April/May 2009

A Case Study

The Reality of Case Studies: Extracting Value from NAIOP's Highly Controversial Building Cost Report

For most projects, a real challenge to balance environmental responsibility and developmental profitability still exists. 

By Courtney C. France, Principal, France Sustainability Solutions

The results reveal the best scenario model would achieve 23% energy savings in Chicago with a payback in slightly less than 10 years. 

To advocate the best public policy for its members, NAIOP’s report presents the argument that using the most practical and economical design efficiency strategies may not be capable of achieving targeted goals like 30% and 50% over the ASHRAE 90.1-2004 baseline standard.  With best intentions, NAIOP endeavored to provide a resource to policy makers and its members, demonstrating the financial impact range of ‘one-size-fits-all’ energy mandates.

Within weeks of the report being published, multiple organizations (USGBC, ASHRAE, ACEEE, etc.) condemned the message translated in NAIOP’s report.  The discrediting critical feedback on blog reports and online commentary forums ranges from “this study is part of a disinformation campaign,” and “results were artificially constrained,” to piercing comments like, “plain wrong” and “a disservice to the development community.” 

It is recommended that you read the brief 19 page report yourself, and draw on your own conclusions; in the meantime, the following is a summary of the controversial reviews of NAIOP’s commissioned report.

Complimentary Report Highlights: 

• A study represents an increased level of green messages targeting Policy Makers.
• The building analysis was based on a real building (representing, according to Co-Star, 50% of the Class-A commercial new construction today ).
• The effort engages the commercial development industry to understand the relationship between energy efficiency and building profitability.
• The study and resultant industry responses have instigated NAIOP to conduct additional refined studies for various building types (high-rises, industrial, etc.) .

Criticized Report Deficiencies:

• The study lacked integrated design efficiencies, or a ‘holistic design’ approach.  The study essentially focused on a ‘bolt-on’ efficiency approach to a building.
• The analysis used average commercial utility rates, rather than actual rates, which may invalidate the cost feasibility calculations presented in the results.
• The study focused on regulated loads only, which are affected by jurisdictional energy codes and mandates, eliminating the developer’s role to improve tenant-related energy efficiency measures.
• Federal, State, and Local incentives, which are increasingly available and applied to projects today, were not considered in the report’s cost or payback calculations.
• The study used a 10 year payback analysis, which may be unrealistic for the majority of developers that use 5 year or less payback models.
• Debates continue regarding the selected energy cost measures that were applied in the analysis, and if they represented the most reasonable strategies (i.e. daylight harvesting measures were not included, etc.)

http://www.naiop.org/about/naiop_energyeff_faq.pdf

www.globest.com interview with Mr. Bisacquino, current NAIOP President

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CBG /April/May 2009