hospitality attorney with tom paladino on green building: looking at the triple top line

8/14/2019 Hospitality Attorney with Tom Paladino on Green Building: Looking at the Triple Top Line

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Financial Higher EdPublic RetailCommercial Mission

Tom Paladino, President,Paladino and Company, Inc.

Creating client value through a sustainableapproach to asset management

The Hotel Developers Conference

Green Building: Looking at the Triple Top Line

March 12, 2008


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our situation today


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peak oil


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desertification


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over population


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climate change


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Required LEED Adoption Rates by the Commercial Building Sector to

Meet the 1992 Kyoto Protocol Targets for Carbon Emissions

10% 20% 30% 40% 50% 60% 70% 80%

Adoption Rate, % of US Commercial Building Sector

Carbon

,MillionMetricTons

Kyoto Target Zone

20

40

60

80

100

120

140

Certified

Silver

Gold

Platinum


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minimize disturbanceontrol emissions

reduce water useminimize waste

ave energy

minimizecontrolreduceminimize

save


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scarcity vs.abundance


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The Poseidon Mystery Island, is competing for the title of the

worlds first luxury underwater resort. The complex will be designed

by Bruce Jones,


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a new paradigm

The Habitat Hotel is a working scale model of a hotel by

architect Enric Ruiz of Cloud 9 Architecture.


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The Hotel Rex


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prosperit

y


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financial

Fi i l A t M t


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Financial Asset Management

total assets, shareholder equity, revenue


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financial


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abundance

Olympic Mountains, Washingt

p

plane

t


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planet

financial


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pp

p

people


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people planet

financial

Creating ownervaluethrough asustainableapproach to assetmanagement


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p

p

p

rosperit

ylane

teople

Triple Top Line Asset Management


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Triple Top Line Asset Management

financial

planet

people

total assets,

shareholderequity, revenue

carbon, energy,

emissions, habitathydrology

productivity, job

satisfaction,health

Current Asset Base


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Current Asset Base

people planet

financial

Future Asset Base


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Future Asset Base

people planet

financial


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Case 1


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sundryness

windvisitors

3 pnc

Pittsburgh mixed use hotel, condo, office and ret

Strategy


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Strategy

Use Triple Top Line as measure of

success, because:

LEED does not currently recognizeenhancements to urban contextusing justLEED may downplay the major successes of

the project.

LEED is still not well known to publicfocusing on people & economics will createwider interest and reception.

Triple Top Line will encourage thedevelopment team to think beyond the LEEDrequirements.


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historic structuressteel bridgespublic transit

pedestrian traffic

3 pnc

Enhance Urban Ecology


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Add pedestrian street

miles per day across thesite.

Connect with at least 3modes of mass transit:

bus, train, & carpool.

Reduce automobile tripsby 50% over

conventional.

Design for the Place


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Design for the Place

Respond to climate. Utilize local materials (500 mile

radius) for 75% of the major,

visible systems.

Reference building precedentsthat reflect local climate,

materials & technologies.Source: Big & Green


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TBL Scorecard

CommunityTotal Points18

EP BMP MO

6

2

2

2

6

2

2

2

6

2

2

2

Mass Transit Connectivity

Automobile Traffic Impact

Make Places for People

Inspire Community Pride

Public Street Experience

Public Open Space Access

24 hr Use

Public Ownership of Space

Interaction with Community Assets

Urban Connectivity

Pedestrian Street Miles


EconomicsTotal Points18

EP BMP MO

6

2

2

2

6

2

2

2

6

2

2

2

Bottom Line

Create Value

Leasability

First Costs

Total Cost of Occupancy

Branding Placement

Capture Incentives

Mixed Use Balance

Equity Focus

Maximize Top Line

Utility/Maintenance Costs

Tenant Marketability

EnvironmentTotal Points18

EP BMP MO

Design for Place 6

2

2

2

Create a Living Building 6####

2

2

2

Demonstrate Leadership 6

2

2

2

Net Producer

Connection with Urban Fabric

Adaptable Space

Shared Infrastructure

Climate Responsive Design

Local Material Use

Green Building Education

Resource Dependence

LEED Rating Potential

Recommendations


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Recommendations

Define Triple Top Line goals to create aframework for decision-making. Goalsshould include measurable targets.

Use a Triple Top Line pro forma to

evaluate design decisions. Weigh inputstreams (rent, condo prices, utilities)against feature sets.

Develop a LEED strategy for theproject to include multiple tenants.

Tenants should commit to green

building goals.


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urban place makingknowledge workforce

business catalyst

Fairmont Hotel LEED-CI


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planet

financial

financial

Fairmont Hotel LEED CI

people

Fairmont Hotel Triple Top Line


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Fairmont Hotel Triple Top Line

people planet

financial

Goal: Align hotel tenant corporate sustainability policyand CI build out with 3PNC base buildings triple topline scorecard

CommunityLocal sourcing

Building materials &furniture

IAQ Low-emitting adhesives,

paints, carpets, etc. GREENGUARD certified

furniture Non-smoking hotel

Green housekeeping Environmentally

preferable cleaningproducts and practices

Green education Educating local furniture

manufactures, hotel staff,

guests, etc.

EnvironmentEnergy

Energy managementsystem

Energy star equipment &appliances

Smart room cards

Water efficiency

Low flow WCs & aerators

EconomicsBranding value increases

VAR

Utility/maintenance costsreduced through energy &water efficiency savings

Fairmont Hotel Draft Scorecard


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Fairmont Hotel Draft Scorecard


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Case 2

Candela Hotels High Performing, Luxury Hotel


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planet

financial

financial

Candela Hotels High Performing, Luxury Hotel

planet

Candela Hotels, Seattle, WA LEED-CI Gold


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Candela Hotels, Seattle, WA LEED CI Gold

people planet

financial

Goal: Create a traveler centric, high

performing, luxury hotel built to LEED Goldstandards

Green drove thedevelopment process:

Identify greendeveloper/partner

Optimize concept toalign withsustainability goals

Map to triple top linescorecard

Candela Hotels Triple Top Line


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Ca de a ote s p e op e

people planet

financial

Goal: Create a traveler centric, highperforming luxury hotel built to LEED Goldstandards

Traveler Centric

Superior air quality

Daylighting

Thermal comfort

Green housekeeping

Green education

EnvironmentLEED Gold

Site (in LEED corebuilding)

Energy Lighting controls

Equipment/appliances

Water efficiency

Materials & Resources Construction waste

management Local / sustainably

harvested resources

EconomicsBranding valueincreases ADR,

Operations centric reducing operational

waste and utility costs


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Front of House Feature Mapping


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Front of House Feature Mapping

LEED Building Features

Full

spectrum

lighting

Hypo

allergenic

bedding

Under floor air

delivery

Operablewindows

Green Guard

furniture

Non-toxic

carpet

Sustainably

harvested

woodDaylight

space

Back of House WATER Analysis


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Back of House WATER Analysis

33%

24%

22%

21%

Clothes Washer Faucets

Showers Toilets

8%

13%

43%

7%

6%

4%

19%

Cleaning Irrigation

Domestic (Grey) Cooling

Kitchen Other

Toilet

ResidentialResidential

Water UseWater Use

HotelHotel

Water UseWater Use

243 gals/day192 gals/day GREYWATER

209 gals/day

90 gals/day GREYWATER

Source: AHLA

Water-Efficient Appliances


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Water Efficient Appliances

ShowerheadsShowerheadsToiletsToilets FaucetsFaucets

TargetTargetFlow &Flow &FlushFlushRatesRates

0.8 - 1.1 gpf0.8 - 1.1 gpf0.8 / 1.6 gpf0.8 / 1.6 gpf

(Dual Flush)(Dual Flush)

< 1.8 gpm< 1.8 gpmAeratedAerated

< 1.8 gpm< 1.8 gpmAerated headAerated head

Sensor controlSensor control

Base Building Ideas


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g


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Case 3

Major Hotel Chain Green Brand Re-Invention


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people planet

financial

financial

j

financial



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j

Goal:Align green prototype design with traveler valuesin a way that demonstrates the green business case to

the franchisee



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jMajor Hotel Chain Green Brand Reinvention

P CurrentlyPossiblebutnotembeddedindocuments

R Requiredas assessmentof thecurrentprototypeLEEDstatus

Total Project ScoreCertified:26to 32points Silver: 33to 38points Gold: 39to 51points Platinum:52ormorepoints

P P P S LEEDCredits

1 4 12 19 9 5 2 2 38 2 3 2 2 22 40 14 1 3 4 0 2 2

Y R ? N

11 1 6 7 4 8 2 9 5 6 8 PossiblePoints 14Y R ? N easy mod diff easy mod diff easy mod diff P S

Y P Y Y Y SSp1

1 1 1 1 1 SSc1 1

1 1 1 1 1 SSc2 1

1 1 1 1 1 SSc3 1

1 1 1 1 1 SSc4,1 1

1 1 1 1 1 SSc4,2 1

1 1 1 1 1 SSc4,3 1

1 1 1 1 1 SSc4.4 1

1 1 1 1 1 SSc5.1 1

1 1 1 1 1 SSc5.2 1

1 1 1 1 1 SSc6.1 1

1 1 1 1 1 SSc6.2 1

1 1 1 1 1 SSc7.1 1

1 1 1 1 1 SSc7.2 1

1 1 1 1 1 SSc8 1

1 2 2 1 4 2 2 1 4 1 3 2 PossiblePoints 5Y R ? N easy mod diff easy mod diff easy mo diff P S

1 1 1 1 1 WEc1.1 1

1 1 1 1 1 WEc1.2 1

1 1 1 1 1 WEc2 1

1 1 1 1 1 WEc3.1 1

1 1 1 1 1 WEc3.2 1

5 1.5 3 2 15 3 4 10 7 5 5 9 8 PossiblePoints 17Y R ? N easy mod diff easy mod diff easy mo diff P S

Y P Y Y Y EAp1

Y P Y Y Y EAp2

Y 1 Y Y Y EAp3

2 1 1 2 2 2 EAc1.1 2

1 2 2 2 2 EAc1.2 2

2 2 2 1 1 EAc1.3 2

2 2 1 1 2 EAc1.3 2

2 2 2 2 EAc1.3 2

1 1 1 1 1 EAc2.1 1

1 1 1 1 1 EAc2.2 1

1 1 1 1 1 EAc2.3 1

1 1 1 1 1 EAc3 1

1 1 1 1 1 EAc4 1

1 1 1 1 1 EAc5 1

0.5 1 1 1 1 EAc6 1

2 3 4 4 3 9 3 4 6 5 3 5 5 3 PossiblePoints 13Y R ? N easy mod diff easy mod diff easy mo diff P S

Y Y Y Y Y MRp1

1 1 1 1 1 MRc1.1 1

1 1 1 1 MRc1.2 1

1 1 1 1 MRc1.3 1

1 1 1 1 1 MRc2.1 1

1 1 1 1 MRc2.2 1

1 1 1 1 MRc3.1 1

1 1 1 1 MRc3.2 11 1 1 1 1 Rc4.1 1

1 1 1 1 1 MRc4.2 1

1 1 1 1 1 MRc5.1 1

1 1 1 1 1 MRc5.2 1

1 1 1 1 MRc6 1

1 1 1 1 1 MRc7 1

4 6.5 2 2 10 3 8 4 3 12 1 2 1 4 1 PossiblePoints 15Y R ? N easy mod diff easy mod diff easy mo diff P S

Y P Y Y Y EQp1

Y P Y Y Y EQp2

1 1 1 1 1 EQc1 1

N 1 1 1 1 EQc2 1

1 1 1 1 1 EQc3.1 1

N 1 1 1 1 EQc3.2 11 1 1 1 1 EQc4.1 1

1 1 1 1 1 EQc4.2 1

1 1 1 1 1 EQc4.3 11 1 1 1 1 EQc4.4 1

1 1 1 1 1 EQc5 1

1 1 1 1 1 EQc6.1 1

1 1 1 1 1 EQc6.2 1

1 1 1 1 1 EQc7.1 11 1 1 1 1 EQc7.2 1

1 1 1 1 1 EQc8.1 1

0.5 1 1 1 1 EQc8.2 1

3 2 3 3 3 PossiblePoints 5Y R ? N easy mod diff easy mod diff easy mo diff P S

1 1 1 1 1 IDc1.1 1

1 1 1 1 1 IDc1.2 1

1 1 1 1 IDc1.3 1

1 1 1 1 IDc1.4 1

1 1 1 1 1 IDc2 1

1 1 1

1 1 1

1 1 1

1 1 1 Innovation in Design:?Innovation in Design:

LEEDAccredited Professional

Innovation in Design:Lo MercuryLightBulbs

Innovation in Design:Exemplary Performance

Innovation in Design:GreenHousekeeping

Innovation in Design:Useof Energy-StarAppliancesInnovation in Design:GreenEducation

Innovation in Design:ECHOProgram

Innovation in Design:GreenFF&E

Thermal Comfort,Verification

Daylight &Vie s,Daylight75%ofSpaces

Daylight &Vie s,Vie sfor90%ofSpaces

Innovation & Design Process

Indoor Chemical and Pollutant SourceCon trol*

Controllabi lityo f Systems,LightingControllabi lityo f Systems,ThermalComfort

Thermal Comfort,Design

Lo -Emitting Materials,Adhesives&Sealants

Lo -Emitting Materials,Paints&CoatingsLo -Emitting Materials,Carpet SystemsLo -Emitting Materials,CompositeWood&AgrifiberProducts

Outdoor Air DeliveryMonitoring

Increased VentilationConstruction IA Q ManagementPlan,DuringConstruction

Construction IA Q ManagementPlan,BeforeOccupancy

Certified Wood

Indoor Environmental Quality

MinimumIAQ Performance

Environmental Tobacco Smoke(ETS)Contr ol

Recycled Content,Specify20%

Regional Materials,10%Extracted,ProcessedandMnfctrdLocally

Regional Materials,20%Extracted,ProcessedandMnfctrdLocally

RapidlyRene ableMaterials

Construction Waste Management,Divert75%Materials Reuse,Specify5%

Materials Reuse,Specify10%

Recycled Content,Specify10%

Building Reuse,Maintain75%ofExistingShell

Building Reuse,Maintain100%ofExistingShell

Building Reuse,Maintain100%Shell&50%Non-Shell

Construction Waste Management,Divert50%

Green Power

Materials & Resources

Storage& Collection of Recyclables

On-SiteRenewableEnergy,20%

Enhanced Commissioning

Enhanced Refrigerant Management

Measurement &Verif ication

OptimizeEnergyPerformance,50%New/ 40%Existing


On-SiteRene ableEnergy,2.5-7.5%

On-SiteRenewableEnergy,10%

Fundamental Refrigerant Management

OptimizeEnergyPerformance,20%Ne / 10%Existing

OptimizeEnergyPerformance,30%Ne / 20%Existing


Water Use Reduction,30%Reduction

Energy & Atmosphere

Fundamental Commissioning of theBu ilding Energy Systems*

MinimumEnergyPerformance

Water EfficientLandscaping,Reduceby50%

Water EfficientLandscaping,No PotableUseorNo Irrigation

InnovativeWaste ater Technologies

Water Use Reduction,20%Reduction

Heat Island Effect,Non-RoofSurfaces

Heat IslandsEffect,RoofSurfaces

Light Pollution Reduction

Water Efficiency

SiteDevelopment ,ProtectorRestoreHabitat

SiteDevelopment ,MaximizeOpenSpace

Stormwater Management,QuantityControl

Storm ater Management,QualityControl

AlternativeTransportation,PublicTransportationAccess

AlternativeTransportation,BicycleStorage&ChangingRooms

AlternativeTransportation,Lo EmittingandFuel EfficientVehicles

AlternativeTransportation,ParkingCapacity

Construction ActivityPollution Prevention

SiteSelection

Development Densityan d Community Connectivity

Brownfi eld Redevelopment

Sustainable Sites

ThisscorecardcomparestheLEEDstatusofthe currentprototypedocumentswiththe

IncrementalandStretchgreenversionsoftheprototype.TheprojectgoalidentifiedfortheIncrementalgreenversionisCertifiedandStretchversionisSilver.VolumeBuildwillbeattemptedaspartof theStretchversion.

MI-MngdBaseGreenPrototype

Increm.

(volbld?) Stretch

Stretch

Vol.

Build

Establish new financial model

Create scalable green feature

packages to give franchisees

more choice

Validate green features through

rigorous cost/payback analysis

Use LEED volume build to

streamline submittal process

Embed cost and payback for

green into pro forma

Back of House ENERGY Analysis


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42%

20%

16%

6%

16%

Water Heating LightingSpace Heating Cooling

Other

Sources: Commercial Buildings Energy Consumption Survey (CBECS). Energy Information Administration, 1998.

Residential Energy Consumption Survey (RECS). Energy Information Administration, 1999.

nalysis of End Use

32%

23%

33%

5%7%

Water Heating LightingSpace Heating Cooling

Other

Hotel Multi-Family Residential

y

Boiler Efficiency


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y

Flexible and

Robust: if

operating at high

temperatures,

condensing

boilers stilloperate at high

efficiency >80%

Condensing

boilers can be

used to capturewaste heat that is

typically sent up

the flue.

Solar Heating & Heat Recovery


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g y

80-90% of theenergy used toheat water is sentdown the drain.

Recapturing heatfrom drain pipescan provideenergy savings inhot watermakeup.

Year-round

supplemental

water heating can

be provided by a

solar thermal

system.


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green cost analogy


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Chevy Malibu

green building cost options


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green building cost options


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constant program process


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Pro forma MODEL


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Green Rent Premium 2% $0.70 PSF/Yr. $595,385

Green Overlay

Improved lease up for green product offering ($0.01) $308,646

Utilities (LEED Silver) 20% 850,550 Sq. Ft. $1.20 PSF $1,020,660

TOTAL NET GREEN OPERATING INCOME 17,402,666

Improvement to NOI 5.8%

NET NOI IMPROVEMENT $952,350SIMPLE PAYBACK 9.2 years

Office 850,550Scheduled Gross Income

Office Space 850,550 Sq. Ft. $35.00 PSF/Yr. $29,769,250Signage Income $500,000 $0.6Plus: Parking Income 2,002 spaces $0 per mo. $0 $0.0

____________ _____

Total Scheduled Gross Income $30,269,250 $35.6

Plus: Recoveries $0____________

Effective Gross Income $28,086,817

Operating Expenses

Operating ExpensesManagement Fees $28,086,817 3.0% of EGI $842,605

Janitorial Services 850,550 Sq. Ft. $1.25 PSF $1,063,188Window Washing 850,550 Sq. Ft. $0.25 PSF $212,638Repairs & Maintenance 850,550 Sq. Ft. $0.50 PSF $425,275Insurance $155,100,294 0.500% Costs $775,501Professional fees 850,550 Sq. Ft. $0.20 PSF $170,110General & Administrative 850,550 Sq. Ft. $0.50 PSF $425,275Security 850,550 Sq. Ft. $0.75 PSF $637,913Landscaping 850,550 Sq. Ft. $0.25 PSF $212,638Parking Expense not paid by Tenant $2,149,980Gr. Lease Payment $216,442

RE Taxes $247,113,601 1.0246% Value $2,531,926____________

Total Operating Expenses $10,684,151

Net Operating Income $17,402,666

(Less): Vacancy 10.00% of SGI ($3,086,464)

TOTAL NET OPERATING INCOME 16,450,316


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Thank You!


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people planet

financial

hospitality attorney with tom paladino on green building: looking at the triple top line

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