The Hotel Developers Conference

Green Building: Looking at the Triple Top Line

March 12, 2008

Financial Commercial Public Retail Higher Ed Mission

Tom Paladino, President,

Paladino and Company, Inc.
Creating client value through a sustainable
approach to asset management
our situation today
peak oil
desertification
over population
climate change
 Required LEED Adoption Rates by the Commercial Building Sector to
Meet the 1992 Kyoto Protocol Targets for Carbon Emissions

140
120
Platinum
100
Carbon 80
, Kyoto Target Zone Gold
Million 60
Silver
Metric
Tons 40
Certified
20

10% 20% 30% 40% 50% 60% 70% 80%

Adoption Rate, % of US Commercial Building Sector

minimize
minimizedisturbance
control
controlemissions
reduce
reducewater use
minimize
minimizewaste
save
saveenergy
scarcity vs.
abundance
The Poseidon Mystery Island, is competing for the title of the
world’s first luxury underwater resort. The complex will be designed
by Bruce Jones,
a new paradigm

The Habitat Hotel is a working scale model of a hotel by

architect Enric Ruiz of Cloud 9 Architecture.
The Hotel Rex
prosperit
y
financial
Financial Asset Management

total assets, shareholder equity, revenue

financial
 abundance

p
plane
t
Olympic Mountains, Washingto
 planet

financial
p
p
people
people planet

financial

Creating owner
value
through a
sustainable
approach to asset
management
prosperit
py
lane
t ople
pe
Triple Top Line Asset Management

total assets,
financial shareholder
equity, revenue

carbon, energy,
planet emissions, habitat
hydrology

productivity, job
satisfaction,
people health
Current Asset Base

people planet

financial
Future Asset Base

people planet

financial
Case 1
 Pittsburgh mixed use hotel, condo, office andsun
reta
dryness
wind
visitors

3 pnc
Strategy

Use Triple Top Line as measure of

success, because:

•LEED does not currently recognize

enhancements to urban context—using just
LEED may downplay the major successes of
the project.

• LEED is still not well known to public—

focusing on people & economics will create
wider interest and reception.

• Triple Top Line will encourage the

development team to think beyond the LEED
requirements.
 historic structures
steel bridges
public transit
pedestrian traffic

3 pnc
Enhance Urban Ecology

 Add pedestrian street

miles per day across the
site.

 Connect with at least 3

modes of mass transit:
bus, train, & carpool.

 Reduce automobile trips

by 50% over
conventional.
Design for the Place

 Respond to climate.
 Utilize local materials (500 mile
radius) for 75% of the major,
visible systems.
 Reference building precedents
that reflect local climate,
materials & technologies.
Source: Big & Green
 TBL Scorecard

Community Economics Environment

Total Points18 Total Points18 Total Points18
EP BMP MO EP BMP MO EP BMP MO

Enhance Urban Ecology 6 Maximize Top Line 6 Design for Place 6

Pedestrian Street Miles 2 Capture Incentives 2 Climate Responsive Design 2

Mass Transit Connectivity 2 Mixed Use Balance 2 Local Material Use 2
Automobile Traffic Impact 2 Equity Focus 2 Connection with Urban Fabric 2

Make Places for People 6 Create Value 6 Create a Living Building 6

####
Urban Connectivity 2 Leasability 2 Adaptable Space 2
Public Street Experience 2 First Costs 2 Shared Infrastructure 2
Public Open Space Access 2 Total Cost of Occupancy 2 Resource Dependence 2

Inspire Community Pride 6 Bottom Line 6 Demonstrate Leadership 6

24 hr Use 2 Utility/Maintenance Costs 2 LEED Rating Potential 2

Public Ownership of Space 2 Tenant Marketability 2 Net Producer 2
Interaction with Community Assets 2 Branding Placement 2 Green Building Education 2
Recommendations

•Define Triple Top Line goals to create a

framework for decision-making. Goals
should include measurable targets.

• Use a Triple Top Line pro forma to

evaluate design decisions. Weigh input
streams (rent, condo prices, utilities)
against feature sets.

•Develop a LEED strategy for the

project to include multiple tenants.
Tenants should commit to green
building goals.
 community goals
• Schemes D and A
– How does it touch the ground?
– Public space and adjacent uses

Scheme
D Community
Total Points18
EP BMP MO

Enhance Urban Ecology 6

Pedestrian Street Miles 2

Mass Transit Connectivity 2
Automobile Traffic Impact 2

Make Places for People 6

Urban Connectivity 2
Public Street Experience 2
Public Open Space Access 2

Scheme Inspire Community Pride 6

A 24 hr Use
Public Ownership of Space
2
2
Interaction with Community Assets 2
 urban place making
knowledge workforce
business catalyst
Fairmont Hotel – LEED-CI

people
planet

financial
financial
 Fairmont Hotel – Triple Top Line
Goal: Align hotel tenant corporate sustainability policy
and CI build out with 3PNC base building’s triple top
line scorecard
Community Environment
• Local sourcing • Energy
– Building materials & – Energy management
furniture system
– Energy star equipment &
• IAQ
–
people planet –
appliances
Smart room cards
Low-emitting adhesives,
paints, carpets, etc.
– GREENGUARD certified • Water efficiency
furniture – Low flow WCs & aerators
– Non-smoking hotel

• Green housekeeping
– Environmentally
preferable cleaning financial
products and practices

• Green education
– Educating local furniture
manufactures, hotel staff,
guests, etc.
Economics
• Branding value increases
VAR

• Utility/maintenance costs
reduced through energy &
water efficiency savings
Fairmont Hotel – Draft Scorecard
Case 2
Candela Hotels – High Performing, Luxury Hotel

planet
planet

financial
financial
Candela Hotels, Seattle, WA – LEED-CI Gold

Goal: Create a traveler centric, high

performing, luxury hotel built to LEED Gold
standards

Green drove the people planet

development process:
– Identify green
developer/partner
– Optimize concept to financial
align with
sustainability goals
– Map to triple top line
scorecard
 Candela Hotels – Triple Top Line
Goal: Create a traveler centric, high
performing luxury hotel built to LEED Gold
standards

Environment
Traveler Centric
• LEED Gold
• Superior air quality
– Site (in LEED core
building)
• Daylighting people planet
– Energy
• Thermal comfort • Lighting controls
• Equipment/appliances
• Green housekeeping
– Water efficiency
• Green education
financial – Materials & Resources
• Construction waste
management
• Local / sustainably
harvested resources

Economics
• Branding value
increases ADR,
• Operations centric
– reducing operational
waste and utility costs
Front of House Feature Mapping
LEED Building Features

Full Operable
spectrum windows
lighting

Hypo
allergenic Green Guard
bedding furniture

Sustainably
Daylight harvested
space wood

Non-toxic Under floor air

carpet delivery
 Back of House WATER Analysis
21%

33%

Residential
Water Use
22% 192 gals/day – GREYWATER
243 gals/day
24%
Clothes Washer Faucets
Showers Toilets

8%
19%
13%

4%
Hotel 6%
Water Use 90 gals/day – GREYWATER
7%

209 gals/day 43%

Cleaning Irrigation
Domestic (Grey) Cooling
Kitchen Other
Source: AHLA Toilet
Water-Efficient Appliances

Toilets Showerheads Faucets

Target 0.8 - 1.1 gpf < 1.8 gpm < 1.8 gpm
Flow & 0.8 / 1.6 gpf Aerated Aerated head
Flush (Dual Flush) Sensor control
Rates
Base Building Ideas
Case 3
Major Hotel Chain – Green Brand Re-Invention

people planet

financial
financial
financial
Major Hotel Chain – Green Brand Re-Invention
Goal: Align green prototype design with traveler values
in a way that demonstrates the green business case to
the franchisee
 Major Hotel Chain – Green Brand Re-Invention
Major Hotel Chain Green Brand Reinvention
P Currently Possible but not embedded in documents
R Required as assessment of the current prototype LEED status
Total Project Score
Certified: 26 to 32 points Silver: 33 to 38 points
Base Green
MI - Mngd
Prototype
14 12 19 9 5 22 38
Y R ? N
11 1 6 7 4
Y R ? N easy mod diff
Y P
1 1
1 1
1 1
1 1
1 1
1 1
1 1
1 1
1 1
1 1
1 1
1 1
1 1
1 1
Y R
1
1
2
?
1
2
N
1 4
easy mod diff
1
1
1 1
1 1
1 1
5 1.5 3 2 15
Y R ? N easy mod diff
Y P
Y P
Y 1
2 1 1 2
1 2
2 2
2 2
2 2
1 1
1 1
1 1
1 1
1 1
1 1
0.5 1 1
2 3 4 4 3 9
Y R ? N easy mod diff
Y Y
1 1
1 1
1 1
1 1
1 1
1 1
1 1
1 1
1 1
1 1
1 1
1 1
1 1
Y
4
Y
Y
1
6.5
R
2
? N
2 10
P
P
1
3
easy mod diff
N 1
1 1
N 1
1 1
1 1
1 1
1 1
1 1
1 1
1 1
1 1
1 1
1 1
0.5 1 1
3 2
Y R ? N easy mod diff
1 1
1 1
1 1
1 1
1 1
This scorecard compares the LEED status of the current prototype documents with the
Incremental and Stretch green versions of the prototype. The project goal identified for the
Incremental green version is Certified and Stretch version is Silver. Volume Build will be
attempted as part of the Stretch version.
Gold: 39 to 51 points Platinum: 52 or more points
Stretch
Increm.
Vol.
(vol bld?) Stretch
•Establish new financial model
Build
P P P S LEED Credits
23 22 22 40 14 13 40 22
8 2 9 5 6 8 Sustainable Sites Possible Points 14
easy mod diff easy mod diff P S
Y Y Y SSp1 Construction Activity Pollution Prevention
1 1 1 SSc1 Site Selection 1
1 1 1 SSc2 Development Density and Community Connectivity 1
1 1 1 SSc3 Brownfield Redevelopment 1
•Create scalable green feature
1 1 1 SSc4,1 Alternative Transportation, Public Transportation Access 1
1 1 1 SSc4,2 Alternative Transportation, Bicycle Storage & Changing Rooms 1
1 1 1 SSc4,3 Alternative Transportation, Low Emitting and Fuel Efficient Vehicles 1
1 1 1 SSc4.4 Alternative Transportation, Parking Capacity 1
1 1 1 SSc5.1 Site Development, Protect or Restore Habitat 1
1 1 1 Site Development, Maximize Open Space 1
‘packages’ to give franchisees
SSc5.2
1 1 1 SSc6.1 Stormwater Management, Quantity Control 1
1 1 1 SSc6.2 Stormwater Management, Quality Control 1
1 1 1 SSc7.1 Heat Island Effect, Non-Roof Surfaces 1
1 1 1 SSc7.2 Heat Islands Effect, Roof Surfaces 1
1 1 1 SSc8 Light Pollution Reduction 1
2 2
easy mod diff
1
1
1 4
easy mod diff
1
1
1
P
3
1
2
1
S
Water Efficiency
WEc1.1
WEc1.2
Water Efficient Landscaping, Reduce by 50%
Water Efficient Landscaping, No Potable Use or No Irrigation
Possible Points 5
1
1
more choice
1 1 1 WEc2 Innovative Wastewater Technologies 1
1 1 1 WEc3.1 Water Use Reduction, 20% Reduction 1
1 1 1 WEc3.2 Water Use Reduction, 30% Reduction 1
3 4 10 7 5 5 9 8 Energy & Atmosphere Possible Points 17
•Validate green features through
easy mod diff easy mod diff P S
Y Y Y EAp1 Fundamental Commissioning of the Building Energy Systems*
Y Y Y EAp2 Minimum Energy Performance
Y Y Y EAp3 Fundamental Refrigerant Management
2 2 EAc1.1 Optimize Energy Performance, 20% New / 10% Existing 2
rigorous cost/payback analysis
2 2 2 EAc1.2 Optimize Energy Performance, 30% New / 20% Existing 2
2 1 1 EAc1.3 Optimize Energy Performance, 40% New / 30% Existing 2
1 1 2 EAc1.3 Optimize Energy Performance, 50% New / 40% Existing 2
2 2 EAc1.3 Optimize Energy Performance, 60% New / 50% Existing 2
1 1 1 EAc2.1 On-Site Renewable Energy, 2.5-7.5% 1
1 1 1 EAc2.2 On-Site Renewable Energy, 10% 1
1 1 1 EAc2.3 On-Site Renewable Energy, 20% 1
1 1 1 EAc3 Enhanced Commissioning 1
1 1 1 EAc4 Enhanced Refrigerant Management 1
1 1 1 EAc5 Measurement & Verification 1
Green Power
•Use LEED volume build to
1 1 EAc6 1
3 4 6 5 3 5 5 3 Materials & Resources Possible Points 13
easy mod diff easy mod diff P S
Y Y Y MRp1 Storage & Collection of Recyclables
1 1 1 MRc1.1 Building Reuse, Maintain 75% of Existing Shell 1
streamline submittal process
1 1 MRc1.2 Building Reuse, Maintain 100% of Existing Shell 1
1 1 MRc1.3 Building Reuse, Maintain 100% Shell & 50% Non-Shell 1
1 1 1 MRc2.1 Construction Waste Management, Divert 50% 1
1 1 MRc2.2 Construction Waste Management, Divert 75% 1
1 1 MRc3.1 Materials Reuse, Specify 5% 1
1 1 MRc3.2 Materials Reuse, Specify 10% 1
1 1 1 MRc4.1 Recycled Content, Specify 10% 1
1 1 1 MRc4.2 Recycled Content, Specify 20% 1
1 1 1 MRc5.1 Regional Materials, 10% Extracted, Processed and Mnfctrd Locally 1
1 1 1 MRc5.2 Regional Materials, 20% Extracted, Processed and Mnfctrd Locally 1
1 1 MRc6 Rapidly Renewable Materials 1
1 1 1 MRc7 Certified Wood 1
8
Y
Y
4
easy mod diff
1
3 12 1
easy mod diff
Y
Y
1
2
P
14
Y
Y
1
1
S
Indoor Environmental Quality
EQp1
EQp2
EQc1
Minimum IAQ Performance
Environmental Tobacco Smoke (ETS) Control
Outdoor Air Delivery Monitoring
Possible Points 15
1
•Embed cost and payback for
green into pro forma
1 1 1 EQc2 Increased Ventilation 1
1 1 1 EQc3.1 Construction IAQ Management Plan, During Construction 1
1 1 1 EQc3.2 Construction IAQ Management Plan, Before Occupancy 1
1 1 1 EQc4.1 Low-Emitting Materials, Adhesives & Sealants 1
1 1 1 EQc4.2 Low-Emitting Materials, Paints & Coatings 1
1 1 1 EQc4.3 Low-Emitting Materials, Carpet Systems 1
1 1 1 EQc4.4 Low-Emitting Materials, Composite Wood & Agrifiber Products 1
1 1 1 EQc5 Indoor Chemical and Pollutant Source Control* 1
1 1 1 EQc6.1 Controllability of Systems, Lighting 1
1 1 1 EQc6.2 Controllability of Systems, Thermal Comfort 1
1 1 1 EQc7.1 Thermal Comfort, Design 1
1 1 1 EQc7.2 Thermal Comfort, Verification 1
1 1 1 EQc8.1 Daylight & Views, Daylight 75% of Spaces 1
1 1 EQc8.2 Daylight & Views, Views for 90% of Spaces 1
3 3 3 Innovation & Design Process Possible Points 5
easy mod diff easy mod diff P S
1 1 1 IDc1.1 Innovation in Design: Use of Energy-Star Appliances 1
1 1 1 IDc1.2 Innovation in Design: Green Education 1
1 1 IDc1.3 Innovation in Design: ECHO Program 1
1 1 IDc1.4 Innovation in Design: Green FF& E 1
1 1 1 IDc2 LEED™Accredited Professional 1
1 1 1 Innovation in Design: Low Mercury Light Bulbs
1 1 1 Innovation in Design: Exemplary Performance
1 1 1 Innovation in Design: Green Housekeeping
1 1 1 Innovation in Design: ?
Innovation in Design:
 Back of House ENERGY Analysis
Analysis of End Use
Hotel Multi-Family Residential
7%
16% 5%

32%
6%
42%

33%
16%

23%
20%

Water Heating Lighting Water Heating Lighting

Space Heating Cooling Space Heating Cooling
Other Other

Sources: Commercial Buildings Energy Consumption Survey (CBECS). Energy Information Administration, 1998.
Residential Energy Consumption Survey (RECS). Energy Information Administration, 1999.
Boiler Efficiency

• Condensing
boilers can be
used to capture
waste heat that is
typically sent up
the flue.

• Flexible and
Robust: if
operating at high
temperatures,
condensing
boilers still
operate at high
efficiency >80%
Solar Heating & Heat Recovery
• Year-round
supplemental
water heating can
be provided by a
solar thermal
system.

• 80-90% of the
energy used to
heat water is sent
down the drain.

• Recapturing heat
from drain pipes
can provide
energy savings in
hot water
makeup.
green cost analogy

• Chevy Malibu
green building cost options
green building cost options
constant program process
Pro forma MODEL
Office 850,550
Scheduled Gross Income
Office Space 850,550 Sq. Ft. $35.00 PSF/Yr. $29,769,250
Green RentIncome
Signage Premium 2% $0.70 PSF/Yr. $595,385
$500,000 $0.6
Plus: Parking Income 2,002 spaces $0 per mo. $0 $0.0
____________ _____
Total Scheduled Gross Income $30,269,250 $35.6

(Less): Vacancy 10.00% of SGI ($3,086,464)

Improved lease up for green product offering
Plus: Recoveries ($0.01) $308,646
$0
____________
Effective Gross Income $28,086,817

Operating Expenses
Operating Expenses
Management Fees $28,086,817 3.0% of EGI $842,605
Janitorial Services 850,550 Sq. Ft. $1.25 PSF $1,063,188
Window Washing 850,550 Sq. Ft. $0.25 PSF $212,638
Repairs & Maintenance 850,550 Sq. Ft. $0.50 PSF $425,275
Insurance $155,100,294 0.500% Costs $775,501
Professional
Utilities fees
(LEED Silver) 20% 850,550
850,550 Sq. Ft.
Sq. Ft. $0.20
$1.20 PSF
PSF $170,110
$1,020,660
General & Administrative 850,550 Sq. Ft. $0.50 PSF $425,275
Security 850,550 Sq. Ft. $0.75 PSF $637,913
Landscaping 850,550 Sq. Ft. $0.25 PSF $212,638
Parking Expense not paid by Tenant $2,149,980
Gr. Lease Payment $216,442
RE Taxes $247,113,601 1.0246% Value $2,531,926
____________
Total Operating Expenses $10,684,151

Net Operating Income $17,402,666

TOTAL NET GREEN OPERATING INCOME 17,402,666

TOTAL NET OPERATING INCOME 16,450,316
Improvement to NOI Green Overlay 5.8%
NET NOI IMPROVEMENT $952,350
SIMPLE PAYBACK 9.2 years
Thank You!

people planet

financial