Investment in green technology pays big dividends
Protects from environmental liability too
Tom Bolt
More than ever, consumers are gravitating towards businesses with green policies. And businesses are discovering an investment in green technology pays off
Real estate companies play a vital role. According to the United States Green Building Council (USGBC), buildings account for 65 percent of electricity consumption and 30 percent of greenhouse gas emissions, raw materials use and waste output. As public awareness grows, attention will focus on which real estate entrepreneurs are reducing their environmental and energy footprint.
Here’s how real estate firms can begin to go green.
• Avoid Environmental Liability
A U.S. Environmental Protection Agency (EPA) suit can be a public relations nightmare. Real estate companies should protect themselves against three common environmental enforcement actions. When purchasing property, hire an environmental professional to conduct a phase I Environmental Assessment consistent with the current standards. Saving a few thousand dollars by relying on an old and possibly inaccurate phase I is not worth the financial risk. Developers of an acre or more must obtain a storm water permit under the Clean Water Act. The permit requires developers to prepare and implement pollution prevention plans that curtail erosion. Think twice about building in wetlands, another favorite government target. While wetlands mitigation projects are possible, they can be very expensive.
• Green Buildings
Financial incentives along with energy savings compensates for a small increase in going green. The federal Energy Policy Act of 2005 provides a tax deduction of up to $1.80 per square foot for new commercial buildings that reduce energy use by 50 percent using the 2001 ASHRAE standards as a baseline. Existing buildings can earn a deduction of $1.20 per square foot for upgrading lighting and HVAC systems.
For almost a decade, the USGBC has implemented its Leadership in Energy Design Rating (LEED), which evaluates the environmental and energy qualities of real estate. Many cities and companies such as Ford, Bank of America, Sprint and Toyota incorporate LEED standards in their buildings, which include the following goals.
• Design for sustainability
Seek environmentally appropriate design, and site development practices to reduce the negative impacts of erosion and pollution.
• Design for water efficiency
Landscape decisions have a huge impact on water use. Many sites capture rainwater for irrigation with roof systems or rain barrels. Some treat wastewater on-site for use in irrigation.
• Use recycled building materials
Consider using building materials produced or manufactured nearby to reduce transportation requirements. Wood should come from Forest Stewardship Council certified forests. Mine the market for reused materials and products.
• Reduce electricity/energy costs
The per capita residential energy use in the United States is more than double that of Europe. In the Virgin Islands it is even higher.
Substituting compact fluorescent lamps for traditional incandescent light bulbs saves close to 75 percent in electricity costs. Firms can purchase “Energy Star” certified products (a joint program of the EPA and the U.S. Department of Energy) and add insulation, reflective roof coating and green roofs to lower energy consumption. Proper fan systems drive down cooling costs substantially. Skylights and glazed windows that track outdoor brightness levels decrease energy requirements for lighting and cooling. Through September 2008, the U.S. Virgin Islands Energy Office is offering two rebate programs- to encourage the public to save energy by purchasing, solar or wind power systems and appliances with the Energy Star logo.
• Focus on indoor air quality
Paints, carpets, and adhesives with low volatile organic and fiber products containing no added resins improve indoor air quality. Poor indoor air quality, with molds and fungus is one of the most important health issues we face today. Installing windows and other natural ventilation systems are key in improving the indoor air. New HVAC systems prevent intrusion of air pollutants. Installing air quality and humidity monitors insures clean and healthy air.
• Become carbon neutral
Real estate companies can support projects such as wind power, solar generation and growing trees, which reduce carbon emissions.
The public’s growing concern for environmental issues presents a great opportunity for innovative real estate companies. Firms that make the small investment it takes to go green will reap huge benefits.
Attorney Tom Bolt is managing attorney of Tom Bolt & Associates, PC, a business law firm in St. Thomas, Virgin Islands. He concentrates his practice in real estate development and finance.
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