Feature: July 2008

Billion-Dollar Makeover

Dealerships are leading a green revolution.

By Laura Withers

Seeing green: Dealers across the country are making their stores more ecofriendly through (clockwise from top left) recycling, wind power, cutting-edge lighting, and low-maintenance landscaping.

When Arkansas dealer Jay Caldwell told some friends he was planning to build a “green” dealership, he got a surprising reaction. “They were thinking ‘green’ the color,” he recalls with a laugh. “They just didn’t get what we were doing.”

That’s no surprise. Ecofriendly dealerships like Caldwell Toyota, Conway, Ark., are still relatively unusual. But dealers across the country are beginning to catch on to the pluses of “going green”—such as saving money and drawing increasingly green-minded customers, not to mention ridding the world of tons of greenhouse gas emissions. The trickle of activity a few years ago has become a flood of facility upgrades and new construction totaling nearly $1 billion. Some stores employ cutting-edge heating and cooling methods and efficient lighting; others are brand-new, state-of-the-art “carbon neutral” facilities using alternative energies like wind and solar power.

EXTREME MAKEOVER: DEALERSHIP EDITION
Forty-eight percent of the nation’s energy—including 70 percent of its electricity—is consumed by buildings, says the U.S. Green Building Council. Dealerships—with their 24/7 security systems and extensive lighting—tend to devour energy. EPA estimates that if all dealerships reduced their energy consumption by just 10 percent, they would save about $193 million in energy costs and cut more than one million tons of greenhouse gases each year.

The payoff: Patt Lobb of Pat Lobb Toyota, McKinney, Tex., says his water cistern will pay for itself in less than two years.

Nearly 800 dealerships are now members of Energy Star’s Small Business Network and have taken the first step toward reducing their energy use by 10 percent under NADA’s Energy Stewardship Initiative. NADA and Energy Star will soon recognize dealers who have reached this benchmark by rewarding them with a certificate and online coverage. (For more, visit www.nada.org/energystar.)

Meanwhile, the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) rating system has two stores—Pat Lobb Toyota, McKinney, Tex., and Toyota of Rockwall (Tex.)—already certified and two dozen others, including Caldwell Toyota, well on the way (see Ecostore’s Growing Savings). The LEED program assesses a facility in five areas (site development, water savings, energy efficiency, materials selection, and indoor environmental quality), then assigns points that determine the project’s rating (Certified, Silver, Gold, or Platinum).

	Rotary in-ground lifts: At Caldwell Toyota, Conway, Ark., the lifts use less fluid and give techs more space to work.
	Customer amenities: Even the bathrooms get a makeover at Caldwell Toyota, with motion-sensitive faucets and wall tiles made of recycled bottles.

Seeing long-term economic benefits and swelling customer expectations, automakers have begun to reflect the rising tide of green in their facility initiatives. Under Toyota’s Eco-Image USA II, panels on a building’s exterior are 90 percent recycled aluminum, and entryways have nonleaded glass and LED lighting. GM, Chrysler, and Honda are offering dealers voluntary programs that incorporate ecofriendly design.

Last month, GM opened its first dealership built according to Gold LEED guidelines: LaFontaine Buick/Pontiac/GMC/Cadillac, Highland, Mich. The $15 million facility has underground pipes for heating and cooling, plus a roof that reflects sunlight.

Michael Bevan, corporate manager of retail market development at Toyota Motor Sales, Inc., credits Pat Lobb—owner of the nation’s first LEED-certified dealership—with planting the seed. “I think Pat said it best: ‘Hey, I’m not a tree-hugger. This is a business investment to me.’ ”

SEEING GREEN IN SAVING GREEN
Some green dealers have slashed energy expenses by upgrading facilities and monitoring monthly usage. You don’t have to spend millions to save a lot, says dealer Jack Fitzgerald, Fitzgerald Auto Mall, Bethesda, Md., whose 12 stores recycled more than four million pounds of waste last year. Whether by greening up their stores or steering customers toward ecofriendly vehicles, Fitzgerald says, dealers should do what they can to help the environment (see Green-Collar Jobs at Dealerships). “You don’t have to do it all, but you ought to do something.” Financial incentives are available from states for energy-efficiency upgrades and use of renewables (visit www.dsireusa.org).

	Waste management: Copper tubing moves waste motor oil from storage tanks to heaters in the service department.
	Cutting costs: Some dealers install fans at each tech’s work station to control air circulation and cut air-conditioning use.

Some dealers say they’ve begun to see a return on their investment in less than two years. Jerry Lawson, national manager for Energy Star’s Small Business Network, says implementing even a few “sure energy savers”—such as placing occupancy sensors on interior lights or using compact fluorescent light bulbs—can bring huge savings over time.

Dealer Dave Kring, Dave Kring Chevrolet/Cadillac, Petoskey, Mich., targeted his heating/cooling and lighting systems. He added a quick-oil-change service that provides enough waste oil to heat the shop all winter. “We save all our oil during the summer, and in the fall we kick on the boiler,” says Kring. The store also slashed its wattage by joining the International Dark Sky Association, which promotes better outdoor lighting that cuts nighttime light pollution. (For a list of Dark Sky–approved fixtures, visit www.darksky.org.)

Dealer Caldwell knew he needed more space; the challenge was deciding how best to use it. In the showroom, he had five skylights called Solar Tubes installed to collect natural light. Caldwell says he now wishes he’d bought more. “They outshine any of our other fixtures,” he says. When the sun goes down, Caldwell turns on T5 compact fluorescent fixtures to light the 34,000-square-foot dealership.

Though the facility is nearly three times the size of his previous one, Caldwell says his total energy expenses will rise by only about 30 percent. Caldwell Toyota is also looking to institute a major recycling program.

Low maintenance: Subaru of Plano (Tex.) owner David Thomas jokes of his store’s water-saving landscaping, “You don’t have to water the rocks much.”

COURTING GREEN-MINDED SHOPPERS
With gas prices at record highs and still rising, everyone wants to be green these days—especially customers. Dumping SUVs for hybrids and smaller cars is part of it. But Toyota’s Bevan also reports “tremendous” increases in customer satisfaction and retention at the automaker’s green dealerships.

Toyota is not alone. At Subaru of Plano (Tex.), for instance, dealer David Thomas says he has gotten raves about his store’s water-saving landscaping design, with rocks and drought-resistant plants native to the Southwest (see Desert Store, Desert Plants). “It’s a good fit with the Subaru customer because we have a more environmentally conscious consumer.” And when Jim Astuna and Chuck Theisen were designing their Mercedes-Benz of Arrowhead store outside Phoenix using green technology, their thinking, says Astuna, was that “consumers are going to want to buy [new, green] products at a facility that incorporates environmental values. As a retailer, you’d better get on that train.”

But for now, what’s hot in California may not have caught on in Kentucky. And though customers in Oregon may soon expect their dealers to be green, that might not be so in Pennsylvania. “It has to do with how the people around them see the environmental movement,” says Sebastian Blanco, editor of AutoblogGreen (www.autobloggreen.com). And time will tell if green dealerships go down as short-lived fads or staples of auto retailing.

Dealer Caldwell has already made his prediction: “I think that within 10 years this will be the standard way to build a car dealership. And I think the public’s going to push this to the point where this is the expectation. Not only is it the right thing to do; it’s also the smart thing to do.”

Laura Withers is an assistant editor of AutoExec.

The Greener Dealership: 10 Case Studies The following dealerships are glowing examples of how any business can slash energy use and boost the bottom line. To find out more about these dealerships (and others), visit nada.org/green.

Fitzgerald Auto Mall, Bethesda, Md. Runs on power generated by wind turbines. (President Jack Fitzgerald is a member of the Clean Energy Partnership in Maryland.) Hand Motors, Manchester Center, Vt.Expects to save about $30,000 a year through initiatives such as heating body shops with vegetable oil and used motor oil. (President Jim Hand was the national winner of the 2007 USA Today Dealer Innovation Award.) JN Automotive Group, Honolulu.Uses sunlight to heat and light its Audi/Harley-Davidson store on Maui (see Let the Sunshine In). LaFontaine Buick/Pontiac/GMC/ Cadillac, Highland, Mich. Is Michigan’s first GM store built to LEED (Leadership in Energy and Environmental Design) standards. It features waterless urinals and a $600,000 geothermal heating and cooling system. Pat Lobb Toyota, McKinney, Tex. Was the first U.S. dealership to get LEED certification. It has multiple layers of decking, concrete, and Styrofoam to reflect heat. Quirk Auto Park, Bangor, Maine. Features a natural-gas turbine generator that has sliced the store’s demand for electricity and heating by 15 percent. Toyota of Rockwall (Tex.). Has a roofing system that reflects 90 percent of the sun’s heat. It was also the first U.S. dealership to snag Gold LEED certification.

Caldwell Toyota, Conway, Ark. Collects rainwater and condensation from air conditioners in an 11,000-gallon cistern to run its car wash and irrigation system. Mercedes-Benz of Arrowhead, Peoria, Ariz. Has installed solar panels on the roof to generate power and reflect heat off the building. (The store now earns credits for power it pumps back into the electricity grid.) Dave Mungenast Lexus of St. Louis (Mo.). Will be one of the first Lexus stores built to LEED certification standards. The $16 million facility will have bike racks and showers to promote biking to work.