Submitted by Dan Cohen, Urban Investment Group
On Wednesday, August 19th, the NAIOP Green Series Education Committee held its fourth session of this year’s Sustainability Series, “Going Green to Find Gold in Your Existing Building.” This five-part breakfast series is designed for building owners, property managers, real estate professionals, developers and others who want to build on last year’s green series with additional, pertinent and to-the-point subject matter on the particulars of “greening up” an existing building. Session Four, “The Legalities," was organized by Dan Cohen, formerly a Vice President with Catellus Development, now with his own firm, Urban Investment Group.
The session included three speakers. Carolynne White, a land use attorney with Brownstein Hyatt Farber Schreck, gave a presentation entitled: "The Legalities: The Regulatory Environment." The presentation was an overview of the current regulatory environment at the federal, State, and local levels with regard to regulation and funding for energy efficiency plans and improvements. At the federal level, Ms. White discussed a variety of programs, including funding headed to Colorado cities from the Energy Efficiency and Conservation Block Grant (EECBG) program. At the State level, Ms. White explained a number of bills considered or passed and indicated that most of the State's climate action efforts are actually implemented at the local level. At the local level, the trend in Colorado is for more green building regulations. Cities such as Denver, Aurora, Lakewood, and Wheat Ridge are all amending their codes. Ms. White closed with the prediction that the trend will be for more regulation in the future in Colorado. Click here to see Ms. White’s presentation materials.
Aaron Hyatt, an attorney in Brownstein Hyatt Farber Schreck's Real Estate Group, gave a presentation entitled: "The Legalities: A Presentation and Discussion of Legal Concepts and Issues in Green Leasing." The presentation was given in tandem with Mike Rooks, a Senior Vice President and tenant rep broker with Jones Lang LaSalle. Mr. Hyatt's focused on the array of issues building owners should be aware of and prepared to address when seeking "buy-in" from their tenants for implementation of a green program. Mr. Hyatt addressed what to look for when analyzing existing lease provisions (including operating expenses, design and construction standards, and rules and regulations) and implementation of green lease provisions into existing leases, including discussion of specific lease provisions (e.g., environmental plan, operating expenses, utility consumption, repairs and alterations, etc.).
Mr. Rooks offered the tenant's perspective on green leasing issues. He addressed questions such as which retrofitting and green improvement measures should a tenant be responsible for paying, what obligations should be imposed on a landlord as part of a green program, and what concessions can a tenant expect to "extract" from the landlord for agreeing to green leasing provisions. Mr. Rooks concluded that because many existing leases do not provide sufficient flexibility to mandate compliance with a green retrofit, landlords will be required to either obtain tenant “buy-in”or entirely self-fund the cost of implementing the green program. In contrast, for new leases on existing buildings and leases for new buildings, a landlord should be able to revise/create leases to address the full range of green issues. Click here to view Mr. Hyatt and Mr. Rooks presentation materials.
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