cherokee business philosophy - td overview

8/7/2019 Cherokee Business Philosophy - TD Overview

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Cherokee Business Philosophy

Lessons Learned and Future Opportunities

Tom Darden, CEO


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Cherokees businessphilosophy

Lessons learned from

investing in brownfields andsustainable development

Trends support sustainabledevelopment

Opportunities to expand theapplication of sustainabilityabound

Presentation Objectives


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Business Philosophy

Tishman Speyer Rouse Company Mary Kay Cosmetics

Walking to the SkyJonathan Borofsky, 2004, Stainless steelpoll and fiberglass figures privatecollection exhibited at RockefellerCenter, New York.


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Introduction to Cherokee


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Cherokee Sustainability Philosophy

Cherokee is a private equity firm investing capital and expertise in theredevelopment of urban infill sites with a focus on brownfield and transit-oriented development.


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North Hills, Raleigh

Vacant and contaminated mall converted to mixed-usetown center


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Boisbriand, Quebec

Former GM plant is now a mixed-use, sustainablecommunity


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Charlotte Southline, North Carolina

Reducing carbon by investing in land near transit


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Cherokee Office

Cherokees office uses significantly less water andenergy


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National Mainstream GreenHome

GreenHome is a model for green building practices


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Brownfield Redevelopment


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Environmental Regulations in U.S.

U.S. Environmental Protection Agency Established and Clean Air Act Adopted

Clean Water Act Adopted

Safe Drinking Water Act Adopted

Resource Conservation & Recovery Act and ToxicSubstances Control Act

Amendments to Clean Air and Water Act

Superfund Act Adopted

19701972197419761977

1980

1880s to Mid-1900s. Simple, local rules. No dense smoke and norefuse in the water

1940s to 1950s. Research on the effects of pollution on air and waterstart modern environmental era


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Superfund Law 1980

1978. Love Canal in Niagara Falls,declared a state of emergency families evacuated

1980. Superfund Lawo Clean up the most highly

contaminated hazardous wastesites

Protect human health and theenvironment

Make the polluters pay by imposing

strict, joint and several liability

Change behavior to stop further toxicwaste dumping


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Superfund Unintended Consequences

EPA highly inefficient at conductingcleanups

In 20 years, only 750 sites cleaned up

40% of the $30 billion spent onlitigation, not cleanup

Arguably, huge price paid for littleenvironmental gain

Cleanup shifted to more efficientstate-level Superfund programs

Promoted greenfield developmentdue to liability concerns


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Superfund Law Amended -- 2002

Limit liability of lenders and prospective developers

EPA agrees to offer federal CERCLA authority to qualified state cleanupprograms

A host of state-level voluntary brownfield cleanup programs emerge

Federal grants and loans provided to state and local governments

Tax law changes more favorable for cleanups


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Sustainable Development


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What is Green or Sustainable Development?

Site Locationo Urban infillo Near transit (alternative transportation)o Reclaimed land

Site Designo Mixed-useo Walkableo Parks and open space

Green Buildingo Energy efficiento Conserves watero Protects the natural landscape

Economic Demando Addresses market needo Price point diversification reduces risk

and supports a diversity of householdtypes and incomes

Stapleton, Colorado


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Evolving Toward Sustainable DevelopmentSource: UrbanGreen


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Benefits of Sustainable DevelopmentSource: ULI Growing Cooler

Location-design of communities reduce themiles a person drives by 25% to 40%

Shifting 60% of new development to smartgrowth can reduce 79 million metric tons ofCO2 annually by 2030

Buildings make up 35% to 45% of the U.S.CO2 emissions

Building emissions can be reduced by 70%to 80% using current green buildingtechnologies

Market is significant and growing 25% to35% of the U.S. market today

Rosslyn, Virginia


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Economic Trends

Spending as a percentage of GDP:o 64% in the 1960so 72% in 2007

Personal savings:o 10% in 1960so 6% in the 1980so 0% today

Ratio of household debt to GDP:o 40 to 50% in the 1960so 70% in the 1990so 110% today


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Drivers for Sustainable Development

Growing Concerns about the Environment

Shifting Global Demographics

Increasing Market Demand

Public Policy Drivers


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Environmental Drivers

Climate Change & Water Eighteen of the last 20 years were

the warmest years on record

During the 20th century, the earthssurface warmed by about 1.4 F

Climate change affecting physicaland biological systems

World Bank reports that 80 countrieshave water shortages that threaten

health/economies


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Shifting Global DemographicsSource: ULI Global Demographics

Global population will increase by 2.5 billion by 2050o equivalent to the 1950 total world population

By 2030 1 in 8 people in the world will be 65 years or older

In 2020, the population in the U.S. living without children in the homewill reach 75 percent

Demographic trends and changing household composition will affecthow and where we live in the future


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Estimates of the marketfor sustainabledevelopment in the U.S.:

LOHAS: 25% Cultural Creatives: 30% RCLCO: 35% +


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McGraw Hill Outlook 09o Next five years green will grow: $96 -$140

billion market

o Non-residential market: green building will be10% to 12% of the 2008 new starts

o Residential: green building is $12-$20 billionof the marketplace in 2008

o Education, office and healthcare -- greatest

growth in green building

o Green will outperform others in a negativemarket


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Third-Party Standards for Green Building

US Green Building Council -- USGBC Members include:

o Designers and service providerso Developerso Universities

Rapid growth and market change: 1999 2008o 60% growth in membershipo USGBC Greenbuild conference attendance: 30,000

Up 25% in 2008o 180% growth in registered LEED buildings

o 3 billion SF of registered LEED buildings


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Consumer ConsciousnessSource: Google -- November, 2008

KEY WORDS

Barack Obama 81,400,000 sustainable 62,000,000 climate change 47,400,000

global warming 44,200,000 George Bush 41,000,000 Angelina Jolie 34,100,000 gas prices 31,400,000 Iraq war 30,500,000 green building 26,400,000


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Wells Fargo $2 billion in financing for Green buildings (November 2008)

JP Morgan Provides energy efficient mortgages Invests in renewable energy

Morgan Stanley Smith Barney

Formed carbon bank Investing $3 billion in environmental markets including carbon credits

Goldman Sachs Develops and generates wind energy

Investing $1 billion in renewable energy and energy efficiency projects Evaluating markets for water, biodiversity, forest management and other

ecosystem services

Other leading banks Bank of America Shorebank New Resource Bank

U.S. Financial SectorResponding to Trends


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Make It Right


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Make It Right


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Make It Right


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Conclusions

U.S. is well positioned to benefit from national and global trends that support

sustainable development

U.S. stimulus package and other public policy decisions will likely supportgreen building and alternative energy development

Opportunities will grow for those who want to pursue jobs in the area of

sustainable development

Convergence of technological advancements, public policy and demographictrends will significantly accelerate the application of sustainability over thecoming decade

cherokee business philosophy - td overview

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