Originally Posted by LeftCoaster
Are they really more lucrative though? Does it not cost the developer nearly the difference to make the tower 'green'? Although im sure the developers are not losing money making buildings green, I doubt it is a huge money maker.
It is a large factor these days in signing tenants though.
Building green doesn’t cost more, report says
By TIM KAUFFMAN
August 28, 2007
Despite popular notions to the contrary, experts say environmentally conscious facilities don’t take more money to build than traditional buildings.
Green building does require a different mind-set, however. Sustainable features too often are tacked on to a project as an afterthought, making them appear as an added cost that can be easily cut, according to a July report by Davis Langdon, a San Francisco-based consulting business that helps architects and building owners manage construction costs.
This is a particular hurdle now, as construction costs have risen nearly 30 percent in the past three years.
“Until design teams understand that green design is not additive, it will be difficult to overcome the notion that green costs more, especially in an era of rapid cost escalation,” according to the report, “Cost of Green Revisited.”
The Davis Langdon report, which studied 221 new construction projects, found no significant difference in the average costs for green buildings and nongreen buildings. Green buildings were defined as those in which the primary goal was to achieve environmental certification from the U.S. Green Building Council; this certification was not considered in the design of nongreen buildings.
“Many project teams are building green buildings with little or no added cost, and with budgets well within the cost range of nongreen buildings with similar programs,” the report said.
Davis Langdon compared the costs of green and nongreen buildings in comparable structures, including laboratories, libraries and ambulatory care facilities. Costs varied widely for both green and nongreen structures, indicating that there can be both low-cost and high-cost buildings in each category.
Most of the buildings surveyed were able to achieve green certification without any additional funding, while some required additional funding for specific sustainable features, such as solar panels, the report said.
About 40 of the nearly 890 buildings certified by the U.S. Green Building Council as of June 1 are owned by the federal government.
Getting the money from Congress to pay for those types of technologies is difficult because of how construction projects are funded, said Dennis Ramdahin, an energy strategist at the Air Force.
The design and construction of new buildings or renovations of existing buildings are funded separately from the long-term operating costs to run those building, even though operating a building makes up 90 percent of the building’s total life-cycle costs, Ramdahin said Aug. 16 at an energy conference in Atlanta.
Since the two expenses are funded separately, agencies often can’t get extra money upfront to cover energy saving innovations that would pay off in the long run. As a result, those innovations often are cut if projects come in over budget.
“The first thing to cut if costs are too high is green design,” Ramdahin said. “You design low [cost] and let the operating budget take the hit for the next hundred years.”
Ramdahin has designed a financial tool to illustrate how money spent upfront on green design features can save in utility bills, repairs and maintenance salaries. New York City officials have embraced the tool and have calculated operational savings into the upfront capital costs for the $400 million renovation of the Empire State Building, he said.
The federal government, however, seems to be in a different place, he said.
Agencies are under considerable pressure from Congress and the Bush administration to cut overall energy use by 30 percent by October 2015 and to increase the proportion of renewable energy used to at least 7.5 percent by October 2012.
In the past few weeks, leaders from the White House, Pentagon and Energy Department have said that agencies won’t get the appropriated dollars to pay for these initiatives. Instead, they will need to rely on private financing by so-called energy service companies, or ESCOs, which pay for improvements upfront and are reimbursed through the savings generated from the projects.
Such financing, which costs more than if agencies could pay for the improvements upfront, could be avoided if Congress would pony up the cash by recognizing the ultimate savings.
“The money you would put into the ESCO in 30 years to improve the efficiency of the building is what needs to be put upfront,” Ramdahin said.