Page 131 - Green Building Through Integrated Design

108 THE BUSINESS CASE FOR GREEN BUILDINGS

(This section is not intended to give you legal advice—please consult with your own
attorney regarding risk mitigation issues!) With a national focus on mold and its effect
on building occupants, developers and building owners should focus considerable
attention on improving and maintaining indoor air quality. If green buildings could
give you a better risk management posture, what would that be worth? Five percent of
initial cost, 1 percent?
The ability of green buildings to qualify for faster permitting or special permit assis-
tance in a number of cities can also be considered a type of risk mitigation. In Chicago,
for example, the city government has created the position of green projects adminis-
trator and offers green projects priority processing of building permits. For large projects,
above minimum requirements, the city waives fees for independent code consultants.
Projects with high-level green goals are promised a 15-day permit review.* In Austin,
Texas, the city fast-tracked the development reviews for a large big box retailer, so that
it was able to open 12 months ahead of schedule; the resulting profit gain of about
$3 million reportedly paid for the entire $2.8 million building! †
In 2007, I conducted a study for NAIOP, a national property developer’s organiza-
tion, and found dozens of jurisdictions offering green building incentives. That num-
‡
ber continues to increase each year. Local governments offered incentives ranging
from accelerated land use and building permit review to density bonuses and tax
abatements. (These benefits typically don’t apply to governmental and institutional
projects which may not require such local permits.)
Another risk management benefit of green buildings in the private sector is the
potential for faster sales and leasing of such buildings, compared to similar projects in
the same city. Green buildings tend to be easier to rent and sell, because educated ten-
ants increasingly understand the benefits (see the CoStar study cited above). Many
corporate real estate departments are now beginning to require LEED certification
wherever possible, as a condition of leasing space in commercial buildings. In some
cases, a building may be fully leased before construction completion, reducing the
developer’s “market risk.” Imagine the benefit to a developer from having all leases
signed, before having to incur all the costs of construction.
Green buildings are also seen as less risky by some insurers. In September of
2006, Fireman’s Fund, a major insurance company, announced it would give a
5 percent reduction in insurance premiums for green buildings. The insurer also
announced its Certified Green Building Replacement and Green Upgrade cover-
§
age. After this initial announcement, other commercial insurance carriers also
began offering special insurance benefits to certified green buildings. While not
representing huge savings, these premium reductions add to the benefit side of the
green building ledger.

*“Speedy Permitting Has Developers Turning Green in Chicago,” Building Design & Construction, November
2005, p. 28; www.BDCnetwork.com, accessed March 6, 2007.
† Personal communication, S. Richard Fedrizzi, CEO, U.S. Green Building Council.
‡ NAIOP, www.naiop.org/foundation/greenincentives.pdf.
§ www.buildingonline.com/news/viewnews.pl?id=5514, accessed March 6, 2007.