Last week the San Francisco Board of Supervisors passed a measure approving the plan and EIR for the redevelopment of the Bayview Hunters Point neighborhood.  The measure was championed by City Supervisor Sophie Maxwell, and passed with an 8-3 margin.

The project, encompassing 720-acres along the Southeast waterfront of San Francisco, adds 10,500 residential units, nearly a third of which would be priced for low-income residents.  The plan also calls for 320 acres of parkland and open space; retail and commercial space – including a new stadium if the 49ers show some loyalty (they won’t) – and new transportation.

Predictably, there are more than a few immediate issues with the project.  At the top of the list….Lennar needs funding, the stadium has no tenant, the shipyard at the site is highly toxic, and a proposed bridge appears to unnecessarily impact sensitive wetlands. Lets just gloss over those for a minute and imagine what this current symbol of blight might look like if these initial issues are solved and the plan moves forward.

We are interested in green building here at the CGBB, so let’s look at this statement from the project website:

“Hunters Point Shipyard will be the first neighborhood in San Francisco powered entirely by clean, reliable public power. In the new “Green Public Power Community,” the San Francisco Public Utilities Commission will deliver reliable, 100 percent renewable and cost-competitive power to new residents and businesses of the current and future developments through its extensive hydropower, solar and other renewable energy generation projects.”

What? 100% from renewable sources?  Until someone really proves they can pull this off, I’m going to say this looks like greenwash. Where’s the co-gen plant?  Where’s the solar array?  There is not much on their website about how efficient the structures will be, so just stating they will pull 100% of renewable energy from the PUC sounds like Lennar is setting up a patsy if the plan falls short, and the PUC will still get paid. Lennar’s plan relies on the development of new energy production technology, and the cost reduction of existing technology.  That, in and of itself, is risky. One can not rely on new technologies.  For example, as we discussed last month, the California Solar Initiative is reducing the state (taxpayer) funded incentives and rebates for solar installations.

But, before I just cynically dismiss this lofty and worthy project, let’s look at Lennar’s track record.  Lennar is experienced in green development, and has the ability to scale the implementation of sustainable technologies.  According to a June 15, 2010 press release, Lennar is the largest producer of solar residential homes in the nation.  In the press release, Lennar discussed the success of its “SunPower Access” partnership with SunPower Corporation to provide a “no-money-down” leaseback program for residential photovoltaic solar installations.  (I am not familiar with the program, but I imagine it follows a Solar City model).  Additionally, Lennar, through its PowerSmart program, offers a pre-designed green home in about a dozen cities in four states (including California).  The PowerSmart program offers homes that are 15% more efficient than California’s current Title 24 requirements.

Whether PowerSmart homes are more efficient than the CalGreen codes that are mandatory starting in 2011 is another story. And, it will take more than green building to make Bayview Hunters Point stick to its 100% renewable energy promise.  Stay tuned for more on this project.

For more information visit the community group by clicking here, or Lennar’s website by clicking here.

The local California programs that allow homeowners to pay for green renovations through an added assessment on their property taxes is in jeopardy.  The BerkeleyFirst program – the first Property Assessed Clean Energy (PACE) program in the nation, is still up and running, but San Francisco suspended the GreenFinanceSF program, and Sonoma County now sends warning letters out with every application.  Mind you, 22 states now have PACE programs (enabled in California by AB 811), and President Obama wants to allocate $150 million in federal funds for these programs.  Someone in his office better call the Federal Housing Finance Agency (FHFA), because they don’t like the programs one bit.

The issues started when Fannie Mae and Freddie Mac sent out a letter in the beginning of May that scared some investors and homeowners because it stated, “an energy-related lien [i.e. PACE loan] may not be senior to any mortgage delivered to Freddie Mac.”  Then, at the beginning of this month, the FHFA (who oversee Fannie and Freddy) stated that the PACE loans pose a risk to lenders, and called for the programs to be stopped.  Last week, California shot back and sued the Federal Government to have the FHFA back PACE programs.

FHFA’s concern is that if a property goes into foreclosure, property taxes are the first debts paid off.  Since the PACE loans are an assessment included in property taxes, the PACE loans would be paid off first in a foreclosure.  Almost universally, a primary mortgage is paid off before any subsequent loans taken on a property.  The PACE loans throw that fundamental rule out the window.  This allegedly adds risk to the primary mortgage, and since Fannie and Freddie are the largest purchasers of mortgages in the nation, they object.

To make matters worse, a New York Times article reports that Fannie and Freddy might not accept mortgages with PACE loans.  Fannie and Freddy turning down mortgages is huge.  The two entities own nearly 50% of the mortgages in the nation, and banks rely on the ability to sell mortgages in bulk to Fannie and Freddie.  If PACE loans make mortgages less valuable in the mortgage market (the banking market that bundles groups of mortgages and sells them wholesale between banks and investors . . .e.g. “mortgage-backed securities”), that will essentially end the programs.

I understand the FHFA point of view, but I think their concerns are overblown. The improvements to the property add value, and the PACE payments are generally very small. A $25,000 loan at 6.5% over 20 years comes to about $185 / month.  If you consider the savings to the owner’s energy bill, are we really talking about a debt obligation that will jeopardize someone’s mortgage payment?  Indeed, what if the local government just increased taxes outright?

The PACE programs are gaining tremendous momentum, creating jobs, and leading us toward energy independence.  Throwing a wrench in the system over something quite small is not only counter-productive, its subversion.  We’ll track this issue closely, and let you know of further developments.

More on the lawsuit from Sustainable Business here

More on the lawsuit from the San Francisco Chronicle here

The CGBB first post on BerkeleyFirst is here

Parts One and Two of our analysis of the Final Report and Recommendations from the Mayor’s Task Force on Existing Commercial Buildings discussed mandatory energy audits, the risks associated with allowing unilateral submetering, and the welcome drive to increase transparency in energy use reporting under an expanded implementation of AB 1103.  In Part Three of this post, we look at the task force’s proposal to “attract game-changing capital.”

First, it should be noted that the task force’s interest in attracting game-changing capital comes from not only prudence, but also awareness of the acute financial restraints facing our society.  The task force offers low-cost solutions such as the Green Tenant Toolkit, and looks to engage the private sector in these and other initiatives.

There are two possibly expensive financial initiatives proposed by the task force that we will address at length.  The first is a Financial Optimization Tool (FOT) – a fantastic idea.  The proposed FOT is software that organizes and amalgamates all incentives and rebates available to building developers, managers, and tenants.  Currently, the best place to find such information is through the Database of State Incentives and Renewable Energy (www.dsireusa.org) (a website that is the anchor on our Tax Incentives and Rebates page).  The problem with DSIRE, and other resources such as the Flex Your Power website or the US Department of Energy Efficiency & Renewable Energy Newsletter, is the fluctuating information is difficult to organize.

DSIRE addresses this problem by simply listing every incentive available, and weekly (if not daily) updating that list.   This approach is thorough, however it creates a mountain of information to sift.   The FOT is a great alternative because it allows owners to use all incentives to design an energy efficiency program specifically tailored to their financial circumstances and their building’s design and condition.

To address the need for constant updates, the task force suggests a public-private partnership (P3).  The inclusion of a private partner could be effective.  But, as with so many other opportunities that are offered to private industry, this represents an early sale of future assets.  Further, including private industry may undermine the intent of the FOT

P3s have an essential place in our society, however, for this situation P3s are not an effective solution.  To have the greatest impact, all parties should have access to the FOT.  Use could eventually be required as a standard of care for the building management industry or as part of energy audits.  But, if a P3 private company is involved there needs to be a profit angle. Due to its niche market, the FOT will not produce sufficient advertising revenue.  And without advertising, the only profit angle is through subscriptions.

A subscription-based FOT will fail because it will deter a majority of potential users including other municipalities.  Further, if the FOT is privatized, anti-trust issues arise if use of the FOT is required

The best approach to implement the FOT is a “top down” approach that I will discuss in Part Four of our analysis.  The federal government, working with state and local agencies, must come up with this tool, so that it is accessible to all interested parties.  Perhaps federal leadership is too much for a locally convened task force to suggest, and perhaps this tool needs to start at the state level with contributions from our state universities.  What the FOT does not need is a private partner seeking profit.

There are areas where a P3 will work, and one surprising area the Task Force misses is an opportunity to suggest a partnership in finance.  The report suggests following the BerkeleyFirst distributed power program that utilizes AB 811.  As we previously discussed on the CGBB, the BerkeleyFirst program is not only innovative in attaching the debt obligations of a solar installation to property taxes, it is also innovative in allowing a private company to underwrite the financing for the installations.  This powerful P3 model epitomizes P3 success.  The private partner provides funding, and earns a fair return on investment.  The municipality reaps the reward of infrastructure development at a fraction of the cost.   Perhaps the task force was wary of opening the proverbial floodgates to private enterprise, or perhaps the task force did not want to single out Renewable Funding LLC, the underwriter in the BerkeleyFirst program.

Nonetheless, San Francisco launched GreenFinanceSF, and the city called on Renewable Funding LLC to finance the project.  BerkeleyFirst deserves a great amount of credit as the first program of this type in California, but GreenFinanceSF looks to be a broader initiative that has a longer list of eligible projects.  Unlike BerkeleyFirst which funds solar residential solar installations, GreenFinanceSF finances a long list of energy and water retrofit projects.  The California Green Building Blog will offer further analysis of the GreenFinanceSF program in the future.

The next and final installation of our analysis of the task force report will discuss a topic near and dear to my heart – the suggestion by the task force that government “lead by example.”  I am a firm believer in this approach.  This is not about government intervention, this is about leadership.  No matter where your political loyalties fall, you’ll want to read next week…

In Part One of our analysis of the report from the Mayor’s Task Force on Existing Commercial Buildings, we discussed the task force’s four themed approach to improving the energy efficiency of existing commercial buildings: 1) “maximize transparency,” 2) partner with the private sector, 3) attract game-changing capital, and 4) lead by example.  We now turn to theme two, “partner with the private sector.”

As discussed in Part One of this post, the transparency mandates suggested by the task force, and/or mandated under AB 1103 will force private industry to report energy use.  These reporting requirements will generate market forces that push buildings to higher energy efficiency.  But, will developers, owners, and tenants really compete in a race to the top of efficiency based on AB 1103 alone? The answer is “probably not,” or maybe I should say, “probably not quickly enough.”

Sure, required energy reporting will occur, but the desired reduction in energy use will not manifest rapidly.   Without government mandate and assistance for developers, owners, and tenants, the measures suggested by the task force, including mandatory energy audits, will create resentment and real hardship for businesses.  Also, the local taxpayers might not be happy with the incentives and rebates suggested to assist in deferring the cost (though some of the underwriting will come from state and federal grants).

The task force suggests two low-cost “tools” to rapidly generate efficiency results and ease the private burden of implementing energy efficiency.  The first suggestion is a “no-brainer,” but the second might not be as simple.

The first tool is the “Green Tenant Toolkit” (“GTT”).  Rather than simply mandating energy efficiency, the GTT proposes a “toolkit” with suggestions for developers, owners, and tenants regarding “best practice recommendations, a model green lease, [and] a standardized checklist to identify green features of spaces for lease.”  Also, as a part of the “partner with the private sector” theme, the task force suggests a public/private (dare I say) task force to come up with the language and suggestions for the GTT.  The proposed GTT is a quick and easy resource, and one that will ease the burden of implementing energy efficiency measures.

The second tool suggested by the task force is “unilateral submetering.”  This strategy proposes allowing tenants or landlords to implement submetering at the requester’s expense.  This is risky, and not completely thought out. First, this option likely already exists for a majority of tenants and landlords, and second the suggestion ignores the issues that arise from such a policy.

For example, unlike other tenant-level capital improvements, submetering affects the operating costs of other tenants.  Generally, a building’s utility costs are averaged, and then allocated to tenants based on square feet.  If a large tenant has a significant amount of space that is below the average energy use in a building, and that space is removed from the building energy calculation, the average cost will rise for other tenants.  Conversely, a landlord, at the bequest of other tenants, may submeter a power-sucking data center.  This action will lower rent for a majority of other tenants, but send operating costs for the data center through the proverbial roof.  It’s not quite that simple, but the example above is closer to the reality than the task force lets on.

To achieve the equity the task force seeks, unilateral submetering will need further analysis, or testing before city-wide implementation.  Perhaps if a tenant submeters, a landlord could be forced for one year to keep the submetered tenant in as part of the calculation for the building’s energy use averages until other tenants can take action to either lower energy costs or also submeter?  Or perhaps the city will limit the amount a landlord can raise an energy charge thus encouraging energy efficiency?  Perhaps other tenants will just have to “get with the program,” submeter, and increase their efficiency to realize ROI.  There are no easy solutions to this question, but submetering is an effective tool to reducing energy use, and is required for any effective energy efficiency policy.

The task force’s next suggestions – including the suggestion of a government fund to cover expenses for implementation of energy efficient technologies – will be covered in part three of our analysis.  Stay tuned…

Hi All,

A friendly reminder that I am presenting in one of three great webinars presented by the State Bar of California.  The webinars will be on May 12, 19, and 26.  If you can’t make these dates, you can register by the date of the event, and listen any time in the three months afterward.

The first webinar is “Sustainable Development: Moving Beyond Green Building Toward Sustainable Building and Sustainable Master Planning” I will discuss alternatives to LEED and the many factors interested parties should consider when designing and developing sustainable buildings and neighborhoods.  Jeff Conner (Conner & Associates), Matt Burris (CTG), and Patricia Chen (Miles Chen Law Group, P.C.) will join me  in a roundtable discussion that will discuss LEED as well as other ways to develop a sustainable project (i.e. ICC, GreenPoint Rated, or independent assessment).  Each approach requires unique planning and permitting.  More information can be found by clicking here.

Our webinar is the first of a series.  There are two more webinars that are really worth checking out.  The first is , “Sustainable Development: Charting a Course to a Sustainable Future Through CEQA Compliance and Effective Climate Action Planning – Demystifying AB 32 and SB 375″ and the second is “Sustainable Development: The California General Plan Law and General Plan Updates: The Future of Sustainable Development”

We hope to catch you online at these events!

Geof Syphers is the Chief Sustainability Officer at Codding Enterprises, developer of Sonoma Mountain Village, a One Planet Communities development in Rohnert Park, California that aims to be close to net zero…as a village!

We’ve written about Sonoma Mountain Village (SOMO) before.  Click here to review that post. Now, as an Earth Day special, please enjoy the interview I conducted with Geof a few days ago.  Click here for the full text, or just click on the “Interviews” tab at the top of this page.

The thing that makes the interview so relevant to Earth Day is SOMO is a One Planet Community.  This means that if every community on the planet lived like the residents in SOMO, we would only use the resources available on one Earth.  As it stands now, if everyone on the planet lived like the rest of the United States, we would need multiple Earths to support our lifestyle! (Click here to take a fun, albiet non-scientific, quiz to check your sustainability footprint).

So, Geof, and the group at Codding are onto something.  Enjoy the information in the interview, and have a great Earth Day!

I have a core belief that one can not complain unless one provides a solution (that is certainly part of the reason for this blog). Perhaps a number of people went to Al Gore with the same complaint.  Inconvenient Truth was heavy on problems and light on solutions.  Well, Al Gore’s new book, Our Choice: A Plan To Solve The Climate Crisis, is all about solutions, and it is a must read.

The central theme of Gore’s work is that civilization must price carbon emissions based on the effect they have on humanity.  There are other solutions Gore provides, but without monetizing carbon emissions, Gore’s plan falls apart.  It’s not a new concept (cap and trade), and Gore admits that.  If you don’t believe in cap and trade, the book is still a very valuable read.  There is something for everyone.

The book is very well written, and easy to read – which says a lot given the sometimes technical and dense content.  Gore is less colloquial than Tom Friedman (click here for my review of Hot, Flat, and Crowded) whose style sometimes loses efficacy to gain mass appeal.  Gore is more academic, but concise.  And on top of that, it’s just plain interesting.  As with Inconvenient Truth, there are graphics and photos to keep the book flowing through the technical parts.

The first half of the book systematically establishes the foundation of the problems we face (a quick summary of Inconvenient Truth), and provides options for the solution.  Mr. Gore addresses the issues with each sector of industry: energy, manufacturing, transportation, farming, housing (though there is really no section on green building per se) and then lays out all of the options for a solution (solar, wind, geothermal, nuclear, carbon capture and sequestration).

Our Choice is the kind of book one will use as a reference.  Not only does the book provide significant policy arguments, it backs up the positions with facts and science (and a healthy analysis of psychology).  The real take-away is the book drills down to risk/benefit analysis for each approach to solving the climate crisis.  Is nuclear energy really an option?  Can carbon capture and sequestration work for coal-fired power plants?  Our Choice asks the reader to make the choice based on the well-defined pluses and minuses for each technology.

The second half of the book focuses on the challenges of convincing the populous and governments that change must occur now.  Climate change detractors and some members of the Republican Party may take issue with some of this subject matter.  The first half of Our Choice is generally non-partisan, but the second half contains some chapters that take on detractors – many of whom are Republican.   A lot of the content in these sections is re-hashed argument, but it needs to be aired and recorded.  In so doing, the differences of opinion are laid out, and some progress can be made toward a political solution.

Mr. Gore has stated repeatedly that our need to create renewable energy is not just a matter of global warming, it’s a matter of national security.  I agree.  As someone who finds political labels a liability, I suggest we consider at least that rationale.

Al Gore does that and more. Our Choice is a great book to help anyone understand the diverse options we face.

My friends over at the Kellogg Alumni Club are at it again with another great clean tech event. On Wednesday, March 17 the group will host a panel discussion on two emerging clean industries: transportation and energy – including nuclear power. Can that, too, be clean?

The event is open to the public, and it will be a great way to learn and network with leaders. Ideas will definitely be flowing. The top-shelf presenters and panelists include:

Rod Diridon - Clean Tech Rail Pioneer, Executive, Political Leader, and High-Speed Rail Authority Board Member
Bob Garzee - Clean Tech Automotive Transportation Pioneer and Entrepreneur
Jeff Hamel - Energy Researcher and Clean Tech Advocate

Networking, passed hors d’oeuvres and a cash bar start at 6pm, and the presentations and discussion will go from about 7 – 8:30 pm. You couldn’t ask for a better setting: the beautiful McCormick and Kuleto’s – right on the water. See you there!

Click Here For More Information And For Reservations.

Also, remember Kellogg’s San Jose clean tech event with different panelists, Thursday, April 1. Click here for more information on that!

Some friends of mine are putting on a great event in San Jose, CA April 1 with a panel of speakers discussing innovations in sustainability.  The subject-matter looks to focus on energy, so it’s not exclusivly green building.  Nonetheless, energy and building are inextricably linked (especially with the funding of smart grid and distributed power technologies).  It will be a fun event filled with new ideas and lots of networking.

The title of the event is “The Clean Tech Gold Rush: Where to place your bets in your Investments and in your Career.” The event will be held at Club Auto Sport in San Jose (gorgeous venue).  The organizers have already confirmed Andrew Friendly from Advanced Technology Ventures (his portfolio companies are Solar Junction, AltaRock Energy, Rive Technology, Wakonda Technologies), Kelsey Lynn from Firelake Capital Management, Bob Garzee (Founder and CEO of ETDC), and Eric Wesoff from Green Tech Media (Chief Analyst).

The event is open to the public, and ”early bird” $15 tickets are available until February 21.  If you’re interested in learning more about the speakers and the event, click on this link: http://cleantechgoldrush.eventbrite.com/

Stadiums.  They’re large, and they’re empty for large amounts of time.  Because of this strange dichotomy, stadiums are incredibly expensive to operate and maintain.  They are also expensive to build.  Construction of the new Yankee stadium cost $1.5 billion.  All that money and a dearth of environmental considerations. Why?!

A few new stadiums are showing better judgment.  The Washington Nationals started the trend a few years ago with the first LEED Silver professional stadium, (more info here).  The Florida Marlins are joining that club with a LEED Silver stadium of their own.  Other venues are showing a commitment to the environment.   The Phoenix Suns, NY Giants and Jets (VIDEO!), NY Mets, San Francisco Giants, and New England Patriots either have or plan environmental efforts or LEED qualifying measures for their stadiums.  The EPA is even helping some of the projects (More info here)

Let’s not forget these efforts are not always smooth.  Remember the labor controversy around the green roof at the Target Center in Minneapolis? (I’m still looking to see how that was resolved – stay tuned).

But, more to the point, public money is regularly required to build these new structures, so implementing green measures should be a required part of the package.  Generally, states are moving to require green municipal buildings, and the federal government already requires it.  How did the new Yankee stadium get city dollars and federal tax breaks and still end up a relic of inefficiency?  It’s disappointing and short-sighted.  The Federal government and many states have long required that large structures for the public must include sustainable measures.  It’s time all publicly financed stadiums get included.  I’m not saying every stadium needs to meet LEED standards, but at 1.5 billion, I’m guessing they could have found some room in the budget for waterless urinals or solar panels. C’mon Yankees, you lead in everything else!

Congratulations to the New Orleans Saints!!  Pitchers and catchers, report in seven days…

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