Early in January of this year, the City of Boston made building green the law of the land for all construction in excess of 50,000 sf. As a result of that legislation, a developer who wants to build in Boston must ensure the project meets the Certified level of the US Green Building Council’s Leadership in Energy & Environmental Design rating system.

According to the USGBC, other cities beat Boston to the punch, but none of them approach the size of Boston. These include Pasadena, CA and Babylon, NY. Among cities of size, New York City’s Local Law 86 went into effect simultaneously with Boston, but it addresses only projects with a public-fund component. Washington, DC, according to the DC-based Building Owners & Managers Association, has enacted similar legislation, but that won’t go into effect until 2009. (Click to USGBC for a complete list).

So Boston’s stance is a watershed one among major metropolitan areas and it carries major implications for the real estate industry. Recently, Menino and Boston Environmental & Energy Services chief James W. Hunt III sat down for a discussion about the origin and goals of the program and how the private sector helped form it.

GlobeSt.com: How did the initiative start?

Menino: You have to understand that if the city government says we’re going to do something and we don’t care how you feel about it, any program will be a failure. We know green buildings are good for the environment, for public health and for the bottom line. So as we implemented this program, we wanted to make sure that we had everyone on board.

Hunt: Toward that end, in 2003 the mayor commissioned the Green Buildings Task Force calling together a diversity of professionals–not only environmental advocates, but public health professionals, real estate developers and the finance community, to come up with an action plan. They were charged with looking at how we can institutionalize green buildings throughout Boston. Many cities were already committed to doing it for public construction. The mayor said we need to hold ourselves to a higher standard. Last year alone we had six million sf come through the development pipeline with that threshold. So this is significant.

Menino: We were the first city in the country to put it on our building permits for private-sector buildings over 50,000 sf. But there was a lot of hard work that went into this. We had several meetings on the issue and where we wanted to go and how we could work together to that end.

GlobeSt.com: What did that work entail?

Hunt: This was the culmination of three years of due diligence. Beyond the task force, the mayor hosted several meetings with key developers. And we did some local cost analyses. We know that the lifecycle cost of green yields tremendous savings. But it’s that upfront cost that people are concerned about. National studies have shown that it’s more like a zero-to-2% incremental cost. In Boston we did an in-house, rudimentary analysis that showed it’s far closer to zero and can be cost neutral if done right and early in the process. Many in the development community were looking to be told what the standards are and what it is the government wanted them to do. After this lengthy process, we set that floor for them through regulation, and we do look at it as a floor and we hope people will continue to reach higher and build even more sustainable. By the way, the city has instituted for all new municipal construction a LEED Silver standard. So we’re holding ourselves to a standard even higher than the private sector.

GlobeSt.com: There was no initial resistance on the part of the private sector?

Menino: Of course there was. In the beginning they really didn’t understand it. We had to work with them and educate them. In the final analysis they said there might be questions about gray areas but this is the right thing to do. It’s new and it’s difficult sometimes to change people’s habits. But we now have a plan that’s acceptable.

GlobeSt.com: Industry associations tend to balk at outside regulation. How did you deal with that?

Menino: We asked [the local chapter of] BOMA to be part of our team.

Hunt: And [the local chapter of] Naiop.

Menino: They were all part of the process. For green to be successful, we needed buy-in from the industry. We couldn’t have one of the groups say yes and others say no.

GlobeSt.com: Let’s talks carrots and sticks. The restrictions are in place. Do they come with any incentives?

Hunt: Prior to the standards, we offered a predevelopment loan fund where we helped early implementers. The mayor has also filed with the state legislature a green building tax credit proposal. This is based on a New York State law and it’s designed to help incentivize the market, not only in Boston, but beyond our borders. It would delegate some of the rulemaking to the Dept. of Energy Resources to set the standards of how green you need to be to be eligible. It authorizes up to $25 million in tax credits at the state level. We’re confident we will get that legislation passed. [At press time, the proposal was slated for a May 14 legislative hearing.]

The mayor has also worked with the Massachusetts Technology Collaborative and the Renewable Energy Trust and received a $2-million grant that we control here in Boston to green affordable housing, so we can move this to some of these sectors so that everyone gets the benefit of green, not just the high-end Downtown projects. And we’ve worked with our utility partners to get rebates for energy efficient products as well.

GlobeSt.com: What about the smaller developer who might be more strapped than, let’s say, a Hines?

Hunt: That’s why we set that 50,000-sf threshold, which gets to the heart of larger developments. For the smaller developer, there are incentives and other programs to help bring a transformation there as well.

GlobeSt.com: Do you expect the legislation will impact lease rates?

Hunt: This is anecdotal, but while we’ve not yet seen that you could charge a premium on lease rates, we have seen that the time on the market shrinks.

GlobeSt.com: Let’s focus for a minute on the public side, which I understand is where it all started. Where does that push stand now?

Hunt: We have two pilot projects: the Mattapan Library and the Charlestown police station. As in any process, we’re going through the growing pains of changing the ways we do business, and you can imagine the complexity of a municipal government and how we procure services and build. But we have trained more than 60 professionals within every aspect of city government in LEED and we are greening those two projects.

GlobeSt.com: Any retrofits?

Menino: We’ve done some smaller projects, such as O’Bryant High School, where we worked with MIT to install solar panels. We’re doing it slowly because we want to do it right. We can rush into this and do every building but we want to make sure as we go along that we get better and better.

GlobeSt.com: Is there a time frame?

Menino: We have 140 school buildings and 300-some-odd other buildings. We’re working within our resources and our capital budget. But everything we do new and all renovations going forward will be green.

Hunt: In 2005 an internal working group was formed–the Mayor’s Energy Management Board, which brings together the key cabinet professionals from environment and budget to public facilities and public health. We’ve recently completed an integrated energy-management plan that looks at all our facilities and identifies opportunities for energy-efficiency retrofits. The budget last year put $6 million into new projects.

GlobeSt.com: What more could the city do?

Menino: In the final analysis it’s all about education, educating the builder or a family on what green means to our future and to our children, to our environment and to senior citizens walking down the street. We spend more than 75% of our lives indoors. We’ve got to tell the story everyday how this will help them. We need to become even more conscience of the need. We’re not doing this because it’s the political thing to do. We’re doing it because it’s the right thing to do.

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