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Crain’s: NYC Developers Remain Unconvinced of Green Building Economics

Today’s edition of Crain’s New York Business contains an article describing a variety of New York City-based developers who remain skeptical about building green. (Unfortunately the article is only available online to premium subscribers so I’m unable to provide a link). NYC Developers Resist the Push to Go Green quotes Rex Hakimian of The Hakimian Organization and Joshua Muss of Brooklyn-based Muss Development voicing their concerns that rising construction costs across New York City (last year alone, up by a whopping eight percent) are, among other factors, a substantial barrier to eco-friendly construction. Hakimian actually calls green building economics “unproven,” and describes his organization as “cautious” in evaluating potential green design elements for its projects. Sayward Mazur, a construction attorney with the law firm of Mazur Carp & Rubin describes a potential scenario where green building could increase costs for an owner in unforeseen long-term maintenance or replacement costs for green elements. Jules Demchick, president of the large residential developer J.D. Carlisle, had perhaps the most derisive things to say about green building, calling the phrase “nebulous” and labeling it “just a marketing tool, another line in the brochure . . . [which] doesn’t have any real meaning.”

While I did not think this particular article was very comprehensive (only passing mention to The Durst Organization and the Hearst Tower, for example), its point is well-taken. Developers, particularly here in New York, where construction costs are far higher than anywhere else in the country, remain hesitant to contract for the additional costs of green design elements without a more reliable body of evidence that those up-front costs will be worth something to them later on. USGBC and other organizations must recognize this reluctance on the owner’s side and proactively address developers’ concerns by commissioning more comprehensive, life cycle analyses of green buildings. The BD+C White Paper, in fact, makes this same recommendation; developers all across the country, not just in New York, still have doubts.

Interestingly, this discussion doesn’t at all raise the issues associated with LEED certification costs as holding developers back from pursuing green projects. It instead suggests that many developers are still trying to grapple with the very definition of what exactly a green building is- a debate which LEED purports to obviate.

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