Greening the Big Apple... Or Not
Two outer limits of the sustainability tides are playing out in New York City. One of the Big Apple’s prized icons, the Empire State Building, is in the middle of an innovative, cutting edge building retrofit that is designed to reduce energy consumption by 38% and to generate $4.4 million annual energy cost savings. Over by the Hudson River, unit owners of a $4.2 million condo unit are suing the developers, architects, engineers, and city building authority because their unit is not green enough. The two limits offer guidance for all developers involved in sustainable building.
Anthony Malkin, owner of the Empire State Building (ESB), has made a commitment not only to retrofit one of America’s best known buildings into one of the most energy efficient buildings in the Big Apple, but also to do it in a transparent manner that will provide a beacon to other property owners to follow with their own green retrofit projects. Beginning in early 2008, Malkin partnered with 5 entities to develop a proposal for the retrofit: The Clinton Climate Initiative, Jones Lang LaSalle, Rocky Mountain Institute, and Johnson Controls. The team’s charter describes their mission:
The retrofit of the ESB into a Class A pre-war trophy building will transform the global real estate industry by transparently demonstrating how to create a competitive advantage for building owners and tenants through profitably greening existing buildings.
After assembling the data and design to do this, the retrofit project is scheduled to be completed by 2013, with 55% of the energy savings available by December 31, 2010. See more of the details in a project white paper and hear Malkin talk about the unique aspects of the project.
Key to the project is a unique contract between ESB and Johnson Controls, called an energy services performance contract, whereby Johnson Controls guarantees certain annual energy savings, or pays the difference, for a period of 15 years. Contracts that specify the responsibilities—and consequences of non compliance---are essential to a well planned sustainable project.
Meanwhile, owners of a luxury condominium at The Riverhouse One Rockefeller Plaza are suing the developers (and its architects and engineers) for $1.5 million in damages because they say the building is not green enough. Among other claims, the owners allege their unit’s air-infiltration system and heating are not up to the green standards they were promised, having conducted an energy audit that showed cold air infiltration through doors, windows, and exterior walls that was more than 49% higher than LEED standards. See more details in a recent Wall Street Journal article.
The Riverhouse lawsuit is just the beginning as owners and tenants, promised sustainable buildings and commensurate energy savings, file suit when the actual building does not perform as promised. Courts will eventually have to determine what are green building best practices and assign liability among the potential defendants. Once again, development contracts that specify green building responsibilties and consequences of non-performance are essential to successful sustainable construction or conversion work.
