When green opportunity comes a-knocking

Just a few short years ago, sustainable (aka green) business practices were all the rage. Everyone wanted to learn more about ways of doing business that were not only environmentally sustainable but also yielded bottom-line benefits. Magazines like this one scrambled to satisfy readers' almost endless appetite for stories about companies that were turning green into gold and trash into cash.

Then came the Great Recession of 2008-2009. For a while, it looked like the economic blues might derail those green efforts. But the green movement proved to have staying power—no doubt because of the mounting, and well-documented, evidence of the financial rewards.

All this helps explain why we're once again hearing a lot of green success stories. The company profiled in this month's cover story is a case in point. As Senior Editor Toby Gooley reports, online retailer Other World Computing (OWC) has become a staunch believer in the power of green. The company built its Woodstock, Ill., DC with environmental considerations in mind. The facility meets all LEED standards inside and out: from landscaping (all native plants, a groundwater recycling program) to lighting and heating (maximum use of natural light, motion-activated LED fixtures, an underground thermal heat system) to power generation (a company-owned wind turbine adjacent to the DC generates more than enough electricity for the building).

The company took its environmental efforts to the next level with a 2010 DC retrofit. With the help of systems integrator Dematic, OWC installed order-filling lanes, packing stations, and conveyors that allowed the retailer to handle much more volume in the same footprint with 40 percent less electricity.

And it's not just OWC. Another example is the Minneapolis-based Murphy Warehouse Co. Richard Murphy, president, CEO, and fourth-generation leader of the 108-year-old family-owned firm, boasts unshakeable green credentials, and his company has a proven track record of following sustainable business practices. For instance, it has already installed solar panels on five of its 10 warehouses. Plus two of the facilities are LEED-certified, with others soon to follow.

Yet for all his eco-knowledge and experience, Richard Murphy is still discovering new and unexpected benefits to going green. The latest came this summer, when Murphy was seeking financing for a 20-year-old, 358,000-square-foot facility he wanted to buy in nearby Eagan, Minn. In total, he was looking for $6.6 million to purchase the building plus another $3 million for upgrades that included LED warehouse lighting, new sprinklers, and rooftop solar power panels.

Of all of the financing options, the most attractive was the Small Business Administration's (SBA) 504 program, which offered below-market interest rates as well as a favorable debt-to-equity ratio. But there was a hitch. "Traditionally, warehouses do not meet SBA mortgage requirements or any other public funding conditions because we do not employ enough people per square foot for their loan ratios," Murphy explains. "This was the case with our new purchase, but much to our surprise, being 'green' came to our rescue."

It turned out that the SBA will sometimes waive its employee-per-square-foot requirement for investments that produce a significant amount of renewable energy. Because Murphy's rehab plans for the facility called for the installation of solar panels, the company was able to take advantage of that exception. The upshot: The project qualified for very favorable financing.

"Being green opened the door for us," Murphy says. "This program literally gives you a financial benefit for running a green business. It's really kind of cool."