Michigan lawmakers push for green building tax breaks

Mar 19 2010 One Comment

By LAURA FOSMIRE

LANSING, Mich. — State lawmakers have introduced several bills, pending in the Commerce and Tourism Committee, that would give tax breaks for building projects that are LEED-certified.

LEED certification, which stands for Leadership in Energy and Environmental Design, means that a structure is built with sustainable and environmentally friendly elements and constructed in an eco-friendly way.

Jim Ebli, president of Gundlach Champion, a construction firm based in Iron Mountain, said certification considers several categories, including waste disposal.

“One of the requirements is that a certain percentage of the discarded material must go into a recyclable facility. Another is that the raw materials provided must be manufactured within 300 miles of the project site,” he said.

A building can be certified when it passes an accreditation exam by the Green Building Certificate Institute, a part of the U.S. Green Building Council, a nonprofit group based in Washington.

Sponsors of the bills include Sens. Patricia Birkholz, R-Saugatuck; Wayne Kuipers, R-Holland; Hansen Clarke, D-Detroit; and Jason Allen, R-Traverse City.

Allen said that “this is to allow for local government to give tax credits for buildings upwards to 10 or 20 percent of the total cost of the project. It makes energy efficiency more affordable.”

Allen said that the tax incentives would apply to updated buildings, also.

“What you can do is called a historical rehabilitation,” he said. “It means you take an old building and gut it, re-engineer it and then you can apply for the breaks. There are certain standards for re-modeling, but it would have to be something significant.”

The Senate committee is holding hearings about the bills and trying to establish what the state’s tax revenue loss would be. Allen said they expect to see action on the bills this spring.

Ebli said that building green makes sense.

“We mostly do LEED certification on larger projects,” he said. “Of the projects we did last year that were over $1 million, over half of them were LEED-certified.

“It’s more advantageous for the owner as far as the energy savings go,” he said. “There’s a higher initial cost going in, but there’s probably a seven- or eight-year payback. If a building lasts 25 years, the payback is three times the cost of construction.”

Eco-friendly construction has one major disadvantage, he said, which is the higher initial cost.

Tony Retaskie, executive director of the Upper Peninsula Construction Council in Escanaba, said that there’s also a cost associated with becoming certified.

“A lot of folks will build LEED buildings but won’t go for accreditation,” he said. “For instance, some builders and architects only build bits and pieces of buildings in sustainable ways. There’s a cost factor there for some folks.”

Retaskie said that the U.P. Construction Council holds seminars to educate local architects and builders about LEED certification.

“What’s most important is more education to developers, builders and architects,” he said. “We need more education from the standpoint of why LEED is good practice to follow in construction activity.

“Education is first, and there’s still some folks out there who still aren’t even really familiar with what LEED is all about,” Retaskie said.

Ebli said that if the legislation passes, more LEED-certified buildings are likely to be built.

“We’re seeing more and more of that now,” he said. “Three or four years ago you might see one LEED green project out there. Now you’re seeing that about 30 percent of the construction work going on is LEED-certified.”

There are two LEED-certified buildings on the campus of Northern Michigan University: Van Antwerp and Meyland halls.

Gundlach is also building LEED-certified student apartments on the campus of Michigan Technological University.

© 2012, Capital News Service, Michigan State University School of Journalism. Not to be reproduced without CNS permission.

One Comment »

  • Chris said:

    Although there is a degree of additional cost associated with building LEED certified buildings, I would hesitate to call this a “major disadvantage”. This is unfortunately a myth that is perpetuated ad nauseum. The truth is that most buildings can certify by adding as little as 2% to the total construction cost. Some buildings actually certify without adding any additional cost due to synergistic savings caused from reduced tipping fees through reduced construction waste debris, smarter design of building to create a more efficient building footprint, and reduced service fees from water/utility companies for reduced demand of potable water/electricity.

    After construction, green buildings have the potential to save owners lots of money through increased energy efficiency, water efficiency, increased occupancy rates (for commercial/residential buildings) and intangibilities such as increased productivity/reduced turnover from employees due to increased access to fresh air, daylight/views, reduced exposure to harmful indoor toxins, and sense of pride for working in an environmentally conscious building.

    For more information on the cost of green buildings, see http://www.southface.org/learning-center/library/cost-of-green-buildings.

    Like or Dislike: Thumb up 1 Thumb down 0

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