In the effort to rebuild the city’s urban core, developers are extensively reconstructing older buildings. Under city law, that means investors have to spend sometimes large sums to make these old buildings more energy-efficient.
Despite the cost, it’s a building code that has become a model nationally for cities looking to pump up aging urban areas. But the desire for smart energy use is now bumping heads with a developer who argues that the law discourages new investment.
The debate is coming to the Las Vegas City Council, which could jettison the rule at its June 19 meeting. Councilman Bob Beers’ proposal would exempt buildings older than four years from having to meet the efficiency standards. (New construction would still have to meet those standards.) Meanwhile, national and local nonprofit organizations, city and state government staff and even some local developers argue that Beers’ proposal is what should be rejected.
The only reason there is a controversy is Las Vegas’ enviable success in converting old buildings to new uses, as downtown investors are turning grimy garages and other structures into chic art galleries and bistros, restaurants and bars.
George Harris, a firebrand conservative and businessman, was one of those affected by the city’s code when he converted the old garage that now houses Mingo in the Arts District.
“This energy code cost us a lot of extra money that frankly was a waste of money,” he told a recommending committee (comprising three council members) on May 14. He said Mingo has large, open windows providing outdoor bar access to two walls. Meeting the city’s energy rules, Harris said, cost him an extra $34,000.
“I’m creating jobs, and we are, in the city, creating roadblocks that are unnecessary,” he said. Council members Stavros Anthony and Bob Coffin supported the change at the meeting. Councilman Ricky Barlow voted against it.
Beers said the problem with the code is clear:
“Now we’ve seen it in action, and it’s not meeting the promises that were made,” he said. “Many people in city government have done the best that they could to reasonably implement this code … It’s hard to argue that this code has led to reasonable results.
“The code was oversold, and it needs to be retooled.”
Was it oversold? Advocates for energy efficiency don’t think so. Industry analysts estimate it would take 12 years of reduced energy costs to pay off the price of a retrofit that costs $2.50 per square foot. Other estimates put the payback time at roughly five to 10 years.
Beers said that the time frame is just too long for many investors.
“This is causing some pretty extreme costs that are not, in any reasonable analysis, are not going to be recouped in 10 years,” he said. Mingo, for example, would have to save about $3,000 a year to recover the builder’s cost, a target that Beers said the new bistro will not meet. (Harris’ numbers put his renovation cost at almost $15 per square foot, considerably higher than the $2.50 estimate used by analysts.)
Beers characterized the supporters of the existing energy-efficiency codes in two ways: They are either companies and allied nonprofits that make money from doing the efficiency work, or government workers who have written and enforced the codes.
Beers said that the code has “a pretty serious chilling effect on repurposing of older buildings” in Las Vegas, but he does not know how many projects were delayed or scrapped because of the energy code.
Beers is an accountant and counts Harris as one of his clients. He said last week that there’s no conflict for him to push to change the city’s energy code because, if anything, the change would lead to more competition with Harris’ Mingo, which has been operating for about a month.
However, a Las Vegas businessman who has helped make the city efficiency-friendly said the city’s energy code, at best, needs only minor revisions. Quentin Abramo rehabbed, and works from, the Faciliteq building on Main Street, just south of the new City Hall. Once an auto-repair facility and now an office building, it regularly hosts visitors who want to check out his state-of-the-art energy-efficient design.
“I experienced in my own building some real energy-efficiency,” Abramo said. “I think the challenge is that developers feel that it’s just one more code to be enforced, and therefore it’s more money, but you have to look at the long term.”
Often tenants benefit from the efficiency savings that builders are required to include in their rehab projects, Abramo said. (Beers said he hadn’t considered the distinction between the costs for developers versus savings for tenants.)
“Energy consumption and costs are going to continue to go up,” Abramo said. “If we can minimize those as a community, than we should do what we can do. To blanket suggest that energy-efficiency codes should be rolled back — to me, it would be a disservice in the long run.”
Abramo also noted that if developers have serious problems with the city’s building codes, they can seek a waiver.
A tenant in the Faciliteq building, Jennifer Turchin, a Las Vegas architect and president of the Nevada chapter of the U.S. Green Building Council, shares Abramo’s perspective.
“I think it’s a huge step backward in terms of energy efficiency in our valley,” she said. “Our area is seen as a model for building codes, how building codes are designed and implemented.”
The city’s commitment to energy efficiency dates back to 2006, when then-Mayor Oscar Goodman and the council signed onto the U.S. Council of Mayor’s Climate Protection Act, resolving to make energy efficiency a priority.
“This seems completely opposed to that,” Turchin said.
She argued that opponents of the existing code haven’t proved that costs outweigh benefits. Meanwhile, the rest of the country has been following Las Vegas’ lead.
“We’re not the only city in the country with older buildings,” Turchin said. “I don’t think we want to be the first city to say we don’t want to do this.”
There’s another issue at play: Ditching the energy code could be a violation of state law, potentially setting the stage for a debate extending well past the June 19 council meeting.
Stacey Crowley, director of the Nevada State Office of Energy Director, said at the recommending committee meeting that the Nevada Revised Statutes requires all local governments to adopt rules modeled on the 2009 International Energy Conservation Code.
The deputy city attorney at the meeting, however, said the council has the discretion to set city rules and policy.
Tucson-based South West Energy Efficiency Project, or SWEEP, is one of several organizations working to preserve the code. Jim Meyers, SWEEPS’s building program director, said the best time to trim energy use in an older building is when it is being rehabilitated. Later, it can be much more expensive to incorporate efficiency, he said.
Meyers said Las Vegas’ building code is flexible enough to prevent hardship, and builders can still request waivers. Crowley, with the state, also said rule waivers are available.
Meyers said that Beers has put pressure on city staffers to support his agenda, a charge Beers denied.
Betsy Fretwell, city manager, said city employees have an emotional attachment to the existing law. “I’m not naive. There are people who have spent their life working on these codes.”
But the council sets policy, she said.
Fretwell said council, staff and community members have to be free to debate the city rules, to make sure that they work as intended, conform to state law and make sense financially.
“We want to make sure there aren’t barriers that maybe we’re blind to,” she said. “We have a code that is written. … We also have to be sensitive to the concerns of small businesses.
“You don’t want to spend dollar to save a dime,” she said.
Fretwell and Beers said they believe that Las Vegas will remain a national trend-setter in energy efficiency, in part because the code will still be in place for new construction. Beers said that though he is characterized as a conservative, he’s also been a longtime member of the Sierra Club and believes energy efficiency is a worthy goal.
His proposal is not about conservative ideology or rejecting climate change, he said.
“In this instance, it is about eliminating barriers to repurposing buildings in old Las Vegas. That’s not a partisan or philosophical perspective.”