Owners says it would not be fair to penalize them when it's their tenants whose energy use is high.
Hoping to cut local energy emissions and promote green jobs, city leaders in Minneapolis are mulling a proposal that would force commercial buildings to receive public ratings based on their energy-efficiency.
The ordinance would require commercial buildings larger than 50,000 square feet to submit utility usage and other information to Energy Star, a government-backed program that offers a tool for calculating energy efficiency. The city would publish the resulting rating -- likely a score between 1 and 100 -- on its website, with hopes of encouraging building owners to cut their energy consumption.
The local building owners association warns this could have detrimental effects on the marketplace, pinning low scores on buildings whose owners may lack the funds to retrofit or have tenants with high energy demands.
Kevin Lewis, executive director of the Greater Minneapolis Building Owners and Managers Association, said requiring disclosure means "it's not a level playing field anymore."
City Council Member Elizabeth Glidden, who authored the change, said the proposal falls in line with the city's pledge to reduce its overall emissions. The city's target is to cut greenhouse gas emissions 15 percent from 2006 levels by 2015. She said there would also be opportunities for job creation.
"We know when you're working on buildings and doing energy-efficient improvements -- very nuts-and-bolts kind of work -- that is green jobs," Glidden said.
Public hearing in January
The proposal will get its first public hearing in January 2013. If approved by the City Council, it would be phased in over two years to eventually cover 551 commercial buildings and all city-owned buildings larger than 25,000 square feet.
The policy would be the first of its kind in Minnesota, but similar disclosure requirements are already in place in Washington, D.C., New York City and San Francisco.
"Unfortunately, we see this as a sign of things to come," said Karen Penafiel, a vice president with the Building Owners and Managers Association International. The Washington, D.C.-based group opposes the disclosure mandate, which it does not believe is necessary. Penafiel added that individual tenants often control much of a building's energy use.
Speaking for the local owners, Lewis said, "The result could be a loss of value for certain members of ours. Or be forced out of business if their vacancies levels rise so much because of this."
This does not appear to have happened in San Francisco, where large commercial buildings started getting mandatory Energy Star ratings in late 2011.
"Our property owners initially thought, 'Oh, this is going to be horrible' ... but there's been no blowback, if you will, from property owners," said Ken Cleaveland, a vice president with BOMA San Francisco. "It's just been a non-issue, quite frankly."
Glidden said they have not found negative market consequences in other cities that have implemented similar systems.
"I don't think that any of this stuff, frankly, is ever going to outshine price and location," Glidden said.
While the disclosure would be a change for many building owners, nearly 50 buildings in Minneapolis already disclose their ratings on the Energy Star website. The full list is available at startribune.com/a1898.
The city doesn't have precise information about what portion of the city's emissions can be attributed to commercial buildings. They do know that commercial and industrial emissions combined accounted for more than 44 percent of the city's total emissions in 2010.
Brendon Slotterback, the city's lead staffer on the project, said commercial properties' natural gas usage accounted for about 50 percent of the city's total in 2011.
Eric Roper 612-673-1732 Twitter: @StribRoper