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Say you have a car that can operate at 40 miles per gallon, but you accelerate quickly after every stop and travel well above the speed limit. Just as your car won’t achieve maximum fuel efficiency if you drive that way, buildings won’t run as efficiently if they’re not managed properly, said Kevin Nordmeyer, a partner at RDG Planning & Design and past chair of the U.S. Green Building Council Iowa chapter.

This comment was made during the Business Record’s annual “Commercial Real Estate Trends and Issues” forum held on April 3 at the Hilton Garden Inn in Johnston. The program focused on “Going Green in Commercial Development” and featured moderator Fred Hubbell, chair of the Iowa Power Fund board, and panelists Nordmeyer, Bob Haug, executive director of the Iowa Association of Municipal Utilities, David Ahlberg, product manager of MidAmerican Energy Co., and Bryan Myers, vice president of estimating at Weitz Iowa. Metro Waste Authority, American Trust and Savings Bank and Barker Lemar and Associates sponsored the event.

Haug supported Nordmeyer’s remarks with a real example of the need to run systems as intended. His organization’s building, which has won national awards for its sustainable design and uses less than half the energy of an energy code-compliant building, had a heat exchanger thermostat set at 46 degrees for nearly eight years. This meant that an electric resistance heater would kick in at 46 degrees to prevent ice from forming on the heat exchanger. Just by resetting that thermostat to 5 degrees, the group reduced its total energy use by 4 percent, he said.

“I’m sure there are things out there in every building, if they were just looked at, if you audited your use of energy now, you could find ways to lower your costs and reduce carbon emissions,” Haug said.

Examples such as this show that the green movement is not just about constructing or renovating buildings to meet sustainable and high energy-efficiency standards, but also require more education and an ongoing effort – in essence, a cultural change, the panelists said.

Even after designing a highly efficient building, Haug said his organization is looking at ways to reduce energy usage to 18 percent of the amount of energy used in an average office building. Hubbell, who worked for ING Groep NV in the Netherlands for about seven years, encouraged Haug to go even further by becoming carbon neutral, a concept he said has been at the forefront of European businesses’ priorities for decades now.

Because Europe is more densely populated, Hubbell said, people there tend to take environmental issues more seriously. European businesses voluntarily give a social responsibility report, part of which outlines their efforts to reduce their carbon footprints, in addition to their financial statements. Meanwhile, he noted, Goldman Sachs Group Inc.’s management team is recommending that the company vote against a shareholder proposal that would require them to start preparing corporate responsibility reports.

“I’m not saying they’re right or wrong,” Hubbell said, “but just by comparison, many, many European companies have been doing this for years voluntarily. Goldman Sachs competes with those companies worldwide and is recommending against that.”

Iowa lags behind other American cities and states that have placed stricter mandates on commercial buildings or added incentives, such as making the process of getting permits faster for buildings striving to achieve a Leadership in Energy and Environmental Design (LEED) rating from the U.S. Green Building Council.

“At some point we have to bring the bottom up,” Haug said. “We have to set the bar at a higher level, and I think it has to be a combination of incentives and regulation. The fact is that Iowa didn’t enforce the commercial energy building code until legislation passed last year.”

Major strides

The panelists did note that Iowa has made some major strides in green development.

MidAmerican Energy has completed 191 projects and has another 131 in the works in its Commercial New Construction program, which works with building owners, architects and construction companies to design highly energy-efficient buildings. Weitz Iowa has completed four projects with LEED ratings and has four more in the works this year, including headquarters for both Aviva USA and Wellmark Blue Cross and Blue Shield.

Myers of Weitz Iowa said that the cost to become LEED certified is around $2,000 to register with the Green Building Council plus the expense of adding features to achieve the level of LEED certification the owner wants to reach. Haug said his building probably cost an additional $30,000 to construct, which the Iowa Association of Municipal Utilities recovered in lower energy bills within four years of occupying the building.

Nordmeyer referred to a study by Davis Langdon & Seah International, which looked at more than 800 construction projects worldwide and determined that “green” features were not the main cost drivers; usually it was some extraordinary design feature. “Almost all the costs that are additional right now are those related to the energy areas,” he said. “The energy areas are the things that do have a return on investment and payback.”

Nordmeyer also pointed out studies that show sustainable buildings increase test scores and worker productivity and reduce sick days. Retail sales also have been shown to increase significantly – as much as 49 percent – with daylighting.

Though Wellmark and Aviva’s headquarters are still in design phases, Myers, whose employer is constructing those buildings, said the companies are driven to become LEED certified because they believe it will help them attract and retain employees in the midst of a worker shortage. But demand for green buildings is growing among tenants as well, Nordmeyer said, which is encouraging developers to go that route. Last year, CB Richard Ellis Group Inc. announced that it would strive to make all of its properties carbon neutral by 2010.

MidAmerican Energy offers greater incentives for tenant-occupied buildings versus owner-occupied to give developers a greater return on their investment up front. Otherwise, they might not see energy savings if they sell the building quickly or lease it.

Barriers

One of the greatest obstacles to making green development more a part of Iowa’s culture, panelists said, is a lack of awareness, especially among crews actually working on a construction site. Weitz said it is training about 20 of its managers in understanding new Environmental Protection Agency standards. “There’s been a lot of … business as usual, and we’re becoming a lot smarter about that,” he said.

Another challenge is that appraisers are not yet recognizing green features as something that adds value to a house. When appraising a highly efficient home Nordmeyer had his Iowa State University students design in Fort Dodge, the appraiser did not have another house to compare it to, he said.

Then comes the continual process of ensuring that the building is being maintained to its optimum efficiency. Myers said companies need to consider practices, such as using the proper cleaning supplies and training maintenance crews on how the building’s systems work. Once a new construction project or major renovation achieves a LEED standard, the goal should be to roll it into the LEED for existing buildings program, which continues to look at how to improve the building.

“It’s an ongoing measurement,” Myers said.