A done photo of downtown Denver in March 2020. (Courtesy Guerilla Capturing)
Mayor Mike Johnston’s administration has proposed more changes to the city’s new rules governing building energy use known as Energize Denver, which the real estate sector has regarded as too onerous.
The proposed changes include pushing back deadlines for compliance and halving the penalties for buildings that ultimately end up out of compliance.
Mayor Mike Johnston speaks to the media in July 2023. (RJ Sangosti/The Denver Post)
“Denver is showing how a major city can craft policies that are both business-friendly and climate-friendly,” Johnston said in a statement.
The Energize Denver regulations were passed in 2021 as part of the city’s effort to eliminate emissions by 2040. Commercial and multifamily buildings account for 49 percent of Denver’s emissions, according to the city, which says Energize Denver could reduce those emissions 80 percent by 2040.
The rules apply to buildings 25,000 square feet and greater.
Currently, building owners must comply with the regulations by 2030. The changes proposed this week push that back to 2032 and allow for owners to seek extensions beyond that date, according to the city. An interim compliance deadline would also be pushed back from this year to 2028.
Penalties would be halved because “the focus of this program is on energy efficiency, not penalties,” according to the city. No penalties have been assessed, per Denver, and none would be assessed until late 2029 under the proposed changes.
The changes would also allow buildings facing financial hardship or high vacancy rates, or a major tenant lease expiring around the same time as an Energize Denver deadline, to receive a two-year compliance delay.
Energize Denver has been a concern for years for the local real estate sector, which has said compliance just isn’t financially feasible for many properties. The program’s deadlines approach at a time the industry faces other prominent struggles, including high vacancy in the older office buildings that are more likely to need energy upgrades.
By last year, real estate trade groups had adopted something resembling a good-cop, bad-cop approach in their quest for changes.
Denver was sued last spring by the Colorado Apartment Association, Apartment Association of Metro Denver, Colorado Hotel and Lodging Association and commercial real estate group NAIOP. They alleged that the rules are at odds with federal regulations. A judge has yet to rule on Denver’s motion to dismiss the case.
Separately, a coalition including the Denver Metropolitan Commercial Association of Realtors, or DMCAR, and the Building Owners and Managers Association formed to negotiate changes directly.
Speaking to BusinessDen in October, DMCAR head Katie Kruger spoke positively about interactions with city leaders.
Katie Kruger
“I think these laws are going to change, and I think we’re going to do it together, which we haven’t seen in Denver in a long time,” Kruger said that month.
Kruger told BusinessDen Wednesday that “unsung strides have been made between Energize and the industry.” She said whether the changes are ultimately enough will depend on feedback from individual building owners, as well as possible changes to regulations at the state level.
“This is a longer process of seeing if these changes get us there … We are now in a place with the Energize team to stay at the table permanently,” she said.
Denver’s Office of Climate Action, Sustainability, and Resiliency will consider enacting the changes at an April 1 hearing.
A done photo of downtown Denver in March 2020. (Courtesy Guerilla Capturing)
Mayor Mike Johnston’s administration has proposed more changes to the city’s new rules governing building energy use known as Energize Denver, which the real estate sector has regarded as too onerous.
The proposed changes include pushing back deadlines for compliance and halving the penalties for buildings that ultimately end up out of compliance.
Mayor Mike Johnston speaks to the media in July 2023. (RJ Sangosti/The Denver Post)
“Denver is showing how a major city can craft policies that are both business-friendly and climate-friendly,” Johnston said in a statement.
The Energize Denver regulations were passed in 2021 as part of the city’s effort to eliminate emissions by 2040. Commercial and multifamily buildings account for 49 percent of Denver’s emissions, according to the city, which says Energize Denver could reduce those emissions 80 percent by 2040.
The rules apply to buildings 25,000 square feet and greater.
Currently, building owners must comply with the regulations by 2030. The changes proposed this week push that back to 2032 and allow for owners to seek extensions beyond that date, according to the city. An interim compliance deadline would also be pushed back from this year to 2028.
Penalties would be halved because “the focus of this program is on energy efficiency, not penalties,” according to the city. No penalties have been assessed, per Denver, and none would be assessed until late 2029 under the proposed changes.
The changes would also allow buildings facing financial hardship or high vacancy rates, or a major tenant lease expiring around the same time as an Energize Denver deadline, to receive a two-year compliance delay.
Energize Denver has been a concern for years for the local real estate sector, which has said compliance just isn’t financially feasible for many properties. The program’s deadlines approach at a time the industry faces other prominent struggles, including high vacancy in the older office buildings that are more likely to need energy upgrades.
By last year, real estate trade groups had adopted something resembling a good-cop, bad-cop approach in their quest for changes.
Denver was sued last spring by the Colorado Apartment Association, Apartment Association of Metro Denver, Colorado Hotel and Lodging Association and commercial real estate group NAIOP. They alleged that the rules are at odds with federal regulations. A judge has yet to rule on Denver’s motion to dismiss the case.
Separately, a coalition including the Denver Metropolitan Commercial Association of Realtors, or DMCAR, and the Building Owners and Managers Association formed to negotiate changes directly.
Speaking to BusinessDen in October, DMCAR head Katie Kruger spoke positively about interactions with city leaders.
Katie Kruger
“I think these laws are going to change, and I think we’re going to do it together, which we haven’t seen in Denver in a long time,” Kruger said that month.
Kruger told BusinessDen Wednesday that “unsung strides have been made between Energize and the industry.” She said whether the changes are ultimately enough will depend on feedback from individual building owners, as well as possible changes to regulations at the state level.
“This is a longer process of seeing if these changes get us there … We are now in a place with the Energize team to stay at the table permanently,” she said.
Denver’s Office of Climate Action, Sustainability, and Resiliency will consider enacting the changes at an April 1 hearing.
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