American Center Improves Return On Investment

July 11, 2002
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The American Center is a 25-story office building with an adjoining retail and convention center.
SOUTHFIELD, MI — Most contractors would like to provide the best possible solution for their commercial clients, but all too often they run into first-cost objections. They know all too well that return on investment is the name of the game for investment real estate.

The American Center, an office tower here in Southfield, is now a better performing asset, and generally a lower risk for the owner, Redico Management, and the building operator.

The American Center’s ownership successfully used the “Performance Agreement for Comfort from Trane” (PACT™) program to make more than $3.2 million in capital improvements, simultaneously reducing operating costs and improving tenant comfort.

The project is creating more than $621,000 in annual savings and qualifies the property to participate in the Environmental Protection Agency’s (EPA’s) Energy Star Building® program. In addition, the electric bill has been reduced by one-third, according to Redico executive vice president Jim Jonas.

AGING INFRASTRUCTURE

Like many office buildings in Southeast Michigan, the American Center property was built more than 25 years ago. Much of the equipment was nearing the end of its useful life.

Redico was facing increasing operating costs resulting from the aging infrastructure, and high utility costs due to the building’s design. The aging cooling system required discussions with Trane; a more comprehensive approach was needed.

The manufacturer played a key role in developing a custom project to lower operating costs and improve tenant comfort. Once the project was approved, Trane assembled an experienced team to begin the work.

“We have had experience working with Trane in a number of properties and knew they were excellent contractors,” commented Joe Mendez, vice president of operations.

Variable-frequency drives and a multiplexer system provide more efficient domestic water booster pumping.

TRIMMING THE LOAD

Several upgrades not only improved the HVAC system’s efficiency, they also improved tenant comfort.

• The original building design used the lighting system as a major source of heat. This worked pretty well when electricity was inexpensive, but rates have increased significantly over the past 25 years. A lighting retrofit helped reduce the cooling load in the summer while improving the quality of the lighting for the tenants. This reduced summer load had a direct impact on the size of the equipment necessary to cool the building.

• Two 640-ton CenTraVac™ chillers from Trane were installed.

• The old electric boilers were replaced with six gas-fired, modular, high-efficiency Lochinvar gas boilers in series. Extensive piping work was required to replace the electric baseboard heat with hot water radiation.

• Upgrades were made to the building’s air distribution system to improve the quality and efficiency of air delivered to tenants. Fixed boxes were replaced with variable air volume (VAV) units, and variable-frequency drives (VFDs) were installed on the main fans.

• The domestic water pumping system also was retrofitted to improve the efficiency of its operation. Square D VFDs were installed on the domestic boost pump system.

• For overall improvement of the building’s environmental control, a Tracer Summit™ building automation system (BAS) was installed. Monitoring and scheduling capabilities reduce equipment run times and, therefore, energy costs. The BAS offers facility management at American Center a tool to respond more efficiently to tenant calls, and to manage the building more proactively.

ENERGY STAR PARTICIPANT

The PACT program guarantees the building’s owners long-term project performance, according to Trane. Through periodic building inspections, equipment maintenance, and monitoring, the company provides an annual guarantee of $500,000 in energy savings and $121,000 in operational savings.

Those annual energy savings are what qualified the American Center Property to participate in the Energy Star program.

In fact, the savings looked so large on paper, “The local utility sent a representative to check the accuracy of our property’s electric meters. They found the meters working properly,” states Redico’s Jonas.

A critical component was to keep the building’s systems fully operational while the renovation took place — no small feat. Careful planning was critical to pulling it off.

TENANT SATISFACTION

Finally, the tenants have appreciated the upgrades. “We have received positive feedback from our tenants on the quality of lighting and improvement in temperature control,” states Mendez.

Sidebar: Contractors Can Benefit From Energy Star

The News posed some questions to Trane and American Center property owner Redico about the Energy Star® program, and how HVACR contractors can find a viable market retrofitting existing commercial buildings to improve energy efficiency and occupant comfort.

The questions were fielded by Debra Ingles, Trane marketing/training coordinator, Novi, MI; and Eric Kasaba, Redico director of operations, Southfield, MI.

Q. How does an HVACR contractor get involved in Energy Star programs?

A. “Perhaps the best way to answer this is to briefly explain the purpose of the program,” said Ingles. “The Energy Star Building program was started by the EPA, and is now cosponsored by the EPA and the Department of Energy (DOE), to promote and recognize building owners’ efforts to improve their building efficiency. This improvement results in savings for the owner in the form of energy and operating costs.

“The energy savings lead to reduced demand at power plants and consequently their emissions, helping to protect and improve our environment. It is not a program that provides subsidies for energy retrofits, like many of the demand-side management programs that are administered by utilities,” continued Ingles. “Rather than providing financial relief for products and solutions that are already installed, Energy Star provides benchmarking and analysis tools and processes that enable owners and partnering contractors to see where buildings fall among their peers from an energy efficiency perspective, and a path to follow that will lead to improving the building’s standing, as well as its comfort and financial performance.

“HVACR contractors can be involved in the program by helping their customers understand the financial and environmental benefits of energy-efficient products and operation; having the capability to accurately assess the opportunity for energy savings; and executing the installation and maintenance of the systems that help the customer achieve the energy-efficiency improvements that will lead to receiving the Energy Star award.”

Q. When retrofitting a building to meet Energy Star standards, are outside HVACR contractors invited to bid on the work?

A. “Since the projects that lead to a building qualifying for the Energy Star award are initiated by an owner or a partnership between an owner and an energy services company (ESCO), there are no inherent limitations on who’s invited to be a part of the installation team,” Ingles said. “The decision is based on the value, creativity, and expertise the contractors bring to the team.”

Q. How do new building systems affect the HVACR maintenance staff? For instance, does the American Center keep its maintenance staffing at the same levels? Is additional training needed for the staff?

A. “The building system upgrades have created a marked decrease in the number of tenant hot and cold calls, as well as reducing the amount of interaction the building engineers have with the HVAC equipment,” said Kasaba. “These improvements have increased the amount of time the staff has to perform other maintenance tasks within the building.

“The building engineers received training on the new equipment as it was installed. The largest items were the energy management system, the drives, and the chillers. Our personnel had operated equipment of these types and needed training specific to the new equipment,” Kasaba said.

“We are very pleased with the results of this project,” he stated. “It has improved tenant comfort, given our personnel additional time to perform their daily duties, and is paying back financially at a greater rate than predicted.”

Q. Is retrofitting to meet Energy Star standards actually a niche market?

A. “The Energy Star program is based on life cycle cost analysis of energy retrofits and sustainable energy savings operations,” explained Ingles. “Retrofitting to meet the standards allows building owners to meet their short- and long-term financial goals while improving comfort and productivity of the occupants.

“It is a long-term commitment to energy savings, environmental protection, remaining competitive in the marketplace, and superior financial performance. It is definitely not a niche market.”

Q. What can an HVACR contractor learn from this story about the Energy Star program?

A. “Energy Star provides resources that help an HVACR contractor gain knowledge and expertise in the analysis, optimization, and installation of energy conservation measures,” said Ingles. “The individual technologies are typically not difficult to understand, install, or operate.

“The real value is provided when a contractor is able to integrate multiple technologies and create a high-performance building system.

“Selling the value of this knowledge and expertise helps the contractor differentiate himself from the competition and develop a longer and closer relationship with the owner,” she added.

For more information, visit www.energystar.gov (website).

— John R. Hall

Publication date: 07/15/2002

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