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May 5, 2011

The Empire State Strikes Back

 

Q&A: Dana Schneider, VP, Sustainability Services Market Lead, Jones Lang LaSalle

In 2009, owners of one of New York City’s great architectural landmarks, the Empire State Building embarked on a renovation to reduce the skyscraper’s energy use by more than one-third by 2013. Part of an overall $500 million building makeover, the energy efficiency strategies, ranging from window replacements and insulation to electrical upgrades and tenant education, are bringing annual savings of more than $4 million, with just a three-year payback on the investment.

Originally built in 1931, the Empire State building is no ordinary office building, of course, but a symbol of American achievement and strength—and now efficiency. At 102 stories with 2.6 million square feet of space, some 6,500 windows and 73 elevators, it has the scale to reap significant energy efficiency savings and to substantially reduce its more than 105,000 metric tons of carbon dioxide emissions a year. Besides many tenants now having LEED-rated interior offices, the Empire State Building is also expected to fall in the top 10 percent of ENERGY STAR office buildings when its renovation is completed, the project designers said.

More than that, though, this Art Deco icon at 34th Street and Fifth Avenue, because of its unique status as perhaps America’s most famous skyscraper, has the opportunity to serve as a model for other office buildings around the world seeking to transform.

“They’re showing the rest of the city that existing buildings, no matter how tall they are, no matter how old they are, can take steps to significantly reduce their energy consumption,” New York mayor Michael Bloomberg told The New York Times.”

Recently BetterBricks’ Brian Libby spoke with Dana Schneider of Jones Lang LaSalle, VP of Sustainability Services, a global real estate services firm overseeing the Empire State Building’s green retrofit.

BetterBricks: You grew up in New York. Do you remember the first time you saw the Empire State Building?

Schneider: I was a little kid the first time. My family has lived in New York for generations. I was there several times as a little kid, but the first time I really remember it is when I was in 5th grade. It was so huge! It was a whole city block. I remember going to the top and thinking, ‘O my gosh!’ You can see forever. Looking down the ground almost looked fake. It put things in perspective.

The Empire State Building carries extra symbolism, doesn’t it?

Yes. In 1931 it became the tallest building in the world, and it was built during the Great Depression. Now it’s one of the world’s most energy efficient buildings, with the retrofitting work also done during tough economic times. It was a beacon of hope when it was built, and I think that’s what it is now.

Could you explain the role you played in the Empire State Building Retrofit Project and the role of Jones Lang LaSalle?

I was the program manager for all the updates that go on. I lead our work on the energy retrofit there.
You have written that in ESB “Under the plan, actions taken by tenants are expected to reduce the building’s energy use by more than 6 percent, about one-sixth of the total reduction target of 38 percent.”

What tools did you develop to involve tenants?

We’ve done a lot of things. We’ve developed a set of really detailed design guidelines for building out their spaces, and how they can achieve LEED certification and built a prebuilt LEED platinum space for them to see our recommendations in action. We also have a tenant energy management program. This is actually a new technology that enables tenants to see their usage in real time and get recommendations to reduce their use. And I personally work with tenants coming into the building to make sure they integrate our recommendations. We also wrote into new leases a whole set of performance requirements such as a five year or less payback.

We understand that tenant involvement was voluntary? What percentage of tenants are participating now and how are the numbers looking re this 6%? Is ESB achieving its goals with regards to the tenant piece?

The tenant initiatives are really focused on new tenants. When we started our work, there was an existing program for tenants. They’re moving to get more prestigious tenants. New spaces will be built out this way. It’s in the lease language. We can’t make anybody do anything, especially in this market. But we present it as a massive added value. We are providing industry leading expertise to build out these spaces at a high level: It’s like, why not? It will save money to have a better-performing space. It’s the carrot rather than the stick. And it’s a huge selling point for the building.

How have you handled long term tenant disruptions during the retrofit process?

The work that would affect tenants in their spaces is already finished. We scheduled it around them. We did work overnight and were in constant communication. We did it on overtime so we would minimize disruption. Extremely extensive work like replacing ducts was only done in empty spaces.

Were lease renegotiations part of the strategy? If so, what new language, requirements, and sustainability language was inserted into the new leases?

There’s a huge part of the strategy in the lease with respect to payback period. I’m literally at the table supporting these people. The building is moving towards sub-metering all the tenant spaces. So it incentivizes them. We’re trying to move to larger full-floor and half-floor tenants. At its peak there were 598 tenants. There are a little under 200 tenants now.

It’s the whole idea of a class-A asset. It’s major tenants instead of little mom and pops. A lot of that drives us. We have more opportunity to optimize spaces for performance. Those tenants tend to be stakeholders who have more interest in these issues. Whereas with a lot of smaller tenants, it might not be something they’re concerned with. Larger spaces are easier to work with, but we didn’t establish that as a goal.

You wrote back in 2009 that “with nearly 40 percent of the building’s space due to turn over within four years, the success level of the tenant engagement program will soon be evident.” What does it look like now? How engaged are the tenants and how is the retrofit impacting the lease up of the building?

They’re very, very engaged. We’re targeting new tenants, and those who have come on have been part of the process. Skanska’s office is LEED platinum, another is LEED silver. Another tenant is signing on to a half a million square feet and it will be LEED silver.

How does this project tie into the overall marketing strategy of the Empire State Building? In what ways are you counting on the energy efficiency “story” to help add value to the property?

It’s a huge part of the marketing, the repositioning of the assets, the performance of the building and all of the environmental initiatives. It’s a class A asset now. In addion to all the upgraded infrastructure, the whole lobby has been restored to its art deco grandeur. It’s a totally different building than it was. It’s very difficult to pull out the value of an environmentally responsible retrofit or even in a new building because there are so many other aspects that add value. But it absolutely does have to do with the increased tenant retention.

How is Jones Lang LaSalle spreading this experience and tools to the rest of your portfolio? Where are you on that?

We’ve had international training sessions for our own experts. We’ve spoken at every major industry conference to make sure people understand what we did and what the benefits are—AIA and USGBC’s Green Build. We want to get the word out. We’ve done numerous publications and case studies, we have a website, www.esbsustainability.com where all of our processes are detailed for everyone to see. We’re trying to engage select corporate clients as well. We’re replicating this in about 30 buildings nationally.

What other barriers are you seeing out there now? What needs to change to help accelerate this level of renovation to the existing building stock? What new tools do we need to make this easier?

We’re working really hard at a state, city and federal levels to encourage policies that encourage retrofit. I think the greater greener building code requires a lot from building owners to make sure their buildings are operating officially: mandatory benchmarking, audits, commissioning. All of it requires better energy efficiency in buildings. And we worked with the city of New York to make sure it reflects how buildings get built. And we’re working to ensure that the incentives work too, for retrofit and for new construction. It’s a matter of getting those tools out there. The more successful cases we have, the more we can move the needle. If the only place we succeed is the with the Empire State Building than we’ve failed. It’s about convincing other people this is an intelligent business decision.

NEEA’s BetterBricks plans to launch region-wide deep renovation initiative later this year. Any words of wisdom for the Pacific Northwest?

Use our model because it works! We spent over a year developing it. We did all kinds of peer reviews. This kind of approach is extremely effective. Take an integrated approach: the envelope, but also tenant behavior. I’m a huge fan of energy modeling. It gives far more robust information. And be open-minded. Let the numbers speak for themselves. Looking at things objectively and outside the box is important: considering measures not typically thrown out there during an energy audits. And work together. We work very closely with the building managers and engineers in every project we work on.

Originally posted on Better Bricks, a partner of RMI.

 

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