Bank of America's Bold Statement in Green

The bank's Cook+Fox-designed tower will be the second-tallest in New York City and a wonder of environmental responsibility

by Adam Aston

Times Square's claim to fame is its million-watt light show and sky-high electric billboards. As much as the New York City landmark is a celebration of capitalism, it's also a crackling, pulsing symbol of energy excess. But just a block away on the Avenue of the Americas, a new crystalline tower is rising that's turning heads for the opposite reason: its unprecedented efficiency.

Designed by Cook+Fox Architects, and co-developed by Bank of America with the Durst Organization, the 55-story tower will be the most prominent addition to New York's skyline in a generation, as well as being the most energy-efficient, water-saving, and healthful office tower ever built.

Even by the outsize standards of New York real estate deals, Bank of America Tower at One Bryant Park is an exercise in superlatives. Budgeted at around $1.3 billion, the building will stand 1,200 feet tall, making it the city's second-highest structure, after the Empire State Building.

The project occupies one of the last remaining large plots adjoining Times Square, a site the Durst family pieced together over 40 years. But in the increasingly eco-aware business of U.S. office construction, it's the tower's green features that are getting all the attention.

Financially Responsible

From the Carolinas to Chicago and L.A., architects are competing on green features as much as they used to over innovative design or building height. And among deep-pocketed developers, anxiety about the prohibitively high up-front costs of building green is waning.

As costs fall, the appealing financial performance of existing green buildings becomes clearer. In a 2006 survey of developers by McGraw-Hill Construction (MHP, MHC is owned by the same corporate parent as BusinessWeek), respondents reported they expected to see occupancy rates for green buildings 3.5% higher than market norms, with rent levels increased by 3%. Operating costs are expected to be 8% to 9% lower, as well.

The economics are straightforward: More rental income minus lower operating costs makes for a more valuable property. Respondents to MHC's survey anticipate green building values will rise by 7.5%, which in turn should improve their return on investment by 6.6%.

These numbers are getting the attention of developers and driving the growth of eco-construction. Nationally, about 2% of today's new, nonresidential construction is considered green, estimates the MHC study. From last year's $3.3 billion, green office and retail construction is expected to surge by up to 10% a year, to $20 billion, by 2010.

Costs Backing Down

Given New York's love affair with tall towers and the unmatched scale of the city's real estate market, it's no surprise that Manhattan is emerging as the epicenter of green high-rise construction. Bank of America's tower will be the greenest of a surge of eco-friendly office buildings sprouting up in midtown and near Wall Street.

First to open was 7 World Trade Center, the start of new construction at Ground Zero. Next was Foster + Partners' stunning addition to Hearst's headquarters in midtown. And nearing completion just a few blocks west of Bank of America Tower on 42nd Street is Renzo Piano's New York Times Building.

The flurry of eco-construction reflects builders' growing confidence that the extra costs of building green are a good investment. The up front costs of building green are still higher than using conventional materials, but that premium is shrinking. Just a few years ago, green construction could cost 10% or more than standard construction.

Today that margin has fallen into the range of single digits. As the market for green materials and design expertise has grown and matured, "the supply of materials and services is going up and the price is coming down," says Taryn Holowka, communications manager at the U.S. Green Building Council (USGBC).