BrandsMart USA’s facility in South Dade County, Florida, is undergoing an energy infrastructure upgrade that is expected to significantly increase energy efficiency and enhance the store’s customer experience — and it’s doing it with no up-front cost.
By Bill Maurer
[Editor’s Note: This article originally appeared in the April/May 2014 issue of Retail Facility Business magazine.]
Earlier this year [in 2014], the electronics retailer embarked on a facility-wide energy conservation project that is expected to save the location 34% on its annual utility costs — that’s $135,000 every year and more than $1.6 million over the life of the contract, while also significantly improving lighting quality.
But those numbers aren’t the only reason the project is exciting. BrandsMart USA is utilizing its existing operating budget to pay for improvements. It will cost BrandsMart USA nothing up front because the improvements are funded through the Ygrene Energy Fund’s Property-Assessed Clean Energy (PACE) financing. The Ygrene Energy Fund, a pioneer in the commercial financing space, is the leading developer and administrator of clean energy financing programs — and this project is a distinct sign that its model is gaining momentum all over the country, not just in California where the program began. Ygrene launched the first PACE program in Florida last year and is actively pursuing similar programs for property owners in other states.
Here’s how it works: More often than not, the single greatest challenge in getting energy retrofit projects off the ground is initial funding. In this case, BrandsMart USA is able to perform much needed upgrades without impacting its capital budget, because PACE allows BrandsMart USA to pay for the energy upgrades over time. Under PACE, projects are repaid through an annual assessment on the property tax bill that is linked to the property as opposed to the owner. In addition, BrandsMart USA’s energy improvements fall within South Florida’s Clean Energy Green Corridor PACE District. The deal taps into the Clean Energy Corridor’s $230 million bond issuance financed through private capital.
One of the advantages of PACE financing is that it is not treated as a loan. If the property is sold or transferred, the tax payment obligation may be transferred with the property to the new owner. The PACE program is a perfect mechanism to connect building owners like BrandsMart USA with private capital and ensure that their buildings will be more efficient, comfortable and sustainable. This is a major step forward for the commercial real estate market.
The comprehensive energy retrofit at BrandsMart USA, which began in March 2014, is the largest PACE-funded project to date in Florida. It includes major enhancements to BrandsMart’s southern Florida facility’s heating and cooling equipment, a modification of the existing energy control system, and the replacement of lighting fixtures with LEDs.
LED lighting is transforming retail facilities across America, but the benefits to BrandsMart USA are not limited to a significant reduction in energy costs. They also enrich shopping environments for BrandsMart USA customers with crisp, white light, provide lighting efficiency rebates for each LED lamp installed, and require virtually no maintenance for many years.
In all, BrandsMart USA will replace 1,410 fixtures with state-of-the-art LED lighting. The following are the types of retrofits being performed at the Dade County BrandsMart USA location:
• T8 Fluorescent Retrofit: Retrofit and/or replacement of all T8 fixtures with new energy-efficient LED fixtures.
• Metal Halide Retrofit: Replace the fixtures with new energy-efficient LED fixtures. These fixture types are currently installed over the pit area and in the warehouse.
• Exit Signs: Existing exit signs containing fluorescent or incandescent bulbs will be upgraded to LED technology. Existing LED exit signs will remain.
“We’re thrilled to provide an enhanced customer experience through these upgrades,” says Lary Sinewitz, executive vice president of BrandsMart USA. “This is a win-win for everyone involved, and positively impacts the environment as well. We’re hoping to implement similar solutions at other BrandsMart USA locations across the Southeast.”
Ygrene hopes to retrofit 100,000 homes and commercial properties in the next 5 years. That number amounts to more than $2 billion in projects and has the potential to create 45,000 jobs and reduce greenhouse emissions by 360,000 tons — which would be like taking more than 75,000 cars off the road a year. While the company goal of 100,000 retrofits may seem like a big number, it is, in actuality, just a fraction of the potential homes and commercial buildings nationwide that could benefit from retrofits.
Ygrene proposes a “turnkey” operation with no cost to local government. It offers to manage the program, oversee the private contractors that are making the improvements and even reimburse the cost of government staff time needed to form the districts. In short, it’s an innovative way to make billions of dollars worth of green improvements with no upfront costs to property owners.
It’s common knowledge that energy efficiency is a key weapon in the fight to reduce carbon footprint and meet climate control mandates, but a recent CleanTechnica article featuring a report from the Southeast Energy Efficiency Alliance (SEEA) shows the return on investment from energy efficiency implementations is even greater than originally thought. They found that energy efficiency retrofits carried out in 16 cities across eight Southeast U.S. states from 2010 to 2013 yielded a 387% ROI.
— Bill Maurer is the senior vice president of New York-based ABM, a leading provider of facility solutions with revenues of $4.8 billion. Services include facilities engineering, commercial cleaning, energy solutions, HVAC, electrical, landscaping, parking and security. Maurer has more than 24 years in the energy and performance contracting industry. Earlier in his career, Maurer spent 10 years at Johnson Controls in various management positions; he then spent 5 years at Chevron managing their Northeast Region. For more information, visit www.abm.com.