A large part of the problem is that New York's buildings, like most of the building stock in America, date back to times when fuel was cheap and energy conservation was almost unknown. While today's green buildings are designed for maximum efficiency, earlier construction was built to take advantage of electricity-guzzling air conditioning, high-powered fans, radiators and other energy-hungry technologies.
Replacing the country's old buildings with new, green architecture would certainly handle the efficiency issue but would also create some problems of its own. As Anthony Malkin, the Empire State Building's owner, notes, green buildings can be expensive to build and maintain, pricing them out of the reach of most clients. Moreover, tearing down existing buildings wastes resources, mitigating the positive effect of any green technology.
The solution, Malkin decided, was to try to find a cost-effective way to slash the Empire State Building's energy consumption.
Bringing a Classic Building Back
In the beginning, Malkin and his father weren't concerned about energy efficiency. When they took control of the Empire State Building in 2006 following a conflict with their partners, the Malkins' main interest was turning around an asset that had become something of an albatross. At the time, the once-proud edifice was showing its age: The lobby's original gold and aluminum Art Deco ceiling had been covered over, the observatory needed a major overhaul and many of the building's hallways, restrooms and offices were out-of-date.
This had had a noticeable effect on the Empire State's renters. As Malkin notes, "We had a large collection of low-quality tenants." In fact, the building's astounding 752 renters were paying, on average, only $26.50 per square foot, a fraction of what more up-to-date buildings in Midtown Manhattan were charging.
For much of the first year after they took control, the Malkins considered various ways to return the building to its former glory. The first step in getting top-quality renters lay in creating spaces that filled their needs, so Malkin began investigating high-end rental spaces to determine which amenities made the biggest difference to lessees.
It was during that investigation that Malkin discovered that many of the companies that he was hoping to attract were highly concerned about energy costs. "For renters, the three biggest expenditures are salaries, rent and utilities," he says. "Larger, better tenants demand better energy efficiency."
This is especially true when it comes to international business, he notes. "European companies measure their energy usage closely, and many boards set maximums on energy usage." That meant if Malkin wanted to bring the building and its clientele into the 21st century, he needed to massively change its energy profile.
Finding a Green Path
To develop a plan for the update, representatives from the building met with people from the Clinton Climate Initiative and other green-energy groups. While Clinton's team was focused on reducing the building's carbon footprint, the Malkins' concerns were more prosaic: "For us, the bottom line was dollars and cents. We wanted to invest the right amount of money in the right amount of order to maximize profit."
The ultimate program, which the building's engineers approved early in 2009, got under way in April 2009. In addition to major upgrades of the building's electrical, ventilation, and air control systems, it improved insulation, updated all of the windows, retrofitted its chiller plant, and installed controls that automatically reduced electrical consumption in tenant spaces.
Along the way, Malkin and company found interesting ways to keep costs down. One of the early steps, updating the building's 6,514 windows, was slated to cost an estimated $2,500 per window, or more than $16 million overall. Refurbishing, on the other hand, could achieve the same energy savings at a cost of only $700 per window, saving more than $11 million. As part of their cost-reduction plan, Malkin's team built a processing center on site, making it possible to remove, retrofit and replace the windows without them leaving the building.
Small Steps, Big Reward
Ultimately, the retrofit cost roughly $20 million, but it has reduced the building's energy consumption by up to 38%. It is expected to pay for itself within five years, and will reduce the building's carbon output by over 100,000 tons over the next 15 years.
For the Malkins, the updates have also had a more immediate impact. Enacted in concert with a major refurbishing of the building's public areas, they have helped restore the Empire State Building to some of the status that it once enjoyed. In mid-February, President Obama mentioned the building in a speech at Penn State, noting that "Right now, its owners are investing in renovations that will reduce their energy consumption, and this investment will soon pay for itself and save them $4.4 million a year in energy costs. That one building."
The changes have also attracted the kind of high-profile, high-paying clients that Malkin wants: "We are drawing large, multi-floor tenants that we wouldn't have seen otherwise," he notes. "For example, we recently rented 480,000 square feet to Li and Fung, a Hong Kong-based business. This is the largest new rental contract in the city."
While it will always be a New York landmark, the Empire State's cutting edge retroifts are helping it to regain its proud position as a titan of American building technology.