Behind the Story: The big business of 'green' buildings and LEED certification

Can a 50-story Las Vegas hotel be environmentally-friendly?  This is the question USA Today reporter Tom Frank sought to answer when he began reporting on the increase in construction of so-called environmentally friendly buildings.  Through his investigation, Frank found that green commercial construction has increased.  Non-profits are behind the movement, but few have assessed the real impact of their programs.  Often, green building improvements are simply cheap routes to large tax breaks.  Frank’s ongoing Green Inc. series explores the challenges non-profit groups face in helping for-profit businesses “go green.”

His investigation began with an online search of the U.S. Green Building Council.  The group has created a well-known program in the green building industry known as LEED, short for Leadership in Energy and Environmental Design.  Companies earn LEED certification for buildings by accumulating points for improvements such as boosting energy performance, using recyclable materials and reducing water waste.  Frank was able to find a database of these LEED certified buildings and how they had earned points on the U.S. Green Building Council’s site.

“It was simply a matter of downloading the documents, collating the results and analyzing,” Frank says.

The results of his Excel analysis indicated that many of the 7,100 commercial buildings in the report had taken the cheapest and easiest measures to reach LEED certification reaping the benefits of the status without substantially improving the building’s environmental footprint.  The least-used building options were those which the LEED user guide promised were effective, but were also expensive to implement.

Frank found that the real incentive for green construction was in tax savings.  The U.S. Green Building Council’s website promotes “tax rebates, zoning allowances and other incentives” available from state and local governments for LEED certification.  He submitted FOIA requests for the tax information.

“Most of the tax breaks were reductions in property taxes,” Frank said, ”That information is always public, and generally easy to get with an email or FOIA. Some of the tax breaks were reductions in a developer’s corporate or personal income tax. That information is not public.”

In the example of the Las Vegas Palazzo Hotel and Casino, LEED certification earned the owners a $27 million tax break over ten years.  Neither the Palazzo nor other LEED certified properties were required to provide evidence of improved energy or water efficiency in order to receive  tax breaks.  The U.S. Green Building Council will vote later this year to decide whether to make an energy efficiency plan and five-year energy reporting plan part of the certification process.

“The biggest emotional issue is that the story is not black-and-white, good-vs-evil. Many of the main characters were well-intentioned,” Frank says.

Nevertheless, he believes the public, the media, and elected officials have too often“glorified” green products without understanding their effectiveness.

“It’s essential to understand who is behind the nonprofit – who gives it money, who holds board seats, who develops the rating system, who certifies products or services as meeting the standard,” he says.  Frank hopes businesses’ environmental efforts will face more scrutiny in the future.

Tom Frank can be reached via email at tfrank@usatoday.com or @bytomfrank on Twitter.