As more and more office buildings implement recycling programs to reduce waste, real estate industry representatives are beginning to think about ways in which they can get office tenants to purchase recycled products.
Creating this demand for recycled goods is necessary to ”close the loop” on the recycling process, environmental experts point out. The continued success of office recycling programs may well depend on the development of new recycled products and the commitment of office workers to use them.
”The (paper) industry is spending hundreds of millions of dollars to make that happen,” said Mike Audit, manager of environmental solutions for Scott Paper Co. ”It might not be happening as quickly as some of you would like, and it can take years yet, but it`s a challenge I believe will be met.
”We must educate the tenant to help create a market demand because the tenant has the most leverage on purchasing power,” Audit said. ”What we`re seeing in the market is that consumers` actual behavior (in buying recycled products) does not yet equal their expressed area of concern (about the environment).”
Audit was one of several speakers on a special recycling panel at the annual convention of the Building Owners and Managers Association held recently in Nashville. BOMA this year has been active in promoting recycling programs in commercial office buildings.
”Recycling is here to stay, and those who establish voluntary programs before the government mandates them will be in a better position in regards to their tenants,” said Roland Downing, president of BOMA.
About a dozen BOMA chapters have helped set up voluntary recycling programs for member buildings in those cities, including Chicago.
One of the latest owners to jump on the recycling bandwagon in the Chicago area is Homart Development Co., which has implemented a point of generation program at its Unisys Center I and II in west suburban Lombard.
The program, operated by Melrose Park-based United Fibers Inc., will involve about 1,300 workers in the twin building, 355,000-square-foot project at 333 and 377 Butterfield Rd. United Fibers officials estimate participants will recycle about 190 tons of paper each year.
Homart is one of more than two dozen Chicago-area corporations and developers participating in United Fibers` program. Numerous other buildings downtown and in the suburbs have designed recycling programs of their own or worked with other waste haulers to implement recycling.
”Our tenants have embraced the program and we expect a dramatic reduction in our waste removal costs because of it,” said Kathy Holz, Unisys Center general manager.
Tenants across the country have been embracing recycling. But only now is a national effort being mounted to give those programs some added direction.
”We`re trying to bring the public and private sectors together to promote a national strategy for office paper recycling,” said Brian Day, director of the National Office Paper Recycling Project, a program of the U.S. Conference of Mayors.
”The goal is to maximize recycling and minimize disposal. We`re targeting two audiences: local government units and building managers,” Day said. ”But I don`t just mean we`re talking about (waste) separation. The loop includes promoting the remanufacture and repurchase of recycled products.”
Eight corporations are part of the recycling project: Waste Management of North America Inc., International Business Machines Corp., Eastman Kodak Co., Xerox Corp., Boise Cascade Corp., Fort Howard Corp., Green Bay Packaging Inc. and Weyerhaeuser Co.
Public sector participants include the National Association of Counties, National Conference of State Legislators, National League of Cities and the mayors conference. Industry trade groups such as BOMA are associate members of the project.
”In our first year we have found that we don`t have a good material handle on what`s going on, we`ve not got a good picture of where we are using all that paper,” Day said.
Day said that a national database is being prepared for the group and that the results of that study should be available soon. That study may give some insights into ways to motivate office supplies purchasers to help close the recycling loop, Day said.
”The problem today is that there are not enough paper mills consuming this (recycled) material. It`s a supply and demand situation and the oversupply right now could last until 1993 or 1994. We`ve got to buy recycled products to close that loop,” said Marshall Friedman, director of paper fibers for Waste Management.
There are a number of places to find help in buying recycled products, including the Recycled Products Guide, published by American Recycling Market Inc. in Ogdensburg, N.Y., and the PaperMatcher program of the American Paper Institute in Washington, D.C. The U.S. Conference of Mayors runs a recycled products procurement assistance program.
”There are new office products that are coming out made of recycled material. We have to buy recycled. We need to strengthen those markets,” said Anne Marie Alonso, director of the New York City council on the environment.
Alonso has helped set up more than 200 recycling projects in New York, including more than 20 in the last year, and is credited with starting the first multitenant recycling program, in 1988. Alonso today has 14 multitenant programs running in various New York high-rises.
”For years we`ve known there is a waste disposal crisis coming and indeed it has arrived in New York, where we have only one landfill left,”
Alonso said. ”Siting new landfills is difficult and expensive, and incinerators cost millions and are controversial. So our options are not very good.”
”However, we do have recycling and we do know that it works,” she said. An audit of two major corporations in New York City found that 50 to 60 percent of the waste coming out of their offices was high grade paper, the kind that is easily recyclable, Alonso said.
Disposal industry estimates say that each day the average office worker throws away at least 1 1/2 pounds of trash, about 80 percent of which is paper and about one-third of which is high grade ledger or computer paper.
Because disposal costs are generally passed on directly to office tenants as part of their leases, companies do have an economic incentive to recycle. But how financially successful a program is can depend in part on the prices paid for waste paper.
”The economics of a program can change dramatically with changes in the market,” Friedman said. ”Prices can fluctuate wildly and fluctuate monthly.”
More demand for recycled products would keep prices up for high grade waste paper, thus making recycling programs more valuable to owners and tenants.
Although the cost is small relative to other operating expenses, perhaps only about 5 cents per square foot, waste removal has been one of the fastest growing components of office operating expenses in the last few years and is expected to accelerate even more in the coming years.
Alonso said that Citicorp, for example, estimates that it will save about $200,000 a year in disposal costs in a 5,000-employee building in which it instituted a recycling program at the beginning of the year. It recouped its modest startup costs in two weeks, she said.
Recycling programs do not cost owners much to set up, either.
”A building management-sponsored recycling program means that the building will pick up the tab (for implementing the program),” Alonso said.
”But the managers then can work with a large volume of paper and the money they invested can be recovered very quickly.”
Startup costs usually involve contracting with a recycler, buying special deskside containers and larger bins to collect the paper and finding storage space for the collected bulk. Waste haulers will either pay building owners for the reclaimed paper or reduce monthly scavenger bills accordingly.
”All of our revenue is applied to the cost of waste removal from the building,” said Gary Wood, a building manager with the Lurie Co. in Chicago. ”Tenants will not be willing to recycle if they feel the building owner is unduly profiting.”
Tenants in Lurie-managed buildings, including 120 S. LaSalle St. 221 N. LaSalle and 33 N. LaSalle, recycle the easy way: They do nothing. Lurie`s waste hauler handles separation of recyclables from other garbage once the trash has been taken to a transfer site.
”From our standpoint it`s so simple it doesn`t require us to change anything,” Wood said, adding that Lurie does operate point of generation recycling programs at some locations where a large amount of computer and data paper is used.
Michael Murphy, assistant vice president of property management for J. Mont Properties in San Francisco, has five buildings that participate in a voluntary recycling program, including a 22-story tower at 88 Kearney St. that was voted BOMA`s office building of the year in 1990.
”Our tenants wanted a program and were supportive of our efforts,”
Murphy said. ”And we made it simple and convenient.”
The program at 88 Kearney started in February of 1990 and cost just $1,375 to set up. With 80 percent of the tenants now participating, J. Mont has been able to reduce the monthly waste hauling cost for the property to $1,200 from $1,480.
”Plus, we get $83 a month in proceeds (from paper sales) that is donated to a charity selected by us or the tenants,” Murphy said.
Friedman said that passive recycling programs such as those the Lurie Co. is involved in actually reclaim about three times as much material as deskside programs.
”The disadvantage is it`s not a visible program. In a desktop system employees get to participate directly and a lot of times they want to,” he said. ”But anyway you look at, recycling in an office building is a fairly complex undertaking.”
