company name in his byline title!!!

Lawn Irrigation Sustainability Eagan Site

Smart Management Tool at Eagan Plant Need + Soil Moisture Level + Rain Forecasting & Adjustment

Soil moisture sensors Weather adjusted irrigation 24/7 automatic site monitoring Internet mgmt. Est’ed ROI: 3 years

Site Level Green

Lighting Since 1980’s Have Been Changing Fixtures w New Tech

ROI of 1.8 Years Typical

Minneapolis Site: 3x so far since 80’s

Fridley Central: new bldg. in 1999

and changed fixtures after 5 years

All facilities now T-8

Site Level Green

LED Lighting Leading Edge in Mid-West For Facilities 100,000 sq. ft. +

Murphy Eagan

350,000 sq. ft. in size

Built in late1970’s

Old high pressure sodium

Upgrade options: T-5 or LED

Existing

Proposed

Vs.

LED Lighting Why?

Multiple Benefits:

Long-term energy use reduction

Long-term maintenance cost reduction

Fluorescent lighting needs the bulbs

replaced every 2.5 - 3 years.

LED fixtures will not be touched for 40-

50,000 hrs. or 20+ years!

LEED / Energy Star impacts

PR Leverage value in corporate strategy ROI

Install Energy Cost Savings Period

Fixture KW Cost * per Year per Year Years

HP Sodium 223.16 -$ 64,937$ -$ n.a.

Existing

T-5 118.56 210,000$ 23,576$ 41,360$ 4.1

LED 89.38 445,000$ 17,773$ 47,164$ 7.8 **

* Includes sensors on each fixture.

** Savings from no T-5 bulb replacement & disposal every

3 years not included. Dakota est'ed utility credit included.

Site Level Green

3873

724

0

500

1000

1500

2000

2500

3000

3500

4000

Typ. Warehouse / DC

Murphy Warehouse Bldg.

Only

Met

ric

To

ns

of

CO

2e p

er Y

ear

GHG Emissions MeasurementTyp. Modern DC

vs. Murphy Northtown DCMetric Tons of CO2e per Year

Toward Carbon Neutrality Murphy Northtown Fridley Facilities 500,000 sq. ft.

12.83% carbon emission vs. standard warehouse **

** Source: US EPA / US DOE Energy Star Program; 3873 GHG reflects an

average warehouse with score of 50. Murphy bldg’s scored 99 & 98

respectively out-of-possible 100 points, thus placing them in top 1% category.

GHG Emissions for Warehouses

Metric Tons of

CO2e per Year

3873

724

3149

Additional Emissions Reduction Measures

142

85

227

Toward Carbon Nuetrality

724

227

497

Total Additional GHG Emission Reduction

Actual Murphy Bldg. GHG Emissions

Total Murphy Additional GHG Emission Reduction

Net GHG Emissions (for a 406,000 sq. ft. warehouse)

Murphy Warehouse - Moving Toward Carbon Nuetrality

Typical GHG Emissions (460,000 sq.ft warehouse)

Actual GHG Emissions (Murphy's actual same size bldg.)

Emissions savings due to energy efficiency measures

On-site Carbon Sequestration in trees and prairie

Altnerative energy generation (Solar PV power)

100%

12.8%

724

-142-85

497

-150

-50

50

150

250

350

450

550

650

750

Murphy Warehouse

Bldg Only

Tress & Prairies GHG

Sequestration

Solar Power GHG

Reduction

Net Murphy Campus GHG

Metr

ic T

on

s o

f C

O2e p

er

Year

GHG Emissions MeasurementMurphy Northtown Campus

Metric Tons of CO2e per Year

Raising The Roof In Eagan To 32’ - The Modern Building Standard

Going to 32’ Would Increase Building Value Geographic Location Lends Positive Support Reviewed and put on hold for now due to budget

Current Bldg. heights are 20 & 22’

Raising roof is approx’ly $8 / sq. ft. ($2.8M)

Cheaper than new construction

Designing new fire sprinkler system and lighting to work with few modifications at 32’

Will re-review / consider over the next decade.

Photos: Albertson 600,000 sq. ft. DC Chicago – 18’ up

to 38’

Experts in field:

http://www.rooflifters.com/

Site Level Green

Why does Murphy voluntarily do green projects and practices?

Their leader is a Landscape Architect –

“what can we say”

As a 4th generation family business we

are in for the long haul.

We believe its important to be a leader -

being green is important today and

will grow more so soon.

Major corporations (our customers) have

/ will have within a few years “Green”

Initiatives that require our

participation.

They need assistance from their Carriers,

3PL’s, Suppliers, etc. to contribute to

their “greenness” measures.

In the long run green practices are showing financial paybacks.

But, in some cases you must be willing to take the longer term view.

Murphy’s stormwater project ROI period: 7.0 years (after Fed credit & taxes).

Murphy’s native prairies ROI period: less than 1.2 years

Murphy’s traditional lighting retrofit ROI

period: 0.8 - 1.5 years.

Murphy’s Solar Energy Projects ROI:

4 years. (w/out Subsidies: 20+ Years.)

Feasibility and short ROI period

result of four major support programs:

Federal, State (Regular + MN

Manufactured Equip.) and Xcel grant.

Typ. Wall Street Firm ROI period:

2 - 3 years, maybe 4. – making some

green practices hard for Fortune 500

companies to approve during recession.

LEEDing The Grounds: Finding Economic & Sustainable Returns

USGBC Building Green Conference

Duluth, MN

October 24, 2012

Richard Murphy Jr. President & CEO

Murphy Warehouse Company www.murphywarehouse.com

&

Adjunct Professor of Landscape Architecture

College of Design, U of MN

and

Past Chair

Council of Supply Chain Management Professionals (CSCMP)

Center For Transportation Studies (CTS), U of MN

American Society of Landscape Architects – MN Chapter

E-mail: [email protected]

Web: www.murphywarehouse.com