On June 5, 2009, nearly 200 representatives of the real estate industry - owners, developers, managers, architects, engineers, accountants, lawyers, lenders, brokers, insurers, academicians, and state and city government and utilities’ employees - convened at the third Sustainability Shoptalk Series event at Baruch College, CUNY, to hear why New Yorkers must, and how they can, become more energy efficient.

The series is sponsored by Baruch’s Steven L. Newman Real Estate Institute, which addresses issues important to the real estate industry and public policy through interdisciplinary applied research and public events. The Sustainability Shoptalk Series was launched in November 2008 to help the real estate industry advance the knowledge needed to make sustainability the norm.

The first Shoptalk event examined the integrated team approach to the design and delivery of sustainable interiors. The second, held in March, explored green leasing. The focus of the June event, “Kilowatts to Cash,” was on capturing federal stimulus funds, state incentives, tax benefits, and valuation gains. It was billed as a workshop for NYC property owners who want to cut energy costs, get ahead of the compliance curve, and come out ahead.

Jack Nyman, director of the Institute, opened the session by declaring that the real estate industry can’t afford not to be energy efficient and must overcome cost barriers to accomplish this now. Mr. Nyman noted a recent article in The New York Times about the rapid advances in LED lighting that portend a paradigm shift in lighting efficiency and sustainability. A fluorescent bulb might last 3,000 hours; an LED fixture lasts for more than 100,000 hours, making it semi-permanent, like plumbing!

Mr. Nyman then introduced the first panel, on compliance. Its members - Bridgett Neely, vice president for energy efficiency and renewable energy at the NYC Economic Development Corporation; Kenneth M. Block, Esq., of Tannenbaum, Helpern, Syracuse & Hirschtritt LLP; and Nancy Anderson, PhD, executive director of The Sallan Foundation - discussed New York City’s plans to dramatically reduce its energy usage and carbon footprint and save consumers money while creating thousands of well-paying jobs.

NYC currently spends $15 billion a year on energy. Buildings produce almost 80% of NYC’s greenhouse gas emissions, and 80% of those buildings will still be here in 2030. The question of who pays for energy costs in commercial buildings now, and who should pay, is a complicated one. Is it the owners or is it the tenants? Capital costs are usually borne by owners, though some expenses may be passed on to tenants. In any case, compliance with proposed energy efficiency regulations should keep building owners out of trouble, reduce their taxes and insurance costs, reduce the risk of electric grid failures, and yield a competitive edge in the marketplace.

Four pieces of new legislation applicable to buildings in New York City are pending. (To read Mayor Michael Bloomberg’s April 22, 2009, news release on this legislative package, click here.) They would create a New York City Energy Code that all renovations would have to meet; require that owners of buildings of 50,000 square feet or more conduct energy audits once every ten years and make improvements that pay for themselves within five years; require owners of commercial buildings of 50,000 square feet or more to upgrade lighting to more energy-efficient systems that pay for themselves through energy savings; and require owners of buildings of 50,000 square feet or more to make an annual benchmark analysis of energy consumption, to better understand how to increase efficiency.

Increased demand for energy auditors, retrofitters, contractors, construction workers, and related professionals is expected, and the City is working with key stakeholders to identify the workforce needs and opportunities created by the legislation. The panelists noted that grants, incentives, and a revolving loan fund will be available to assist owners in complying with the new regulations.

Following a Q&A session, the second panel, on challenges, opportunities, and experience, discussed the current cost of energy, the current state of energy efficiency, and incentives and programs for improving energy efficiency.

Ronald H. Bowman, Jr., executive vice president of Tishman Technologies Corporation, discussed its mission-critical focus on organization IT data centers, major users of energy. According to Mr. Bowman, generating power on site would increase reliability by reducing exposure to grid interruptions while also lowering costs. The market barriers to energy technology deployment include construction and technology challenges as well as lack of capital and government funding. Interestingly, he noted that 80% of the world’s population will live in urban areas by 2040.

Michael T. Colgrove, director of energy programs at NYSERDA (New York State Energy and Research Development Authority), noted that NYSERDA, which will be administering federal stimulus funds, will focus efforts on facility improvement, clean fleet development, renewable energy, codes, and training. They have several programs to assist not-for-profit organizations, municipalities, and residential buildings (5+ units), where they hope to reduce energy consumption by 20%.

Dave Pospisil, manager of the energy efficiency group at Con Edison, discussed Con Edison’s programs to assist 1- to 4-family residence owners and small businesses. On the residential side, the HVAC program is offering rebates for certain equipment while the focus on the business side is to manage the demand from customers. Con Edison also has programs to assist owners who wish to convert to natural gas.

Nicholas D’Alessandro, tax manager, construction planning at KPMG, stressed the need for companies to have an energy policy. He suggests that payback, the measure everyone currently uses for expenditures, is the wrong measure to focus on. Companies should instead look at profitability, the cost of money, and post-payback cash flow.

Geraldine Walsh, vice president, Grubb & Ellis, presented their sustainability Intranet website which includes information on energy conservation, LEED certification, benchmarking, ASHRAE guidelines, and many other topics.

Panel moderator, Ashok Gupta, air and energy program director and senior energy economist for the NRDC (National Resources Defense Council), wrapped up the session by reinforcing what several panelists had already noted, that workforce development will be a key component for success in achieving energy efficiency and sustainability.

After a Q&A session, the meeting was adjourned. Attendees were asked to complete evaluation forms; comments on the session from audience members were strongly positive. Here’s a small sampling:

“I was impressed with the high level of intellectual capital of the speakers.”

“The wide range of panelists covered the many topics necessary to have a macro view of energy efficiency.”

“. . . very pragmatic, real world.”

“Good facts and diversity of topics. Great value!”

“As a building manager it was helpful to hear about new legislation and new incentive programs in the same event.”

Four Shoptalk events are planned for the coming academic year. They will be announced this summer.

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Leslie Kahle is a freelance writer who lives in New York City.

Story posted: July 2009