Making Green by Being Green

Michael Gyory took an old concrete-block-and-steel warehouse in Thornwood, added a third floor while recycling all the steel that was there, insulated it with soy-based spray foam, planted local vegetation to eliminate the need for irrigation, installed solar power panels on the roof, and created Thornwood Self Storage Center. Did he and his partner, Dan Kasman, spend all that money just to be environmentally correct? Not exactly. As Gyory puts it, “We make green by being green.”

Ask any of the growing number of county business owners why they’re investing in green technology products and practices, and you won’t hear much about melting polar ice caps, carbon footprints, or the endangered yellow-striped wangalooey swimming forlornly up and down the Hudson. You will get an earful of figures on cost savings, slashed expenses, return on investment, and money in the bank.

Like many county business owners, Gyory found that saving Mother Earth also fattens Father Profit’s bank account. He says he could have spent a quarter-million dollars less on rehabbing the building using conventional materials and power systems, but he figures his company will more than recoup the added cost with reduced operating expenses in the years to come. “People assume—wrongly—that going green isn’t going to make sense economically.” Gyory says. “It’s just the opposite.”

How much will Gyory save? For starters, his Con Edison bill was slashed more than half by the solar panels. “Given current rates, that will be a three- to four-year payout on a twenty-year system,” he says. More savings will come from lower natural gas bills due to the insulation and even less electricity being consumed by lighting that is now controlled by motion sensors.

The 82-kilowatt (kW) solar power setup, consisting of 405 Suntech panels installed by Mercury Solar Systems, carried a price tag of $475,000, but 30 percent of the cost was covered by a federal tax credit, and the New York State Energy Research and Development Authority (NYSERDA) picked up another 30 percent, so Gyory and Kasman were out only 40 percent, or $190,000. “To a great extent, these things only work when there is subsidy money involved,” Gyory admits.

But the point is, they do work—environmentally and economically. And you don’t need to build something new from the ground up to take advantage of the possibilities. As Casey Egan, owner of Emma’s Ale House in White Plains, puts it, “There’s a green alternative to everything from your light bulbs to your computers. And when you’re buying new equipment, it’s a no-brainer to choose green.”

When Egan opened his casual restaurant on Gedney Way two years ago, he didn’t set out to operate a green business. By the time he finished, though, he’d installed enough energy-efficient appliances and had adopted so many resource-conserving procedures and products that the Green Restaurant Association named Emma’s a Certified Green Restaurant—one of only two in the county (Port Chester’s Tarry Lodge is the other) to meet standards for water efficiency, waste reduction, sustainable furnishings and food, energy conservation, handling of disposables, and pollution reduction.

Egan made one small decision after another, using sort of a “save the world one plastic bottle at a time” approach. The single most expensive item he installed was a range that cost about 15 percent more than a non-green alternative. The appliance uses fuel much more efficiently and cleanly, though. “I’ll recoup some of the additional thousand dollars on energy savings, but it will take a long time,” he says. Rather than massively upgrading the central air conditioning system, Egan installed mini-splits—through-the-wall, self-contained units that cost more, but can be used more efficiently to cool particular spaces. Energy efficiency is also crucial in a restaurant that has walk-in refrigerators, freezers, and beverage coolers. “You’re running them all the time, so they are killers,” he says. “We replaced three of the four when we moved in. On the other one, we put in a new, more efficient compressor.”

The little things count, too, according to Egan. “Why anyone would put paper hand towels in a bathroom today is beyond me. I figure it’s around twenty-five hundred dollars a year for hand towels. The electric hand dryers are about eight hundred. And there’s no mess!”
And those ubiquitous plastic bottles? “One of the biggest changes we made was in the water we serve,” Egan says. “Instead of selling bottled water, which leaves you with a bottle you have to dispose of, we installed a water dispenser that processes tap water five times and puts it out ice cold. We serve it in glass bottles that we wash and reuse. It cost about five thousand dollars, but, at the end of the year, that replaces a lot of plastic bottles.”

Illustration by Chris van Es

Emma’s Ale House

Ask for a doggie bag for what’s left of your Emma Burger (highly apropos since the place is named after Egan’s friendly yellow Lab), and you’ll get a cost-effective green alternative. “The to-go containers we have are bio-degradable after two years,” Egan explains. “We could use one that’s made out of corn starch that dissolves immediately, but they’re too expensive at this point.” He adds, “Some of it is common sense, too. We use bags made from recycled materials, but if you’re taking home a half-sandwich, why do you need a bag as well as a container? It’s just going into the trash when you get home.”

On the other end of the cost spectrum is the extensive greening undertaken by Doral Arrowwood—a two-year-old program that will take a million-dollar leap when construction begins on a new 375 kW co-generation heat and power system supplied by American DG Energy. The cogen system will use excess steam from the resort’s heating plant and convert it into electricity. “We’re going to manufacture some of our own power,” says General Manager Steve Mabus. “The technology has come a long way in the last few years.”

So has the financing of such projects. “I can’t speak too much about the arrangement, because of a confidentiality agreement,” Mabus says, “but they’re going to front the cost of the installation, and we’ll pay them back over time. That’s a creative way to become more green and still manage it from a financial standpoint.” As of this writing, the resort is waiting for town approval to start construction. Mabus says Doral looked at solar power as well, but “the system we looked at cost two-hundred fifty-thousand dollars and had a ten-year payback. But some of the equipment may have to be replaced at that point, so there wasn’t any real savings. We’re waiting for terms to get better.”

Big capital projects aren’t the only way Doral Arrowwood saves by greening its operation. The resort replaced 75 percent of its lighting with compact fluorescent bulbs and installed motion sensors to turn them off when not needed. It also replaced six of the eight water heaters with heat exchangers that provide “instant” hot water and installed an organic composter in the kitchen that liquefies waste so it goes into the sewage system rather than a landfill. “We even outfitted some of our guest service staff with uniforms made out of recycled material to see how comfortable they are,” Mabus says. “So far, so good. Now we’re checking the wear factor before we make a full commitment. There’s a lot of neat stuff out there.”

The resort has a green committee that meets once a month. Everyone is assigned different areas to research. “Our engineer is looking at capturing condensate from our dryers and recycling it,” Mabus says. “He’s also looking at other equipment that would enable us to capture waste water and turn it into gray water for use in various places.”

Another big spender on green initiatives is C.W. Brown in Armonk, whose $2 million headquarters is the only building (so far) in Westchester awaiting a Leadership in Energy and Environmental Design (LEED) Platinum Certification by the U.S. Green Building Council. The construction management company earned that honor with major renovations to the building that included a new HVAC system, use of Solatubes to harvest daylight, furniture made from recycled and FSC (Forest Stewardship Council) materials, and a 60kW solar power system.

On the smaller business front, Joseph Curto finds that operating the Yonkers Tennis Center with one eye on the bottom line and the other on the state of the environment makes good sense, even if it does cost a little more. The biggest step he took was signing up for Con Edison Solution’s Green Power, which certifies that the electricity the company uses is from 100-percent environmentally friendly sources like wind and hydropower. “Last year, we spent over a hundred thousand dollars on electricity,” Curto says. “Con Edison estimates that our use of Green Power is equivalent to taking a half million car miles off the road.” He says it’s a couple of cents per kilowatt hour more expensive. “Our bill will probably go up a fraction, but we can justify it in a lot of different ways.”

Tarry Lodge Restaurant Photo by Tomas Cyparski

Curto says he looks on greening up as a small marketing expense and adds, “We jumped on environmental initiatives as part of our mission statement to give back to our community.” They are also one of the most visible recyclers in the county. “If you walk into a classroom and see tennis balls on the chair legs, you can pretty much bet they came from us.” He also says they’ve started a program to recycle sneakers. “We’re a small company, but we do a lot of stuff for the community that adds up.”

Strauss Paper Company has invested about a half-million dollars to go green in the last five years, according to President and co-owner Stewart Strauss. The latest step the company took was to install solar panels on the roof of its warehouse at in Port Chester. The reason? “When you put all the tax benefits and other incentives into the equation, I estimate it will pay for itself in three or four years,” Strauss says. “It’s a twenty-year life-span product.”

But that’s not the only money-and-earth-saving change the $50 million company has made. In 2006, the company installed an imaging system to replace paper invoices, statements, and proof of delivery forms. “Today, that all goes out by e-mail,” Strauss says. “That saves seventy-thousand pieces of mail, not to mention postage, envelopes, and the gasoline to deliver it.” In 2008, the company replaced every light fixture in its 90,000-square-foot facility in Port Chester with high-efficiency fluorescent lighting. Strauss Paper was not just taking out standard incandescent bulbs, either. The ones used to light the warehouse were huge mercury vapor domes the size of basketballs. The next year, Strauss installed motion detectors on more than 100 lighting fixtures in the warehouse.

“There are about thirty aisles in the warehouse that we used to light all day long,” Strauss says. “Now, if nobody’s in the aisle, there are no lights on. I figure we reduced our power usage by twenty-five percent—even before we installed the solar power system.” Along the way, the company changed all the heating and air conditioning system units—including the boilers—to high-efficiency models. “We even put in a waterless urinal that we’re testing now,” Strauss adds.

Every one of those steps slashes operating expenses while making the world a little cleaner, Strauss maintains. One that doesn’t is perhaps more symbolic, but adds a nice touch of green to employee relations: staffers who buy hybrid cars get a $500 bonus from the company. Strauss reports that only one of his 100 employees have taken him up on it so far.

Investing in green technology, facilities, and practices helps reduce expenses, but it’s harder to measure the impact on the top line of the income statement. As Casey Egan put it, “It’s not like I’m doing ten percent more business simply because we’re not using bottled water. That system is costing me five-thousand dollars more, but it’s not bringing in five-thousand dollars more from customers.”
Steve Mabus of Doral Arrowwood agrees. “We pay very close attention to clients and some of our companies ask us for green policies. I don’t know how much difference it makes to them, but we’re doing it because it’s the right thing to do.”

Rich Stytzer, co-owner of catering facility Antun’s of Westchester Catering & Events in Elmsford, puts a more positive spin on it. “There are people who want to do business with companies that are green. We’re not one-hundred percent green, but we’re doing as much as we can. We monetize the investment from gaining new customers.” Antun’s investments started five years ago and have included a $50,000 HVAC system, an upgrade to most of the facility’s lighting, and installation of a $20,000 roof membrane that keeps the building both cooler in the summer and warmer in the winter. The company received financing and other assistance from NYSERDA and Public Energy Solutions, which supplied compact fluorescent bulbs at reduced cost.

“We did it for three reasons,” Stitzer says, “to help the environment, to save money, and because the clients want it.” In other words, like most county business owners, Stitzer went green not just because it’s the right thing to do, but because it’s the profitable thing to do.

How to Have a Green Beginning

Developing a business plan to save Mother Earth is easier than you think.

Compact fluorescent bulb

Going green sounds great, but where do you begin? With recycled computer paper? LED office lighting? New heating and air conditioning? Non-toxic cleaning products? No-flush toilets? Hybrid vehicles? A locavore lunchroom? Solar power? There are lots of possibilities, each of which has its own jargon, measurements (what’s a lumen, anyway, and how many do you need?), not to mention costs, timelines, tax benefits, and technical ins and outs. Besides, who has time for all that stuff when you’ve got a business to run?

“The worst thing to do is just jump in,” says Mark Karell, a consulting engineer in Mamaroneck who has spent the last 25 years providing environmental services to places like the U.N. headquarters, Jacksonville Airport, and Alberto Culver’s plant in Melrose Park, Illinois. “First determine what you want to accomplish. It also helps to decide why you’re doing this. Do you want to save money? Attract more customers?”

He says there are three general areas of concern for a business looking to lower its impact on the environment: electricity, heating fuel, and transportation. “Look at the largest component first—it’s usually energy use—and figure out how to reduce its impact on the environment,” Karell says. “Or, let’s say you have a fleet of vehicles. Is it feasible to use hybrids? Or at least better MPG [miles per gallon] vehicles? That’s when you look at the economic costs.”

You can even get some free or low-cost expert advice during the planning process. One good starting point: sign up for the Westchester Green Business Challenge, a public/private partnership between the county government and the Business Council of Westchester, whose goal is to get all 35,000+ businesses in the county to start greening their business. Dani Glaser, whose Croton-on-Hudson company, Green Team Spirit, administers the program, says it’s easy to begin. “The business performs a twenty-minute assessment of where they are using one of four scorecards, then sets a plan for greening up.”

The process begins when you register online to take the challenge (see “Where to Start Greening Up,” p. 62), where you will receive an interactive scorecard outlining up to 82 actions you can take to make your business greener. Not all strategies may apply to your particular company, but the goal is to accomplish as many as you can. As you fill in the scorecard, it links you to targeted resources.

You can also get help from Con Edison. You’d think the giant utility would want to encourage consumption of more electricity, but it’s eager to help you use less for several reasons, not the least of which is that reducing peak usage saves the utility company money. You can not only get a free energy audit but some pretty substantial financial help implementing the recommendations. Nearly 900 Westchester companies have taken Con Edison up on the offer thus far.

A Con Edison consultant will come and do a 90-minute survey, according to Esteban Vasquez, program manager for the Con Edison Small Business Direct Install Program. “We can also provide some equipment for free,” Vasquez says. “If you have incandescent bulbs, for example, we’ll provide compact fluorescents for free. If you have electric water heating, we can do some upgrades. Companies can start saving energy and money without spending a dime. There’s no further obligation, either.”

Other incentives are offered, too. “Those can amount to as much as seventy percent of the cost of some upgrades like upgrading your T-twelve lighting to T-eight, installing occupancy sensors, tuning up the air conditioning system and refrigeration.” While business owners can choose their own contractors, Con Edison has a cadre of pre-approved vendors available as well. When those are used, the business doesn’t have to cover the entire cost of the project and then file for a rebate—they’ll be billed for 30 percent, and the contractor will collect the remainder directly from the utility.

NYSERDA provides a similar service, although surveys and incentives include more than electric-power-related items, according to Westchester Coordinator Elizabeth Sellick. For small businesses using less than $25,000 worth of electricity annually, the audit costs $100. For those whose Con Edison bill runs up to $75,000, the fee is $400. “If the customer implements any of the recommended measures, NYSERDA reimburses that fee,” Sellick says. For larger users, NYSERDA does a 50/50 cost share on the study.

For smaller jobs implementing the recommendations, NYSERDA offers cash incentives for HVAC, lighting, refrigeration, and other energy using components from pre-qualified manufacturers. “All you have to do is send your application with receipts and proof of installation and NYSERDA will send you a check,” Sellick says. “For projects qualifying for more than ten thousand dollars worth of incentives, NYSERDA pays based on the number of kilowatt hours reduced by the project. The scope of work has to be pre-approved.” Both NYSERDA and the Con Edison programs are funded by a little-noticed item on your electric bill, the Systems Benefit Charge, so the business owner can’t tap both.

Even green initiatives like installation of solar power systems don’t have to be daunting—or prohibitively expensive—but check with your accountant for the full skinny on the costs and returns on investment. Jared Haines, president of Mercury Solar System, points out that solar power costs between four and six dollars per watt of electricity produced. He says a system will pay for itself in three to five years through lower power bills—savings that will then continue for the expected 25 year life of the system. Mercury Solar started in 2006 with four employees in an office in New Rochelle. The company now has eight offices in four states with more than 200 employees.

In addition to the power savings, a business can reap the benefits of a 30 percent federal tax credit (at least through 2016), and NYSERDA will fund an additional $1.75 per watt. “If you put a ten kW system in, you’ll get seventeen-thousand five-hundred dollars,” Haines explains. “It usually works out to between another twenty-five to thirty-five percent of the cost.” And here’s where your accountant will be helpful: solar power installations are also entitled to accelerated depreciation, (one vs. 30 years for 2011), which produces further tax benefits.

Still not sure you want to go the green route? Consider this point made by consultant Karell: “If you save one hundred thousand dollars in electricity costs, that’s one hundred thousand dollars added to your bottom line. How much would you have to increase your sales to make one hundred thousand dollars? If your profit margin is ten percent, you have to sell one million more! And once you change your light bulbs, increase your insulation, or whatever, you reap the savings for years to come. With energy prices constantly rising, so do your savings. Just like the environment is sustainable, these savings are sustainable.”

Where to Start Greening Up

–Green Team Spirit (914) 736-1322

–Climate Change & Environmental Services (914) 584-6720

–Green Business Challenge (look for the Green Business Directory, too)

–Con Edison Green Team (877) 870-611

–New York Energy Smart (877) 697-6278

–Mercury Solar Systems (914) 637-9700

Dave Donelson writes about business not only for 914INC. but in The Dynamic Manager’s Guides, a series of books on small-business management.