Empire State Building: An older lady gets a new "green" dress

For me, the most enduring symbol of New York has always been the Empire State Building. Having been born and bred in "The Big Apple," each street and building is a new adventure. As a young child, each time that I went inside this icon of New York, something "magical" happened for me, especially when I was deemed old enough to visit the observation floor. When I looked over the guardrail, suddenly, all of the splendor that is N.Y.C. was right there shining for me. Over the years, it was always reassuring to know that on each trip that I took to mid-town, I would see my "old friend." Unfortunately, as the years continued to add up, the Empire State building hasn't aged gracefully. On the outside, it still looks the same Art Deco icon, but its energy infrastructure and tenant spaces have become out-dated and lost in time - until now. The technical knowledge about how to retrofit an existing office building to maximize energy efficiency is readily available. But, most building owners have taken little action. Why? The usual answers include: a troubled economy, tight credit and capital, a down real estate industry, little regulatory pressure, rigid business models and simple inertia. What's the alternative? Knowledge plus leadership equals action. Malkin Holdings, the Empire State Building's new owners, have taken the leadership role in this new business realm. Led by Anthony Malkin, they are undertaking a historic retrofit to bring the landmark building's infrastructure up to modern energy efficiency standards and, simultaneously, to improve the quality and efficiency of tenant spaces. Malkin's goals for the Empire State Building retrofit are visionary. "The goal with ESB has been to define intelligent choices which will either save money, spend the same money more efficiently, or spend additional sums for which there is a reasonable payback through savings. Addressing these investments correctly will create a competitive advantage for ownership through lower costs and better work environment for tenants. Succeeding in these efforts will make a replicable model real for others to follow," he said. This energy efficiency retrofit plan didn't fall out of the blue. Malkin Holdings had planned a scheduled capital improvement program with a budget of over $550 million. Before the company moved ahead, they evaluated the cost of upgrading the energy efficiency at the same time. Most building owners merely replace existing HVAC equipment with the same model and generate marginal new energy savings. After seven months of development that included energy experts and sustainability consultants from Johnson Controls, the Rocky Mountain Institute and Jones Lang LaSalle, they came up with an energy efficiency plan with key expected results including: $4.4 million of energy cost savings; 38% energy annual savings (more than double conventional savings rates of 10-20%); 3.1 years payback for the incremental cost of energy efficiency retrofits; and 105,000 metric tons of carbon emissions saved over 15 years. The ESB plan includes eight strategic areas for improvement: windows; radiative barrier; tenant daylighting/lighting/plugs; chiller plant retrofit; variable air volume (VAV) air handling units; direct digital controls (DDC) based on one of the largest wireless networks; demand control ventilation; and tenant energy management. The window component is especially interesting in that it includes removing 6,514 double-hung dual pane windows, separating the glass panes and remanufacturing the glass into super-insulating glass units (IGUs) and reinstalling the units. Serious Materials', the technology provider for the remanufactured windows, has built a first-of-its-kind, on-site production facility that eliminates virtually all of the waste. The new insulated windows will improve the R-value of the windows from R-2 to a range of R-5 to R-8. This package of energy efficiency measures reduces peak cooling requirements by 33% (1,600 tons) enabling immediate and future CapEx avoidance. The package also reduces peak electrical demand by 3.5 MW, benefiting both the ESB and the utility. For tenants, the package enhances indoor environmental quality and other amenities, such as: better thermal control; improved air quality; and better lighting conditions. The team developed three programs to reduce and manage tenant energy use: tenant pre-built spaces; tenant design guidelines that include tools to verify the economic validity of recommended measures; and tenant energy management that includes sub-metering of all tenant spaces and an energy feedback tool with energy and carbon reporting. Malkin Holdings reports that maximum cost-effective savings are achieved by: taking a whole-systems, dynamic, life-cycle approach; coordinating energy efficiency projects with equipment replacement cycles; and addressing tenant spaces. Skanska, the international building concern, has already rented an ESB suite and are making this location their official headquarters. They wanted their space to create a LEED Platinum interior that, over the life of the lease, cost no more than a typical class A office space. Skanska found all that they were seeking in the Empire State Building. The Skanska Corporation had a day of brainstorming. The cast included key participants from Skanska itself, the owners of the building and members of the architecture, space planning and engineering teams. After a day of brainstorming, the project goals were: an outside view for all employees; using daylight as the primary light source; and maximizing energy efficiency, individual controls and the ability to monitor energy use. Skanska's total cost is $4,624 million, which is greater than a hypothetical class A office budget by $210,858 or $8.64 a rentable foot, an increase of 4.7%. The upfront investment is on track to pay for itself in five years, exceeding expectations. Projected out over Skanska's 15-year lease, the net present value of energy saved is $683,200. When combined with a $20,527 grant from the New York State Energy Research & Development Authority, Skanska generated a net gain of $492,869 or 11%. Thank you, Mr. Malkin, for helping this great lady remain young, beautiful and rentable. You are showing the rest of us how becoming as green as possible can make such great difference no matter what the age of the building. You are proving that "green" is not only more easily rentable, but also that it saves the tenants money in operating costs. Barbara Parker is president of Green Fox Communications, New York, N.Y.