Friday, June 11, 2010 | 3 a.m.
Eighteen months ago, no one could have predicted the fanfare and national attention for a rundown 46-year-old, 11-story office tower in downtown Las Vegas that was 20 percent occupied.
It was more than just a little bit of elbow grease that transformed a former asbestos-laden building into what is now considered a symbol of energy efficiency — and an example of what’s to come nationwide.
The office tower known as 302 E. Carson Ave. received the state’s first retrofitted building gold certification by the U.S. Green Building Council, which recognized the improvements for decreasing energy usage by 30 percent and water consumption by 40 percent.
The occasion was marked May 19 by a visit by former President Bill Clinton, whose foundation launched the Clinton Climate Initiative to help reduce greenhouse gas emissions.
“This is really an important moment. This is the shot heard around the world,” said Rick Fedrizzi, president of the U.S. Green Building Council. “What we have now is an incredible example in Nevada that shows what you can do with an existing building and how much energy and water and waste can be salvaged.”
Fedrizzi said in cities across the country, owners are bulldozing a lot of decaying buildings and leaving empty lots, but this shows what can be accomplished by retrofitting instead.
The $11.5 million retrofit was completed in 13 months by Shangri-La Construction as the general contractor. The investment by Thompson National Properties is expected to take 10 years to recoup, but it adds significant value to a building struggling to add tenants.
Thompson bought the property in October 2008 from Fitzgeralds for $20 million and ended up spending $81 per square foot to upgrade it.
“We like the future of downtown Las Vegas and saw an opportunity where others did not,” said Tony Thompson, chairman and CEO of Thompson National Properties, which manages 3.5 million square feet of office space in Las Vegas. “What we spent on it is still below the replacement cost.”
The vacancy rate downtown is 12.5 percent and 5 percent for higher-end buildings, according to Colliers International. It lists the overall office vacancy rate at 23 percent, and others put it even higher.
With the renovations, Thompson said the occupancy rate has doubled from 20 percent to 40 percent, and he expects it to reach 80 percent within the next year. Downtown is desirable for government, law firms and medical groups, he said.
The developer is charging $2.50 to $3 per square foot monthly. The downtown office market rents average $2.23 per square foot a month and are $2.83 per square foot for high-end buildings, according to Colliers.
The retrofit included installing dual-glaze windows to reduce heat transfer into the building and lowering energy bills because more light is allowed into the building.
Heating, ventilation and air conditioning upgrades are expected to save more than $50,000 a year in electricity costs. Plumbing was upgraded to install low-flow and no-flush fixtures to reduce water use.
The roof was replaced to reduce the amount of heat that enters the building. Seventy-five percent of the renovation waste was recycled and reused.
Fedrizzi said the cost of $81 per square foot is half the price many other green office redevelopment projects have paid across the county and shows what’s possible. Rather than have buildings decline, owners will have an incentive to upgrade them, he said.
“There should be a lot more going on and this is one of the best examples I have seen to date,” Fedrizzi said. “It is easier to build a green building in new construction than it is an existing building. They have proven otherwise. It sends an important message to the marketplace that you can retrofit these buildings for a high level of performance and ultimately revitalize parts of a city that had been the decline.”
Clinton pushed for retrofitting aging buildings to make them more energy efficient and promoted alternative sources of energy as a way to create jobs and grow the economy. The project created 250 jobs in Las Vegas.
Clinton said studies show a large amount of greenhouse gases that need to be cut can be eliminated simply by being more efficient. In large cities, buildings can account for up to 70 percent of carbon emissions, and older buildings waste massive amounts of energy, he said.
“I believe climate change is a huge problem and we have only scratched the surface of what we have to do,” Clinton said.