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City buildings save money while gaining 'Star' status: EPA program gives tax breaks for energy efficiency

April 23, 2007

Thomson Inc. building, 10330 N. Meridian St.

In 2006 alone, the EPA awarded more than 3,400 buildings nationwide with the Energy Star designation.

Buildings can achieve the status by adopting an energy-management strategy and tracking the results during a 12-month period using an EPA rating system. Results need to be verified by a professional engineer.

All Energy Star products qualify for a tax credit. A deduction of up to $1.80 a square foot is available to owners and designers of new and existing commercial buildings that save at least 50 percent on heating and cooling usage.

The commitment at Market Tower began following its purchase in 2004 by locally based real estate investment firm HDG Mansur, which in turn hired the local office of St. Louis-based Colliers Turley Martin Tucker to manage the property.

CTMT managers Kevin Branch and Kevin Brady led the push to pursue Energy Star prestige.

"[Brady] came back to me and said, 'We need to do this, this and this,' but the price was astronomical," Branch recalled. "[HDG] didn't give us everything we asked for, but they saw the benefit."

HDG invested about $1 million in phases to lessen the brunt of the upgrades that ranged from inexpensive to costly.

An initial energy audit conducted by CTMT engineers enabled HDG to reduce costs immediately without spending a dime. The audit included readjusting controls of heating and cooling systems to more efficient settings and tweaking their operating schedules. Some units no longer run on Sundays, for instance.

Installing compact fluorescent bulbs throughout the building resulted in significant energy savings, including an 80-percent reduction in the cost last year just to light the rest rooms.

Compact fluorescent bulbs use at least two-thirds less energy than standard incandescent bulbs and last up to 10 times longer, while generating 70-percent less heat. They do cost more initially, but are much more cost-efficient in the long run.

If every American home replaced just one standard incandescent bulb with a compact fluorescent bulb, the EPA says, enough energy would be saved over the lifespan of that bulb to light more than 2-1/2 million homes for a year and prevent greenhouse gases equivalent to the emissions of 800,000 cars.

CTMT also replaced one of the building's chiller units and added variable-frequency drives to air handling and pump equipment, reducing motor speed during low-use periods.

Variable-frequency or speed drives are an effective energy-saver. The National City Center has them on its chilled water loop, and the Thomson North office building on its air-handling units. Further, speed drives at the Minton-Capehart Federal Building help reduce its energy costs by about $34,000 annually.

The federal government's energy reduction efforts predate the Energy Star program, which originally targeted the private sector. In the late 1970s, President Jimmy Carter established the Department of Energy and mandated in an executive order that federal facilities cut consumption collectively by 2 percent a year.

In January, President George W. Bush increased the goal to 3 percent and directed all government-owned buildings, with a few exceptions, to meet Energy Star guidelines.

The designation is particularly difficult for U.S. courthouses-the one in Indianapolis not withstanding-because of the age of the buildings and the unique configurations of the courtrooms, said Mark Ewing, the U.S. General Services Administration's director of the Energy Center of Expertise.

"We don't give ourselves a plaque," Ewing said. "We just report that we've done it."

The Energy Star program is part of the broader Leadership in Energy and Environmental Design, or LEED, certification developed by the U.S. Green Building Council. LEED is a benchmark of sorts for designing, building and operating green buildings. Buildings can attain several levels of certification based on their performance.

Energy Star and its appliance program, in which household products earn the designation, are easily recognizable, said Bill Brown, an architect at locally based Browning Day Mullins Dierdorf and community relations manager of the Green Building Council's Indiana chapter.

"If you can improve the efficiency of buildings, you can go a long way in improving the energy bills of the entire country," Brown said. "We're seeing a huge interest in green buildings, in general."

Indeed, there are roughly 400 certified green buildings in the United States, and an additional 3,300 under construction, according to the council.

Beyond energy savings and tax credits, more efficient commercial buildings can have an edge in luring tenants.

At the 567,000-square-foot Market Tower, for instance, CTMT shaved 13 cents a square foot off electrical operating costs. While that might not affect rental costs, it still can attract tenants.

Brady, senior engineering manager for CTMT, explained it this way. A tenant paying $18 a square foot for rent and $9 a square foot for operating expenses might be able to afford nicer digs by paying $21 a square foot for rent, but only $6 a square foot for operating expenses.
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