Full text story in Arizona Business Magazine
Arizona real estate is LEED-ing the way, breaking into the Top 10 in the nation for the most projects per capita certified LEED for its green building initiative.
LEED, Leadership in Energy and Environmental Design, is a green building certification program where projects satisfy prerequisites and earn points to achieve different levels of certification. The U.S. Green Building Council (USGBC), created to promote sustainability in the construction industry, established LEED to exhibit projects notable for high environmental and health achievements.
Fifteen new LEED certifications, combining for a total of 2,810,153 square feet of space, have been LEED certified in Arizona since the beginning of 2015, says Aline Peterson, a spokeswoman for USGBC.
The Arizona chapter of USGBC opened in 2002 and its founder Charlie Popeck, currently president of Green Ideas Sustainability Consultants, says “it has been refreshing to see more people are getting into (green building).”
Public developers have been among the leaders pioneering LEED building.
“Believe it or not, they are spending our tax dollars wisely,” Popeck says. Some higher education establishments, municipalities and the federal government have established minimum LEED certification requirements.
Public developers have a greater awareness about the importance of life cycle costs, says Bryan Dunn, market sector executive at Kitchell. The evaluation of a 30-year life cycle of a building shows 2 percent of the overall cost is attributed to construction, 6 percent for operations and maintenance and the remaining 92 percent is attributed to personnel cost, Dunn says. Many experts agree LEED buildings increase workplace productivity and engagement and, according to Dunn, “municipalities understand the importance of this and are willing to make the investments in their human capital.”
Some private developers are skeptical of green building because they do not feel they have the luxury or incentive to build green. However, a variety of tax benefits and incentives are available for green buildings, according to the USGBC. Examples of these incentives include tax credits, grants, expedited building permits and reductions or waivers in fees.
LEED-certified buildings use 25 percent less energy and have a 19 percent reduction in aggregate operational costs compared to non-certified buildings, per the USGBC.
“The struggle with LEED is it takes a lot of moving parts coming together to make a LEED project work,” says Thomas Cochran, the regional manager at Energy Inspectors Inc. It forces people to get together earlier in the design phase and may be a shift in process from developers.
The “sexy thing” right now is energy efficiency, Popeck says, and green building will pay off in the long run.
Education and the expulsion of the “myth” that LEED building is expensive will increase private sector activity, says Dale Benz, director of facilities consulting at FM Solutions. LEED for the private sector “boils down to the bottom line,” Benz says. With a good practical design and operation, you can get a silver certification with minimal or no additional cost, experts say.
“Most developers tell me they don’t want to pay the money for a plaque,” Dunn says. Their mindset can change if a market demands green building and developers can generate higher rents, maintain higher occupancy and lower operational cost, he says.
“There are a lot of stakeholders concerned about sustainability throughout Arizona,” says Lisa Estrada, board member for the Arizona chapter of the USGBC. “To get more on board, we just need to promote it and education people about its value.”
The continuation of the verification of the value of LEED building will cause the demand for LEED buildings to increase over time, according to experts. If a dollar amount can be attached to energy savers and sustainability, stakeholders will be able to see the value, Cochran says.
Getting more appraisers certified to validate energy and solar features on projects will help, Cochran says. “The key is to get all the players the industry to identify the value,” he says.