More cities to issue energy disclosure mandates, says International Council of Shopping Centers

by Shane Henson — December 11, 2013—U.S. shopping center owners already contending with European-style energy-benchmarking laws had better prepare for more of the same, says the International Council of Shopping Centers (ICSC), a global trade association of the shopping center industry with more than 60,000 members in over 90 countries.

According to ICSC, Boston, Chicago, Minneapolis and Philadelphia passed new mandates this year, and others are seeking to do the same. Municipalities and environmental groups argue that these efforts will ease operating costs and boost property values. Critics say the measures cannot be applied equitably to multitenant retail buildings. But these laws are not going away, according to ICSC sources.

As Will Teichman, director of sustainability at Kimco Realty Corp, notes, energy benchmarking and disclosure laws are now a reality for center owners with multiple locations in top metro areas. The mandates require owners of midsize and large shopping centers and other commercial buildings to track and report energy consumption and greenhouse gas data, says Teichman, but because the laws fail to account for the high percentage of space controlled by the triple-net-tenant majority, they often do not represent true energy use.

Teichman adds that most tenants are separately metered, and it remains a maddening challenge to access energy-consumption data from them or utility providers. Regardless, the laws require “whole building” disclosure from owners responsible for producing data on both landlord (common area) and tenant (building interior) metrics. A few cities now include provisions requiring utilities to aggregate meter data without need for tenant release forms, but until this is the norm, inaccuracies and inefficiencies are likely to persist, says Teichman. For that reason, ICSC opposes city benchmarking measures.

ICSC’s Property Efficiency Scorecard benchmarking system enables shopping center owners to measure their own energy use and green operations against those of their peers. The gauge is intended to fill the gaps left by systems that fail to account for tenant control of triple-net lease spaces.

Read more about green benchmarking laws in the upcoming December 2013 issue of Shopping Centers Today.