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Chicago’s Proposed Energy Benchmarking Ordinance: Our Support for Energy Intel, But Opposition to Public Disclosure

By Michael Cornicelli

On June 26, 2013, Mayor Emanuel unveiled an energy benchmarking ordinance that, if passed by the City Council, would require municipal, commercial and residential properties over 50,000 square feet to track and publicly report their energy usage. BOMA/Chicago shares Mayor Emanuel’s passion and desire to make Chicago’s buildings as energy efficient as possible, and we believe having comprehensive data to benchmark, measure progress and drive value is essential.

BOMA/Chicago has a longstanding commitment to sustainable property management and many of our building members are already well positioned to meet the benchmarks set forth in the proposed ordinance through their participation in internationally-recognized benchmarking initiatives such as LEED and Energy Star. In fact, according to our own 2012 Economic Impact Study, Chicago ranks first in square footage of LEED certified Existing Building (EB) and LEED certified New Construction (NC) and second in square footage of office buildings with Energy Star ratings across all U.S. cities. Benchmarking is clearly something we value and a practice we promote.

While we support Mayor Emanuel’s benchmarking ordinance, we believe the public disclosure mandate in the proposed ordinance will unfairly penalize and marginalize many older and historically significant buildings in Chicago.  Frankly, not all of our members are Class A LEED Platinum. We represent many buildings that are doing what they can to improve their sustainability and energy efficiency, but still struggle with infrastructure limitations and the cost of retrofit work.  Publishing the scores for buildings that simply cannot afford the work necessary to raise them will not “shame” those buildings into achieving higher scores. It will simply impose yet another competitive burden on an already challenged sector.

We would rather see recognition and incentives for buildings that meet and exceed the benchmarks. Let’s celebrate the fact that Chicago already has one of the highest rates of LEED certification and Energy Star scoring in the country – even now, without a mandate to do so. Building owners and managers can see the benefits in that and use it in their marketing.

Conversely, public disclosure of low scores will only put low scoring buildings at a further disadvantage and potentially jeopardize their ability to attract and retain tenants.  Long-term, this could have a detrimental trickledown effect, causing increased vacancy at a very precarious point in our industry’s recovery.

BOMA International and a consortium of real estate organizations facing a similar disclosure mandate in Boston commissioned a study co-authored by Harvard University environmental economist Robert Stavens that concluded there is no credible evidence that a regulatory approach like this is effective in achieving the goals for which such it is intended. Surely we can find a better way in Chicago.

We are committed to working with Mayor Emanuel and the Chicago City Council to come to a reasonable compromise on this important issue. Benchmarking empowers building owners and managers with the knowledge to run their buildings as efficiently as possible, and we strongly support it. However, it shouldn’t come at the cost of jeopardizing older and historically significant buildings that make the CBD a unique and desirable place for businesses. We would rather see the many environmental achievements of our buildings celebrated.