The GSB Interview: Kunal Merchant of Lotus Advisory, Bringing Green-Sports to Sacramento, Oakland and Beyond

Kunal Merchant occupies a fascinating perch in the Green-Sports world. A member of the Green Sports Alliance board, the Bay Area-based Merchant has a background in business, politics, and social enterprise. And as co-founder of Lotus Advisory with his sister Monisha, Merchant has guided the sustainability efforts on state-of-the-art green stadium and arena projects, from Sacramento’s Golden1 Center — the first LEED Platinum indoor arena in the world — to the nascent Oakland A’s ballpark project.

GreenSportsBlog spoke with Merchant about his work on Green-Sports projects, with the Alliance, and where he sees the movement heading.

 

GreenSportsBlog: Kunal, I can’t wait to dig into your story which takes place at the intersection of sports, politics, and sustainability. Nothing juicy there…

Kunal Merchant: It has been a fascinating ride to this point, Lew. I came to the sports world from the political side, working as Chief of Staff for then Sacramento Mayor and ex-NBA All Star Kevin Johnson. I served in that role during his first term, between December 2008 and June 2012, which was a dramatic time. The Mayor took office right as the national economy was entering the Great Recession. Sacramento was particularly hard hit by double-digit unemployment and a foreclosure crisis. Morale was low, and right when the town thought it couldn’t get any worse, we found out that our beloved Sacramento Kings – the one and only pro sports team in town – wanted to leave town.

The team had been struggling both on and off the court for years, including several failed attempts to build a new arena to replace what had by then become the oldest and smallest arena in the NBA. The Kings’ ownership felt that their best shot was to start over in a new city, with Seattle being the most likely destination. It was a punch to the gut for Sacramento, and in the Mayor’s office, we knew that how Sacramento responded to this challenge would have implications far beyond sports for the city’s economic and civic identity.

GSB: So how did you go about dealing with the significant headwinds?

Kunal: That’s a topic for a much longer conversation! But, oversimplified, there were three key checkboxes on our “to-do list” to save the team: (1) prove that Sacramento was a viable NBA market; (2) recruit a new ownership group willing to buy the team and keep it in Sacramento; and (3) develop a plan to build and finance a new arena. The arena was arguably the most critical – and difficult item – particularly since, for a market the size of Sacramento, some form of public investment was going to be needed.

Taxpayers were understandably skeptical about putting public money towards a basketball arena. But after studying similar situations around the country, we in the Mayor’s Office concluded that, under the right terms and structure, we could deliver a public-private partnership for a new arena that would be a win for the Kings and for Sacramento. To get there, we needed to generate transformative economic and community benefits, something that was only possible if we used the arena to anchor the broader revitalization of our blighted and long-underperforming downtown core.

In that respect, Sacramento really reminded me of the Denver of my childhood in the 1980s. At that time, Denver was perceived as a classic “flyover city” by people on the coasts. But over several years, the community and city leaders pushed through smart and strategic investments that led to a positive change in the city’s economic and cultural trajectory. Things really took off in the 1990s, in part due to the energy generated by Coors Field, the downtown ballpark built to be the home of our new Major League Baseball team, the Colorado Rockies.

 

Kumal Merchant Headshot

Kunal Merchant, co-founder of Lotus Advisory (Photo credit: Lotus Advisory)

 

GSB: I remember visiting Denver during the late 1990s and saw how Coors Field had seemingly changed a whole neighborhood. Was the ballpark built by the team, the city or some combination? The reason I ask is that there are many studies showing that public investments in sports venues are not efficient uses of the public’s money. Where do you come down on that question?

Kunal: Great question. Like a stodgy and aging arena, I think the rhetoric around public financing for sports venues is in serious need of an upgrade. There’s way too much dogma on a topic filled with nuance.

In the case of Coors Field, the project was a public-private partnership, where taxpayers made a significant investment. As a local resident who saw that area before and after Coors Field, I would argue that the taxpayers’ investment paid off handsomely in catalyzing a true economic and cultural renaissance that continues to this day.

But the success of Coors Field doesn’t vindicate all forms of public financing. The reality is that every situation is different, and plenty of sports facilities – too many I would argue – receive public funding in amounts and terms that are truly terrible deals for the public. When we were developing the Kings arena deal, we studied up on the good, bad and ugly of prior public subsidy deals. And we were determined that any arena deal we cut with the Kings would protect taxpayers and generate strong economic and community benefits.

That process in Sacramento began by fighting to locate the new arena downtown, and resist temptations by some in town to “play small” and simply refurbish or rebuild at the old arena’s suburban location.

GSB: The old Arco Arena is north of the city, kind of by itself off of I-5.

Kunal: Yes. At the time it was built in the mid-1980s, that building size and location made sense. But by the 2010s, we had different civic imperatives around sustainability and urban planning. Beyond the economic appeal of a downtown location – analysts forecasted $150 million in new annual economic activity each year – we wanted the arena project to reflect the values of a community that cared deeply about the environment. So we set – and ultimately met – incredibly ambitious goals for green design, air quality, water efficiency, energy efficiency, transit, food, waste diversion, and so on.

GSB: What was your role in the project?

Kunal: My role evolved over the course of the project. At the start, I was the Mayor’s Chief of Staff, representing the Mayor and City in almost every facet of our work with the NBA, Kings, City and community to save the team and develop the arena plan. When the NBA voted to keep the team in Sacramento in May 2013, and approve the sale of the Kings to a new ownership group, I moved over to the team side as an executive focused on making sure we followed through on our promises to the community on the arena.

That meant finalizing the public process to approve the deal, negotiating key labor and community benefit agreements, and continuing to engage the community in this truly once-in-a-generation project. It also meant championing what became the most ambitious sustainability agenda of an NBA arena to that date, anchored around achieving status as the first-ever LEED Platinum indoor sports arena.

GSB: That’s quite a transition. How did working for a sports team differ from working in municipal government?

Kunal: Well, it’s safe to say that spending a Tuesday night at an NBA game is a bit more fun than at a City Council meeting! And I used to joke with friends – only half-kidding – that I could get more done chatting with various folks at a Kings game than I could ever do in one month at City Hall. There were obvious advantages to working in a private sector context in terms of speed, agility, and efficiency. But this deal was a true public-private partnership where both bodies were integral. What’s most powerful to me is that my spirit and purpose on this project never changed regardless of what my business card said; from beginning to end, this endeavor was always about doing something really big and historic and transformative for the people of Sacramento. And both the City and Kings wholly embraced that mindset.

GSB: What did you do after the arena took shape?

Kunal: As Opening Day for the Golden 1 Center got closer, I started getting calls from other folks in sports who were impressed by what we’d done in Sacramento and wanted to see if I could help out elsewhere. To his credit, then-Team President Chris Granger was extremely supportive, and I was able to transition from being a full-time employee to a consultant able to take on other work. As part of that transition, I launched Lotus Advisory with my sister Monisha as a strategy and management consulting firm focused on driving positive change at the intersection of business, government and community. Because of my background, I ended up specializing quickly on sports-related projects, while my MIT-educated sister took on high tech clients like Airbnb. In the years since, we’ve been lucky to work with an amazing range of clients in a variety of industries and sectors.

 

Kumal Merchant at Golden 1 Center

Kunal Merchant touring construction of the Golden 1 Center and the Downtown Commons in 2015 during his time as a Sacramento Kings executive. The $1.5 billion dollar project includes a LEED Platinum NBA arena, hotel, and retail and entertainment district that has been the primary catalyst behind the new economic and cultural renaissance unfolding in Sacramento’s long-struggling downtown core (Photo credit: Lotus Advisory)

 

GSB: What are some the sports projects on which Lotus Advisory has worked?

In recent years, we’ve done a lot of work in soccer and baseball. I was the Chief Strategist for Nashville’s successful 2017 bid to join Major League Soccer, where we went from being on no one’s radar as a viable soccer city to finishing first in a twelve city race for the next expansion slot. A huge part of our success was powered by the people of Nashville – whose pride in their city is as strong as I’ve ever seen anywhere.

Similarly, I helped lead and advise Sacramento’s bid to join MLS for several years, particularly in shepherding their downtown stadium development plan through the planning, predevelopment and approval processes. The heart and soul of that bid are the supporters of Sacramento Republic, the United Soccer League (USL) Championship¹ club that took the city by storm when it launched in 2014 and has woven itself deeply into the cultural fabric of Sacramento with remarkable speed.

Currently, I’m working closely with the Oakland Athletics on their plans to revitalize the Oakland waterfront with a new privately-financed ballpark district near the Jack London Square area. It’s a really gorgeous project with a strong spirit of sustainability and environmental justice.

GSB: Very cool! What’s the status of Sacramento’s MLS bid? I know they’re looking to get to 28 teams by 2021 or 2022. Cincinnati United began play this month as the league’s 24th club, with Miami and Nashville set to join next year and Austin in ’21. So that means there’s one more slot left in the near term.

Kunal: Sacramento is one of two cities considered to be favorites for the 28th slot. I know that I’m biased, but I don’t think the competition is remotely close. Sacramento’s MLS bid stands alone as arguably the most resilient, mature, and comprehensive MLS bid in league history. Since embarking on the MLS journey in 2014, Republic FC has checked all the boxes time and again: a die-hard fan base, committed corporate support, a fully-approved and transformational downtown stadium plan; and a credible and committed ownership led by a formidable combination of Pittsburgh Penguins owner Ron Burkle and several local business leaders. MLS will be lucky to have Sacramento join its ranks and I’m cautiously optimistic that it will happen soon.

GSB: Good luck! When will the new stadium be ready and what are some of its green features? 

Kunal: Obviously the MLS stadium is contingent on entry into the league, but the stadium could likely be ready by either the 2021 or 2022 MLS season. As impactful as the Golden 1 Center is for Sacramento, the MLS stadium for Republic FC will be a game-changer in its own right.

The stadium will be built few blocks away from the Kings arena at a huge 240 acre site called the Sacramento Railyards that, when fully built out, will double the size of downtown Sacramento. The MLS stadium represents one of the first and largest major private investments in the Railyards in several decades, and will catalyze a historic wave of economic and community development. In terms of green features, the stadium will be another model of transit-oriented development, located a block from light rail, and a short distance by foot, bike, scooter, or rideshare from the rest of downtown. Republic FC has a terrific culture around local food and beer, so I’d expect some innovative sourcing strategies there as well.

 

Sacramento Republic MLS Stadium

Artist rendering of proposed Major League Soccer stadium in downtown Sacramento. The project will anchor an estimated $5B economic revitalization effort at Sacramento’s historic Railyards district (Credit: Sacramento Republic FC)

 

GSB: Turning to another long-running new stadium project, let’s talk about the Oakland A’s.

Kunal: The A’s have a truly visionary plan to revitalize the waterfront near Jack London Square through a new Major League Baseball ballpark. The project will be LEED Gold Certified and reflect a “ballpark within a park” theme, with an intimate 34,000 seat stadium nestled carefully into its urban surroundings. The ballpark is privately-financed and will anchor a new, vibrant waterfront district that will feature a mix of housing, including affordable housing, offices, restaurants, retail, small business space, parks and public gathering spaces. And the team is also showing tremendous leadership by leveraging the ballpark project to address longstanding environmental justice reform issues around air, soil and water quality faced by West Oakland residents for years.

 

Oakland Ballpark

Preliminary artist rendering for the proposed Oakland A’s ballpark near Jack London Square in Oakland. The project will be LEED Gold and reflect the A’s strong commitment to sustainable development and environmental justice (Credit: Oaklandballpark.com)

 

GSB: Add the A’s new ballpark to my sports bucket list. OK, before we go, let’s talk a bit about your work as a board member of the Green Sports Alliance. How did that come about?

Kunal: I’ve known and been a fan of the Green Sports Alliance since its earliest days, when Alliance leaders reached out to invite Mayor Johnson to the inaugural summit in Portland. The Alliance was hugely helpful in guiding my thinking on the Golden 1 Center, and I worked with the Alliance to help bring the Summit to Sacramento during the Golden1 Center’s inaugural season in 2017. I’ve continued to work closely with the Alliance since then, and at some point it just made sense to take on a more formal role. So, I joined the board last fall with a pretty important first project: co-leading the search for a new Executive Director. It was a fascinating process that yielded a terrific hire: Roger McClendon.

GSB: McClendon comes to the Alliance’s executive director role at a key inflection point in the Green-Sports movement. I like to say Green-Sports 1.0 — the greening of the games — is now almost if not quite a given. It was a necessary and obvious first step. But Green-Sports 2.0 — engaging fans, players and more to take positive environmental action, specifically on climate change — which is where I think is starting now, is a more complicated, heavier lift. What do you think?

Kunal: I totally agree. There are fundamental questions facing the green sports movement and the broader environmentalist community at the moment. The science around climate change grows more dire by the day, with the recent IPCC report advising that humanity has really just a handful of years left to aggressively decarbonize or face catastrophic consequences. So the cost of inaction is escalating. With that as backdrop, the Alliance is asking ourselves: what are we going to do? Our ethos has been to meet people where they are. Which means that if a league, an event, a team is aggressive on climate, we’ll support them. If they’re going slowly…

GSB: …Or not even talking climate at all?

Kunal: …we’re not going to push them too far beyond their comfort zone.

GSB: But doesn’t that imply that it’s ok for sports not to go fast enough? That seems risky at best.

Kunal: Well, it’s tricky. But here is a reason to be optimistic: things are impossible until they’re not. Looking at history, there are many social movements that looked bleak for years, or even decades, right until a period of rapid change that completely upended the status quo. I’m heartened by the younger generations — Millennials and Gen Zers — who will increasingly hold all institutions, including sports teams, accountable for the issue of climate change. The Alliance needs to be ready, and I think we’re taking important steps in that direction. If there’s one thing that I’ve come to appreciate deeply in my career, it’s that, with vision and leadership, sports can be an extraordinary platform for positive change. And on issues of climate, we can’t afford for sports teams, leagues, or fans to sit on the sidelines anymore.

GSB: With some well-timed and positive pushing from organizations like the Alliance, I’ll say. To be continued, Kunal!

 

¹ The USL Championship is the second-tier of North American professional soccer, one level below MLS.

 


 

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Chase Center, Future Home of Golden State Warriors, Goes for (LEED) Gold

The word gold will feature prominently in this blog post.

The Golden State Warriors are fashioning one of the golden eras of NBA history, having been to the last three NBA Finals, winning championships in 2015 and 2017. And while the Houston Rockets — and perhaps others — look like they will be a worthy challenger, Stephen Curry, Kevin Durant, Draymond Green, Klay Thompson and the rest of the “Dubs” are favored to bring home championship gold to Oracle Arena in Oakland this June.

Gold will also be an operative word when the club moves to San Francisco and the new Chase Center for the 2019-20 season — as in the LEED Gold certification the arena is expected to attain. GreenSportsBlog spoke with Peter Bryan, VP Construction and Development for the new Warriors arena, and Molly Hayes, LEED certification project manager for Mortenson︱Clark, to get a better sense of how, from the Warriors/Chase Center perspective, green is golden.

 

GreenSportsBlog: Managing the construction for the new arena for the Golden State Warriors, an organization that demands the best from top to bottom, is a big job. Congratulations! How did you get here?

Peter Bryan: Thanks, Lew. I worked for 19 years at Clark Construction, starting in 1997 in Bethesda, MD, working up to running all of the company’s pre-construction in Northern California and the Pacific Northwest. Clark built the MCI Center (now the Capital One Arena) in DC, home of the NBA’s Wizards and NHL’s Capitals, while I was there, although I didn’t work on that project. I moved to Clark’s Bay Area office in 2004. There, I was involved with pre-construction for my first sports venues — Galen Center, home of USC Trojans basketball, and the renovation of the press boxes at the Rose Bowl. Then I was involved in Clark’s bid on the new Warriors Arena at Piers 30-32. We came in second but kept in touch. When the site moved to Mission Bay, Piers 29-32, a new RFP was issued and we won it. I handled pre-construction. Then the Warriors replaced the person heading construction on the project. I had a good rapport with Steve Collins, Chase Center’s Chief Operating Officer who was overseeing the project for the Warriors. I approached him about coming to the club to run construction; one thing led to another and I signed on in May 2016.

GSB: You have a championship-level responsibility for sure. Talk to us about where sustainability fits in…

PB: Absolutely. Sustainability has been embedded in the project since its inception. Prior to my joining the project, sustainability consultants — as well as mechanical, plumbing and electrical engineers — Smith Seckman Reid developed a LEED scorecard and the sustainability plan in June 2013, held sustainability workshops with my predecessors two months later, and infused the project team with lofty sustainability goals and aspirations, as well as with a “what’s possible” point of view.

 

Peter Bryan Jordan Bell Karl Mondon-Bay Area Media Group

Peter Bryan (r) gave the first tour of the Chase Center construction site to a Warriors player, Jordan Bell, in December 2017 (Photo credit: Karl Mondon/Bay Area News Group)

 

GSB: What are Chase Center’s key sustainability features and benefits resulting from those lofty aspirations?

PB: Well we went into it with a broad definition of sustainability. Let’s start with the Mission Bay site, purchased from Salesforce.com. Located in a redevelopment zone that was once a bay, it is in a reclaimed brownfield area. Since before I came on board, mass transit and alternate transit have been a big priority. There will be a bike valet with 300 spaces…

GSB: …Wow…that’s the biggest bike valet I’ve heard of at an arena.

PB: …Then once I joined the team, we put a big priority on water efficiency. The arena will feature a top quality water re-use program and other water use reduction measures.

GSB: That makes a lot of sense for any new stadium or arena but especially one in California during the era of the five-year drought…

PB: Without a doubt. In addition to our water re-use program to reduce potable water use, we will have a very robust building management and HVAC system that will result in significant energy and water conservation. The HVAC system features IDEC or indirect evaporation and cooling air handling units. There are no high water usage, high energy use chillers involved in Chase Center. Instead the system is condenser-based, which is much more efficient given our local climate. Savings will also come from a gray water recovery system. We’ll recover the storm water off the arena roof, store it in the parking garage, treat it and put into a storage tank. From there, we’ll use it for irrigation, the toilets and urinals.

 

Chase Center March 2018 1

Aerial view of the Chase Center construction site in the Mission Bay section of San Francisco in March 2018 (Photo credit: Golden State Warriors)

 

Chase Center March 2018 3

Artist’s rendering of the completed Chase Center in the foreground (Credit: Golden State Warriors)

 

GSB: In light of the mega five-year California drought, these water conservation measures could not be more timely or important. You mentioned mass transit before. Tell us more.

PB: We have a lot going on mass transit-wise. There is the extension of the MUNI platform next to our plaza, which will feature the 18,000 seat Chase Center and two, 11 story office buildings (580,000 square feet of office space). That extension will handle more cars, allowing more people to get out faster. The MUNI connects to BART and also CalTrain commuter trains a mile away. Multiple bus lines will service the arena, with added buses on game days. And there will be shuttles from different points of the city.

 

MUNI SFMTA

Artist’s rendering of the MUNI station in the shadow of Chase Center (Credit: SFMTA)

 

GSB: Do you have a projection of the percentage of fans that will use alternative and/or mass transit?

PB: The project’s environmental impact report estimates that fans arriving in cars will range from 52-59 percent…And some portion of those vehicles will be EVs. The on-site parking structure will have 29 EV charging stations

GSB: …So 41-48 percent using mass or alternative transit and 29 EV charging stations? Impressive. Now let’s turn to waste. Will there be on-site composting?

PB: No, we won’t compost on-site — we don’t have the space like they do over at AT&T Park…

GSB: …Home of the San Francisco Giants

PB: But we will have a three-stream waste system: recycling, compost and landfill. The organics will be sent offsite for composting. The challenge is how do we get our guests to put their food waste in the right receptacles.

Molly Hayes: Yeah, the Warriors consulted with the Sacramento Kings’ Golden One Center and the team leading the renovation of Madison Square Garden regarding waste diversion and one thing that’s unique about San Francisco is that 100 percent of waste streams must be sorted correctly.

 

Molly Hayes Warriors

Molly Hayes, LEED certification project manager for Mortenson︱Clark at Chase Center, the future home of the Golden State Warriors (Photo credit: Golden State Warriors)

 

GSB: That seems like an impossible standard to meet…

MH: …San Francisco has strict standards that we will have to meet.

PB: We’re actively talking with the San Francisco Department of Environment to get to the best result.

GSB: What about on-site renewables and energy storage?

PB: We talked a lot, and conducted several studies about, the feasibility of solar and wind at the site. Our conclusion was that the surface area was insufficient and that we didn’t want to do it just for show. Now, we are working the utility PG&E to deliver electricity from clean sources. Energy storage is not in the mix right now — we did look at it for backup emergency storage, but due to the facility type, regulatory approval from a fire and life-safety standpoint, and additional onsite space allocation needs it was not a viable option. A bioswale^ at the perimeter of the roof was considered but we decided against it, in part because of the drought. That said, a significant portion of our food —managed by Bon Apetit Management, a division of Levy — will be sourced locally,

GSB: Very impressive, really. Now, I understand that Chase Center will be seeking LEED Gold certification but not Platinum. Reasons?

PB: I think it comes down to lack of on-site renewables. But we are very happy to go for the Gold. Our first submission to the USGBC is this spring.

GSB: Good luck…

PB: We’re excited about being able to operate a LEED Gold arena and office campus and for our opening in Fall 2019.

 

^ Bioswales are landscape elements designed to concentrate or remove debris and pollution out of surface runoff water. They consist of a swaled drainage course with gently sloped sides (less than 6%) and filled with vegetation, compost

 


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