LEED and Economic Development

The Wealthy Theatre's renovation helped spark transformation for the district, which once was a haven for drug and gang traffic.

Green-building Incentives Promote Renovation and Redevelopment in a Down Economy

Recently USA Today published an analysis of the Washington, D.C.- based U.S. Green Building Council’s LEED rating system. (Read the article at on USA Today‘s website.) When it was published, the article’s criticisms sent a shockwave through the green-building community. If the author’s intention was to get people talking about the subject, mission accomplished. But was the article fair and on-track?

The USA Today article is broken into a two-part disparagement about buildings that have been LEED certified. The first part is an age-old criticism of it being too easy to achieve a LEED certification, focusing on several of the “low-hanging fruit” credits that have been slammed for many years. (To read my thoughts about these criticisms, see “Low-hanging Fruit.”)

The second part of USA Today’s article questioned the use of LEED with economic-development incentives. The particular project cited in the article was the Palazzo Hotel and Casino, Las Vegas, which received $27 million dollars in economic-development incentives during a 10-year period for receiving LEED-NC Silver certification.

At its heart, LEED was designed to be a voluntary program meant for projects to showcase their green attributes. It was not designed to be baked into building-code language or tied to legislation that would cause it to be mandatory. However, for a period of time economic development incentives continued to be crafted encouraging energy-efficient and sustainable buildings, naming LEED as the bar to achieve. This was in part because LEED had developed market traction. For a government official who knows little about sustainable architecture and construction it’s easier to ask for a LEED certification than to determine a building’s green attributes without it. This is one reason USGBC backed ASHRAE 189.1 green code development.

The Wealthy Theatre’s renovation helped spark transformation for the district, which once was a haven for drug and gang traffic.

Before the decline of the economy, many states and municipalities used LEED as the stick to the carrot of economic-incentive dollars. My own state, Michigan—before its current legislators took office—offered a significant increase in available brownfield economic-development funds for achieving LEED certification as a part of the development. When our current governor was elected, the state was in economic trouble and almost every economic-development incentive available (LEED-related or not) was done away with, and, not surprisingly, most of our new economic development also disappeared.

In the post-economic meltdown, there is a tremendous amount of risk involved with real-estate development. Projects are very costly and more often than not incentives are the tipping point between a go/no-go on a project. Economic development is what this country needs right now. We need to have developers taking the risk investing in buildings that create jobs for construction workers and demand for manufacturing products and goods. We need to encourage real-estate developers to consider redeveloping older and functionally obsolete buildings (a very sustainable notion) to preserve infrastructure and rebuild the core of our existing urban fabric. Economic-development incentives are the engines that make the cars go.

About the Author

Nathan M. Gillette
Nathan M. Gillette, AIA, LEED AP O+M, CEM, is director of Natura Architectural Consulting, Grand Rapids, Mich., and a retrofit editorial advisor. He works with clients to successfully implement and manage energy efficiency and sustainability projects.

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