Green Stimulus Money Not Hitting Market Fast

The nation's green-building industry is awaiting billions of dollars in economic-stimulus funding earmarked to make government buildings more energy efficient. But based on the slow pace of allocations thus far, it could take months or years for spending to trickle down to contractors.

The General Services Administration, which oversees the federal government's property, was allocated $5.5 billion as part of the American Recovery and Reinvestment Act passed by Congress in February, of which $2 billion should be allocated before Dec. 31. The initiative is designed to create jobs and to pioneer cutting-edge technology in construction that is environmentally friendly.

At a time when construction on private projects has stalled, advocates of green building hope the GSA, which is America's largest landlord with a 1,500-building portfolio, can use its purchasing power and nationwide reach to lower costs, test emerging products and educate the industry.

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The value of having the government lead the industry on such projects "is priceless," said Jason Hartke, vice president of national policy for the U.S. Green Building Council, a nonprofit advocacy organization.

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GSA
Leah Nash for The Wall Street Journal

The Edith-Green Wendell Wyatt Building in Portland, Ore., is set for a new exterior "skin" that will make it more energy efficient, including 20,000 solar cells and a series of vegetation fins along one side.
GSA
GSA

But so far, the agency has allocated just $1.5 billion, or 75%, of the funds it was appropriated for 2009 and is racing to allot an additional $500 million by the end of the year, just two weeks away. The agency said bids for work are coming in under budget, a good thing, but one that slows them down from meeting its benchmark.

In addition, the GSA has paid out only $89 million. "What we've got now is a lot of architects working overtime to get the work done," said Bob Peck, the agency's commissioner of public buildings. Mr. Peck said the delay in spending reflects the long lead time required to draw up building plans, which can take a minimum of six to nine months.

Economists said the delays in putting the funds to work illustrate the challenges of trying to quickly create new jobs in an industry that traditionally moves slowly. And government planners tend to move more slowly than private industry, according to developers.

"Obviously, [the funds] would have to be outlaid for it to create jobs," said Kermit Baker, chief economist for the American Institute of Architects. "But once [companies] feel that money is coming through the pipeline, it'll have a dramatic effect."

The projects that are furthest along are those that already were in the works, but on hold due to lack of funding. For example, the agency broke ground on a federal courthouse in Austin, Texas, in September. Planning began eight years ago.