The following is an excerpt from Living Above the Store: Building a Business That Creates Value, Inspires Change, and Restores Land and Community by Martin Melaver . It has been adapted for the Web.
“No. We won’t do that.”
The words came from Colin Coyne, our COO. The ensuing quiet around the Balch & Bingham boardroom that Monday morning in Birmingham was awkward and disconcerting. After six months of intense work to propose a build-to-suit, $70 million office tower for the largest law firm in Alabama, our team was prepared to walk away from the deal, just like that, because of who we are. The project was an important one for our company, Melaver, Inc. We had acquired the old Federal Reserve Bank, built in the 1920s, and hoped to renovate it and the adjacent annex building, as well as add an office and hotel complex abutting the existing structures. It would be our first mixed-use sustainable development of significant size outside our home state of Georgia. Birmingham, decades after abandoning its downtown core in the aftermath of its stance against integration, seemed ripe for the type of renaissance our project could augur.
We had commissioned a top green architectural firm, BNIM out of Kansas City, to deliver an iconic design that we hoped would catalyze redevelopment in the downtown area. The iconic part was challenging, since we wanted a design that would fit into the turn-of-the-century architecture while suggesting a new chapter in the city’s history, befitting the first change in the skyline in almost twenty years. We were looking to include a host of community stakeholders in the project, so that the final product would inject new life into the downtown’s staid nine-to-five-and-go-home rhythm. The potential client—Balch & Bingham—was vacillating between staying in their current offices or signing with us to build them a new signature office complex. Many movers and shakers, prominent people not only in Birmingham but from the entire state, were seated around the board table that morning, creating a golden opportunity for us to advocate the merits of sustainability.
Sustainability—such a hot topic these days. It’s virtually impossible to pick up any newspaper in this country without reading some article on the subject, from green building and technologies to organic agricul¬ture to global warming and other aspects of environmental degradation. There may be no consensus about what the term means, but there is defi¬nitely a general feeling that we know it by its absence. There’s no lack of sobering statistics conveying the degree to which we have degraded our habitat—our air, our waterways and groundwater, our soils and landscape. Perhaps the most sobering statistic of all is the notion that we currently need 1.2 planet Earths to accommodate our consumption of resources and our discarding of waste. If all the world’s population lived the standard of life in the United States, we would need five planet Earths to provide for us all. It doesn’t take a scientist to tell us that things are out of whack. But it is not just that we are degrading our environment, or that we have become the only species on the planet that is literally modifying its host environment on a global scale. We are degrading ourselves, perhaps without even being cognizant of the fact. It’s not a message most of us care to hear, particularly given the advances our civilization has realized since the Industrial Revolution and what those advances have provided: increase in life span and leisure time and wealth, improvement in health, the relative freedom to shape one’s own destiny, and so many other benefits. We seem to know so much more than we did even a century ago, and this knowledge carries with it a sense that it will set us free. But is this really the case? Or has our vast increase of knowledge enriched us in certain narrow contexts while impoverishing us in others?
The food we Americans eat travels an average of 1,500 miles to arrive on our tables. Separation between us and what we eat is indicative of a more fundamental displacement between ourselves and nature, the cycle of the seasons, and our connection to where we live. At what point do we grasp that the food we eat is filled with some of the 80,000-plus synthetic chemicals in our environment, the consequences of which are only vaguely understood? With 40 percent of the world’s population living on less than two dollars per day, how can we not see that we are feeding ourselves mythologies of health and progress, both physical and metaphysical?
One of my favorite books is Flatland, written in 1884 by the British teacher and theologian Edwin Abbot. The book tells the story of a two-dimensional world in which one “character,” a line, begins to imagine a three-dimensional world that is literally beyond his flat, physical real¬ity. The challenge Flatland poses for us today is this: How do we step outside a world that has brought us so much knowledge and advance¬ment and see another dimension, one that enables us to recognize that our ethical orientation toward the world is flat and misguided and not so much enabling progress as leading to our own demise? How might we see that the turbocharged pace of life for so many of us today is lack¬ing in a calm, deliberative, purposive sense of direction? How do we go about the process of living sustainably, and what can a business do to facilitate this movement? Oddly enough, underlying this very focused business meeting in Birmingham, Alabama, were deeper questions such as these. Building sustainably, living sustainably; this is what our company, Melaver, Inc., has been about to a large extent since its inception in 1940. The built environment in the United States accounts for 36 percent of total energy use and 65 percent of electricity consumption, more than 40 percent of greenhouse gas emissions, and 35 percent of all nonindustrial waste.
Part of building sustainably means reducing waste, using less energy and water. It also means using and reusing local materials, as evidenced in our proposal to rework the old steel piping throughout the Federal Reserve Bank building, originally manufactured in the steel mills around Birmingham. And building sustainably means utilizing paints and flooring and furnishings made from healthier materials. As part of our company’s overall commitment to sustainability, we develop all of our buildings to Leadership in Energy and Environmental Design (LEED) standards—standards established and evaluated by the nonprofit U.S. Green Building Council. In addition, all our company’s staff members must at least study for and take the LEED exam, resulting in approxi¬mately 80 percent of our staff being LEED accredited.
But building sustainably, for us, means more than the physical struc¬ture. Our company has grown slowly and deliberately over the decades, sustaining itself in large part by keeping pace with the needs of our community. And so sustainability entails a social component as well as a physical one. It entails working within the urban core of a community so as not to contribute to the hundred-plus acres of open land that get converted to concrete and asphalt every day, so as not to exacerbate urban sprawl, greater congestion and commute times, and greater disso¬lution of communal life. Building sustainably calls for injecting social programs into our developments so that we contribute to the overall reinvigoration and health of a community. It means using our projects as levers to bring along a broad group of stakeholders—educators, govern¬ment leaders, health and social workers, artists, nonprofit advocates, urban planners—to work collaboratively on enhancing community. Our company’s statement of purpose neatly summarizes our sense of what this type of sustainable development entails: “Enveloping our community in a fabric of innovative, sustainable, inspiring practices.” To us, restoring the Federal Reserve building was nothing less than the opportunity to be envelopers, to catalyze the restoration of downtown Birmingham. Building sustainably, for us, however, extends even beyond the social context of how our work fosters community. Building sustainably is part of a larger business model, in which how one earns a living flows seam¬lessly into a set of ethical beliefs and practices promoting the overall health and well-being of our land and community. Managing a sustain¬able business entails connecting our viability as a successful business to the viability of our human and natural environment. Granted, this is a more idealistic vision of a business than one typically sees. Maybe, just maybe, it’s this mission-driven ethos that gives us the reputation for being so difficult to deal with was one of the thoughts running through my head that morning in Birmingham. Can we afford to be so idealistic in this case?
Like most businesses, we don’t like to find ourselves in situations where we are forced to negotiate from a position of weakness. But we had no backup tenant prospects looking at the Birmingham Fed project—hardly an ideal position from which to take a strong nego¬tiating stance. We badly wanted—and needed—this deal with Balch & Bingham. For starters, there just wasn’t a lot of big-tenant demand for significant commercial space in downtown Birmingham. Inking a deal with Balch would enable us to prelease at one fell swoop about two-thirds of the project. With this prelease in hand, it would be rela¬tively easy to entice a lunch-dinner restaurant to locate on the premises. The remainder lease-up activity would likely move ahead with simi¬lar ease. A deal with Balch would also fast-track our financing nego¬tiations and facilitate discussions we’d been having on lining up New Markets Tax Credits, a complex funding mechanism that assists with loans in areas designated by the federal government for critical urban renewal. Adding to our challenges, this was our development debut in the Birmingham market. Our entire team felt the pressure to make this debut successful.
The Birmingham Fed project was also important to our team on a personal level. This wasn’t surprising. Our staff reminds me a lot of the sandlot baseball team in Disney’s movie The Bad News Bears: a team of talented, kick-ass malcontents who are hell-bent on playing the game their own way, trying to earn respect from their peers but not willing to earn that respect by the same old methods. Our controller, Karen Stewart, who has worked with us for almost fifteen years, came to our company after raising her two kids. She had put a promising account¬ing career on hold to manage a family, and as she told me at her initial interview many years ago, she wanted to spread her wings and find out just how much she could accomplish. Randy Peacock, a good ol’ coun¬try boy who grew up building cheap stick tract housing and is now in charge of our green construction, wanted to prove to the change-resis¬tant construction industry that building green not only made sense but was the only way to build. Denis Blackburne, our CFO, left a successful career working for some of the largest and most prestigious companies in the world in order to make a difference. And me? As the CEO of a third-generation family business, I knew only too well that while only one-third of successful family businesses make it to the third generation, and just one-sixth make it to the fourth. I did not want to be the weak link that broke a chain reaching back seventy years.
As I looked around the conference room table in Birmingham that Monday morning, my thoughts drifted to the fact that it isn’t always so easy to deliver on our aspirations to become a sustainable business. Sometimes it feels as though I am asking our team to run a relay race in Birkenstocks. It isn’t just that we are trying to promote a different way of building, although that is challenging enough. Part of the challenge involves jettisoning traditional business conventions in lieu of different management practices designed to realize a business’s highest poten¬tial. We weren’t just trying to restore an old Federal Reserve building in Birmingham. We were also engaged, each of us, in an ongoing process of restoring who we are. Partly to console my worries, partly as whistling in the dark, I thought about former Herman Miller CEO Max De Pree’s words—which open this chapter—on a company needing a redemptive purpose. That’s easy for him to say, I thought. Maybe, just maybe, we’ve gone too far this time?
The issue on the table, posed by the newly annointed managing direc¬tor of Balch & Bingham, was this: “Guys, we love your work and we love many aspects of your proposal. But we don’t get this sustainable stuff. Would you be willing to develop this project for us, but not do it sustainably?” The question may have been directed at Colin, but I felt all eyes in the room on me. I looked over at Colin and we shared a brief smile. It seemed like minutes before he responded, though it was only a few seconds.
In retrospect I think the folks at Balch & Bingham were shocked by our response, though I don’t know if they were taken aback more by our refusal or by the fact that such a monumental stake was placed in the ground by someone other than me. As it turns out the decision to say no and the fact that this decision was made and articulated by a colleague are fundamentally related. While our no that day in Birmingham took only a fleeting moment to utter, it took decades of collective groundwork to build the foundations underlying what was being said. The remainder of this book will be devoted to fleshing out the affirmative principles embedded in our no that day: the management principles and practices that shaped this foundation-building work, the journey we took as a company to realize who we are, and the moves we are making to become a sustainable business.