Winter 2008 | Volume 88, Number 2

FEATURES

MICHAEL KEVIN DALY
Mark Edlen and Bob Gerding

Green Makers
Almost no one cared about sustainable property development when Bob Gerding ’61, M.S. ’63, Ph.D. ’67, and Mark Edlen ’75, M.B.A. ’76, formed their company. Now they’re the LEED-ers of the pack.
by Todd Schwartz

Green.

It’s the color of the day.

It’s the color of the sustainability movement. It’s the color of money.

And whether you’re all about the biosphere or all about the Benjamins, only the most fervent antidevelopment types would refuse to salute the green flag of Gerding Edlen Development, who, according to the U.S. Green Building Council, have developed more Leadership in Energy and Environmental Design (LEED)-certified buildings than anyone in America.

The one-time biochemist and the one-time suburban kid have done more to reimagine and reshape the urban core of Portland—and now other West Coast cities—than anyone, with the possible exception of fellow megadeveloper Homer Williams. And they’ve done it as greenly as the changing times and evolving technology would allow for more than a decade—which in the world of sustainable development makes them the Big Bang.

For the first few years, the sustainable-building universe was expanding at considerably less than the speed of light, and the self-described team of “one tall bald guy and one short bald guy” were the butt of countless industry jokes, with their mantra of motion sensors and dimmable light ballasts and operable windows and energy savings. But that was back in the last century. Now, in the world of 2008, the other developers just follow the Gerding Edlen LEED.

Since the two kindred spirits first met, they have been willing to break new ground as they broke new ground, you might say. Yes, they’ve also gotten wealthy, and no, they aren’t perfect environmentalists. But with even the best-intentioned development, as with sustainability itself, there are always tradeoffs. Still, while many real estate developers’ carbon footprints resemble a Sasquatch in a two-week clog-dancing marathon, Gerding and Edlen continue to aim for a relatively respectful bit of soft-shoe.

• • •

Robert (Bob) Gerding ’61, M.S. ’63, Ph.D. ’67, remembers the greenhouse where he would watch his grandfather carefully graft roses to create new strains. That’s where Gerding’s love of biology and the natural world took root. That same grandfather scraped together enough money to buy a large piece of land in southwest Portland, which he subdivided into one of the city’s earliest postwar suburbs. For Gerding, another seed was planted.

“I never thought I was like him,” Gerding says. “But he was very intense, very determined to do whatever he set out to do. And he was successful. I’m proud to be compared to him.”
They didn’t have much time together—Gerding’s grandfather died when Gerding was just eleven years old—but he learned a lot during the time he had.

Gerding graduated from Portland’s Lincoln High School in 1955 and traveled south to Eugene to begin pre-med. He left the UO after his freshman year for two years of military service, then came back to Portland, where he worked full-time and went to Portland State University. But UO biology professor Jacob Straus urged him to come back to Eugene and, with the late professor Aaron Novick, encouraged Gerding to pursue research rather than medicine. After earning his master’s degree, he spent time at the University of California at Berkeley, then returned to the UO to complete his doctorate in biochemistry under professor Ray Wolfe.

“At the end of the ’60s, we dreamed of having our own labs and our own research grants,” Gerding says, “but with the Vietnam War going, all the grants dried up and there were just no jobs at major universities. I had a family; I couldn’t afford to be a postdoc forever, so I went into clinical biochemistry and starting running a hospital lab.”

He began to learn as much about the business of running a lab as he knew about the science. Soon he was designing new lab facilities and consulting on their construction and early computerization. He was moving closer each day to that other path he learned from his grandfather: real estate investment. By the end of the 1970s, Gerding was buying, fixing, and reselling properties.

“The training I received in science and research was the biggest thing in my life,” he explains, “because it gave me the ability to independently learn anything and to do anything. I’m a strong analyst and an innovator directly because of my doctoral training and the professors who taught me. And they were also responsible for my attitudes about protecting the environment. Plus, trying to scare up research grant money is great training for trying to find investors for a real estate project!”

Gerding’s first major commercial project was the redevelopment of the ADP Plaza building in Portland. He met a forthright commercial real estate broker named Mark Edlen, who was representing one of the tenants interested in the ADP building. He liked him right away.

“I found him to be extremely tough and bright, and an absolutely straight-ahead, high-integrity person,” he says. “When he said something, he never wavered from what he said or what he promised.”
Then, in 1993, Gerding finally had a chance to build from the ground up and to begin going green. Pacific Gas Transmission decided to move its corporate headquarters to Portland, and the company’s CEO, Steve Reynolds, was one of the first executives committed to creating an environmentally conscious and energy-efficient building. When the project was done, they had built a structure that saved more energy than any other building in Portland ever had. Real estate broker Edlen was also involved in the PGT project as the owner’s representative, and again he and Gerding clicked.

“I wasn’t looking for a partner,” Gerding explains, “I just really liked Mark. And we worked well together. He was very capable and I was very capable, but when you put us both together we were a lot more than that.”

A year passed, then one day Gerding phoned Edlen and asked if he’d ever thought about going into development . . .

• • •

Mark Edlen, ’75, M.B.A. ’76, was born in Fort Madison, Iowa, a town of not quite 10,000 people in the state’s southeastern tip, beside the Mississippi River. At eleven, he moved with his family to the western ’burbs of Portland, in Beaverton. His father was a lumber salesman, his mother worked at Sears and was a homemaker, and Edlen (pronounced “EED-len,” as in LEED) grew up in what he calls a “T-One-Eleven special,” the kind of inexpensive plywood tract homes that proliferated after World War II. Edlen has been interested in finance and real estate since he was a kid, and he’s always been a go-getter. During his last two years at Sunset High School, he was working nearly full-time as a journeyman clerk at Safeway, making good money.

So when he found himself at the UO, as the first in his family to go to college, majoring in business was a foregone conclusion. He powered right through to his M.B.A., then went to work in sales for Xerox in Portland.

“It was a great opportunity to learn about corporate America,” Edlen says, “and it very clearly cemented my notion that I wanted to stay in Oregon and not transfer around the country. I love it here.”

Where else could Edlen so easily enjoy the many outdoor pursuits he had come to enjoy as a dedicated member of the UO Outdoor Program, where he had backpacked and climbed and kayaked? So, after two years, when Xerox asked him to transfer, Edlen left the company and started a small residential real estate brokerage. The brokerage grew, but his background and education kept leading him toward the larger-scale commercial side of the real estate business, and in the early ’80s he joined the firm of Cushman and Wakefield as a leasing agent. He would be there for fifteen years.

Along the way, he represented Bank of America as they explored leasing space in a building being developed by a team that included a former research scientist named Bob Gerding.

“I was impressed right away by how smart Bob is,” Edlen says. “He’s one of the best big thinkers I’ve ever met, and with him the glass isn’t just half full, it’s overflowing onto the table! We had a natural fit with each other, a very candid relationship.”

Not long after their first encounter, Edlen again found himself working on a build-to-suit project that involved Gerding and a new aspect: a focus on energy cost savings, a prosaic but powerful bottom-line concern that is really where the seeds of green building germinated.

“That project went very successfully, and before long we had teamed up to acquire a piece of dirt in John’s Landing for a project. At that point in time I called Bob and said, ‘This is ridiculous—we ought to start a company.’ So that’s what we did.”

• • •

Regardless of who called the other first, it was an effective partnership, in that their skill sets were so complimentary, and a unique partnership, in that no specific division of labor was established.

“We’ve never really delegated responsibilities to one or the other of us,” Edlen points out. “We worked collaboratively from the first day.”

And it was also a partnership born in the mid-1990s, when the U.S. economy was on a drunken-sailorish multiyear bender—a fine time to be in the development business. Gerding Edlen’s bread-and-butter work, build-to-suit corporate office space, was the foundation of the firm—and still is, even though it’s their condos that get all the press. The company grew quickly, in part because of their mutual backgrounds on the service side of commercial real estate.

“Since we came from commercial sales and leasing as opposed to the sticks-and-bricks side or the financing side,” says Edlen, “we were really prepared to think hard about who our customer was and how we could serve them, how we could out-deliver their needs.”

They were also able, like the first mammals, to do business around and under the heavily capitalized but lumbering feet of the giant developers.

“We were able to kind of work in the seams, so to speak, or the voids,” Edlen says, “whether it was a historic rehab, or a public-private partnership, or a client who had some needs that were a little off-the-wall or left-of-center. We were able to work with them and to find solutions to what their needs were, clients like [advertising giant] Wieden+Kennedy, Portland State University, InFocus—whomever. It really created opportunities.”

From the first, Gerding Edlen seized those opportunities with a novel combination of bottom-line sense—they didn’t care if their clients’ only motivation for saving energy and resources was cutting costs, as long as it got done—and high-angle vision: They were able to convince those same clients to spend a little more in the short-term to save a lot more over the long haul.

“We were good at coming up with ways to convince both clients and governments to try new things,” Gerding says. “We would propose both a building and process to get to that building. It’s a lot like winning a research grant—you must have a well-formed argument and a facility for creating an effective public-private partnership. And it takes patience to do new things in this industry—with each new social or environmental goal you hope to achieve, you have to demonstrate commercial viability in either cost-savings or productivity gains.”

Project by project, Gerding Edlen and their team of local architects, engineers, contractors, and vendors—to whom they remain steadfastly loyal — changed the face of a city and began to get noticed around the country and around the world for their commitment to what was becoming known as green building. The Wieden+Kennedy headquarters, as well as Portland’s Brewery Blocks, Pearl District, and South Waterfront neighborhoods, are icons of sustainable development and what Gerding and Edlen call “placemaking.” Now they’ve even expanded their signature style to the world capital of baby-you-can-drive-my-car: Los Angeles.

“We have formulated a notion that we call 20-minute living,” explains Edlen. “We look for development opportunities where, within 20 minutes, people can walk or bike or take public transportation—basically anything but get in their cars—to work, school, cultural events, restaurants, grocery stores, and more. We work with the idea that if we can build in environments where there is alternative transportation, and build as sustainably as possible, we can leave a much softer footprint. We think about how we can use as many locally sourced materials as possible, and what those materials are. All the cabinets we use are sustainably grown agrifiber, the floors are sustainably grown and harvested woods, we’ve gotten the toxins out of the paints and glues and carpets, we introduce a lot of fresh air into the buildings—today, if you aren’t building in a sustainable fashion, I think you will very soon be seen as creating buildings that are obsolete even before they are completed.”

• • •

The state-of-the-green in sustainable building today is represented by LEED platinum certification from the Green Building Certification Institute, which is the nationally accepted benchmark for measuring the “design, construction, and operation of high-performance green buildings.”

In 2006, working with Oregon Health & Science University, on land fronting the Willamette River in Portland that had for years been an industrial dumping ground, Gerding Edlen and their team completed what may well be the greenest commercial building in America. Its south side is covered in photovoltaic panels; 100 percent of the sewage produced inside is processed internally (it isn’t even attached to the city sewer system); its toilets flush and its landscaping is irrigated with rainwater (in fact, the building can process so much of what would normally be runoff that it is a net exporter of water to the city); and the combined on-site heat and power production annually slices some 9 million pounds of carbon dioxide from its carbon footprint.

Both Gerding and Edlen are proud of the OHSU Center for Health and Healing, and both are also completely, and probably congenitally, unsatisfied.

“I’ve decided I’m probably going to be frustrated for the rest of my working life,” says Edlen, “because we’re just not getting there fast enough. Recently we were able to develop this building that is very successful in processing sewage and capturing water, to the point where we aren’t on the sewer and we export water. It’s been tougher on the energy side. The best we’ve done so far is a 60 to 65 percent savings in energy over a comparable code-designed building. That’s a platinum-level project. But we still have a long way to go to get to buildings that sustain themselves.”

According to the U.S. Green Building Council, commercial buildings use 60 percent of all the electricity consumed in America, so Gerding and Edlen hear the clock ticking.

“Over the next four years,” Edlen declares, “we will be trying to get to the point of building buildings that consume more waste than they produce and produce more energy than they consume. And which do the same thing with water—because water will dwarf energy as the most serious shortage we face. Getting to that point will be a tall order! But I think we’ll get there. People are much more aware of and sensitive to these concerns, and we’re seeing large-scale customer demand for green buildings. Just three or four years ago, maybe only 5 percent of our customer base was concerned about sustainability. Now they understand—and are willing to pay for—the importance of sustainability. They see the payback.

“But I also still get plenty of people saying to me, ‘How much more does it cost?’ My sense is that, on a $100 million building, to go from [LEED] silver [certification] to gold, you’re probably talking three quarters of a [percentage] point to one point. To go from gold to platinum, you’re probably talking about a couple of points. But then, what’s your payback? And what kind of incentives or tax credits are out there? When we started doing this stuff ten years ago, it was maybe 3 percent more costly to get to the equivalent of LEED gold. But today, because we’re smarter about how we’re doing this, and our architects and engineers and contractors have been doing this with us for ten years, that’s changed for the better.”

“Sometimes,” Gerding adds, “Mark and I get credit for being gurus or whatever about sustainability. But it was a team effort. All of this stuff was. And everybody had to buy into it. They had to buy into working hard and being innovative. Mark often talks about the principle of having a team, and we all go into the ditch together—if we get into a ditch—and we’ll all get out of the ditch together.”

• • •

Sometimes the ditch becomes a canyon, and the economy itself falls in. Like in 2001, when Gerding Edlen Development had just dug a very large and expensive hole for the Brewery Blocks project—and then September 11 happened. Or today, when the real estate market and the banking industry have dug a ditch that is rather ominously grave-shaped.

While neither Gerding nor Edlen are particularly eager to discuss the down times, they have survived, and no doubt will, by once again returning to their warm-blooded instincts of being quicker than the dinosaurs.

“We were commercial office developers long before we were condo developers,” Gerding says simply.

“We’ll weather this period,” Edlen says. “We’ll shift as the market shifts. One example is our South Waterfront District project called 3720—instead of selling condos we’re going with apartments. We’ll certainly be doing more office development work than we have in recent years. It has always been all about problem solving, and we have an exceedingly underrecognized and underappreciated design, engineering, and construction community right here in Portland. We will remain nimble, quick on our feet, and entrepreneurial. And we’ll keep looking all over the globe for the best ideas. What I call the Big Stupid Idea, the one that no one thought would work and ends up changing everything.”

Gerding is mostly retired these days and, with his wife Diana, devotes himself mainly to philanthropy (witness the acclaimed Bob and Diana Gerding Theater in Portland, where the decrepit Armory building was transformed into the nation’s first National Register of Historic Places building and first performing arts center to achieve LEED platinum certification) and some consulting. Edlen (a self-diagnosed “news junkie” and a voracious reader of periodicals) and his team of architects and builders travel widely in Europe, Asia, and elsewhere looking for breakthrough ideas, trends, and technologies.

“We don’t have all the answers here,” he says. “We don’t even know all the questions. So by traveling and being open to new things, we can experiment with our own projects and bring what’s working around the world back here. Buildings are assets with 100- to 200-year life cycles, so all developers have a responsibility to build quality, sustainable projects that don’t spend the next century wasting resources.”

Gerding, naturally, agrees: “We need to continuously reimagine the city and the ways we live in it for the coming centuries, and we need to have government leaders as well as private leaders accomplishing that vision, so that the next generations of people like Mark and me and the team with which we work can build that future.”

• • •

In that future, obvious things will happen: “More and more emphasis will be placed on living close to public transit lines,” says Edlen, “whether it’s in Hillsboro or Gresham or urban Portland, in our case; or in any part of any city in the country.”

And less obvious things will happen: “Buildings will be viewed more as vehicles to create social interaction than as commodities,” Edlen continues. “With wise placemaking—creating interesting places for people to live, work, learn, and interact with each other every day—buildings and neighborhoods and how they are developed really create an opportunity to do something different and better. I grew up in the suburbs, but that way of living and working just isn’t sustainable over the long run. Getting up in the morning, going to the garage, hopping in the Chevy, driving thirty minutes alone to park in another garage and go up to your office, then doing it all in reverse at the end of the day—that’s just not going to be seen as a high-quality lifestyle.”

And in fact, Gerding and Edlen will be the first to admit, the old notion of the haves living in the suburbs while the have-nots live in the inner city is beginning to reverse. Virtually all of the condos that Gerding Edlen and other urban-core developers have built are priced for the moderately to substantially affluent. Before recent decreases, prices were routinely topping $400 to $500 per square foot of living space. At that rate, the future city might just look like a replay of the Middle Ages: the elite live inside the walls while the modern-day serfs populate the surrounding lands.

“We are beginning to understand,” Edlen says, “that a vital piece of sustainability is social equity. How can sustainability be brought to those who aren’t affluent? We need to create buildings and places that let people live a high-quality lifestyle and do it in an energy and cost-efficient manner, so that more of their incomes can go toward food and education and the like, and less toward the costs of transportation. It’s a challenge we all face, and one we haven’t done well with as an industry. But we will continue to address it—our company just completed 140 units of affordable housing in conjunction with the Housing Authority of Portland. They are LEED gold-certified and targeted for people at 25 to 70 percent of median family income. It’s our responsibility to address that challenge.”

So, okay, Mark Edlen and Bob Gerding are developers, and maybe you’re no fan of development.

Or maybe you live (or used to live) in a neighborhood that has been drastically reshaped (and concurrently repriced) by one of their developments. There are always tradeoffs—the paper-or-plastic conundrum. At one point in the conversation, Edlen slaps the wood of his conference table and says: “See this? This is the same certified, sustainably grown-and-harvested wood we use for the floors in many of our buildings. It’s the greenest hardwood source we have found. But it’s grown in South America, then shipped to China to be milled, then shipped here! Is that really an improvement in our footprint? In the end, all you can do is use your best judgment and never stop looking for better solutions.”

And all we can do is give Gerding and Edlen the benefit of the doubt. They share a love of the great outdoors and the natural world. They have put their money where their green is for the life of their company. The biochemist and the suburban kid have been green-makers longer and more often than probably anyone else in the country. It hasn’t always been easy—you try spending months in meetings attempting to convince city code officials that it’s really all right, really, to flush toilets with rainwater. They preach (and then actually build) sustainability, social interaction, creative placemaking, ethics, and transparency in all their dealings.

Here’s the thing: Until the lights go out on this particular branch of the primate tree, development is inevitable and can be beneficial—and, if every developer thought like these two guys, those sustainably powered, natural-light-augmented, motion-controlled lights will stay on much longer.

Todd Schwartz ’75 is a Portland writer who is committed to minimizing his carbon footprint by substantially limiting the hours he works each day.

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