.
| Finance.. |
Going green
Lender ready to LEED the restaurant industry
| The Midtown Niki Group hopes to help restaurants and retailers get greener through its lending practices. |
We've all heard of green grocers and sustainable developers, but the Midtown Niki Group in San Diego hopes to be known as a green lender. The boutique real estate investment company has given Andrew Malk the title of director of acquisitions and sustainable finance and a mission, "to support eco-friendly retailers and restaurant owners." Malk seems perfect for the job.
Malk has both a bachelor's and master's degree in environmental science and worked for a number of environmental protection non-profits in Washington, D.C., before going back to school for an MBA and joining Midtown Niki. "I believe we must make our civilization sustainable," Malk said. "This is becoming an imperative for more than a few do-gooders. Globally, we add billions of square feet of new building area every year. If more of that were built with recycled materials and designed to be energy-efficient, it would start moving our economy in the right direction."
|
Andrew Malk heads Midtown Niki's efforts to help companies go green through its |
companies, project managers and other resources required to make their projects sustainable. And because we're committed to sustainability, we're ready to fund such projects, even if they cost more than traditional construction."
Restaurant franchises make ideal clients, Malk said, because they operate on such tight margins. "Energy prices are going up 6 percent to 8 percent a year, putting pressure on both the restaurant owner and his customers. By developing a green facility, you can see tangible energy and cost savings, plus gain in intangibles like employee recruiting and retention and productivity," he said.
Not to mention all the positive publicity. So far, only about 30 restaurants around the country have registered for LEED-certification; the first two in Florida are franchises of Pizza Fusion, based in Fort Lauderdale. Pizza Fusion, launched in 2006 by college friends Vaughan Lazar and Michael Gordon, has received far more press for its Prius delivery vehicles, its countertops made from recycled detergent bottles and its insulation made from recycled blue jeans, than for its organic pizzas.
|
Pizza Fusion is one of the few eateries registered for LEED certification. |
Last summer, Pizza Fusion became the first franchise in the country to require LEED certification for its franchisees' build-outs. Randy Romano, a franchise veteran who's become the pair's third partner said, "It took a while to put through all the paperwork, but it's already paying off, because we're attracting young people who have the same values in respect to the environment who want to be our franchisees."
"We've signed on a franchisee in Atlanta who just traded in his Porsche for a Prius," Gordon said, "and another in Pittsburgh who's giving up his Hummer. Last night we watched while our newest Florida franchisees hooked up their water heating system. We warm our water without electricity, by using the heat from our ovens. It's the coolest thing." Also cool are the chain's utensils—Spudware knives and forks made out of potato skins and cups made out of cornstarch that will biodegrade within 30 days. "I left a cup in my car," said Romano, "and in three days it looked like a pancake."
The publicity also attracted Malk, who traveled from California to meet the Pizza Fusion founders. Because the Midtown Niki model is for free-standing buildings and all Pizza Fusion's franchisees are leasing space, Malk has not arranged any of their financing. But he is talking to the partners about building a corporate store with a training kitchen that Midtown Niki will lease back to them. "Andrew definitely shares our morals and values," says Gordon.
When the cost-savings of going green is shared within the franchise community, Jerry Yudelson, a green building consultant in Tucson, said he expects more systems to follow Pizza Fusion's lead. It's expensive for a single unit to win LEED certification—total fees to the USGBC can top $3,000 and hiring a consultant like Yudelson to design and oversee the project will cost $15,000 to $30,000. But LEED is testing "a pilot portfolio program," said Justin Doak, LEED's manager for retail. Once a prototype is approved, it will be far less expensive to certify franchises that replicate the original energy efficient design. "The franchisor can do the heavy lifting," Yudelson said.
The National Restaurant Association formed the Green Task Force last May to encourage the nation's restaurants to adopt practices that are good for the environment. And according to printed reports, McDonald's, Subway and Dunkin' Donuts are all testing prototypes that can eventually be LEED-certified. Of the 294 retail projects now registered for certification inspections, only 30, including the two Pizza Fusions, are restaurants, Doak said. "But we're getting more and more inquiries from the QSR (quick service restaurant) segment."
As more building owners are opting for green designs, the cost of recycled and energy-efficient materials is falling, Malk said. "Today you might spend 5 percent more than traditional materials and take 30 percent off your utility bills. Sustainable buildings are eligible for tax breaks and expedited building permits and, if they lose their original tenants, they're easier to re-lease. If you build one, you're communicating that you're a strong corporate citizen."
LEED awards points for each sustainable feature in a building's design and operation, from being located within walking distance of public transportation or a residential neighborhood, to driving fuel-efficient vehicles, using low voltage light bulbs and buying furniture made from recycled wood. Water conservation is especially important in restaurants; all Pizza Fusion franchises recycle water from the kitchen sinks into their bathrooms. You need only 26
points to be certified, but some building elements are mandatory.
