Federal Realty Case Study
About the Client:
For over 50 years, Federal Realty has been a proven leader in the ownership, operation, and redevelopment of high quality retail real estate, including shopping centers and urban mixed-use properties in the country’s best markets. Federal Realty’s portfolio is located in metropolitan markets primarily in the Northeast and Mid-Atlantic regions of the United States, California and Florida. Federal Realty is an S&P Midcap 400 company and its shares are traded on the NYSE under the symbol FRT.
About the Mall:
Bethesda Row is an upscale mall located in Montgomery County. It encompasses a total of 533,000 square feet and 298 parking spaces. There are over 78 retail establishments as well as prestigious residences in the stylish and contemporary building known as Upstairs.
About The O’Keefe Group
TOG is a waste reduction consultancy that partners with companies to help them identify opportunities and strategies to decrease waste hauling costs by diverting waste away from traditional disposal haulers. For over 35 years, TOG has developed turnkey recycling programs for thousands of companies nationwide to help them claim their independence from trash haulers and provide them with an environmentally safe alternative.
"We hope more property owners will declare their independence and join our Zero Waste Movement”— TOG's President, Michael O'Keefe
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- Increase in costs due to over-servicing
- Decrease noise level and eliminate odors from truck traffic in the mall
- Eliminate odor, vector and rodents caused by the organics container
- Maintain compliancy with OSHA and ANSI Standards
- Inefficient hauling
- Streamline and automate operations.
- Remove all front-load containers
- Institute TOG R.A.P. (Recycle All Paper) Program
- Install four new Paper Recycling Compactors
- Develop a plan to break dependency on hauling contracts
- Consolidate equipment
- Educate tenant on source separating and clean waste streams
- Eliminate organics container
- Overall monthly costs have been reduced by 56%
- Reduced GHG Emissions from less trucking
- Increased efficiencies and productivity without increasing overhead
- Enhanced brand image of the mall by decreasing truck traffic, thereby eliminating odors and noise level
- Increased recycle recovery rate at a rate of $75.00 per ton, less trucking costs
- Minimized regulatory risk by making environmental practices an integral part of daily operations
- Generated income by combining the pad rentals with the cardboard and plastic recycling revenues
- Source separating has kept the waste stream clean and more marketable
- Compliancy with Montgomery Recycling Regulations
- Established best practices
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The Client’s Challenge
Federal Realty’s national hauler was providing front-load service for corrugated, mixed paper, and commingled bottles and cans. FRIT took action to stop this wasteful practice and to reduce expenses. TOG provided the platform needed to improve the quality of service and reduce costs. There was no reason why all paper fibers could not be combined in a single compactor making them eligible for a recycling rebate.
Most days, one or more containers would over-flow. The daily truck traffic degraded the pristine and popular shopping experience with the presence of garbage trucks driving around the property at all hours. The daily service meant large amounts of diesel fuel had to be burned in order to service the center, thereby, contributing to greenhouse gas emissions, as well as the odor of diesel trash trucks. Federal Realty was tired of haulers making extravagant promises to reduce costs and never following through.
The TOG Solution
TOG’s first priority was to get the national hauler to restore safety to its equipment, review current hauling contracts, and negotiate better terms. All front-load containers that held mixed paper, corrugated and office paper were removed and replaced with new paper recycling compactors that met OSHA and ANSI standards.
TOG instituted the TOG R.A.P. (recycle all paper) Program and instructed the tenants to deposit all paper in the TOG red paper recycling compactors. New trash compactors were installed that had far superior compaction than the previous ones. TOG then installed yellow, 18 gallon bins to collect bottles, cans, glass, and other beverage containers, and banned the bagging of food and beverage containers. Previously, when the tenants were allowed to bag them, they also threw trash into the containers and then dropped them into the 90 gallon recycling totes, contaminating the stream. The Organics Container was eliminated and Rubbermaid containers were added.
Educating and training tenants on the importance of source separating (keeping trash out of the recycling waste streams), has made the material more marketable. The amount of water weight from bottles and cans has reduced the weight in the compactors and has saved Federal Realty additional money on direct disposal. This resulted in the sale of R.A.P. materials at a rate of $65.00 per ton, less trucking costs. When the 15 and 20 yard recycling roll-off containers were eliminated, and new compactors installed, the need to haul almost daily was eliminated and hauling costs were reduced. The addition of 18 gallon commingled recycling boxes increased recovery rates further at the store level for other commingled recycling
TOG has reduced costs at Bethesda Row by 56% per month. A portion of the savings was the elimination of fuel and environmental fees, a charge designed by national haulers to raise prices. TOG instructed the national hauler to eliminate these surcharges from its clients invoiced costs. TOG requested net pricing only with a price guarantee for 2 years. Federal Realty gained the right to use the hauler of its choice and to challenge higher prices and eliminate wasteful practices that created higher costs.
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