Chapter4 and 5 in “Carbon Efficient City” reminded me of one recent irrational event over teardown of iconic Class-A office building which was only 20 years old in Tokyo, Japan. Through this actual event, I’d like to consider the importance of having flexibility and versatility, and how we could avoid such un-ecological and illogical teardown.
The building was located in Hibiya area where is one of the most prestigious and expensive office areas in Tokyo, like Manhattan in NY. There is a big public park in north side of this site. Office workers could enjoy great view of imperial palace. Originally, this building was designed and occupied as one bank head office. Whole building was occupied by the bank since after completion in1993. In 2008, Morgan Stanley (MS) acquired this building for USD1.3billion, but the bank moved their head office in 2011 and MS default the loan. In 2012, one private real estate fund won a bid for USD560million, half of the original price. And the winner announced turndown of existing building and rebuild new office building which will be almost same FAR and building height. Why rebuilding plan was most economically rational and won the bid even though existing building was only 20years old?
According to one interview with successful bidder, they also considered other game plan which was to remodel existing building and leased it out. But three big problems made them decide to proceed with turn down and rebuild plan. First, rentable ratio of the existing building was extremely low, approximately 40% since existing building was designed for bank head office. There were a lot of un-leasable spaces. Second, lack of versatility. Inefficient floor plan and obsolete building equipment made it difficult to remodel to multi tenant office building. Finally, excessive equipment increased operational cost. Above these three main reasons, the plan turning down existing building and rebuild was most economically rational and they won the bid. But, from ecological and social point of view, that plan seems irrational and inefficient. Remodel existing building and leased it out is more efficient and eco-friendly.
3. How we could avoid this inefficient plan?
As A-P Hurd mentioned in the book, carbon taxes is one of the effective means to the spoil motivation of turn down the existing building.
(2) Local Government
If local government was more flexible to remodel and upgrade existing building, remodel plan had more economical sense. I think remitting or reschedule property tax would be also one of the influential methods.
As I wrote above, this building was designed for head office of one bank. When completing the existing building around 1990, no one imagined the banks bankruptcy situation. Actually, there were no banks defaulted before this bank collapsed in 1998. But, if the exiting building is designed to have more versatility, the building never turned down. Furthermore, if the original owner did Life-cycle cost analysis more accurately, operating cost would be lower and the building lived longer.
Below pictures are interior and exterior of turned down building.