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Hotels Lag in Energy Sustainability. One Project May Change That.
November 10, 2020
The hotel industry has fallen behind other real estate sectors in adopting energy-efficiency measures, but a Connecticut developer hopes to change that by converting an office building into what could be the most energy-efficient hotel in the country.
The $50 million gamble aims to revive the long-vacant Armstrong Rubber Company headquarters, a distinctive concrete box in New Haven that was designed by the Modernist architect Marcel Breuer in the late 1960s, as a 165-room boutique hotel to be called the Hotel Marcel.
The developer and architect, Bruce Becker, is building the hotel to meet net-zero energy standards, meaning it will generate as much energy as it uses.
“It’s probably the most challenging project I’ve ever undertaken, particularly since we’re doing it during a pandemic,” said Mr. Becker, whose firm, Becker + Becker, is based in Westport. “But I’ve been intrigued with the building at least since I was a graduate student at Yale in the late ’80s, and I thought it could be fascinating.”
Some large hotel brands and owners have set companywide greenhouse gas reduction goals, but much of the industry has failed to take advantage of measures that could save energy and reduce operating costs, according to a report by the Urban Land Institute’s Greenprint Center for Building Performance.
Among the obstacles to widespread adoption are complicated hotel owner/operator models, a lack of collection of energy use data and concerns about the impact on guests, the report said.
“The hotel industry is very well poised to benefit from sustainability — the owner/operators carry the burden of all of the energy costs,” said Marta Schantz, the center’s senior vice president. “The fact that this Connecticut project has decided to do it from the get-go is the perfect, most cost-effective way to do it.”
Ms. Schantz said she knew of no other net-zero energy hotel in the United States. But some major hotel brands are trying to reduce their carbon footprint, using various management systems and apps to track their progress.
Among the leaders is Host Hotels & Resorts, a real estate investment trust that owns about 80 upscale hotels in Brazil, Canada and the United States. The trust is aiming for a 55 percent reduction in carbon emissions by 2025.
Such goals are of increasing interest to investors, who regularly ask about environmentally and socially sound business practices, said Michael Chang, the director of energy and sustainability for Host Hotels.
The trust uses a diagnostic tool that identifies opportunities to install energy-saving technology — like LED lighting and room thermostats with occupancy sensors — that provide a good return on investment, he said. The trust makes the investments, and it depends on hotel operators to use them efficiently. To that end, it prefers to work with brands that have their own sustainability programs in place, Mr. Chang said.
The trust also hopes to increase the renewable share of its energy use by 30 percent in the next five years, primarily through off-site solar agreements.
“Even if we blanketed our portfolio with solar, we’d probably only get to 10 percent of our energy usage,” Mr. Chang said. “There is a limited amount of space to put panels on.”
The Armstrong building, along Interstate 95 near New Haven Harbor, is notable for a striking Brutalist design that incorporates a two-story open gap between the block of offices above and the ground-level lab space. The building’s beige exterior is made of precast concrete panels and is lined with deep-inset windows.
Locals also know it as the Pirelli building; the Italian tire maker moved into the space in 1988. Ikea bought the property in 2003 for one of its warehouselike stores. Much to the consternation of preservationists, the company demolished a taillike section of the ground floors to allow for more parking, but it left the rest of the building intact.
In recent years, Ikea has worked with the city to come up with a plan to convert the historic structure into a hotel. Last year, Mr. Becker bought the building and about 2.5 acres for $1.2 million.
He recognized the structure’s compact shape as a naturally efficient envelope — the ratio of surface area to interior space is low, a plus for minimizing heat gain in the summer or heat loss in the winter.
“It’s hard to make buildings that meander efficient,” Mr. Becker said. “But with a highly efficient envelope and building systems, we’ll be able to use about 80 percent less energy than a typical hotel building.”
Mr. Becker has considerable experience with high-efficiency construction, most recently at a Modernist office building in Hartford that he redeveloped into a 27-story apartment tower. That project, called 777 Main Street, is powered with a fuel cell and a solar array. The U.S. Green Building Council gave the building its highest efficiency rating, LEED Platinum.
For the hotel project, solar canopies over the parking lot and rooftop solar panels will supply all of the building’s electricity, Mr. Becker said. High-efficiency air-source heat pumps will be used for heating and cooling.
Other efficiency measures will include triple-glazed windows, high-efficiency insulation, an all-electric heat pump HVAC system, and heat and energy recovery systems. These methods should help the hotel meet passive house standards, a set of design principles aimed at creating ultra-low-energy buildings, Mr. Becker said.
“It will probably cost about $5 per square foot more, but we’ll be saving about $1 per square foot every year on energy,” Mr. Becker said. “So it really does make a lot of sense. It’s an opportunity to create a new paradigm that the hotel industry can look at and study and learn from.”
Slated to open next fall as part of Hilton’s Tapestry Collection, Hotel Marcel will have a restaurant, a bar, meeting spaces and a top-floor gallery with views of Long Island Sound on one side and the city skyline on the other.
The project is being partly financed through a $25 million construction loan from Liberty Bank in Middletown, Conn. The balance is a mix of developer equity, solar tax credits, federal and state historic tax credits, and a utility program grant.
Christopher Arnold, Liberty’s senior vice president and commercial real estate manager, said that although the hotel industry faced extreme challenges because of the pandemic, this project’s proximity to Yale, its high visibility and its inclusion in the Hilton network gave him confidence it would succeed. The efficiency measures will help by lowering operating costs and enhancing cash flow, he said.
The hotel is likely to gain national attention because its level of sustainability “just doesn’t happen in the hospitality industry,” said W. Chris Green, the president and chief executive of Chesapeake Hospitality, a Maryland-based hotel operator that will manage the property.
“I do believe this is going to be a huge test,” Mr. Green said. “Hotels are long-term real estate plays — there is a value to saving money on electricity, sewage and water.”
Mr. Becker hopes to spur the industry with his all-in approach. Many sustainability strategies, like eliminating single-use shampoo bottles and asking guests to reuse towels, are largely “superficial measures,” he said.
“If you really want to change the paradigm, you’ve got to not use fossil fuels and generate all your energy on site,” he said. “I think the time will come when what we’re doing becomes the norm.”