Shades Of Green

April 30, 2007
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Throwing caution to the wind, Sam Pobst, chairman of the U.S. Green Building Council of West Michigan, opened last week's chapter luncheon at CalvinCollege's PrinceConferenceCenter with the notion that sustainable business had taken such a foothold in West Michigan because of its historically "value-conscious" nature.

Citing Australian Richard Grove's 1996 book "Green Imperialism," Pobst noted that the Dutch origins of environmentalism began when Holland's seafaring settlers discovered how finite an island's resources can be.

"Being cheap is a virtue," Pobst said.

As reported in the Business Journal's online edition (grbj.com), keynote speaker for the event was S. Richard Fedrizzi, president, CEO and founding chairman of the U.S. Green Building Council, on hand to talk about the rapid growth of green building and the council.

It took the better part of a decade for national membership to reach 500 companies, yet it added that many companies in each of the last two months, driving membership to an astounding 8,700 organizations. There are more than 35,000 professionals accredited in the council's Leadership in Energy Efficient Design standards, and a growing roster of thousands of LEED-certified buildings.

"I think we've reached the tipping point," said Fedrizzi. "This isn't a marketing program; this isn't a blip. This is a group that is making a difference."

The LEED standard was initially embraced for its potential to reduce energy costs and increase productivity. Green buildings have been proven in academic and government studies to increase productivity by nearly every organizational measurement and to operate 30 percent more efficiently. Today, as concern grows for climate change and carbon footprints, green building (residential and commercial construction is the largest source of carbon emissions) is proving a source for immediate and measured environmental impact.

While Fedrizzi did not cite the involvement of West Michigan furniture companies in launching the council and the LEED standard, he did highlight Grand Rapids for its green building achievements. When the city appeared in a series of slides showcasing "green cities," he joked: "This slide is always up here. I didn't just put it in there for today — but I usually use it for laughs, that it has the most green buildings per capita. … But seriously, I don't know how it happened, but what has happened with green building here is astounding."

Honored in a separate event later that day was Ryan Garone, a recent hire at local architecture firm Design Plus, winner of the chapter's first annual Natural Talent Design Competition. The competition was launched late last year as a means to foster the state's emerging green designers.

**As the agreement that allowed the merger of Butterworth and Blodgett hospitals into Spectrum Health 10 years ago stipulated the new health system keep costs down, any discussion of its profit margin tends to be a touchy one.

During a recent review by local watchdog organization Alliance for Health concerning the DeVos Children's Hospital, Spectrum Health projected an 8 percent operating margin for the fiscal year ending June 30 and nearly 10 percent by June 2008. It expects the margin to drop to 7.93 percent with the advent of the new children's hospital. Alliance for Health guidelines suggest a 2 percent to 7.5 percent margin for "a healthy and viable nonprofit organization."

This led Alliance for Health President Lody Zwarensteyn to suggest that, with a margin that would make many business owners smile, the health system should consider lowering prices. "It is recommended that the Spectrum Health board of directors re-examine its schedule of charges in light of real expenses and expected revenues, and reduce its charges," the AFH analysis stated."We have the opportunity to consider where we are going," Zwarensteyn added at the review session.

Spectrum Senior Vice President John Mosley took exception: "We think it is inappropriate. We are one of the most concerned and best systems as far as transparency," he retorted. "We're very upfront."

He attributed most of the margin not to operations, but to investment income. Mosley said that Spectrum Health is bracing itself for an ever-increasing number of low-income patients on Medicaid — a program that is notorious for paying less than the cost of care — and an anticipated 2008 cut in Medicare reimbursements. "I think we are well within guidelines when you take all things into consideration," he said.

In an earlier interview, Spectrum Grand Rapids CFO Joe Fifer also took exception: "(The AFH review) says that our costs are too high in this project and margins too high. … We're well within industry standards for all of those. It's just not fair or representative of what we're saying and what we are to this community."

**Local accountant and Business Journal columnist Paul Hense, immediate past chair of the National Small Business Association, was in Washington, D.C., last week to testify on behalf of small business.

Speaking before the U.S. House Committee on Small Business, Hense attacked an IRS initiative targeting small business on the premise that it loses an estimated $290 billion to small business tax evasion. As it turns out, according to IRS taxpayer advocate Nina Olson, 94 percent of this sum is due to tax filers who do not understand the 17,000-page beast of a tax code.

In a column on the subject last year, Hense wrote, "What happens if, after the initial onslaught, the massive cheating is not evident? … I think the term is 'collateral damage.' If a few innocent taxpayers get caught in the crossfire, that is simply the price of being in the wrong place at the wrong time."

**Robert Roth, president and CEO of RoMan Manufacturing Inc. in Grand Rapids, has been named a John G. Thodis Michigan Manufacturer of the Year by the Michigan Manufacturers Association.

Roth's Small Tier Michigan Manufacturer of the Year award (recognizing leaders of firms with fewer than 500 employees) is one of five awards that will be presented to manufacturing leaders on May 8 at the HenryCenter for Executive Development in Lansing.    

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