Tim Lawless, President, NAIOP
Tim Lawless, President, NAIOP Arizona

By Tim Lawless, President, NAIOP Arizona

This column was published in the May/June 2015 issue of AZRE.

In January, the City of Phoenix considered a draft ordinance that mandates owners of buildings more than 50KSF had to report their energy usage on a government website or face a Class 1 misdemeanor and minimum $500 fine for every day or instance there is a violation.

According to the city, the ordinance would affect 1,398 buildings, including 35 hospitals, 69 hotels, 147 retail facilities and 142 schools.

This type of ordinance is similar to energy reporting in Austin, Boston, Chicago, Washington D.C., New York City, Philadelphia, San Francisco and Seattle enacted in the last few years.

These types of costly energy reporting ordinances are hard to comply with as they force property owners to collect information for dozens of tenants who view this type of information as private or proprietary.

The use of this type of information is also dubious as it can be used by interest groups to shame certain building owners, leading to a movement to mandate expensive retro-fit improvements for facilities that can hold up the sale of buildings. This is where California is headed with legislation like AB 758, and these proposals have a chilling effect on economic development.

We do not have a problem with a voluntary energy reporting system and some of our members who specialize in LEED would welcome that. In short, the market should dictate energy efficiency and the market is already going in that direction as younger professionals prefer these working environments.

As a result of this draft ordinance, NAIOP-AZ  formed a coalition with 10 other groups to pass SB 1241 (Barto) at the State Legislature that preempts cities from enacting this type of mandatory reporting  and this bill was signed into law by the governor.