Printer Friendly

Recycling as a way of life.

Recycling has become a way of life for many Americans. No longer does one think of collecting aluminum minum cans along the highway when recycling is mentioned. Rather one envisions neat, stacked containers of recyclable wastes, set out in front of each home alongside the normal household trash on collection day.

Today, recycling is a way of life for many. In November 1990, the Wall Street Journal reported that 30 states had some form of statewide recycling law. More dramatically, 65 state or local recycling laws were passed in the first half of 1990 alone.

In order to encourage recycling, several pieces of legislation are pending at the federal and state levels which give incentives to recycle. The White House has proposed a tax on all products (glass, paper, plastic, and metal) that are produced from virgin materials. In the House, legislation has been introduced to require all paper products produced in the U.S. to contain a minimum percentage of recycled paper or to charge a non-compliance tax on that which does not. Some states are even considering a tax or surcharge for every disposable diaper purchased.

What many do not realize is that recycling is rapidly becoming essential to the American way of life. State and federal lawmakers see the importance of the issue and are acting in the interests of our communities, our country, and our businesses. Property managers must do the same and act now to take advantage of available resources and to use various marketing techniques to their advantage.

Why recycle?

The United States today generates approximately 160 million tons of municipal waste each year. The three most common methods of disposing of this waste are landfills, waste-to-energy or other waste incinerators, and recycling. All three methods are expensive, costing an average of $70 to $120 per ton to incinerate, $40 to $60 per ton to dispose of in a landfill, and $20 to $30 per ton to recycle.

There are approximately 6,000 active landfills operating in the United States. Federal, state, and local regulations, as well as environmental activists and citizen protests, have severely restricted the addition of new landfills. The Environmental Protection Agency (EPA) estimates that 50 percent of current landfills will be closed by 1995 and 61 percent by 2000. The agency estimates a net decrease in disposal capacity of 36 million tons per year by 1992.

In addition to dwindling capacity and facilities, the costs of disposing of wastes in landfills has been steadily rising. From 1986 to 1988, the national average cost per ton for landfill disposal has increased by over 100 percent. In the Northeast, costs have risen by over 120 percent for the same time period. This results in large price increases by waste removal companies and directly impacts operating costs for commercial and residential real estate projects.

Waste incinerators, while more expensive, are an alternative that is becoming more popular, especially with the increase in Pollution-control technologies and the ability to use the facilities to generate electricity. Pollution control is not absolute, though, and incinerator ash by-products are a major concern. Ash generated from burning waste has only 10 percent of the volume of the original waste, but it contains higher concentrations of heavy metals and Dioxin (a cancer-causing agent).

The least expensive altemative, as well as the most environmentally friendly, is recycling. By recycling as much as possible, not only is there less waste to dispose of, but there are fewer demands on the world's nonrenewable resources, less consumption of energy in obtaining these resources, and less stress on the environment.

Recycling one ton of aluminum prevents the need for and use of approximately four tons of bauxite, one ton of petroleum coke, and one ton of pitch. Recycling a ton of paper saves about 17 trees and 7,000 gallons of water. Every live tree absorbs about 250 pounds per year of carbon dioxide, which is a contributor to global warming.

Of Americas 160 million tons of waste generated annually, only 11 percent is recycled today. The EPA hopes to raise this to 25 percent by 1992. In 1988, only 23 percent of white paper, 1 percent of all plastics, 35 percent of newspapers, 12 percent of glass, and 55 percent of aluminum cans were recycled. Yet all of these categories are almost 100-percent recyclable.

Recycling and the

real estate industry

The question remains, what the implications of recycling on the real estate industry? What can a property manager expect from from impending legislation? What problems will the property manager need to be prepared for, and how is each different property type affected?

In a broad sense, the real estate industry will be one of the largest sources for recyclable materials in the country. Scrap materials from development, tenant upfit, and tenant refit are substantial. During initial construction phases, separation of the various types of recyclable waste is relatively simple, even if it is inconvenient. The costs for removal of separated materials will increase due to the additional receptacles required and the different disposal facilities relative to the site or the project.

Existing projects will generate hundreds of thousands of tons of waste through the operation of businesses and the day-to-day living activities of tenants and residents.

In all likelihood impending legislation will make recycling mandatory. Proactive preparation by both residential and commercial buildings now may lead to easier transitions in the future. Of course, any current situation which could make recycling a profit source should be implemented immediately to increase the property's income stream.

Economic considerations

The property manager should take the costs of various disposal alternatives into account when determining initial market rates and pro-forma budgets for a new project. New projects should provide for additional space for receptacles in which deaning crews, maintenance, and residents can separate the recyclable wastes from the nonrecyclable wastes.

All building managers should determine whether it is more cost effective to have one company pick up all the waste types or whether each recycling center should pick up its specific waste type. In some cases, generally in smaller projects, it may be more cost-effective to have in-house personnel and vehicles dispose of any recyclable waste collected on a regular basis.

An important consideration is the fact that many recyclers will pay for waste brought in to their facility to be recycled. This generally requires that the project deliver the wastes at its own cost. However, depending on the logistics of collection and delivery, recycling may actually be a profitable exercise on some projects (see sidebars).

Another possibility would be to allow an off-duty maintenance worker or tenant to keep any money obtained from recycling centers merely for the effort of removing the waste. This is a good way to cut costs on smaller projects. Liability waivers should be obtained from everyone involved if this method is used, and it should be allowed only with relatively low risk materials such as aluminum cans or paper.

Initiating recycling and waste minimization efforts also creates good public relations and is a good marketing tool. By advertising the preparations prior to mandated compliance, many people and tenants in the community will look favorably on the project, the owner, and the management company. It also lets the property owner know that management is on top of the issues affecting the project on a daily basis.

Proactive planning will enable the property manager to choose the best alternative, get the best price available for required services, and prepare for any changes when budgeting for the project. In the event capital improvements are necessary (e.g., new dumpster bins and pads or the purchase of additional receptacles), the property owner may be prepared in advance for the associated costs.

During this time, the property manager also can investigate financial possibilities as well. Should the project require major expenditures in order to comply, low interest loans from the Small Business Administration and Industrial Revenue Bonds may be available to finance it. Tax breaks available at the local, state, and federal levels should also be investigated.

Instituting recycling

The most fundamental issues for recycling at multifamily and commercial real estate sites are separation, collection, storage, and removal. For each type of project, these problems impact dffferently. The key to the solution is in mutual cooperation and communication.

In retail and industrial projects, each tenant is responsible for its own waste disposal contracts. Few tenants can afford to or wish to incur the extra cost of separating and disposing of recyclable materials when in many instances, the individual tenant's volume of recyclable waste is not enough to require additional containers.

By adding a recycling clause to the lease document or modifying existing clauses if available, the costs of additional dumpsters in a central location and the costs of removal contracts on the additional dumpsters may be added to the common area maintenance charges and spread out among all the tenants. In this way, the only inconvenience to the tenant would be separating the waste as it is generted in their space.

Cost-cutting measures should also be investigated and instigated. separate bins in the service elevator bies of each floor in a highrise can the janitorial crews more efficient in sorting wastes, thereby decreasing the number of man-hours associated with the job and decreasing the building's janitorial costs.

Perhaps an agreement may be arranged with the municipal waste department whereby a project will purchase and install separate dumpsters at its own cost in exchange for free pickup by the department. By creating an on-site compost area for yard and landscape maintenance waste, the costs for removal and for mulch in landscaping contracts can be reduced.

High-rise office buildings and buildings in central business districts provide their own unique set of problems. While the costs of disposal will be passed through in normal building operating cost increases, the logistics of separation and storage can be complex.

The most efficient method of separation is separation at the source. In an office building space, each tenant is a source, and efficient separation is made more difficult. Besides educating employees on what may or may not be recycled, central receptacles should be available in each office to provide employees a place to separate waste without undue clutter. Enforcement would be based on an employee's honor in most instances, as well as the knowledge that any fines assessed to the property will be billed back through the operating expenses.

A major obstacle is that most tenant spaces have not been designed with central waste separation in mind. Other alternatives may have to be considered and negotiated between the property manager and tenant

Once separated at the tenant level, the waste should then be separated by floor. This is the job of the janitorial crews and should merely consist of grouping already separated wastes together. Once organized by floor, the waste should be disposed of in its specific receptacle for the building.

In a commercial high-rise application, the need for two to four dumpsters rather than just one may create design and trafficking problems. Most buildings in use today were designed for one central waste disposal unit, and the increase in number means several major changes may need to be made. The confined area of downtown areas may require capital improvements in order to comply with recycling objectives.

Large residential communities will find centralized containers the most efficient means of storage and removal. Individual tenants will be required to separate at the source and, depending on the size and acreage of the project, tenants may be required to take their separated waste to the receptacles themselves, or project maintenance personnel may provide a routine pickup for them. These projects are more likely to require additional dumpsters in more locations as a direct correlation to the number of units and the area to be served.

Communication between manager, tenant, and janitorial service is critical. In every instance, the property manager should meet with his or her tenants face-to-face to discuss policies and procedures.

For retail and industrial projects where tenants contract their cleaning themselves, a representative of the janitorial service should accompany each tenant to this meeting. At this time, the manager who will handle all recycling related matters should be introduced, thereby giving everyone at the meeting a contact's face and name for any problems, questions, or suggestions which might arise.

As each property is different, encourage suggestions. It is a very inexpensive way to become more efficient while letting tenants feel involved.

Part of the routine

The important thing to remember in initiating a recycling program is that its planning and execution are extensions of the fundamentals of property management. Be aware of your market area and the attitude toward recycling. Be up to date on current affairs and how they affect your property. Know your project and determine the best methods of separating, collecting, storing, and disposing of separated materials as efficiency as possible.

Know your property owners and asset managers and know their tendencies when confronted by issues that were, if not similar in nature, similar in type of impact. Know your tenants and how best to approach each tenant's individual needs. Know your tenants' attitude toward janitorial issues and services. With all this information at hand, the transition should go smoothly.

Most importantly, realize that it is probably only a matter of time before mandatory recycling is law in most states. While transition to a recycling system may not be implemented by an owner or manager prior to statutory requirements, pro-active plans and studies now can save a great deal of time later. After all, if recycling becomes the law, every procrastinating property in town will need to speak with the people and contractors you have already consulted.

By planning ahead, communicating, and preparing a plan of action, not only can you be one step ahead of the crowd, but you will have led the way in making recycling a win/win/win situation at your properties.

David C. Parks is senior property manager and director of environmental operations for the Trammell Cro Company's office in Charlotte, North Carolina. He is responsible for overseeing environmental operations, including due diligence, Phase I and II assessments, and compliance monitoring. He also supervises a full management and maintenance staff overseeing a 5-million-square-foot portfolio of office, retail, and industrial properties.

Mr. Parks is an adjunct professor of real estate management at Central Piedmont Community College, a county commissioner for the Industrial Facilities and Pollution Control Financing Authority and a member of the North Carolina Citizens for Business and Industry's Environmental Concerns Committee. He is a graduate of Baylor University and is in the process of completing his M.B.A. degree from Fontbonne College in St. Louis.
COPYRIGHT 1991 National Association of Realtors
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Author:Parks, David C.
Publication:Journal of Property Management
Date:Mar 1, 1991
Previous Article:Tenant lease concessions.
Next Article:Disposable income from office trash.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters