Small Sit es, Big Result s –

Lessons Learned in

Green Infrast ructure for

Small Businesses

Craig Wilson, Principal, ASLA, LEED AP

Small Sites, Big Results:Lessons Learned in Green Infrastructure for Small Businesses

• About Sustology• Definition of a small business• 8 Lessons learned• Panel case studies• Q & A

Agenda

Sustology

• Sustology leads businesses and organizations toward financial and environmental sustainability

• Founded in 2005• Third party independent sustainability advisor to:

Private business (85%)

Government (10%)

NGO (5%)

Our team:

Craig Wilson, LEED APM.L.A., M.U.R.P

Melissa Rappaport Schifman, LEED APM.B.A., M.P.P.

Our regional impact:

• $15 million rebates and incentives for clients• 4.5 million square feet of LEED certified space• 1.5 MW of renewable energy• 250 acres of green infrastructure

What is a “small business?”:

• Managed by the SBA• Varies by business sector• Most are under 500 employees• Most have annual operating budgets less than $50 M

Our ‘8 lessons learned’ in green infrastructure for small businesses:• Lesson #1: Speak the language of business

• Payback

• Net present value (NPV)

• Internal rate of return (IRR)

• Return on Investment (ROI)

• Lesson #2: Expose externalities• Lesson #3: Understand competing priorities• Lesson #4: Know incentive programs• Lesson #5: Aesthetics matter • Lesson #6: Work with decision makers• Lesson #7: Transparency = authenticity • Lesson #8: Minnesotans love water!

Lesson #1: Speak the language of business

1. Payback

Payback = Cost of Project / Annual Cash Inflows

ExamplesA project costs $100,000 and is expected to save $20,000 annuallyPayback = $100,000/$20,000, or 5 years

A project costs $10,000 and is expected to save $2,000 annually Payback = $10,000/$2,000, or 5 years

Lesson #1: Speak the language of business

2. Net present value (NPV)

Net Present Value = the sum of the present value of all cash flows related to the project

ExamplesA project costs $100,000 and is expected to save $20,000 annually10 year NPV = $51,843

A project costs $10,000 and is expected to save $2,000 annually 10 year NPV = $5,184

Lesson #1: Speak the language of business

3. Internal rate of return (IRR)

Internal Rate of Return is the discount rate (%) that makes the net present value of all project-related cash flows = 0%

ExamplesA project costs $100,000 and is expected to save $20,000 annually10 year IRR = 15%

A project costs $10,000 and is expected to save $2,000 annually 10 year IRR = 15%

Lesson #1: Speak the language of business

4. Return on Investment (ROI)

ROI = Gain from Investment - Cost of Investment / Cost of Investment

Examples:A project costs $100,000 and is expected to return $20,000 annually for 10 years, or $200,000, the ROI would be 2. This would be a strong ROI.

A project costs $100,000 and is expected to return $20,000 annually for 3 years, or $60,000, the ROI would be 0.6. This would be a weak ROI.

Lesson #1: Speak the language of business

Rules of cost/benefit analyses:

1. Use Net Present Value (NPV)!2. Only include incremental costs and incremental benefits to the

project you are evaluating3. Include all on-going costs and benefits – such as insurance,

maintenance, replacement, parts, etc. These may be subject to inflation, so those costs should grow over time

4. Investment decision must be separate from the financing of the project, otherwise it confuses the analysis

5. Highlight other hard-to-quantify benefits for the client

Lesson #2: Expose externalities

Lesson #3: Understand competing priorities

Lesson #3: Understand competing priorities

Annual Operating Expenses

Total $ Savings Savings per SF % Reduction

Repair/Maintenance $42,000 $0.06 5.1%

Energy (Gas and Electric) $179,000 $0.27 17.7%

Water/Sewer/Stormwater

$15,000 $0.02 39.6%

Total Savings $236,000 $0.35 12.6%

Lesson #4: Know incentive programs

Murphy Eagan earned an Energy Star rating of 99, corresponding to percentiles for energy e ciency performance in EPAs database of warehouse spaces. Energy Star certi cation enables buildings t o showcase their ongoing committment to reducing environmental impacts associated with excessive energy use while saving money through energy e ciency.

LEED Gold Certi cation : LEED for Existing Buildings - Operations & Maintenance

Building Exterior and Hardscape Management

Sustainable Purchasing Policy

Solid Waste Management Policy

Green Cleaning Policy

Indoor Air Quality (IAQ) Policy

www.usgbc.org/ebom

About LEED EBOM

The information provided is based on that stated in the LEED® project certif

i

c

a

t

ion submittal s. USGBC does

not warrant or represent the accuracy of this information . Each building's actual performance is based on its

unique design, construction , operation , and maintenance. Energy efficiency and sustainable results will vary.

MAJOR POLICIES & PROCEDURES

LEED Facts

*

Sustainable Sites

Gold 67

LEED EBOM v2009

Murphy Eagan

Certi cation Awarded 08/26/2014

Water E ciency

Energy & Atmosphere

Materials & Resources

Regional Priority Credits

Innovation in Operation

Indoor Environmental Quality

*Out of110 possible points

7/26

6/14

33/35

5/10

9/15

5/6

2/4

™

STRATEGIES AND RESULTS

PROJECT BASICS

EXEMPLARY PERFORMANCE

ENERGY EFFICIENCY PERFORMANCE

Project Location

Site Area

Project Building Size

% O ce Space

% Warehouse Space

756,235 sq ft

358,532 sq ft

% Murphy-Occupied Building Space 97.7%

0.5%

97.2%

905 Yankee Doodle RdEagan, Minnesota

MURPHY EAGAN CAMPUS

EAGAN, MINNESOTA

LEED for Existing Buildings helps maximiz e the e ciency of operations while minimizing the impac t on the environment. The lowest cost and highest impac t rating system, LEED EBOM provides the best framework to implement sustainable investments and adopt sustainable operations and policies . LEED EBOM focuses on actual building per formance, so the value of sustainable in vestments can be quan ti ed and proven. This rating system encompasses site, energy use, water use, indoor air qualit y, purchasing and waste practices, building material selection, as well as the ongoing practices and policies r elated to these areas.

Sustainability Consultant

Sustology leads businesses and organizations toward nancial and environmental sustainabilit y. Sustology helps clients achieve annual savings in energy, water, and maintenance costs, improvement in employee health and morale, and a strong commitment to sustainability that can be communicated to customers to produce an increase in revenues.

SS Credit 5: Site Development - Protect or Restore Open Habitat

In an e ort to conserve existing natural areas and restore damaged areas to provide habitat and promote biodiversity, Murphy invested heavily in protecting and restoring native prairie, deciduous forest, and coniferous forest ecosystems both onsite and o site. The habitat is equivalent to over 50% of the M urphy Eagan campus sit e area, excluding the building f ootprint, which is over twice the credit threshold requirement.

EA Credit 1: Optimize Energy E ciency Performance

By investing in LED ligh ting inside and out , high e cienc y HVAC equipment such as Ener gy Recovery Ventilators, Murphy was able to secure signi cant energy savings which drop right to the bottom line. This allowed Murphy to gain the maximum number of poin ts available for this credit.

IEQ Credit 3.2: Green Cleaning - Custodial E ectiveness Assessment

Murphy achieved exemplary performance in a cleanliness audit of the w arehouse, o ces, and washrooms at this facility. Walls, oors, surfaces, xtures, and trash cans were inspected and found to be orderly and clean, reaching exemplary performance for this impor tant indicator.

As a third generation family owned business in the Twin Cities, Murphy Warehouse has had a long term interest in sustainabilit y from the perspec tive of water management and site functionality. In addition, M urphy s commitment to ISO standards, good management practices, and high qualit y buildings all play into a broader commitment to sustainabilit y. When the oppor tunity became available to work with Sustology on the LEED for Existing Buildings - Oper ations & Maintenance (LEED EBOM) certi cation for their building loca ted at 905 Yankee Doodle Rd, Murphy decided to move forward with certi cation.

Conducted over a period of 12 months, Sustology led Murphy Eagan towards achieving Gold certi cation through LEED EBOM. A c omprehensive analysis of site conditions, water e ciency, energy and atmosphere, material and resources, and indoor environmental quality established new policies and pr ocedures created speci cally for the exterior and interior of the building. Murphy and Sustology were able to create a more consistent and e cient model for the facility, leading Murphy towards renewed nancial and en vironmental sustainabilit y.

of building’s energy derived

from renewable sources

equivalent of site area* planted

with native or adapted vegetation *excluding building footprint

Energy Star rating

102%

50%

99

Lesson #5: Aesthetics matter

Lesson #6: Work with decision makers

John Gabbert, Founder Bruce Champaeu, President & COO

Lesson #7: Transparency = authenticity

Lesson #8: Minnesotans love water!

Panel Case Study:Tiny Diner & Farm

Questions and Answers