Last spring, Fairfield architect William Becker pleaded with the Connecticut General Assembly to create a tax credit for “green building” construction, saying the lack of an incentive had already scuttled financing for geothermal heating and solar panels for a $160 million development in New Haven.
Fresh off the Greenbuild conference in Boston last month ”“ and with a new legislative session commencing in January ”“ Becker and others are warming up to the topic once more.
In the procedural rush to complete legislation last May, the state Legislature did not enact a bill that would have created a tax credit similar to one offered in New York that some credit with the construction of some of the most impressive green buildings in the country.
Sponsored by Fairfield Sen. John McKinney and Norwalk Rep. Lawrence Cafero, among others, the Connecticut version would have provided developers a tax credit for between 8 percent and 10 percent of the cost of building a green facility, or for a major renovation amounting to at least half of a building”™s cost.
Commercial interior projects would have been eligible for smaller tax credits of between 3 percent and 6 percent of the expenses associated with systems that mitigate a building”™s impact on the environment.
Green building construction rose from $10 billion in 2005 to at least $36 billion this year, according to a new study by McGraw-Hill released at the Greenbuild conference in Boston last month sponsored by the U.S. Green Building Council, which drew 26,000 attendees on the first day. McGraw-Hill predicted green building construction will reach at least $96 billion nationally within five years.
In a bid to force the adoption of green buildings in Connecticut, the state enacted a law last year that requires any large buildings constructed with public financing to comply with elements of green-building design, which are summarized in the Leadership in Energy and Environmental Design (LEED) criteria maintained by the U.S. Green Building Council.
Becker, who runs the Fairfield-based architectural firm Becker + Becker, fears that the mandate could actually keep future projects on ice, given the additional costs developers would have to meet. He is not opposed to government using the bully pulpit to push environmental initiatives, but says incentives often are more effective.
Connecticut government strategy has been effective by at least one measure: As of October, Connecticut”™s government trails only Pennsylvania”™s among states when it comes to paying for power produced from renewable sources, according to the Green Power Partnership. Connecticut derived the equivalent of 17 percent of the state government”™s total energy consumption from green sources arranged by Direct Energy and Suez Energy Resources, among others.
Lawmakers are currently working on several environmental initiatives, according to Michael Smalec, a manager with Southern Connecticut Gas Co. who is also a director of the Connecticut Green Building Council.
Smalec said any tax-credit proposals may be a tough sell, however, given the budgetary pressures the state is working to resolve.
Becker argued that any budgetary impact of a tax credit passed next May would not be felt for years, because credit would not be able to be taken until a building had been built and certified as LEED-compliant. He thinks a green-building tax credit would spur additional investment in a down economy.Â
For a governor and Legislature facing two years of budget cuts heading into the 2010 election year, a no-cost economic incentive might be particularly attractive ”“ and give incumbent candidates a “green card” to play.
“In New York City, most developers are not considering (constructing) buildings that are not green, but in Connecticut that is not happening ”¦ except at Yale University,” Becker said. “Of course, they have the resources to think really long term.”
