Making Multi-Family Building’s Green

Marycrest Assisted Living modernized their buildings and cut their utility bills by more than 30% while significantly reducing their environmental impact.

What does your multi-family property cost you in electric, natural gas and water every month/year?
Have you had complaints about uncomfortable areas?

Do you have maintenance issues beyond your expectations related to lighting, heating and cooling?

The ownership at Marycrest Assisted Living, located in Denver, Colorado, was repeatedly answering yes to these last two questions. They also had high electric and natural gas utility bills for their 2 buildings: in 2011, they spent nearly $145,000 combined between one that is 55,000 ft² and the second that is 28,000 ft².

With 161 residents this works out to $900 per resident. With a typical family of four living in a single family house in the metro Denver area paying an average of $1,900/year in 2011, or a cost of $475 per resident, they knew their buildings were operationally sick; too much cost for them and too much impact on the environment. The question was: how to find, prioritize, and fix the problems to get the most improvement for their allotted improvement budget.

Marycrest Assisted Living was founded and operated by the Sisters of St. Francis when these buildings were constructed in 1989. These women had a mission which focused on physical and spiritual caring, both for the residents and the larger community in which their housing was located. Marycrest Assisted Living is currently owned and operated by the Health Dimensions Group.

The Sisters of St. Francis’ mission of caring had carried over to a desire to be good stewards of the environment when they were having the facility built. Unfortunately, there was no one there to guide them or their general contractor on how important it is to construct the building as an integrated system of components to ensure good performance. Someone should have been there who was experienced with best-practices in construction as well as heating & cooling system design and installation. This is a fundamental service for all newly built multi-family buildings as well as renovated multi-family buildings when they seek ENERGY-STAR or LEED certification.

This consultant would focus on the sustainability of the building; indoor air-quality, low-embodied energy and low-maintenance materials along with energy-efficiency. This balances against the General Contractor’s priority to reduce upfront costs. It is this combination of personnel in the project team which results in the lowest overall cost of construction and operational cost for your multi-family building.

In the case of Marycrest, as they were planning for a major renovation of their building in late 2011they recruited Lightly Treading, Inc., (www.lightlytreading.com) a Denver-based building performance consulting firm that has been delivering sustainability and building-as-a-system services since 1997. Marycrest hired them to perform a Building Performance Analysis (BPA) of their buildings along with Project Management of their energy efficiency improvements. The BPA was performed in the spring of 2012 and numerous opportunities for improvement were found:

• Insulation and air-leakage issues that should not have even passed Code standards in 1989 were clearly contributing to high energy bills and comfort complaints.
• Heating and cooling systems that were often operating in competition with each other, increasing comfort problems while sending energy bills through the roof.
• Ductwork from the rooftop units that was leaking enough air-conditioned air into the attics that they were unintentionally being cooled by more than 30 degrees. The result was that much of the air conditioned air never got where it needed to go. The residents were uncomfortable and an astonishing amount of energy was being wasted.
• Windows which were allowing too much heat in during the summer and too much out during the winter.
• Lighting which was overused and less efficient than current LED lighting. Also they needed controls to turn off lights in unoccupied over-lit spaces.

The ownership at Marycrest used the solutions from Lightly Treading’s BPA report, as well as estimated savings from these improvements to apply for a grant from the Colorado Division of Housing. This grant, comprised of dollars from the Federal Government’s ARRA program, was designed cut their energy consumption. They were ultimately awarded the grant, which defrayed much of the cost of the improvement projects.

For building owners, as well as homeowners, who are not able to qualify for grant dollars to move forward with the energy saving and performance enhancing improvements, there are financial institutions that want to offer you financing. This financing rewards you for making improvements which improve your bottom line while offering aggressive interest rates and ease of qualifying. The benefits for future generations are also important.

Contact these institutions to find out more about interest rates, application process, etc.:

• Bank of Colorado -Stephen Ponce-Pore (stephen.poncepore@bankofcolorado.com)
• Wells Fargo Bank -Peter Pittman (peter.j.pittman@wellsfargoadvisors.com)

Rebates are also available to improve your Return on Investment (ROI) from making energy-saving improvements. Utility companies such as Xcel Energy, Platte River Power Authority( including Ft. Collins Utility, Loveland Power & Water, Longmont Power and Estes Park Power), and Black Hills Energy are offering rebates which often pay you back on 25% to 35% of the costs of your energy-efficiency improvements. Insulation & air-sealing, lighting, heating & cooling equipment as well as controls, water heating and even window improvements are what they want you to invest in, based on what is identified through your Building Performance Analysis.

Of course, there is no such thing as a free-lunch. To earn rebates someone will have to negotiate the utility program’s rebate program structure, fill out paperwork and submit proof of the improvements to receive the money. In the case of Marycrest, Lightly Treading took care of all this. Lightly Treading’s 15+ years of experience in working in the program and policy world of utilities was beneficial in ensuring Marycrest received the maximum rebate dollars available. They were awarded just under $45,000 on their investment of $234,000 of energy-saving improvements.

Finally, there is yet one more way to increase your ROI on improving multi-family residential buildings: federal tax credits. Specifically, there is a tax credit that applies to renewable energy and advanced technology installation on existing buildings through 2016 and generous tax credit for building highly energy-efficient low-rise multi-family buildings in 2013.

First, An Energy Investment Tax Credit (IRC Section 48): A tax credit is available to offset up to 30 percent of the cost for the purchase of qualifying solar energy systems, combined heat and power systems, small wind energy systems, geothermal heat pumps, fuel cells and microturbine systems.  This credit is available through 2016.

Second, A New Energy Efficient Homes Tax Credit (IRC Section 45L): Low-rise multifamily properties (three stories or less) may qualify for a $2,000 per unit tax credit for new residences that achieve a 50 percent energy savings for heating and cooling over the 2004 International Energy Conservation Code (IECC) and supplements. At least 1/5 of the energy savings has to come from building envelope improvements. The savings must be shown through a HERS Energy Rating of the individual units in relation to the overall building. This credit is available through December 31, 2013. For more information on this contact Lightly Treading at 303-733-3078 or www.lightlytreading.com

Conclusions
The work at Marycrest was completed in October of 2012 and the residents are already talking about the comfort improvements. Estimated savings projections yield a conservative estimate of $32,000 annually. In the first two full months (November & December 2012) of normalized utility bills for changed utility rates and weather , the savings , is averaging $3,126/month, a rate that’s on pace to equal $37,500 of savings for the year even without solar being installed!

Additionally, their savings in electricity equals just under 400,000KWH/year of reduced consumption. This is credited with the elimination of 171,996 pounds of CO2 being released into the atmosphere every year! This is equivalent to removing the pollution from 15.5 typical U.S. cars that would be driving 12,000 miles every year!

If you knew investing $234,000 in making your multi-family building more comfortable would result in rebates from Xcel Energy of $44,900 AND $32,000 to $45,000 in reduced energy bills EVERY year – a return on investment of 17% to 24% would you make the investment?
Contact Paul Kriescher at Lightly Treading, 303-733-3078 x301 or paulk@lightlytreading.com for more information.