Aug 12
August 12, 2014

Anthony E. Malkin

Chairman, Chief Executive Officer and President, Empire State Realty Trust

Four Reasons Why the Empire State Building Retrofit Model Works


According to the World Business Council for Sustainable Development, 40 percent of the energy in the United States is consumed by buildings. In dense urban settings like New York City, however, commercial buildings account for up to 75 percent of the energy used. The largest commercial buildings, which make up about 20 percent of commercial buildings, consume 80 percent of this energy. To put it in perspective, 64 percent of the energy consumed in New York City is used by only 20 percent of non-residential buildings. 
Five years ago, the Empire State Building consumed as much energy in one day as 40,000 single family homes—an economically costly and environmentally unsustainable business model. That is why, in 2009 we decided to take action by joining with the Clinton Foundation’s Clinton Climate Initiative (CCI), C40 Cities Climate Leadership Group, Empire State Realty Trust, Jones Lang LaSalle, Johnson Controls, and the Rocky Mountain Institute to launch the Empire State Building Retrofit Project to improve energy efficiency and reduce our energy consumption by 40 percent. Our goal was not only for the Empire State Building to be more sustainable, but also to serve as a model for other building retrofit projects, regardless of building age. 
We knew that the Empire State Building had the greatest potential to be a successful test case and leader for retrofitting existing structures for four reasons: 
  1. Ownership: The ownership of the Empire State Building had the balance sheet and credibility to coordinate such a major project, and also had the experience with redeveloping pre-World War II buildings in New York City.
  2. Replicability: The vast majority of buildings in New York City today are more than thirty years old. When we launched the project, we believed that if an the Empire State Building could enhance profitability through improving energy efficiency and reducing overall carbon output, that other buildings could do the same. 
  3. Transparency: Throughout our process to achieve sustainability, we have made sure that our methods and developments are transparent so that other building owners have a model to follow in pursuing their own green projects.
  4. Attention: Due to the fame and iconic nature of the Empire State Building throughout the world, the retrofit project has received international attention that has resulted in inspiration and adoption amongst building owners. More than 4 million visitors annually have the opportunity to see the building’s interactive multi-media exhibit, which highlights the energy efficiency retrofit of the building and why it is important for the environment. Additionally, more than 100 owners, lenders, corporate real estate executives, and government officials have toured the building since the commencement of the retrofit process, and many of these visits have triggered calls to action. 
One of the most exciting aspects of the retrofit project is the substantial and quantifiable results that have proven through monitoring and verification since its implementation. In 2011, the Empire State Building beat its year-one energy-efficiency guarantee by five percent, saving $2.4 million.  In year two, the property surpassed its energy-efficiency guarantee by nearly four percent. This year, the iconic property beat its energy-efficiency guarantee by 15.9 percent, saving $2.8 million.  Over the past three years, the program has cut $7.5 million in energy costs – exceeding far beyond what we originally anticipated. Once all of the tenant space is upgraded, the building is expected to save $4.4 million a year and reduce its energy use by 38 percent. Moreover, throughout the retrofit process more than 250 jobs in manufacturing, construction and engineering were created. 
Even more exciting, however, is that over 50 buildings and partner projects around the world have implemented the Empire State Building’s retrofit model due to its success. Some of these buildings include the Merchandise Mart and Daley Center in Chicago, all 13 properties of Empire State Realty Trusts’ New York metropolitan-area commercial portfolio, One Worldwide Plaza in New York, The Port Authority of New York and New Jersey, Pier 1 and the Moscone Center in San Francisco, and Union Station in Chicago. 
We hope that more buildings will take on retrofit projects using the Empire State Building’s model. Similar projects will save energy, create jobs, save money, and attract companies and tenants interested in saving money and reducing their carbon footprints, all while making our world a cleaner and safer place. In the meantime, we have spread our learnings into tenant space design and build-out and look forward to announcing our results in that area in the future.