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Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
Lee ding the grounds    finding economic and sustainable returns  - murphy - usgbc duluth conf - oct 24 - 2012 final
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Lee ding the grounds finding economic and sustainable returns - murphy - usgbc duluth conf - oct 24 - 2012 final

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  • 1. LEEDing The Grounds:Finding Economic & Sustainable ReturnsUSGBC Building Green ConferenceDuluth, MNOctober 24, 2012Richard Murphy Jr.President & CEOMurphy Warehouse Companywww.murphywarehouse.com&Adjunct Professor of Landscape ArchitectureCollege of Design, U of MNandPast ChairCouncil of Supply Chain Management Professionals (CSCMP)Center For Transportation Studies (CTS), U of MNAmerican Society of Landscape Architects – MN ChapterE-mail: richard@murphywarehouse.comWeb: www.murphywarehouse.com
  • 2. PerspectiveFrom an Industrial / Logistics View -Strong Market for LEED Assistance Presentation Flow • Why We Went LEED  5 Strategies • Where Do I Come From  Intro to Murphy  Intro to Logistics World • Site Level - Green / Sustainable Practices with ROIs  Native Prairie Planting – why plant & maintain, economic ROI (return-on-investment) results.  Trees + Prairies Carbon Sequestration  Stormwater Management – how to be green and economic at the same time.  Solar Power Generation – using state of art technology, designed and manufactured in Bloomington, MN.  Impact of Solar on Mortgage Finance  LED Lighting & ROI Analysis / Decision – 350,000 sq. ft. case study in Eagan by Murphy  Carbon Neutrality – Murphy’s practices getting very close at 12.83%
  • 3. Sustainability CertificationLEED Gold & Silver and Energy Star GOLD Top 1%2 LEED GOLD & 1 LEED Silver Certified“Existing” Facilities (GOLD: July 2010 - built in 1994 and 1996; SILVER: Oct 2012 (pending) – built 1999)  Minneapolis Campus Spring 2013  Eagan Campus Spring 2013; Target level Gold/PlatinumEnergy Star Certification  Scored 99 & 98 on 100 point scale (Aug 2010).  Central Ave scored 87 (Jan 2012).  Minneapolis & Eagan review Winter 2012/3.
  • 4. Sustainability CertificationISO 14001 and SLI CertificationISO 14001 Certification  Environmental Performance & Management Certification; expected Oct. 2012.Sustainable Logistics Initiative  International Warehouse Logistics Association sustainability certification for the 3PL Logistics Industry.
  • 5. Why LEEDWhy We Went LEEDEspecially at the Height of a RecessionPut Another Way:Why Does Murphy Voluntarily Do GreenProjects/Practices?5 Part Strategy 1. Leader’s and Family’s Perspective on Leadership 2. Doing most of the actions anyway so why not get 3rd party recognition 3. Strategic Business Reasons 4. Green practices are showing positive economic ROI results 5. Marketing and Branding
  • 6. Why LEEDWhy We Went LEEDLeadership Strategy(Item 1)• Leader a Landscape Architect  “what can we say…..”• 4th generation family business  “in for the long haul”• Family believes it is important to be a leader - being sustainable is important and will grow
  • 7. Why LEEDWhy We Went LEED Top 50 Green SupplyBusiness Strategies Chain Partners List(Items 2 & 3) Murphy has been listed since list inception 4 years ago• Doing most of the actions anyway so why not get 3rd party recognition  Client’s sustainability departments don’t understand what we have been up to for years.  They do not readily understand where the rubber literally hits the pavement. • We will discuss these under case studies• Listening and responding to our client’s “future” needs  Major corporations will have “Green” initiatives and requirements – esp. once the recession in finally over!  They need assistance from their Carriers, 3PL’s, Suppliers, etc. to contribute to their “greenness” measures.  They cannot achieve their goals without the suppliers involvement and assistance.
  • 8. Why LEEDWhy We Went LEEDEconomic andMarketing / Branding Strategies(Items 4 & 5)• Green practices showing financial paybacks & positive ROI  In many cases must be willing to take longer view than Wall Street ROI period of 2 - 4 yrs.• Leveraging “Green” brand via marketing / PR  Murphy gets far more “press” time than a typical business its size – esp. at the national level.  Opens up a totally new avenue for marketing and sales penetration.
  • 9. Why We Went LEEDBranding ImpactWorld Trade 1002012 Article Highlighting Murphy“You can’t buy this kind of exposure”
  • 10. Why LEEDWhy We Went LEEDBranding ImpactKARE 11 TVRichard Interviewed on Simply Science FeatureDiscussing Murphy’s Prairies and StormwaterMN Pollution Control AgencySmall Business Enterprise Newsletter Feature
  • 11. Why We Went LEEDBranding ImpactBusiness School Case Study on theEconomics of GreenExploring Stormwater ROI Issue at Murphy
  • 12. Why We Went LEEDBranding ImpactSierra Club Article2,000+ word article forpublication late 2012Writer for the club contacted Richard Murphy Warehouse Company Has Long History with Green Initiativesbased upon web research & networkingand heard we were the company to By Cassandra Hallcontact! With over a century under its belt, the Murphy Warehouse Company has been a fixture of the Twin Cities business scene for quite a while—and reinforces its commitment to stick around by investing time and money into the latest green initiatives for their fleet of warehouses. The Murphy Warehouse Company started in 1904 as a simple horse and buggy affair, hauling materials off of paddle boats and barges; at one point they carried materials for building the St. Paul capitol. Warehouses have always been part of, and grown with, the company. Now on their fourth and fifth generations of family shareholders, and proud owners of five buildings out of their fleet of twelve warehouses, the Murphy family continues to serve the Twin Cities area in third-party contract logistics—that is, distributing people’s products when, how, and to whom they need them shipped. A number of industries use Murphy Warehouse’s service, including the food, medical supply, paper, industrial product, recycling, retail, beverage, and building material industries. It is difficult to think of a thriving business taking the time to consider how their actions are impacting the environment, especially when environmentally-conscious moves might cost money. On the contrary, according to President and CEO Richard T. Murphy Jr., not only is Murphy Warehouse dedicated to doing right by the community and the environment, doing so is not financially impractical at all and actually makes a lot of business sense. To begin with, being environmentally-conscious is a big part of listening and responding to clients’ needs for the future.
  • 13. Where FromWhere Do I Come FromSupply Chain Logistics / TransportationWhy care About This IndustryTouches everything we do….% of Economy:8.9% Logistics$3.83 per person in U.S.vs.17.3% Healthcare$7.89 per person in U.S.
  • 14. Where FromWhere Do I Come From3PL (3rd Party Logistics) IndustryWarehousing in Logistics5 Billion Sq. Ft of warehousing in U.S.Floor area equals a 4 foot walkway fromhere to the Moon…!!!Industry has a massive impacton the Nation’s landscape
  • 15. Where FromWho is MurphySupply Chain Logistics Services / 3PLWe are a Service Company  Warehousing, distribution, transportation, value-added, fulfillment, international, etc.We handle products throughout their life-cycle  From raw materials to in-process goods to finished products to returns for numerous industry segments. Murphy Family, 4thGeneration (1904) Square Feet Operated: 2,700,000 SKU’s Controlled: 31,000+ Truck Loads Handled / Year: 120,450 Companies Served: Fortune 100 to Small Entrepreneurs Rail Cars Handled / Year: 9,000 (equivalent to 31,500 TL’s) Domestic and Global Industries Served: Retail / Catalogue / Consumer Medical / Health Care Grocery / Food Processing Beverage Plastics Recreational / Camping Industrial Forest Products (Paper/Packaging) International3PL – “3rd Party Logistics Services Provider”
  • 16. Where FromCustomer Returns ManagementReverse LogisticsWhat happens to your clothes once they reachthe final end of retail Clothing – garments shipped overseas for fibers to be separated and reused.  A local fashion designer has a clothing line made from re-cycled threads. Shoes – rubber soles are recycled; fabric used as compost. Leather Goods – reprocessed into other leather items.Mass Merchant Retail SupportStore Backroom LogisticsSupply of 1500+ Stores with items to run stores  Supplies, training manuals, uniforms. Sales/promo materials, bags, etc.  Full “pick-pack” operation..
  • 17. Where FromMedical Support LogisticsJIT ReplenishmentSurgical KitsCustom kits for various surgery operations  Customized for teams of Doctors at every hospital.  Kit contains all the items needed for a surgery.  JIT delivery to hospital.Hospital Supplies  IV Solutions, Needles, Dressings, etc.Manufacturing Support LogisticsComponent Customization, Pick & SequencingFor Direct Shipment to Manufacturing Line on JIT
  • 18. Inbound Flow - Raw MaterialsGlobal Sourcing –Domestic ProductionMultiple Concepts in OperationFood Products – Raw, In-Process & FinishedImport From Middle East & elsewhereVendor Park (Global Consolidation Point) Outbound Flow – Finished GoodsNorth America DistributionU.S. DistributionRecreation IndustryCanadian Company CoveringEntire U.S. from One Central DCOperations Include:  Item Pick / “Pick-Pack”  Case Pick  Pallet pick  Small-to-Large Order  Custom Labeling  Carrier Selection and Management
  • 19. Murphy Rigging & Erecting, Inc.A Rigging / Millwright ContractorFrom Very Precarious Handling….to Very HeavyLifts ….to Fragile Works of Art….to Delicate andExpensive Medical DevicesClients: Manufacturers to Printers Medical to High Tech. Artists to Classified Military.
  • 20. Sustainability / Green PracticesA Fresh PerspectiveTraditional Focus is Inward Looking  Lighting, HVAC, forklift & truck fuel, packaging, recycling, green purchasing, etc.Added Focus is Outward Looking - Site LevelGreen / Sustainable PracticesIn many cases these represent “low-hanging fruit” with short ROIs.  Native Prairie Planting – why plant & maintain, economic ROI (return-on-investment) results.  Trees + Prairies Carbon Sequestration  Facility Design: Stormwater Management – how to be green and economic at the same time.  Solar Power Generation – using state of art technology, designed and manufactured in Bloomington, MN.  Impact of Solar on Mortgage Finance  LED Lighting & ROI Analysis / Decision – 350,000 sq. ft. case study in Eagan by Murphy  Carbon Neutrality – Murphy’s practices getting very close at 12.83% – –
  • 21. Site Level GreenA Question We In OurIndustry Must Ask:Have you ever given muchthought to your facilities?  Landscape?  Stormwater?
  • 22. Site Level GreenA Question We In OurIndustry Must Ask:Have you ever given muchthought to your facilities?  Landscape?  Stormwater? ….You Should…!!!
  • 23. Site Level GreenNative Prairie vs. LawnThree Questions 1. Is there a cost difference? 2. Is there an environmental difference? 3. Do they look OK?
  • 24. Site Level GreenNorthtown Logistics Campus4700 & 4850 Main St NE, Fridley, MN 55421Location of cost figures GOLD Top 1%Campus Specs:500,000 sq. ft Warehouse; 6 Acres of Native Prairie; 4.2 Acres of Cut Lawn Brown areas are native prairie Photo taken in early spring.
  • 25. Site Level Green Site: 4700 & 4850 Main St NE, Fridley, MN 55421 Actual data from Murphy expense recordsFacility DesignNative Prairie vs. Lawn Native Prairie vs. LawnIs there a cost difference – YES Total Cost DifferencesAnnual Maintenance Costs $25,000  Why have manicured lawn entirely surround large DC & manufacturing facilities? $21,650  Manicured lawn costs 7.3x move to $20,000 maintain than native prairie plants!  Much more environmentally friendly and Total Costs sustainable! $15,000 $10,000 $5,000 $4,240 $- 6 acres 4.2 acres Praire Areas Lawn Areas
  • 26. Site Level Green Site: 4700 & 4850 Main St NE, Fridley, MN 55421 Actual data from Murphy expense recordsNative Prairie vs. LawnIs there a cost difference – YES Native Prairie vs. LawnAnnual Maintenance Costs Total Cost DifferencesIf all 10.2 acres is cut lawn: $52,652 $60,000 $6,000 $5,167 $50,000 $5,000 $40,000 $4,000 Cost per Acre Total Costs $30,000 $3,000 $20,000 $2,000 $10,000 $1,000 $707Manicured Lawn costs 7.3x more to $- $-maintain than native prairie plants! Praire Areas Lawn Areas If All Cut Lawn 6 acres 4.2 acres 10.2 acres Total Costs Cost / Acre
  • 27. Site Level Green Site: 4700 & 4850 Main St NE, Fridley, MN 55421 Actual data from Murphy expense recordsNative Prairie vs. LawnIs there a cost difference – YESAnnual Maintenance Costs Native Prairie vs. LawnComponent Costs Component Cost Differences $12,500 $12,015 If all Existing Set-up Cut Lawn $10,000 Prairie Lawn Lawn $8,630 Areas Areas AreasAnnual Costs 6 acres 4.19 acres 10.19 acres $7,500Maintenance $ 4,240 $ - $ -Mowing - 12,015.00 29,220.25 $5,000 $ 4,240Watering - 8,630.00 20,988.00Fertilization - 1,005.00 2,444.14 $2,500 Total Cost: $ 4,240 $ 21,650 $ 52,652 $1,005 Cost / Acre.: $ 707 $ 5,167 $ 5,167 $- Praire Areas 6 acres Lawn Areas 4.2 acres
  • 28. Prairie MaintenanceKey to success…!!!Provided since day one byPrairie Restorations of Princeton, MNwww.prairieresto.com  Services include site visits 4-6 times per growing season and burning every 3 years. Brown areas are Native Prairies
  • 29. Native Prairie vs. LawnIs cost difference significant - YESEconomic Impact“Over the last 16 years we have saved over$947,428 while being green by plantingnative prairies on 2 logistics Campuses!!”
  • 30. Site Level Green Site: 4700 & 4850 Main St NE, Fridley, MN 55421 Actual data from Murphy expense records Native Prairie vs. Lawn Is there a cost difference – YES ROI of Prairie vs. Lawn Installation Install Cost Install Cost 6 Acres vs. Prairie Prairie $ 34,320 - Seeded Lawn* $ 48,000 1.4x Sod* $ 111,000 3.3x * Does not include $30,000+ cost of sprinkler system. Maint. Cost 6 Acres Lawn: $ 31,002 Prairie Install Cost $ 34,320 1.28 Years Prairie: $ 4,240 Savings per Year $ 26,762 of Prairie vs. LawnCost Difference: $ 26,762
  • 31. Site Level GreenNative Prairie vs. LawnIs there an environmental difference - YES  Native plant materials selection.  No watering required, or significantly less in dryer climates.  No fertilization required.  Roots are deep and assist stormwater infiltration.  Large root systems sequester much more carbon.Lawn Grass: 1-3 inches Prairie Grass: 3-15 feet
  • 32. Site Level GreenNative Prairies & TreesEnvironmental MetricsCarbon Sequestration Annual Benefits14 Acres of Native Prairie  24.93 MtCO2e/Year732 Trees  275 Oaks, 274 Maples, 183 Spruce/Pines  117.1 MtCO2e/YearCarbon Sequestered by Murphy’sTrees and Prairies over 14 years:  5,009,961 pounds
  • 33. Site Level GreenNative Prairie vs. LawnDo they look OK?Neighbors love it…!!!  We run 37,000 trucks through the neighborhood yet the #1 thing I hear is…...“oh, you’re the guys with all the pretty flowers on Main St.”Start-up Issue….  Prairie plants often do not meet city lawn height ordinances!  Needed a variance in 1994 with 1st one.  Former Landscape Architecture student of mine was Fridley’s Assistant City Planner and understood what we wanted to achieve and allowed us to proceed - the rest is history!Photos show native prairies at Murphy’s Campuses - 14 acres total at four facilities.Prairies installed in 1994, 1996, 1999 and 2008.
  • 34. Site Level GreenEdgeKey Design ElementMuch like a picture frame gives orderto a busy painting, a cut lawn edgedoes the same for a prairie.
  • 35. EdgeKey Design ElementWithout an edge prairiesare very, very rough looking. Note flowing line (“edge”) between prairie and lawn Note straight line (“edge”) Note flowing line / edge between prairie & lawn
  • 36. Site Level GreenNative Prairie vs. LawnDo they look OK?Not only do neighbors love themWe’ve been robbed twice!One 4th of July a van was seen pulling awayfrom the property with plants in back. Policearrested the individual.  Contacted Ron Bowen of Prairie Restorations for a value per police request he responded: “they’re priceless!”  These were 7 year old plants with deep roots.Summer 2009 an elderly couple were seendigging up plants. Unfortunately not caught.
  • 37. Site Level GreenFacility DesignStormwater Regulation ImpactsChanging facility design & management  Traditional Focus: get stormwater off-site fast  Today’s Focus: handle stormwater onsite and reuseFew outside profession realizegrowing impact…!!!EPA mandated cities to control theirstormwater – quantity & quality  Regulations required cities to comply with no additional Federal Funds, thus local fees.Stormwater fees growing  2000+ cities to date nationwide.  Minneapolis - $3,400 per acre (i.e. $0.12 per sq. ft. of warehouse). Most DC/warehouses use 20+ acres; cost is $68,000+/yr.
  • 38. Site Level GreenMinneapolis Logistics CampusStormwater Project701 24th Ave SE, 55419• 22 Acres, highly urban site• Buildings dating from 1904 – 1980’s• 24/7 busy logistics operation.• 95% impervious before project  58% bldg., 37% pavement, 5% green  New suburban regulations often require 25-40% green coverage  95% of Stormwater ran off site. Kasota / Rollins Ave. 24th Ave SE still combined storm / sanitary line. Goal #1 – reduce or eliminate annual stormwater fee of $68,000. Goal #2 – we are here for the long haul, therefore, be a good corporate citizen and do the right thing. Goal #3 – leverage environmental leadership in our strategy.
  • 39. Site Level GreenMinneapolis Logistics CampusStormwater ProjectTwo Solutions Explored 1. Underground Storage  Very expensive system – extra $300,000 for our project & added 5 more years to ROI. 2. Permeable Pavements - Concrete, Asphalt & Pavers  Great idea – per respective industry associations: not capable today of withstanding the constant grinding & shear stress from truck’s turning while pulling back into docks.
  • 40. Minneapolis Logistics CampusStormwater ProjectBasic Water Flow Design Key: Main Retention Pond Bio Retention Basins Surface and underground pipe flow Underground only flow Overflow release to area storm system Prairie grass infiltration areaKey Person: Rebecca Kluckhohn, P.E.Email: rkluckhohn@wenck.com
  • 41. Minneapolis Logistics CampusStormwater ProjectNet Result 100% stormwater fee credit $68,000 annual savings 50% federal depreciation deduction* * NOTE: not known till after completion. NOTE: Original design generated 78% stormwater fee credit. “As-built” drawings = 102% net credit. Site: 22 acres % impervious: 95%Project Cost (Design + Const.) $ 580,000Annual Storm water Fee $ 68,000 Payback in Years: 8.53 + Federal Stimulus Package Immediate 50% Depreciation: $ 290,0007.0 yrs after Fed Credit & Tax Impact8.5 yrs simple pre-tax basis
  • 42. Site Level GreenMinneapolis Logistics CampusStormwater ProjectMajor Retention Basin in photo
  • 43. Site Level GreenMajor Retention BasinNW Corner of SitePhotos Show 1st Year Growth
  • 44. Site Level GreenMajor Retention BasinNW Corner of SitePhotos Show 2nd Year GrowthImportant to recognize that nativeprairie plantings will take 3 years toshow maturity. One must be a bitpatient.
  • 45. Site Level GreenFacility DesignGray + Green InfrastructureCities starting to treat & regulate street treeslike sewers and roads.  To handle urban heat, stormwater, and improve real estate values thus higher property tax values.Only a matter of time before they look to privateproperty to help in this cause.Gray Infrastructure Green Infrastructure
  • 46. Site Level GreenGreen Urban InfrastructureWhy Trees Will Be In Your FutureTrees and Stormwater Management  Mature trees hold nearly an acre-foot of stormwater…!!!  Mature tree’s leaves & branches hold 80% of 1” rain in 24 hrs. In Minneapolis this represents 90% of all storms!  Reducing stormwater prolongs life of sewers and pipes. Cities today can’t afford to replace current old and wearing out systems!
  • 47. Site Level GreenUrban “Heat Island”Impacts From TreesUrban InfrastructureNew planting technologies allow more:  Tree root growth - thus bigger trees  Stormwater - holding & recycling  Gray Infrastructure - reducing stormwater prolongs life of sewers and pipes. Cities today can’t afford to replace current old and wearing out systems  Shade - more due to bigger tree growth reducing urban heat island impact  Increased property values Silva Cell example in Minneapolis (http://www.deeproot.com)  Technique readily useable on Logistics / DC Campuses
  • 48. Site Level GreenEnergy Creation - Solar PowerRoofs - Large available flat areas “just sit there”LEED Credit Points….Commercial solutions include:  “Solar Energy Service Provider” - 100% responsibility to design, build, own and operate the asset - including all upfront purchase and installation costs….challenge in Midwest – utility rates too low for economic models!!!  ….to solutions where building owner owns the solar assets and provider merely design-builds the system. Staples Store, CA 2 Solar Providers:
  • 49. Site Level GreenEnergy CreationSolar PowerMyth: Solar PV better in hotter climates.Fact: Solar PVs are more efficient the colder they get. Minnesota’s climate is perfect!
  • 50. Site Level GreenEnergy Creation By Murphy4th Largest Solar Energy Producer in MNIkea is #1 & other in top 10 are government entitiesMurphy installed 8 systems 2010 - 2012320KW total power  5 buildings  Fridley Logistics Campus: produces 50% of energy use on 2% of roof…!!! 2 LEED Gold site5 Major Innovations (state of art in world today):  Run at low voltage – increases efficiency and solves fire department issues with live systems; system can be turned off when fire dept. shows up for fire!  Solved “shadow problem” – shading a portion of panel now doesn’t shut system down!  Can Utilize 3M Solar Reflector Tech – only solar manufacturer who can utilize this boasting power.  Smart Panel Technology – panels only produce power when asked by control device.  No Roof Penetrations – held in place by weight array (vs. attaching to roof with potential roof leaks!)
  • 51. Site Level GreenEnergy CreationROI of Solar Power1st Three Systems in 2010Project Cost for 120KW power: $1,000,000 • Normal, non grant supported solar ROI period is 20-25 years. • Murphy’s project ROI period is 4 years…!!!  4 Grants at work here: 1. Xcel Energy Grant (Utility Company) 2. Federal Stimulus 3. State Stimulus 4. State special grant for using MN solar tech.  Murphy paid $90,000 (of $1M system cost) 3M Solar Reflector Film tenKsolar Panel
  • 52. Energy Creation 40 KW Solar PV2012 Case Study in Eagan350,000 sq. ft. Building  Built 1978-80  Empty for 8 years  2012 Murphy purchase  $3.8M in upgrades • Lighting • Fire System • HVAC • Dock equip. • New access road • Re-establish rail • 90 trees • 1.5 ac. Native prairie  LEED Platinum / Gold target  40 KW array - Nov. 2012 install
  • 53. Site Level Green Energy Creation Jon Kramer NABCEP certified PV installer 2012 Case Study in Eagan Sundial Solar office phone: 612-926-8506 40 KW Solar PV Array cell phone: 240-463-3688 Dakota Electric vs. Xcel ROI website: www.sundialsolarenergy.comDakota Electric Xcel
  • 54. Site Level GreenEnergy CreationEagan ROI of Solar PowerWhy Install with 11 Year ROI?SBA Mortgage Loan Impact • Original finance goal was to secure an 80-20 loan structure (80% loan with 20% Murphy cash investment).  Market is closer to 70:30 to 75:25 structures • Explored 5 different banks, 1 REIT, and the insurance market. • Two of the banks suggested we explore SBA track as part of total mortgage package. • Because Murphy, plus others in our industry, have large buildings with few employees per sq. ft. we never meet SBA criteria. This time it was no different. • HOWEVER…..when the SBA saw on our application that we are installing solar power (i.e. renewable energy) we automatically became eligible! • Result: 95:5 structure….unheard of today!!!  95% is mortgage with only 5% Murphy cash Murphy Minneapolis Logistics Campus 1 of 4 solar arrays onsite
  • 55. Energy CreationEagan ROI of Solar PowerSBA Loan PR Benefits FromMurphy’s Education EffortNational + Local CoverageDC Velocity Dec. 2012 IssueMitch Mac Donald BylineWill highlight the SBA loan to Murphy and howit represents the 1st time many have heard ofdirect benefits for being green esp. for mid-market sized companies.The impetus for this article came from Richard’ssending Mitch a note re this interestingsituation. Mitch also highlighted Murphy in2010 as seen below – the 1st time he has everused a company name in his byline title!!!
  • 56. Site Level GreenLawn Irrigation SustainabilityEagan SiteSmart Management Tool at EaganPlant Need + Soil Moisture Level + RainForecasting & Adjustment  Soil moisture sensors  Weather adjusted irrigation  24/7 automatic site monitoring  Internet mgmt.  Est’ed ROI: 3 years
  • 57. Site Level GreenLightingSince 1980’s Have BeenChanging Fixtures w New TechROI of 1.8 Years Typical  Minneapolis Site: 3x so far since 80’s  Fridley Central: new bldg. in 1999 and changed fixtures after 5 years  All facilities now T-8
  • 58. ExistingLED LightingLeading Edge in Mid-West ForFacilities 100,000 sq. ft. +Murphy Eagan  350,000 sq. ft. in size  Built in late1970’s  Old high pressure sodium  Upgrade options: T-5 or LED Proposed Vs.
  • 59. Site Level GreenLED LightingWhy?Multiple Benefits:  Long-term energy use reduction  Long-term maintenance cost reduction  Fluorescent lighting needs the bulbs replaced every 2.5 - 3 years.  LED fixtures will not be touched for 40- 50,000 hrs. or 20+ years!  LEED / Energy Star impacts  PR Leverage value in corporate strategy ROI Install Energy Cost Savings Period Fixture KW Cost * per Year per Year Years HP Sodium 223.16 $ - $ 64,937 $ - n.a. Existing T-5 118.56 $ 210,000 $ 23,576 $ 41,360 4.1 LED 89.38 $ 445,000 $ 17,773 $ 47,164 7.8 ** * Includes sensors on each fixture. ** Savings from no T-5 bulb replacement & disposal every 3 years not included. Dakota ested utility credit included.
  • 60. GHG Emissions Measurement Typ. Modern DC vs. Murphy Northtown DC Metric Tons of CO2e per YearToward Carbon Neutrality 4000 3873Murphy Northtown Fridley Facilities 3500 Metric Tons of CO2e per Year 3000500,000 sq. ft. 250012.83% carbon emission 2000vs. standard warehouse ** 1500 1000 724 500 Murphy Warehouse - Moving Toward Carbon Nuetrality 0 Typ. Warehouse / Murphy DC Warehouse Bldg. Metric Tons of OnlyGHG Emissions for Warehouses CO2e per Year100% Typical GHG Emissions (460,000 sq.ft warehouse) 3873 GHG Emissions Measurement Murphy Northtown Campus Actual GHG Emissions (Murphys actual same size bldg.) 724 Metric Tons of CO2e per Year Emissions savings due to energy efficiency measures 3149 750 724Additional Emissions Reduction Measures 650 On-site Carbon Sequestration in trees and prairie 142 550 Metric Tons of CO2e per Year Altnerative energy generation (Solar PV power) 85 497 Total Additional GHG Emission Reduction 227 450Toward Carbon Nuetrality 350 Actual Murphy Bldg. GHG Emissions 724 250 Total Murphy Additional GHG Emission Reduction 22712.8% Net GHG Emissions (for a 406,000 sq. ft. warehouse) 497 150 ** Source: US EPA / US DOE Energy Star Program; 3873 GHG reflects an 50 average warehouse with score of 50. Murphy bldg’s scored 99 & 98 -50 -85 respectively out-of-possible 100 points, thus placing them in top 1% category. -142 -150 Murphy Tress & Solar Power Net Murphy Warehouse Prairies GHG GHG Campus GHG Bldg Only Sequestration Reduction
  • 61. Site Level GreenRaising The Roof In EaganTo 32’ - The Modern Building StandardGoing to 32’ Would Increase Building ValueGeographic Location Lends Positive SupportReviewed and put on hold for now due to budget Experts in field: http://www.rooflifters.com/  Current Bldg. heights are 20 & 22’  Raising roof is approx’ly $8 / sq. ft. ($2.8M)  Cheaper than new construction  Designing new fire sprinkler system and lighting to work with few modifications at 32’  Will re-review / consider over the next decade.  Photos: Albertson 600,000 sq. ft. DC Chicago – 18’ up to 38’
  • 62. Why does Murphyvoluntarily do green In the long run green practices areprojects and practices? showing financial paybacks.  But, in some cases you must beTheir leader is a Landscape Architect – willing to take the longer term “what can we say” view.As a 4th generation family business we  Murphy’s stormwater project ROI period: 7.0 years (after Fed credit & taxes). are in for the long haul.  Murphy’s native prairies ROI period:We believe its important to be a leader - less than 1.2 years being green is important today and  Murphy’s traditional lighting retrofit ROI will grow more so soon. period: 0.8 - 1.5 years.  Murphy’s Solar Energy Projects ROI:Major corporations (our customers) have 4 years. (w/out Subsidies: 20+ Years.) / will have within a few years “Green”  Feasibility and short ROI period Initiatives that require our result of four major support programs: participation. Federal, State (Regular + MN  They need assistance from their Carriers, Manufactured Equip.) and Xcel grant. 3PL’s, Suppliers, etc. to contribute to their “greenness” measures.  Typ. Wall Street Firm ROI period: 2 - 3 years, maybe 4. – making some green practices hard for Fortune 500 companies to approve during recession.
  • 63. LEEDing The Grounds:Finding Economic & Sustainable ReturnsUSGBC Building Green ConferenceDuluth, MNOctober 24, 2012Richard Murphy Jr.President & CEOMurphy Warehouse Companywww.murphywarehouse.com&Adjunct Professor of Landscape ArchitectureCollege of Design, U of MNandPast ChairCouncil of Supply Chain Management Professionals (CSCMP)Center For Transportation Studies (CTS), U of MNAmerican Society of Landscape Architects – MN ChapterE-mail: richard@murphywarehouse.comWeb: www.murphywarehouse.com

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