Strong Incentives Exist for LEED-EB

Jan. 1, 2005
Editor's note: In the interest of fairness, HPAC Engineering offered this page to the USGBC as an opportunity to rebut some of the criticism of LEED-EB

Editor's note: In the interest of fairness, HPAC Engineering offered this page to the USGBC as an opportunity to rebut some of the criticism of LEED-EB voiced in this column last month (see “LEED-EB needs a strong incentive” at

The U.S. Green Building Council's (USGBC) new standard, LEED for Existing Buildings (LEED-EB), was designed to promote green building practices by providing market incentives to building owners. For those interested in improving the environment and saving money, LEED-EB is, in fact, rife with incentives.

LEED-EB provides a venue for the expansion of green building practices into uncharted territories, which will strengthen interest in the Council and its mission. But, as promoters of an innovative concept, the USGBC must anticipate and address barriers that face building owners and operators. One challenge, in particular, is providing information about the incentives for getting certified.

The costs of operating a building throughout its lifetime far outweigh initial construction costs. For this reason, any early reluctance to make capital investments in building upgrades should give way to the quick return on investments and longterm financial rewards associated with efficient, sustainable buildings. Early adopters of LEED-EB are already realizing this expectation of financial reward.

Thomas Properties Group, manager of the LEED-EB Platinum certified Joe Serna Jr. Cal/EPA Headquarters in Sacramento, Calif., has realized financial benefits from both sustainable operations that require capital investments and those that do not. Sustainable systems and practices within the building resulted in the savings of $1 per square foot in comparison to average downtown Sacramento operating expenses. This saves the site nearly $1 million annually. Some of the savings result from investment in high efficiency equipment, but actions that do not require capital can also produce economic benefits. Shifting janitorial schedules to daytime hours has diminished the need for after hours heating and lighting, incurring utility savings of $100,000 annually and reducing janitorial complaints and staff turnover significantly.

Even organizations lacking capital can participate in LEED-EB. As a part of the California State University System, the Moss Landing Marine Laboratories did not have much to spend to get certified. Despite a $7,000 project budget, the lab managed to score a rating of LEED-EB Gold. The process of getting certified revealed the strengths and weaknesses of the building, which will aid the lab managers in making purchasing decisions for system upgrades when capital becomes available.

As the largest operating expense in most commercial buildings, energy costs significantly affect building valuation and attractiveness to prospective tenants and buyers. In a case study commissioned by the New York State Energy Research and Development Authority of the Telergy Office Building in DeWitt, New York, it was found through an energy analysis that by retrofitting the building systems, the building could realize a 26 percent decrease in energy consumption. This energy analysis resulted in an increase of $1.2 million in the appraised value of the building.1

Another way in which LEED represents a real estate advantage is as a tool for negotiating lease agreements. For example, the U.S. EPA will only lease newly constructed buildings with a LEED-NC Silver or higher rating.2 Our hope is that agencies, such as the EPA, will soon require their leased space to also be LEED-EB certified.

Finally, many federal, state, and local government organizations are adopting LEED as the standard for their buildings. The latest example is the State of California executive order adopting LEED for all state-owned buildings.

To learn more about LEED-EB and the incentives is provides, visit the USGBC's “State and Local Toolkit,” available at


  1. Majersik, C (March 2003). “The Impact of Energy Costs on Commercial Building Value.” The New York State Energy Research and Development Authority, Institute for Market Transformation.

  2. “U.S. EPA Administrative Services: Green Buildings.” Accessed December 17, 2004, from EPA Website:

Michael Arny served as the chairman of the committee that wrote LEED-EB. He works for the Leonardo Academy, which focuses on energy and environmental issues. He can be reached at [email protected]