If you retrofit it, they will come. At least that’s what city officials are hoping.
Atlanta’s economic development agency is betting that making downtown’s buildings more energy efficient will help it attract new businesses, an effort that involves millions in public cash and hundreds of millions in private investment.
Invest Atlanta’s board on Thursday signed off on a plan to create a pool of at least $200 million in private funds that would be used to retrofit the aging stock of buildings downtown. It comes months after the agency voted to use up to $8 million in property tax funds to help downtown building owners upgrade their properties.
The move, which must still be approved by Atlanta’s City Council, would allow building owners to voluntarily pay the city extra property taxes. That money would be pooled in a fund administered by Ygrene, a California-based firm that specializes in this business.
Building owners who pay the tax would have access to the pool of capital to help finance improvements such as energy-efficient windows and heating and cooling upgrades. The resulting long-term savings on utility bills could offset the short-term cost of the voluntary tax payments. In the process, the city predicts the overhauls would support thousands of jobs as people are hired to do the work to make buildings more energy efficient and downtown commercial buildings attract new tenants.
For downtown, it’s another chance to update crumbling buildings saddled with high energy costs. Market reports show about 200,000 square feet in premium downtown office space emptied out this year, while Buckhead and Midtown are trending the other direction.
“We’re really trying to redefine our aging stock of real estate because it’s getting older and needs to be more efficient,” said A.J. Robinson, who heads Central Atlanta Progress, the downtown booster group. “This is yet another tool to help save water and energy costs, another tool in the toolbox for folks to access funds to fix up their buildings.”
In April, the board agreed to use property tax funds collected around a special district that includes parts of downtown to help building owners conduct energy audits and retrofit aging structures. Under this program, taxpayers would fund as much as 40 percent of the cost of the work and the landlord would pay the rest.
Atlanta is also one of a few pilot cities selected to take part in the Obama administration’s “Better Buildings” challenge, a program that aims to reduce energy consumption in commercial buildings by 20 percent by 2020.
Rutherford Seydel, a co-owner of the Atlanta Hawks and an environmental attorney, said these types of efforts help plumbers, electricians and contractors who have been sidelined by the economic downturn get back to work.
“This is really going to help local businesses – not only craftsmen but also suppliers of these goods that go into these buildings,” said Seydel. “We don’t have a lot of cranes up, so this is the perfect time to be retrofitting our buildings.”
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