HOK vice-president Don Crichton and developer Jon Westeinde at last month's HOK event. (Darren Brown, OBJ)

Experts say government should step up with incentives

With a growing number of buildings in Ottawa being built to LEED standards or being retrofitted to meet BOMA's GO GREEN certification, the pressure is increasing for other landlords of existing buildings to follow suit.

"Once you're outed as a greenie, there's a lot of people that follow," said Richard Williams, a LEED-accredited vice-president at architecture firm HOK Canada.

Mr. Williams kicked off an HOK-organized panel discussion on sustainable development, a panel and social event put on to celebrate HOK's tenth year of doing business in Canada, last week at the National Gallery.

New buildings are more and more likely to meet some sort of "green" standard these days, and that fact is trumpeted with plaques and advertisements. It's what's in vogue now, and likely for the long term, the panel agreed.

As a result, the pressure is increasing on existing buildings to quickly refurbish aspects of their operation to keep up with the Jones', said Nadia Orawski, a senior consultant with Deloitte Consulting LLP in New York and one of the panellists.

"It's really about the existing building market (now)," she said. "A lot of landlords wouldn't have necessarily thought about it (before), but a lot are starting to think 'what's going to happen if the new construction that comes online (are LEED), and all these tenants want to move into a LEED building?' So, there may be a receptive audience there."

Much as air conditioning was simply a nice bonus landlords provided for tenants in the 1960s, it very quickly became the industry standard for commercial real estate when tenants began to demand it. Now, it's next to impossible to find buildings with windows that open to allow for fresh air.

Soon, most buildings will need to be refurbished to meet green specifications or have been built green in the first place to keep clients happy, the panel predicted.

However, as with air conditioning, going green is not necessarily favourable to the building owner's pocketbook. At least the perception exists that it's not.

"(Air conditioning) was a new way to attract people," said Joe Tibensky, director of real estate services for TELUS Communications and one of the panellists. "It wasn't good for the bottom line."

"There's a lot of desire out there to become a LEED green building," said Bruce Wolfgram, a local broker at DTZ Barnicke, who was not on the panel. "Tenants have determined a need to be in a LEED silver or gold building.

"(But) it's not mainstream yet," he continued. "Clients are saying 'we want a green building, as long as it doesn't cost me more.'"

Proponents can't say enough about the benefits of green. Besides more efficient energy use (and therefore, a healthier bottom line), many other factors provide both "hard" and "soft" positives, said Mr. Williams.

The "harvesting" of more natural daylight as well as cleaner and fresher air inside has made for happier – and therefore more productive – workforces where green standards have been implemented, and the statistics prove it, he said.

"There's definite cost benefits to making these adjustments, not just environmental benefits," BOMA Ottawa's Dean Karakasis told the OBJ. BOMA promotes GO GREEN certification for existing buildings in Ottawa, a useful scoring system for buildings which compares the energy efficiency with buildings in a similar class.

"Some are just safety, when we're talking hazardous materials – like asbestos and cleaning products – (in terms of) isolating them, making sure that when there's an accident they can be handled," he said. "Then there's hard costs: less energy, less water, reductions on your monthly bills. Then, the public relations benefits, which is really about you being part of the solution instead of the problem."

But there's a need to convince building owners. While the federal government has spoken encouragingly of its entire real estate portfolio becoming accredited with green standards, that's decades away, and it hasn't stepped in with major incentives for conversions to happen.

And as is usually the case with the private sector, a business case has to be made for an investment in something new, especially if there's an impact on the bottom line.

"Unfortunately, we do have to prove our numbers," said Joe Tibensky, who was responsible for and able to convince his bosses to opt for LEEDS silver when TELUS built Ottawa's newest downtown office tower on Slater Street.

All agreed that the market will drive the move for most, if not all buildings, to go green, whether or not the government steps in.

"In the United States, people are buying homes that are green, even in the credit crunch," said Ms. Orawski. "This is the next wave, this is where the market is shifting to."

Retrofitting lighting and systems, "that's the easy part," said Don Crichton, a vice-president at HOK. "The difficult part is what's beyond that. How are you supporting the tenant?"

What's needed, according to some of the panellists at HOK's event, is more education for brokers, tenants and landlords.

"It's going to be the broker and the tenant understanding what that building could offer . . . and approaching the landlord with the value proposition to turn that building into something that's making the existing building green," said Ms. Orawski.

And the best body to provide the information is the government. There's benefits not just for tenants in terms of lower utilities, fresher air and happier workers, landlords should be told, but for tenants in the rest of the building as well.

"It would definitely help us if there was something," agreed Mr. Tibensky.

"Ultimately, it's the local government," said fourth panellist Jonathan Westeinde, CFO of Westeinde Group. "Development is local. Building permits are local. Zoning and codes and all those things are in the hands of municipalities, (but) they have their hands tied."

Oryst Deneka, property manager of Minto Place in Ottawa, agreed, telling the OBJ that eventually, green building will be entrenched, as it has been at Minto for some time.

"I think the marketplace does a fine job," he said. "I think we need perhaps more incentives for landlords to jump into these things. I'm surprised that at city hall, there's not more programs that support landlords that want to go green, because it helps everyone.

"I think local municipal landlords can do more to encourage (it)."