NYS Industrial Development Agencies and "Green" Building

For 40 years, Industrial Development Agencies (IDAs) have been providing financial incentives to businesses locating their facilities throughout NYS. According to the NYS Comptroller's Report for the year 2007, there were 115 active IDAs statewide providing $970 million in tax exemption benefits. By law, each IDA is empowered to recover a portion of such tax exemptions by programs providing for payments in lieu of taxes, commonly known as "PILOT Programs".

Each IDA develops its own tax exemption policy and PILOT Program. Of the $970 million in tax benefits in 2007, $377 million were recovered by PILOT payments. The net tax benefit to businesses totaled $593 million.

Each IDA develops its own guidelines and policies to maximize the ancillary benefits from providing tax exemptions, such as job creation and increased economic activity. IDAs are in a strong position to require, through their policies and programs, "green" development and building practices in exchange for a business receiving IDA benefits.

The Onondaga County IDA provides one example of "green" initiative by giving a "Green Building PILOT Credit" to encourage the construction of sustainable buildings. The credit is available by meeting the IDAs' Tax Exemption Policy, and by construction that is LEED certified. The basic credit is a percentage of hard construction costs ranging from 4.8% (LEED Certified) to 15.6% (LEED Platinum). Projects where 75% of the work is performed by workers located within 200 miles of Onondaga County qualify for an increase of 20% in the basic credit (Local Contractor's Incentive).

IDAs are in a uniquely strong position to accomplish substantial economic, social and environmental gains for their communities. It is a sound proposition to require sustainable development and construction when the financial benefits in return, in the form of tax exemptions, are so substantial. All IDAs should explore incorporating responsible "green" requirements in their policies and programs.

Orange County Legislature (NY) adopts "Green Building and Environmental Protection Policy"

By Resolution No. 312, Orange County, NY adopted the "Green Building and Environmental Protection Policy" on recommendation of its Green Building Study Committee. The Resolution provides that:

* One employee of the County Department of Public Works shall be "trained and accredited in LEED Standards".

* All new construction and renovation of County buildings "address and incorporate into its design 'Green Building' practices", which include "sustainable sites; water efficiency; energy and atmosphere, material and resources; indoor environmental quality and innovation in upgrades; operations and maintenance".

* Any architect hired by the County for new construction projects shall have a LEED accredited person working on the project, and such person will work with a NYSERDA representative and an engineer chosen from a NYSERDA referral list.

* All "in-house construction projects" shall avail itself of the County LEED accredited person and/or the NYSERDA representative.

The minutes of the December 6, 2007 legislature meeting indicate concern with the reference to LEED standards while omitting competing standards. It should be noted that there is no requirement that construction actually be certified as meeting LEED or any other standard, and there are no continuing compliance requirements after construction is completed.

NAHB Green Building Standard approved by ANSI

The American National Standards Institute™ (ANSI) has approved the National Association of Home Builders' (NAHB) rating system known as the "National Green Building Standard"™ (NGBS). NGBS certification applies to residential construction of single-family homes, apartments and condos, including remodeling and renovation. I listened to the NAHB tele-conference announcing the approval and it is clear that the NAHB intends to got head-to-head with LEED™ and other competing standards.

“The National Green Building Standard is now the first and only green building rating system approved by ANSI, making it the benchmark for green homes,” said Ron Jones, who chaired the NAHB consensus committee that developed the standard. Rachel Neuhaus, Government Affairs Director at the Builders Association of the Hudson Valley, sent me a comparison showing that the additional cost of NGBS certification is significantly less than LEED-H certification.

How do we reconcile competing "green" standards? LEED is positioned as the "top of mind" brand but is considered expensive in application. NGBS is touted as affordable, has stature afforded by the ANSI certification, but is new to the market. Throw in Green Globes™ and Energy Star™ and there is bound to be confusion in the marketplace (developers, design professionals, municipalities, etc.)


Locally, the Town of Blooming Grove Zoning Ordinance provides an example of the uncertainty these competing standards create. In the Ordinance, the district regulations provide for a 10% density bonus for residential subdivisions based upon "adherence to New York State Energy Star guidelines, low-impact development guidelines, or U.S. Green Building Council Leadership in Energy and Environmental Design (LEED) standards". Each standard is remarkably different but all will result in the same bonus. The Town may now want to add the NGBS to the list, and at the same time, clarify what actions will constitute "adherence" to each.