Green Building Practices Can Increase Real Estate Value, Decrease Operational and Maintenance Costs
Blank Rome Offers Five Tips for Implementing a Building Strategy to Grow the Bottom Line
In today’s “green” business climate, environmental and social aspects of commercial relationships and operations are becoming increasingly scrutinized and more closely linked to financial performance. As these issues continue to develop, Blank Rome LLP has formalized a Green/Sustainability industry group to help clients effectively evaluate and implement sustainability practices.
“Reducing environmental impact has become an integral part of the mission statements of many of our most forward-thinking clients,” said Stuart Kaplan, Esq., a partner and Real Estate Practice Group Leader at Blank Rome. “With the heightened awareness surrounding global ecological issues today, companies are being held accountable for their services, products, and facility operations – and if any of these are perceived as having a negative environmental footprint, the company’s reputation and profitability will likely suffer. Our cross-disciplinary approach helps businesses gain a competitive edge and transform their ‘green’ policies and practices into something that impacts their triple bottom lines of economic, social and environmental profitability”
Following are five tips offered by Blank Rome for implementing profitable and successful sustainability initiatives.
Contracts should clearly reflect the role of each member of the design and construction team in earning the desired level of LEED or Green Globe certification. Responsibility for achieving certification must be clearly allocated among the architect, the general contractor, major sub-contractors and project manager.
Select design professionals and consultants that have demonstrated a thorough understanding of “green” building practices and principles and are familiar with LEED certification requirements, resources and processes.
“Certifications are based upon fairly rigid point systems covering a wide range of specific areas; for example, LEED certification rates in the areas of sustainable sites, water efficiency, energy and atmosphere, materials and resources, indoor environmental quality, and innovation in design. As a general rule, this is a movement that places a particular premium on accuracy and accountability. Therefore, it’s imperative that each team member have a thorough knowledge in his or her discipline so that all requirements are met,” said Kaplan.
There can be material differences between a building marked “green”, a term applied to environmentally-friendly products and services, and a LEED-certified building. LEED is a point system used to verify “green” criteria set by the USGBC (U.S. Green Building Council).
Companies should develop specific contracts that require the utilization of legitimate “green” materials and systems.
“Many products and services claim to be ‘green’ but they aren’t—a practice becoming more widely known as ‘greenwashing’,” added Kaplan. “If a building owner uses these products and services they, too, risk being accused of ‘greenwashing’; which can negatively impact a company’s reputational capital.”
Stay informed about current and anticipated state and local legislation. Many states offer tax reductions for sustainable construction and capital improvements that promote carbon neutrality.
One example is the Battery Park City Solitaire Building, a 27-story luxury building. Ozone-free heating and air-conditioning units, as well as a fresh-air ventilation system were installed, resulting in a tax credit of $2.8 million over five years and a $100,000 grant from the New York State Research Development Authority.
This summer, New York Governor David Paterson signed legislation granting a $4.50 per square foot tax credit for “green” rooftops, a particularly accessible benefit given the enormous quantity of rooftop space in New York City. And recently, an idea was introduced by the New York City Councilman Daniel R. Garodnick, for the development of Solar Empowerment Zones to ease the financial and regulatory burdens of installing solar systems. Garodnick is also co-chairman of the Council’s Infrastructure Task force, a committee that explores the use of solar, wind and other green power.
Conduct a thorough cost/benefit analysis.
According to the New York State Energy Research and Development Authority (NYSERDA), a one-time investment of less than one percent of initial costs can increase energy efficiency over standard building code practices by 20-30%. Con Edison, for example, recently installed a “green” rooftop in one of their training facilities; it’s estimated that this rooftop will result in a 30% decrease in operational costs.
“Other advantages to ‘green’ building practices include better tenant retention and a competitive advantage in attracting the growing pool of first-class tenants that are demanding sustainable and carbon neutral facilities,” said Kaplan. “As companies continue to examine and implement sustainable development strategies the business case for these strategies will become increasingly apparent on many levels.”
Blank Rome’s Green/Sustainability industry group employs a full-service approach drawing on the talents of attorneys from various, diverse practice areas throughout the Firm to advise clients as they adapt to the global objectives of sustainability and achieving carbon neutrality. Utilizing the experience of attorneys from the Firm’s Energy, Real Estate, Environmental, Public/Private Companies and Tax practices enables Blank Rome to assist clients across a wide range of industries as businesses and governmental entities navigate daily challenges arising from newly enacted laws, rules and regulations. The Firm works with clients who focus on reducing environmental impact to assess their situation and familiarize them with the latest technologies and benefits programs as they relate to sustainability and renewable resources.
Blank Rome will host a Sustainable Development Forum on November 17, at noon in the Firm’s New York City office to explore the current issues confronting “green” and sustainable real estate development and operation. The Forum will bring together a cross-section of real estate professionals from Grubb & Ellis Company, Liberty Property Trust, Kohn Pedersen Fox Architects and Viridian Energy and Environmental LLC, as well as a panel of attorneys from Blank Rome’s real estate development group.