Sprawling big-box stores, surrounded by acres of surface parking, have bedeviled urban planners seeking smarter growth at the same time that those planners’ cities seek new retailers to increase property tax bases and sales tax revenues. In Centennial, Colorado, a ten-year-old city of 100,000 people just south of Denver, a new 415,000-square-foot (38,600 sq m) IKEA store offers a more sustainable model on only 13.5 acres (5.5 ha) of land along Interstate 25. The building is heated and cooled entirely by geothermal wells and is lighted by solar-tracking skylights and LED systems powered by photovoltaic cells.
Typically, big-box stores are single-level buildings, so a store the size of the one in Centennial could easily consume 25 to 30 acres (10 to 12 ha) if laid out in the traditional manner—at an assumed 85 percent net-to-gross space efficiency, along with parking for more than 1,550 cars at a ratio of 3.75 per 1,000 square feet (4 per 100 sq m) of retail space. But Denver’s innovative IKEA has no surface parking and is built on four levels.
Most big-box stores have resisted multilevel stores because of the difficulties of moving shopping carts from one level to another. Some stores have used separate 30-degree-sloped cart escalators, but customers pushing strollers cannot use them, and customers with children riding in their shopping carts must carry the children on passenger elevators. Such impediments discourage such shoppers and reduce sales on upper levels.
IKEA is different than most big-box stores in that it does not give its patrons shopping carts to push through stores. Moreover, it provides secure child care services at store entrances not only to provide relief to busy parents, but also to encourage them to shop at a more leisurely pace. IKEA’s typical store channels patrons through a mazelike pattern of display rooms on the second floor. Merchandise carts are provided only on the first-floor warehouse sales level to enable patrons to move selected boxes to the checkout stations and the merchandise pickup areas.
When structured parking is substituted for surface parking, the ability to move shopping carts to lower parking levels is critical. For this purpose, IKEA uses ramp conveyors, called travelators, which are inclined at only 12 degrees. Unlike a simple moving sidewalk, these ramp conveyors have grooves to lock the shopping cart wheels. Not only must IKEA bear the added cost of building structured parking, which can easily be 25 to 30 times the cost of surface parking, but it also must bear the cost of installing ramp conveyors to both levels of parking below the main store level.
Because there was no IKEA in the Denver area before this new one, and because Centennial was eager to add the store to its retail tax base, the city and IKEA entered into a special public/private partnership agreement as an incentive for the chain to develop and complete the project during 2011. Under the agreement, 75 percent of the sales tax revenue generated by the store will be paid to IKEA to offset money the firm spent on what the city/IKEA agreement defined as public purpose improvements such as parking, utilities, traffic control, drainage retention, public amenities, lighting, landscaping, and signs. The agreement drops the split to 50 percent after three years, and continues that split for up to ten years or until the tax payments to IKEA total $18 million, whichever comes first.
IKEA, a privately held company, has not disclosed the sales totals at the Centennial store; the firm’s only comment is, “We are thrilled with the store’s success,” a statement by IKEA executive Joseph Roth. Some observers were quoted in the Denver Business Journal in June 2011 saying they expect the 2.5 percent sales tax to generate $2.3 million for the city annually, which would imply gross annual sales of $92 million, equal to about $222 per square foot ($2,389 per sq m). Another observer with experience developing other centers, including IKEA stores, noted that IKEA sales often can reach over $400 per square foot ($4,300 per sq m). If that level were achieved, the city tax rate on IKEA’s annual sales of $166 million would produce $4.15 million annually. Under the allocation formula, over $9 million would be reimbursed to IKEA in the first three years, and the balance of the $18 million would be paid over the following four years.
The unique aspect of the agreement is that the city did not need to invest any of its reserves upfront in order for the company to invest in building the store and thereby generate sales tax revenue for the city. In this way, the city essentially shifts the burden of generating adequate sales, as well as the risk and costs of collecting the tax, to the private retailer.
A different agreement in Draper, Utah, near Salt Lake City, provided that the city pay upfront for nearly all infrastructure upgrades to IKEA’s 40-acre (16 ha) site, including upgrades to water, sewer, electric, communication, and gas lines. In addition, the city paid all the developer’s permit and impact fees. That city claims to have recovered its investment through sales tax revenues in three years. Because the Denver-area store is the only IKEA store for neighboring states Wyoming, Nebraska, Kansas, Oklahoma, and New Mexico, city officials expect its superregional character to attract travelers who will also visit other area retailers and restaurants that will, in turn, generate accelerated sales tax revenues.
The Denver-area store is the largest and most dense using this compact development model, but it is not the first. In California, the IKEA store in Covina has 325,000 square feet (30,000 sq m) of space on 12.5 acres (5 ha), and the store in East Palo Alto has 290,000 square feet (27,000 sq m) of space on only ten acres (4 ha). Both stores are built over structured parking.
However, the Centennial IKEA is the first in the United States to be heated and cooled entirely with geothermal energy. This technology involved drilling 130 holes—each 5.5 inches (14 cm) wide and 500 feet (150 m) deep, set in a grid of 13 wells by ten wells—into the earth for pipes holding heat-transferring liquid circulating through underground loops to either warm or cool the temperature inside the store. Because the earth stores energy at a constant temperature of about 55 degrees Fahrenheit, the large mass of thermal inertia can produce both heating and cooling very efficiently simply by concentrating and moving the heat required either from or to the ground.
The depth of the holes was determined by soil conditions, thermal conductivity tests, and the large amount of liquid needed for the heating and cooling loads of the large store. IKEA partnered with the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) in Golden, Colorado, to study geothermal efficiency in large-scale buildings. NREL’s monitoring and data will help IKEA make decisions about adding different mixtures to the liquid, tempering the flow, and adding more pumps or an additional cooling system. NREL’s database is open to researchers around the world to use for their models. At the site, geothermal energy also warms the surrounding access ways, melting the snow that could impede shoppers and delivery vehicles.
A system of manifolds can be used to regulate the heated or cooled liquid sent to water-to-air heat exchangers located throughout the store. Tanks that can hold ice water can be used as thermal buffers to store energy for cooling. Not needing other fuel sources, the geothermal pumps will also use about 50 percent less electricity than conventional heating or cooling systems.
Geothermal heat pumps produce both heating and
cooling very efficiently without another fuel source
simply by concentrating and moving the heat
required, either from or to the ground. Since the
earth stores energy at a constant temperature of about
55 degrees Fahrenheit, the large mass of thermal
inertia becomes the fuel source. Below: Tanks that
can hold ice water can be used as thermal buffers
to store energy for cooling.
Whereas including the geothermal system was in the design from the earliest planning stage, the rooftop solar array was added during construction. The photovoltaic system incorporates a 60,000-square-foot (5,600 sq m) array with 2,212 solar panels. The 498-kilowatt system will produce about 740,000 kilowatt-hours of electricity—the equivalent of cutting 564 tons (512 metric tons) of carbon dioxide emissions, eliminating the exhaust of 100 cars, or powering 62 homes annually. The system is the largest single-use rooftop array on a commercial building in Colorado, and will contribute to the local utility’s renewable energy portfolio and lower the carbon intensity of the electricity grid.
Solar-tracking skylights maximize daylight in selected areas, and a grid of skylights floods the second floor—the main retail showroom floor—with natural light. LED systems predominate for outside lighting and signage, and their use inside the store is increasing. Also, IKEA now sells only energy-efficient light bulbs.
Detention ponds and sand filter basins outdoors pretreat, store, and slowly release stormwater runoff. Waterless urinals and motion-activated faucets conserve water, and hand dryers eliminate paper towel waste in restrooms. Food waste from the IKEA restaurant is recycled and composted. All cardboard, wood, paper, plastic, and glass waste is recycled, and no disposable bags are provided to customers, thereby reducing the amount of waste taken to landfills.
Perhaps one of the most sustainable practices that IKEA follows is flat-packing its furniture, which increases the efficiency of trucks transporting the goods as well as the efficiency of consumer transport of the products to their homes. The ability to disassemble IKEA pieces also facilitates subsequent moving trips and even the eventual disposal of furniture and other products into the recycled-waste stream.
IKEA’s company colors are blue and yellow—colors that when combined create green. Because installation of geothermal and solar systems at its Denver-area store reduces energy use and greenhouse gas emissions—and because the property and sales taxes are generating revenues for Centennial and the state, and the sales are generating profits for IKEA—one may conclude that blue and yellow make many shades of green.