Landmark model removes barriers to performing energy retrofits to existing buildings
(DENVER—June 23, 2008) The Building Owners and Managers Association (BOMA) International and the Clinton Climate Initiative (CCI) today announced a ground-breaking new BOMA Energy Performance Contract Model to allow building owners to perform major energy retrofits to the existing building marketplace by removing key barriers and providing a turnkey solution.
BOMA and CCI collaborated to develop the more efficient business model for performing energy retrofits to existing buildings to improve both the financial and environmental performance of commercial real estate while dramatically improving energy efficiency. Specifically, the BOMA Energy Performance Contract Model provides a standardized energy performance contract, similar to the American Institute of Architects construction contract terms, whereby key legal and technical provisions have been vetted by top real estate companies, energy service companies as well as BOMA legal council and experts and CCI. Coupled with other standard documents, FAQs and case studies, real estate professionals are now provided with a new solution for how to improve performance and value.
BOMA and the commercial real estate community joined with CCI, energy service companies and financial institutions to create the BOMA Energy Performance Contract Model , which provides a market mechanism that every building—regardless of age, location and type—can use to significantly improve efficiency and sustainability in public and private buildings worldwide.
"I am grateful to BOMA for their partnership in promoting energy efficiency in existing buildings," said Ira Magaziner, Chairman of the Clinton Climate Initiative. "Through their leadership in the creation of standardized documentation and tool kits for building owners and managers, BOMA is helping to remove the barriers to scaling up the global market for building retrofits."
As part of the Model, BOMA, CCI and USAA Real Estate Company (USAA) teamed up to generate an energy efficiency pilot project in the commercial sector that addresses key issues confronted by building owners looking to improve financial performance and reduce their company’s carbon footprint. USAA provided two buildings for the pilot project to help develop and refine an energy efficiency building retrofit model to reduce barriers, particularly time and complexity, of such projects.
The pilot project was launched in late January 2008 and has achieved numerous successes that will be directly beneficial to the commercial real estate sector, including a demonstrated positive business case for energy efficiency improvements, and the development of a model financial structure to fund efficiency programs. Working with CCI partner, Hannon Armstrong, an investment bank specializing in energy projects, USAA, BOMA and Hannon Armstrong developed a financial structure using the assets in the building as collateral, and not the building itself, and using the guaranteed energy savings from the project to pay for the loan.
“Improving energy efficiency and financial performance is a growing priority for property owners, but energy retrofits have often been complicated, time consuming and cost prohibitive,” said BOMA International Chairman and Chief Elected Officer Brenna S. Walraven, RPA, CPM, Managing Director, National Property Management, USAA Real Estate Company. “The marketplace now has an industry-vetted, streamlined, cost effective and time efficient ‘model’ contract that building owners, energy service companies and financial institutions can use to facilitate the implementation of major energy retrofit projects in publicly and privately-owned buildings.”
Energy performance contracting has been in place for more than 20 years, but has rarely been used in the private sector due to cost, a lengthy execution timeframe of 18-36 months and limited financing options. The new model represents a significant market shift by standardizing the contract terms and conditions whereby energy service companies are committed to lowering costs and the financial institutions are committed to extending market interest for the loans.
Founded in 1907, the Building Owners and Managers Association (BOMA) International is an international federation of more than 100 local associations and affiliated organizations. The 17,000-plus members of BOMA International own or manage more than 9 billion square feet of commercial properties in North America and abroad. BOMA’s mission is to enhance the human, intellectual and physical assets of the commercial real estate industry through advocacy, education, research, standards and information. On the Web at www.boma.org.
In August 2006, President Clinton launched the Clinton Foundation’s Clinton Climate Initiative, with the mission of applying the Foundation’s business-oriented approach to the fight against climate change in practical, measurable, and significant ways. In its first phase, CCI is serving as the exclusive implementing partner of the C40 Large Cities Climate Leadership Group, an association of large cities that have pledged to accelerate their efforts to reduce greenhouse gas emissions. CCI is assisting its partner cities to develop and implement large-scale programs that directly result in substantial greenhouse gas emissions reductions. For more information, visit www.clintonfoundation.org.
The C40 Large Cities Climate Leadership Group consists of the following cities: Addis Ababa, Athens, Bangkok, Beijing, Berlin, Bogota, Buenos Aires, Cairo, Caracas, Chicago, Delhi, Dhaka, Hanoi, Hong Kong, Houston, Istanbul, Jakarta, Johannesburg, Karachi, Lagos, Lima, London, Los Angeles, Madrid, Melbourne, Mexico City, Moscow, Mumbai, New York, Paris, Philadelphia, Rio de Janeiro, Rome, Sao Paulo, Seoul, Shanghai, Sydney, Toronto, Tokyo, and Warsaw.
Contact:
Laura Horsley
Director of Communications
BOMA International
(202) 326-6315, (202) 386-2484 (cell) or lhorsley@boma.org
Clinton Foundation Press Office
press@clintonfoundation.org or 212.348.0360
Clinton Climate Initiative
Climateinfo@clintonfoundation.org