SR-510-008 (3)
EPWM:CP:SM:GR\EPD\HIPERFGRANT.DOC
Council Meeting: January 13, 2004 Santa Monica, California
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Approve a Santa Monica Green Building Grant Program for New
Construction and an Innovative Technology Grant Program for New and
Existing Buildings
INTRODUCTION
This report recommends that City Council approve establishment of a Santa Monica
Green Building Grant Program to promote construction of LEED (Leadership in Energy
and Environmental Design)-rated commercial, multi-family, and mixed use buildings in
Santa Monica. It also recommends establishment of an Innovative Technology Grant
Program to promote the use of innovative energy efficiency, distributed generation, and
stormwater technologies in new and existing buildings.
BACKGROUND
In 1996, Council adopted Green Building Guidelines designed to encourage
developers and property owners to invest in ?green? or high performance buildings that
are designed, built, renovated, operated, or reused in a more sustainable and
resource-efficient manner. High performance building benefits include:
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Long-term financial savings for building owners and occupants;
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Saving energy and natural resources;
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Helping the City to meet its goals to reduce greenhouse gas emissions;
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Reducing the use of toxic materials;
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Enhancing indoor environmental quality where people spend 80 percent of their
time or more;
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Minimizing site impacts by protecting and enhancing natural open space;
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Minimizing stormwater runoff and erosion; and
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Building demand for innovative and efficient building materials, energy systems,
and related services that can create jobs and stimulate economic growth.
In December 2000, Council adopted a Green Building Ordinance that requires
construction and ?substantial remodels? of commercial and multi-family buildings to
achieve energy performance levels beyond the State?s Title 24 standards, and to use
construction materials with recycled content. Council also adopted a Construction and
Demolition Waste Ordinance requiring projects valued over $50,000 to divert at least
60 percent of construction and demolition waste from landfills. These ordinances and
the Guidelines, when combined with existing City requirements related to resource
conservation, pollution prevention, and transportation management, constitute the
basis for the City?s Green Building Program. The program?s goal is to accelerate the
design and construction of energy and resource efficient buildings throughout Santa
Monica.
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The U.S. Green Building Council?s LEED (Leadership in Energy and Environmental
Design) Green Building Rating System was introduced in 2000 and has steadily gained
acceptance by the building industry as the national standard for evaluating and rating a
building?s energy and environmental performance. In recognition of LEED?s growing
emergence as the national green building standard, the City Council adopted a policy
effective July 1, 2001, that requires all new construction and major renovations of City
facilities to meet the Silver level of LEED wherever feasible. To date, the City?s Public
Safety Facility, Main Library, Virginia Park, and Big Blue Bus campus projects have
been or are being designed to achieve LEED Silver certification.
DISCUSSION
Green Building Grant Program
The goal of the proposed Santa Monica Green Building Grant Program is to build
momentum for high performance buildings by encouraging private sector builders to
create sustainable buildings that will serve as examples for future projects to emulate.
Providing incentives for the design of LEED-certified residential and commercial
buildings reinforces the City?s commitment to improving the quality, cost effectiveness,
and safety of the built environment while reducing stress on the natural environment.
Green Building Grants will be awarded to projects in the following four categories:
commercial, affordable housing, mixed use, and multi-family residential. Eligible
projects must also be registered with the U.S. Green Building Council for LEED
certification. The LEED system provides a quantifiable and verifiable system on which
to base City-provided financial incentives that closely reflect the goals of the City?s
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Green Building Program. The grants would help cover the cost to design a LEED-
certified building, estimated by the State?s Integrated Waste Management Board to add
approximately two percent to design and construction costs. When approximately 10
private sector LEED-certified buildings have been constructed and occupied for a
period of at least one year in Santa Monica, a strong business case, based on actual
construction costs and post-occupancy data, could be made for the economic
opportunities high performance buildings provide. Such real world case experience
and cost/performance data will be extremely useful in the City?s education and outreach
efforts to encourage resource and energy efficient design in the private sector as one
of the means to achieve the goals and targets of the adopted Sustainable City Plan. It
is anticipated that the grant program would end on completion of 10 projects.
The grants would be approved on a first-come, first-served basis after review and
approval of the application by a committee comprised of three City staff members and
two green building experts from other municipalities or nonprofit environmental
organizations. Grantees will be required to provide verification of LEED registration,
execute a Letter of Agreement with the City and receive their City building permit
before any grant funds are released. All grant funds will be disbursed on a
reimbursement basis as eligible costs are incurred. The Letter of Agreement commits
the grantee to: provide verification of project completion by submitting the LEED
Certification Document from the U.S. Green Building Council; allow the City to evaluate
the payback and performance of measures for which the grant was given; cooperate in
the creation of educational materials, case studies, or photos; and agree to make their
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facilities available for Green Building Tours. Grant recipients who fail to comply with
the terms of the Letter of Agreement will be subject to forfeiture or refunding of their
grant award.
Green Building Grants will be awarded to successful applicants as follows:
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LEED Certified: $20,000
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LEED Silver: $25,000
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LEED Gold: $30,000
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LEED Platinum: $35,000
It is anticipated that these proposed grant amounts would offset approximately 25
percent of the incremental cost for a prototypical LEED-certified Santa Monica multi-
family residential building of 30 units or a LEED-certified small commercial building.
Developers of larger commercial projects are generally more responsive to process
incentives.
Fifty percent of each grant will be funded from the Community Energy Efficiency Fund
which was established by Council in FY 2002 using utility user tax revenues received
during the State?s energy ?crisis?; 12.5 percent will be funded from the Water Fund; 12.5
percent will be funded from the Wastewater Fund; and the remaining 25 percent will be
funded from the Solid Waste Fund. For example, an approved LEED Certified project
would receive a total of $20,000; $10,000 from the Community Energy Efficiency Fund,
$2,500 from the Water Fund, $2,500 from the Wastewater Fund and $5,000 from the
Solid Waste Fund.
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Process Incentives
During the development of the Green Building Program, the City held focus groups to
solicit input from architects, developers, businesses, and residents on how to structure
an incentive program that would accelerate the design and construction of high
performance buildings. The stakeholders identified grants of fee waivers and
expedited plan check and permitting as incentives. Process redesign for permits and
plan check has begun to reduce turn-around times for projects. When target turn-
around times are consistently met, it will be possible to consider process incentives
without penalizing other applicants.
Innovative Technology Grants
The proposed Innovative Technology Grants are intended to encourage developers
and property owners to incorporate energy efficiency, on-site energy generation, and
urban runoff technologies into projects beyond standard City requirements. The private
sector is often reticent to incorporate new technologies because of the risk of adopting
unproven systems. The Innovative Technology Grants will help mitigate the risk of
using new technologies by providing financial incentives to their adoption. Ultimately,
the program will provide real world examples that will make it easier for other property
owners and developers to justify incorporating these or similar technologies into their
projects. City staff will work with owners and developers to measure the efficacy of the
systems that are installed. The grants will consist of a flat $5000 award per project and
will be limited to 20 total grantees. The funding for energy efficiency and on-site
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generation projects will be paid from the Community Energy Efficiency Fund and funds
for innovative urban runoff technologies will come from the Stormwater Fund.
All new and existing commercial, mixed-use, affordable, and multi-family buildings
greater than two units will be eligible to apply for Innovative Technology Grants. To
ensure a variety of technologies are funded, grants would be issued on a quarterly
basis. Applications will be reviewed and approved by a committee comprised of three
City staff members and two green building experts from other municipalities or nonprofit
environmental organizations. Applicants may propose their own technology or may
elect a technology from the following list:
Underfloor Air Distribution for HVAC
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Photocell-controlled daylighting
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Demand-controlled Ventilation
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Natural Ventilation or Forced Air Ventilation alternative to conventional AC
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Ground-coupled Heat Pump (hydronic) or earth-cooled ventilation
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Green Roof application (vegetative, earth covered building)
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Innovative urban runoff systems, with City?s approval.
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Selected grantees will be required to provide verification of system
installation/completion under an approved building permit (if applicable) and execute a
Letter of Agreement before the grant funds are released. All grant funds will be
disbursed on a reimbursement basis as eligible costs are incurred. The Letter of
Agreement will commit the grantee to: allow the City to evaluate the payback and
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performance of measures for which the grant was given; cooperate in the creation of
educational materials, case studies, or photos; and agree to make their facilities
available for Green Building Tours. Grant winners that fail to comply with the terms of
the Letter of Agreement will be subject to forfeiture or refunding of their grant award.
BUDGET/FISCAL IMPACT
Funding for the proposed programs is available from the following existing sources:
$275,000 ($175,000 for LEED grants, up to $100,000 for innovative technology grants)
from the Energy Efficiency/Conservation Fund, Account Number C01076302.589003
and Account Number C01076302.589004; $43,750 from the Water Fund, Account
Number C25008299.589003; $43,750 from the Wastewater Fund, Account Number
C31008299.589003; and $87,500 from the Solid Waste Fund, Account Number
27441.555150. Innovative Technology Grants for urban runoff projects will be funded
in an amount up to $100,000 from the Stormwater Fund, Account Number
C34058803.589004.
RECOMMENDATION
This report recommends that City Council approve establishment of a Santa Monica
Green Building Grant Program designed to promote construction of LEED -rated
commercial, multi-family, and mixed use buildings in Santa Monica. It also
recommends establishment of an Innovative Technology Grant Program to promote the
use of innovative energy efficiency, distributed generation, and stormwater
technologies in new and existing buildings.
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Prepared by: Craig Perkins, Director, Environmental and Public Works Management
Susan Munves, Energy and Green Building Program Administrator
Greg Reitz, Green Building Advisor
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