Below is a press release from San Francisco’s newly appointed mayor. It’s sounds like a bold initiative with real implications for commercial real estate building owners and managers. But is it? There must be something more to this than just entering your energy use into an online tool.

Rofo leases space at one of the few LEED Gold certified office buildings, 100 Montgomery Street in San Francisco. Everything about the building feels normal from a tenants perspective. Typical nice looking lobby, good security, and fast reliable elevators. Nothing is “in your face” about saving the planet. Occasionally the property manager will highlight a recycling initiative and its nice reminder that the landlord took some extra steps to pitch in.

The big question and concern about greening a space or a building is the upfront cost. Is the landlord going to take a financial hit and push rents up? And by doing so are you pushing tenants out. The city has been apparently ‘battling’ to keep Twitter in San Francisco and offering concessions/incentives (I know nothing about that real estate deal but I’ve been involved in commercial real estate leases as a broker where cities compete for a headquarters deal and can honestly say its not about the tax breaks. Its about the real estate.)

So cities have a big challenge and competing interests. Personally, as a tenant, I like the green building initiatives. But I also like keeping the rent competitive.

Would love to hear to your thoughts on this as a broker, tenant or building owner.

MAYOR LEE SIGNS LANDMARK LEGISLATION TO GREEN EXISTING COMMERCIAL BUILDINGS
New City Code Improves Energy Efficiency in Existing Buildings, Protects the Environment and Creates Green Jobs

San Francisco, CA—Mayor Edwin M. Lee today signed landmark green building legislation that will improve energy efficiency in existing buildings, reduce greenhouse gas emissions, lower energy costs, and create green jobs. Passed last week by the Board of Supervisors, the Existing Commercial Building Energy Performance Ordinance will require owners of existing non-residential buildings to determine how much energy each building consumes, and to make that information public on an annual basis. The new city code will also require commercial buildings over 10,000 square feet to conduct energy efficiency audits every five years in order to help the building owners and managers optimize building efficiency and utility savings.

“San Francisco needs to increase the energy and resource efficiency of existing buildings if we are going to meet our aggressive greenhouse gas reduction targets,” said Mayor Lee. “This new green building code will educate building owners about what they need to do to save energy and money, and boost our local green economy.”

“San Francisco continues to provide visionary leadership to protect our environment,” said Board of Supervisors President David Chiu. “Making our commercial buildings more energy efficient shows we can work together creatively to make real progress.”

Energy is one of the biggest expenses of building ownership, and will be an even greater financial burden for owners in the future as energy prices escalate. Buildings, which account for about 70 percent of the electricity consumed in the U.S., could be made up to 50 percent more energy efficient with currently available products and services.

Under the new law, Chapter 20 of the San Francisco Environment Code, building owners will be required to benchmark the energy use of their buildings using a free online tool provided by the U.S. Environmental Protection Agency, the results of which will be filed annually with the city. The code also requires building owners to conduct energy audits, starting with commercial properties larger than 50,000 square feet starting in October 2011, and then phase in so that by 2013, the rules would apply to all commercial properties 10,000 square feet or larger.

The Ordinance codifies the recommendations of the Existing Commercial Building Task Force, which then-Mayor Gavin Newsom convened to identify ways the city could work in concert with the private sector to improve the energy and resource efficiency of existing commercial buildings in San Francisco. The Task Force, similar to the one that developed recommendations for new construction, was comprised of 18 members of San Francisco’s building ownership, developer, financial, architectural, engineering, and construction communities, who the Mayor selected for their knowledge of the building industry and commitment to San Francisco’s long-term sustainability.

“San Francisco currently offers energy efficiency audits for businesses through our Energy Watch program, and we have learned that up to 70 percent of business that have an audit will take action and conduct a retrofit,” said Melanie Nutter, Director of San Francisco Environment. “We expect this Ordinance will deliver similar returns with existing buildings, which could lead to a 50 percent reduction in commercial building energy use within 20 years.”

Today’s signing ceremony was held at the San Francisco offices of Adobe, located in a 1905 building on the national historic registry that has been upgraded to LEED Platinum, the highest level of environmental performance recognized by the U.S. Green Building Council. The building employs extensive energy efficiency technologies, securing an Energy Star rating of 98.

“Adobe is committed to being a responsible corporate citizen in the communities where its employees live and work,” said Randall H. Knox, III, Senior Director of Global Workplace Solutions at Adobe. “Our company takes a hands-on approach to resource conservation and sustainability, achieving Energy Star ratings and US Green Building Council LEED certifications at many of our locations. It’s our hope that this new City of San Francisco law will inspire building owners to be more informed about energy consumption and take action.”