The final phase of the Esterra Park development in Redmond, Washington, is a carbon-neutral development. Schwabe client JTM Construction is the general contractor for that project. As attorneys, we are interested in staying up to date on market trends, so we asked JTM to put together a panel to brief Schwabe’s Real Estate and Construction industry group on the carbon-neutral aspects of the project. The panel was composed of Derek Deeter from JTM, Kevin Snook and Evan Burnett from ZGF Architects, Mike Austin of electrical contractor Prime Electric, and Dan Connell of mechanical contractor Holaday-Parks, all of whom are involved in the design or construction of Esterra Park. 

The panelists believe that carbon-neutral development is clearly the wave of the future, driven both by market demand and by government mandates. On the market demand side, the panelists cited tenant Microsoft’s clear commitment to carbon neutrality. Microsoft plans to be carbon negative by 2030, and its business units are incentivized by being charged an internal carbon tax. Many other technology companies powering Seattle-area development seem equally determined to reduce their carbon footprints.

At the same time, government mandates relating to electrification, such as elimination of gas boilers, are pushing development in the same direction. Increased costs are being borne by market leaders such as Microsoft, but as low-carbon technologies become more widespread, costs should fall for the broader market. More broadly, SEC-mandated climate risk reporting for public companies seems to be only a matter of time. These trends have very concrete impacts on commercial development. As an example, Microsoft directed the design professionals to design all-electric kitchen facilities for their tenancy at Esterra Park.

The concept of carbon-neutral development could be meaningless without widespread adoption of rigorous greenhouse gas accounting, to measure the carbon intensity of erecting a structure (the embodied carbon), of operating the project over its lifetime, and of disposing or recycling the structure’s components at the end of its useful life. Whether many building owners or tenants have the sophistication to independently investigate, audit, and verify the carbon neutrality of a development, or the resources to hire a sustainability auditor to do so for them, remains to be seen.