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Nj future redevelopment forum 2014 green infrastructure levine

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  • 1. The Green Edge: How Commercial Property Investment in Green Infrastructure Creates Value Larry Levine, NRDC March 14, 2014 NJ Future Redevelopment Forum
  • 2. Green Infrastructure • Water quality management techniques o green roofs o tree plantings o rain gardens o permeable pavement • Proven to help solve major urban stormwater problems and improve the health and livability of neighborhoods • The Green Edge shows the range of benefits that these practices can provide to commercial property owners and tenants when use on private property
  • 3. Stormwater Runoff & Sewage Overflows • Each year, urban runoff generates 10 trillion gallons of polluted water that flows into waterways and oceans, often combined with untreated human sewage Newtown Creek, Brooklyn Image: Riverkeeper
  • 4. Stormwater Infrastructure Challenges • Federal “Clean Water Needs Survey” identified $100 billion of infrastructure investment needed over the next 20 years to address stormwater and sewage overflows in order to reach Clean Water Act compliance • American Society of Civil Engineers gives U.S. water infrastructure a “D” grade • Decline in traditional funding sources for municipal stormwater improvements (municipal budgets and federal funds)
  • 5. Green versus Gray Infrastructure • Traditional “gray” stormwater infrastructure – tunnels and sewage systems – has proven environmentally and economically costly. • “Green” infrastructure (GI) helps stop runoff pollution by capturing rainwater and either storing it for use or letting it filter back into the ground, replenishing vegetation and groundwater supplies. • GI mimics the way nature collects and cleanses water, and can be far more cost-effective than relying solely on gray infrastructure. $0 $1 $2 $3 $4 $5 $6 $7 Gray Infrastructure Green Infrastructure Billions Estimated Cost of Philadelphia CWA Compliance
  • 6. Community benefits of green infrastructure  Improving urban quality of Life  Beautifying neighborhoods  Increased property values  Cooling and cleansing the air  Reducing asthma and heat-related illnesses  Lowering heating and cooling energy costs  Recharge groundwater supplies/improve conservation  Spurring economic revitalization  Creating green jobs
  • 7. Benefits of green infrastructure for private, commercial property owners  Increased rents and property values  Increased retail sales  Energy savings  Stormwater fee credits and other financial incentives  Reduced infrastructure costs  Reduced costs associated with flooding  Reduced water bills  Increased mental health and worker productivity for office employees  Reduced crime
  • 8. Higher Rental Rates, Retail Sales, and Property Values • Landscaping adds approx. 7% to the average rental rate for office buildings – For a medium-sized office building rental in Philadelphia this could mean an additional $72, 150 in rental income per year • Consumers are willing to spend more (8-10%), visit more, or travel farther to shop where there is attractive landscaping or green streets – For a mid-sized retail center this could mean over $1 million in increased annual sales
  • 9. Higher Rental Rates, Retail Sales, and Property Values • Landscaping and trees increase residential property values 2-5% – Green roofs may add 16% to the average multifamily unit rental rate • LEED certification can be achieved through the use of green infrastructure – Increase occupancy rates in office buildings – Increase rental rates in residential buildings
  • 10. Lower Energy Costs • Green roofs and tree plantings save on heating and cooling costs – Better insulation – Reduce solar radiation – Reduce roof surface temperatures – Improve operational efficiency of rooftop air conditioning units • A green roof can reduce daily energy demand for cooling in a one-story building by over 75% • A single large tree can generate nearly $45 in energy savings annually
  • 11. Cash Back • Tax Credits – NYC: one-year credit up to $200,000 for green roof on at least 50% of a structure – Philadelphia: credit of 25% (max $100,000) on green roof installation costs • Rebates – Milwaukee: up to $10 per square-foot for green roof projects – King County, WA: pays builders 50% cost of green infrastructure retrofits, up to $20,000 • Floor Area Bonus – Portland, OR: green roof bonus in its zoning code
  • 12. Cash Back • Stormwater Fee Credits – Philadelphia: up to 80% reduction in stormwater utility fees for installation of green infrastructure • Grants – NYC: $11 million from the Green Infrastructure Grant Program committed to 29 green retrofit projects on private property since 2011 – Onondaga County, NY: $3.8 million in grants for commercial properties installation of green infrastructure retrofits – Philadelphia: $7.9 million in competitive grants for commercial properties installation of green infrastructure retrofits
  • 13. Reduced Infrastructure Costs • Reduced life-cycle costs – Green roofs have 40 year life expectancy (conventional only 20 years) – Could avoid over $600,000 in roof-replacement costs (net present0-value), in a midsize retail building with a 40,000 sq. ft. roof – Allow for use of smaller HVAC system – reducing capital costs • Permeable pavement used in parking lots have significantly lower maintenance costs • Integrating green infrastructure into site design decreases the amount of required below- ground drainage infrastructure, resulting in net cost savings
  • 14. Other Hard-to-Quantify Benefits • Reduced flood damage – Reducing the volume of stormwater runoff – Flood mitigation can increase property values (2-8%) • Reduced Water bills – Rain barrels and cisterns can save on water for landscape costs and other non-potable uses • Reduced Crime – Studies found significantly lower rates of property crime, violent crime, graffiti, vandalism, and littering in urban areas with well- designed green space • Improved health and job satisfaction – Reduced levels of stress – Direct benefit to employees
  • 15. RETAIL CENTER
  • 16. APARTMENT BUILDING
  • 17. MEDIUM-SIZE OFFICE BUILDING
  • 18. Acknowledgements: Stratus Consulting, lead report author Larry Levine Senior Attorney Natural Resources Defense Council llevine@nrdc.org Full report at: go.nrdc.org/greenedge