LEED certification Featured

7:00pm EDT November 25, 2007

Business owners are hearing more about LEED certification, but they may not know of its significance. Leadership in Energy and Environmental Design (LEED), which was launched in 1998, is a building rating system and a nationally accepted benchmark for design, construction and operation of green buildings. These standards will some day be the rule, rather than the exception, in commercial development.

“There is the potential of a marginally higher initial cost, but the long-term cost efficiencies are definitely there,” says Ellen Hanson, a LEED Accredited Professional and marketing director at CresaPartners. Hanson sites as an example Exelon Corporation, one of the largest electrical utility companies in the U.S. that recently renovated its 220,000-square-foot Chicago office headquarters to be LEED certified at the platinum level. The company’s stated goal was to increase productivity while reducing long-term occupancy costs. The renovation, which was in an existing building, resulted in a reduction of electrical consumption by more than 43 percent and water consumption by 30 percent compared to its previous space.

Smart Business spoke to Hanson about how tenants can join the green movement.

What is LEED certification?

LEED certification provides independent, third-party verification that tenant-leased spaces and base building projects meet the highest green building and performance measures. The United States Green Building Council (USGBC, www.usgbc.com) has established four categories for LEED ratings: (1) new construction and renovation, (2) core and shell, (3) commercial interiors, (4) existing building.

There are four levels of certification: certified, silver, gold and platinum, which are based upon a point system. In order to be considered, a project must meet all the prerequisites for every area of concentration in a LEED project. Examples of the prerequisites include minimum energy performance, minimum indoor air quality, performance factors and environmental tobacco smoke control.

The LEED approach recognizes performance in five key areas of human and environmental health: (1) sustainable site development — where it’s located, proximity to public transportation, etc., (2) water savings, (3) energy efficiency, (4) material selection (resource reuse and recycled content) and (5) indoor environmental quality. How well a building performs in these areas dictates the number of points received.

Why should business owners consider this type of construction/renovation?

Corporations are identifying with the environmental, economic and social elements of green design. The benefits can include reduced operating costs, increased worker productivity and minimized environmental impact. It is reported that energy costs savings of 20 to 50 percent are common through energy-saving technologies, natural daylight, ventilation and downsized equipment.

Major corporations recognize the corporate value of environmentally responsible business practices. How companies manage issues related to energy and the environment can have a significant effect on the success of their business. Whether you are a tenant occupying 20,000 square feet or more than 200,000 square feet, you can benefit from a high-performance office design.

There are studies that show an increase in recruitment and retention of people who work for companies that apply green practices in the workplace. It’s a healthier, more satisfying environment and, with good indoor air quality, people are sick less. Natural light plays an important role in the interior environment, as well. Studies show it can offset the use of electricity, provide a higher quality of light than artificial lighting and lead to a more productive workplace.

Are there extra costs involved?

Yes, but the cost differential, as compared to ‘conventional’ construction, keeps getting lower. In many cases, any additional first costs are recouped within five years through energy cost savings. As of 2006, it cost 2 to 5 percent more to develop a sustainable building or office because the process has been streamlined. Green technology has evolved tremendously over the past decade. Now, energy-efficient and resource-efficient solutions aren’t necessarily more costly and are part of mainstream product offerings.

What is the future of green building?

Many state and city government agencies are mandating that new government building projects have at least minimum certification. In July, 2005, the Pennsylvania legislature passed a bill providing financial incentives to public school districts that achieve LEED silver certification. There are now four state funds, including a $20 million sustainable energy fund, to provide grants, loans and equity investment in energy efficiency and renewable energy projects in Pennsylvania. In April, 2007, the City of Philadelphia adopted the Local Climate Action Plan, which requires all new municipal construction and major renovation projects over 10,000 square feet to achieve LEED silver certification.

Also, the City of Chicago has recently developed an expedited permit process for projects incorporating innovative green building strategies, including LEED certification.

Although tax incentives are primarily with government agencies, it is increasingly likely that tax incentives will soon be made available for private companies.

ELLEN HANSON, LEED Accredited Professional, is the marketing director with CresaPartners in Chicago. Reach her at (312) 376-4100 or ehanson@cresapartners.com.