The Green Age - making your real estate greener
by Pamela Green, B.A. (Hons), LL.B.
In real estate and real estate development, "being green" has arrived. Although not yet mandatory in Ontario, the ever increasing attention by government to issues relating to the environment leaves little doubt that government will soon mandate green development.
Green Globes, instituted by the Building Owners and Managers Association (BOMA) in Canada in 2004 and the Leadership in Energy and Environmental Design (LEED), instituted by the United States in 2000, are two examples of environmental assessment, education and rating systems. Certification under these types of systems adds both prestige and value to your real estate. These rating systems are being used, in turn, by governments to develop guidelines and legislation for "green buildings."
The City of Toronto has spearheaded the green movement in Ontario. In 2006, it developed the Green Development Standard (GDS). The GDS contains performance guidelines for both site and building design to promote better environmental development and sustainability. For the first year, the GDS will only apply to new City-owned and affiliated projects and will be voluntary for the private sector. The timing of GDS's implementation is yet to be determined.
The City of Mississauga does not currently have any formal "green building" criteria that developers must meet, but the City is actively working on a strategy to promote "green" development; this will involve policies akin to the GDS, as well as incentive programs and educational information. City of Mississauga staff have confided to us at Pallett Valo that they will look very favourably upon applications that have "green building" features. But they don't really want this to be a secret. The City welcomes public input and participation.
As a result, developers as well as owners of existing buildings who are thinking or already building "green" can help to shape the Green Age. We can advocate standards that won't be cost prohibitive, as well as encourage the City of Mississauga to implement incentives and rebates like those already in place at the City of Toronto that would make green development cost friendly. [see sidebar article on Government Incentives].
What does "going green" or "building green" look like? "Green building" features can include (and the list is endless): paper, plastic, glass and metal recycling programs; natural light in a building via skylights; groundwater geothermal heat pumps; carpeting made from recycled materials; an atrium that can function as a heat regulator and an interior recreational space for tenants or occupants; rainwater harvesting from rooftops to be used for flushing toilets; and rooftop gardens [see sidebar on Benefits].
Your "Green Team"
So, if you've made up your mind to retro-fit "green" features into an existing building or you want to be the envy (green!) of your industry by designing and building the most environmentally sensitive building to date, where do you start?
Your "green team" should include the developer or owner, an architect, planners, surveyors, engineers, environmental consultants, contractor(s), and a lawyer with experience in "green" development projects. "Building green" is different enough to get a lawyer involved in the early stages to protect your interests, especially with changing laws, regulations and even attitudes of permit-granting officials and politicians.
Here are some ways lawyers experienced in "building green" can facilitate "green" projects:
- They have a network of "green" professionals. Having an established network means that your green project will come together more quickly, efficiently and cost-effectively.
- They know today's guidelines and trends, such as Green Globes and LEED, and they anticipate tomorrow's legislation, such as the Green Development Standard. It's their business to know and participate in "green" legislation coming down the pipeline.
- They can facilitate the approvals process for "green" projects and structure agreements and creative arrangements with municipal and other authorities having jurisdiction.
- They can assist with the many different layers of a green project such as helping to strike deals with suppliers and contractors, and negotiating contracts with environmental consultants and environmental engineers.
Benefits of going green
There is a cost premium for "going green," but there are good business reasons for doing it, too. Some benefits are easily quantifiable for both business owners and developers; others are harder to quantify.
For building owners, a "green building" can mean a rent premium. For tenants and their employees, it means a happier, healthier workplace that translates into better profit margins. For both, it means less environmental stress on the planet. Here is a partial list of benefits:
- Operating cost savings and lower maintenance and life cycle costs
- Reduced emissions and wastewater
- Improved air quality, lighting and thermal controls
- Reduced seasonal and chronic infections
- Improved employee productivity
- Increased employee satisfaction with the workplace
- Employees feel they are doing their part for the environment
- Lower health insurance costs for employers as a result of fewer sick days
- Reduced employee turnover and increased employee retention
- Improved public image and reputation
- Increased value of property
Government incentives & rebates
Here are some incentives and rebates that business owners and developers could be encouraging in Mississauga (and Peel Region):
- Fast-tracking of "green" applications
- Increased density
- Realty tax abatements (may require Provincial co-operation)
- Development charge credits/rebates
- Direct monetary incentives for specific "green" features
- Negotiate arrangements for preferred green suppliers
- Increase/expand awards and other recognition of "green" projects
Here are links to the Green Development Standard and certain City of Toronto incentive programs and rebates:
Green Development Standard:
http://www.toronto.ca/environment/greendevelopment.htm
Better Buildings Partnership Program promotes and implements energy efficiency and building-renewal retrofits:
http://www.toronto.ca/bbp/pdf/bbp_procedures_manual.pdf
Better Buildings New Construction Program strives to have new buildings designed to be at least 25 per cent more energy efficient than current standards:
http://www.toronto.ca/energy/pdf/bbncp_occupancy_permit_requirements.pdf
Green Roof Incentive Pilot Program supports the City's stormwater plan and is designed to encourage "green" roof construction. Successful applicants receive a grant of $50 per square metre of eligible "green" roof area up to a maximum of $10,000 for single family homes and $100,000 for all other property owners:
http://www.toronto.ca/greenroofs/index.htm
Toronto Atmospheric Fund exists to help finance projects that combat global climate change and improve air quality:
http://www.toronto.ca/taf/
Pamela Green (yes, that's her real name) is a partner in the Commercial Real Estate Practice at Pallett Valo LLP, Mississauga's largest law firm. She can be reached at pgreen@pallettvalo.com or at (905) 273-3022, ext. 265.