News for the Hospitality Executive
Green Hotel Development
Gaining In Popularity
|October 2007 - As a sign of its sweeping popularity, one
of the best attended sessions at the recent Lodging Conference in Phoenix
“Going Green: Environmentally Profitable Hotels.” Some of the pioneers of the green hotel movement, including panel moderator, Howard Wolff, Senior Vice President of the architectural firm Wimberly Allison Tong & Goo, and Wen-I Chang, President of Atman Hospitality Group of South San Francisco, were there to share their challenges and triumphs in working toward a carbon constrained future.
What Is The Cost Premium For LEED-Certified?
Naturally, the biggest question on everyone’s mind was: How much more does it cost to develop a new hotel that meets the silver, gold or platinum standards of LEED (Leadership in Energy and Environmental Design) green building rating system?
According to Chang, developer of the only LEED gold-certified hotel in the world (the Gaia Napa Valley Hotel & Spa), his first LEED gold hotel cost about 15% more than a hotel built using conventional standards — but that was largely because of a late decision to go green, and starting off with advisors who had never built a LEED project. His next hotels built to the same standard were close to a cost premium of only 5%.
It is interesting to note that the green premium for Chang’s projects is significantly higher than the 1 to 2% premium that recent U.S. Green Building Council (USGBC) studies have shown. Perhaps these studies involved projects with greater size and scale. Perhaps the developers of the projects studied made the decision to go LEED-certified earlier in the process, or were able to tap the right team of LEED experts or employ alternate designs and building systems. But, the fact is that the cost to go green is going down, and that is what is important.
What Incentives And Savings Offset The Costs?
Up front incentives. According to panel member Gary Golla, an associate with the architectural firm SERA of Portland, Oregon, there are many incentives currently offered to help offset the higher front-end costs of LEED-certified hotel development. These range from fast-track approvals for entitlements to actual incentive payments and from tax credits to replates. For example, a hotel developer in the audience reported that the city paid him a $250,000 incentive payment as well as an additional $250,000 in sewer hook up fees, because of the project’s reduced water usage.Lessons Learned: How To Build Green
With the economic “why” for green development established, the panel
also gave the audience some good “how to” advice for developing green.
First, is making the decision to go green before you start anything, and
then getting a green building team on board at the earliest time possible.
Your team should be experienced in everything from site layout and design
to building certification requirements, city and other incentive programs
and green certified building materials and systems. They need a clear understanding
of the LEED certification process, which can be lengthy and complicated.
Second, it is important to find out all you can about green hotel development.
There are lots of available resources to learn more about the process,
including several publications and Web sites, and a good foundation of
knowledge makes for a sounder development overall.
And our special thanks to Howard Wolff for recommending the UNLV-JMBM
Hotel Developers Conference being held March 11-13, 2008 at the Green Valley
Ranch Resort & Spa in Las Vegas, Nevada. This is not just an introduction
to green development, this is a comprehensive, 2-day program entirely devoted
to green hotel development. For more information, to register or to participate
in sponsoring the conference or being an exhibitor, go to: www.jmbm.com/thdc.
Catherine DeBono Holmes is a senior member of JMBM’s Global Hospitality Group® and a partner in the firm’s Corporate Department, specializing in financial and investment services. Because of her background in representing investment advisers, securities brokers and real estate brokers, she brings an additional expertise to hotel owners seeking financing through securities and/or sales of condo hotels. Working with several developers of luxury mixed use resorts throughout the United States and in Mexico, Costa Rica and the Caribbean, she includes Gencom, Grand Sierra, Remington Hotels and The Trump Organization, as her clients. In addition, she advises condo hotel developers on working with local government authorities to obtain approval for their projects, and discusses ways condo hotel units can be sold legally here and abroad. Catherine can be reached at 310.201.3553 or email@example.com.
Copyright © 2007 Jeffer, Mangels, Butler & Marmaro LLP (JMBM). All rights reserved. Global Hospitality Advisor® and Ask the Hotel Lawyer™ are trademarks/service marks of JMBM. The Global Hospitality Advisor® is published four times a year for the clients and friends of JMBM.
|Also See:||How Global Warming Laws Will Affect Hotels; Will California’s New Legislation Set The “Standard” For The Country? / Global Hospitality Advisor / October 2007|
|Building a Green Hotel - The Challenges of Certification / Jim Butler / June 2007|