Gas-price pain pumps up energy-conservation efforts at small firms

By: Ann Meyer July 11, 2011

David Friedman credits the gas price spike of 2008 with saving him money in the long run.

It spurred his property management company to be more conscious of energy conservation when planning the renovation of the Crown Plaza Chicago O'Hare Hotel & Conference Center, says Mr. Friedman, the 59-year-old president of Skokie-based F&F Realty Ltd., which manages the hotel and has annual revenue of about $7.5 million.

"We always had this awareness, before it was fashionable," Mr. Friedman says. "But we became more conscious of it as energy prices went up."

As painful as high gas prices are, experts see a silver lining: growing awareness of energy conservation. The price of gas is "one of the most concrete and in-your-face benchmarks that people have to face every day," said Garratt Hasenstab, 37, principal and chief sustainability officer at Verdigris Group, a real estate development and sustainability consulting firm in Chicago. "The rising price of gas is making a statement in people's minds," he says. "We all have to become more conscious of energy in our daily lives, whether it's commuting or at home."

Mr. Hasenstab says he believes the green movement stalled during the recession because businesses were more concerned about cutting expenses than conserving energy. But companies will go green when it's affordable, he maintains. Those that do invest in energy savings today will benefit down the road.

Increasingly, businesses are getting creative in the ways they save money and energy.

The restaurant at the Crowne Plaza features locally produced meat and produce, including the Dietzler Farms grilled steak and Mindoro bleu cheese salad. A windmill in front of Abt Inc. in Glenview powers its sign, while the electronics and appliances retailer has moved off the electric grid to natural gas from 8 a.m. to 5 p.m. daily. The company opens its on-site recycling center to neighboring businesses and carts back cardboard and polystyrene foam materials when it makes a delivery.

"We like to set a good example," says Mike Abt, 48, co-president of the family-owned retailer.

Increasingly, that's the case for many companies, says F&F's Mr. Friedman. With 90% of corporations inquiring about the Crown Plaza O'Hare's environmental practices during the request-for-proposal process, Mr. Friedman's management company introduced a "go green" promotion and a menu of locally grown food items.

Overall, Mr. Friedman says, the green initiatives helped grow the hotel's revenue, which is expected to hit $20 million this year from $15 million in 2010. The hotel also has eliminated the use of 29,000 plastic water bottles by installing filtered water stations on each floor.

Area hotels in general are out in front in energy conservation, says Bruce Stewart, managing director and chief marketing officer at Constellation Energy Group, based in Baltimore. "Illinois hotels have been among the most progressive in the nation," Mr. Stewart says.

The Illinois Hotel & Lodging Assn. has recognized 50 Illinois hotels through its green-energy recognition program, which considers a hotel's energy conservation, recycling programs and use of environmentally friendly products, says Marc Gordon, president and CEO of the Chicago-based association.

Small savings can add up. The Crown Plaza renovation included low-emissivity thermal windows, low-flush toilets, light-emitting diodes lighting and Energy Star heating systems and appliances. (Energy Star is a voluntary U.S. Environmental Protection Agency labeling program designed to identify energy-efficient products.)

When evaluating sustainable options, consider the payback time in years, says Mr. Hasenstab, the conservation consultant, who recommends data from GreenandSave.com, a Philadelphia-area organization. For example, the payback time for compact fluorescent lighting is less than a year because this lighting adds $60 to standard lighting costs but saves $80 a year in energy consumption, for a 10-year savings of $800, according to data from GreenandSave.com, based in Devon, Pa. Water-efficient toilets pay for themselves in two years, because they add $50 to the cost but save $25 a year in water usage.

Some of the most efficient solutions are also the simplest, such as adding insulation to a building's walls instead of investing in more expensive solar panels, says Joel Berman, 47, a LEED-certified architect in Andersonville. "It's mostly all common sense," he says.

To assist small businesses in becoming more energy-conscious, Andersonville Development Corp. has devised a rating system based on a firm's sustainability efforts, says Mr. Berman, who is on the non-profit's board. For example, businesses earn points if their employees commute by public transportation or bike, as Mr. Berman often does. The program also considers use of recycled materials, environmentally friendly cleaning supplies and compact fluorescent or LED lighting, he says.

Meantime, Abt creates store displays in-house using recycled material and has eliminated paper catalogs while promoting its website. It also has reduced its garbage pickup to three times a week due to its recycling efforts. The retailer operates a restaurant on its campus and also brings in food three times a week so employees don't have to travel during lunchtime.

About a quarter of its 230 delivery and service vehicles use bio-diesel fuel, and the company has its own gas station on-site. What's more, it uses routing software to organize service calls efficiently (see accompanying story on GPS tracking technology), says Mr. Abt, who was a biology major in college.

Calling himself "an environmental conservationist," Mr. Abt says he's seeing green initiatives spread to other businesses. "Ten years ago, no one cared. But now it's popular. Customers care."

Copyright © 2011 Crain Communications, Inc.