Transmittal - 11/24/2021SALT LAKE CITY CORPORATION
451 SOUTH STATE STREET, ROOM 118 WWW.SLC.GOV · WWW.SLCRDA.COM
P.O. BOX 145518, SALT LAKE CITY, UTAH 84114-5518 TEL 801-535-7240 · FAX 801-535-7245
MAYOR ERIN MENDENHALL
Executive Director DANNY WALZ
Director
REDEVELOPMENT AGENCY of SALT LAKE CITY
DATE: November 24, 2021
PREPARED BY: Lauren Parisi and Cara Lindsley, RDA Project Managers
RE: RDA Sustainable Development Policy
REQUESTED ACTION: Consider Approval of Resolution to Adopt the RDA’s Sustainable Development
Policy
POLICY ITEM: Sustainability – Citywide RDA-Funded Projects
BUDGET IMPACTS: N/A
EXECUTIVE SUMMARY: The Redevelopment Agency of Salt Lake City (“RDA”) recognizes the great
impact development has on local air quality and is currently working on a sustainable development policy to
promote smarter, more sustainable growth across the city. Since the policy was presented to the RDA Board in
early October (see Attachment C for October report), updates have been made to the policy to address comments
from the Board as well as the Redevelopment Advisory Committee (RAC). Agency staff presented the most-
updated sustainable development policy to the RAC at their November meeting. The RAC had no questions and
unanimously voted to forward on a positive recommendation of this policy to the RDA Board.
This memo will review the proposed updates to the policy including:
•Reducing the dollar amount that triggers “Threshold” sustainability requirements
•Providing flexibility for loan interest rate reductions
•Noncompliance Regulations
The updated sustainable development policy is provided as Attachment A for the Board’s review and potential
adoption.
ANALYSIS:
Policy Updates – A few reoccurring comments have been addressed in the updated policy document and
described in greater detail below.
1.Threshold Dollar Amount. At their October meeting, the RDA Board expressed interest in reducing
the dollar amount of RDA funding that would trigger compliance with the first Threshold Requirement
to earn a “Designed to Earn Energy Star” score of at least 90 and participate in the City Sustainability
Department’s Elevate Buildings programs. Staff initially set this trigger to $400,000 to exclude smaller,
potentially urgent gap financing requests for rehab projects that have an inherent level of sustainability
because they preserve an existing structure.
To capture even more RDA projects while still allowing flexibility for smaller adaptive reuse loans, the
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first Threshold Requirement has been updated to apply to all projects receiving over $200,000 from the
RDA. It should be noted that all new construction projects must meet the Threshold Requirements,
regardless of the amount of RDA funding.
The updated requirement would not apply to projects participating in the Granary District’s Adaptive
Reuse Program that offers forgivable loans up to $200,000. Obtaining an ENERGY STAR score
typically requires that an energy model be completed. This additional expense could deter an applicant
from applying for a smaller amount of RDA funding and result in fewer RDA-supported adaptive reuse
projects.
Still, the RDA will work to encourage energy efficiency in all projects by highlighting other energy
incentive programs that are available for small businesses, including:
•Rocky Mountain Power: WattSmart Incentives & Programs for Businesses provides incentives
for typical energy upgrades to equipment such as lighting, HVAC, compressed air and more. In
addition, this program offers assistance on energy analysis, project manager co-funding, and
other in-depth energy management tools.
Local business Red Iguana received $3,785 from the WattSmart program to upgrade to more
efficient LED lighting in their restaurants. This lowered their annual energy bill by $1,300 a
year. Rocky Mountain’s current LED lighting incentive will pay for 75% of a lighting upgrade
project, up to $4,000 total.
•Commercial Property Assessed Clean Energy (C-PACE) helps property owners access private
financing to install energy efficient building improvements and increase the value of their
property. Because the long-term financing can cover up to 100% of a building’s modernization
project cost and often requires no money down, C-PACE may enable property owners to make
substantial upgrades to their buildings. The project’s energy savings may outweigh the C-PACE
payments, creating positive cash flow for the property owner whose upgraded building may be
more valuable after a C-PACE project.
Salt Lake City’s convention center hotel received $54.7 million in C-PACE financing to cover
improvements such as heating and cooling systems, interior lighting and equipment, fans, heat
rejection, pumps, and water systems. As a result, the hotel's energy performance is projected to
exceed the energy code compliance level by over 20 percent. Smaller commercial projects can
apply for this funding as well.
•Energy Efficient Tax Deductions of up to $1.80 per square foot are available to owners or
designers of commercial buildings or systems that demonstrate a 50% reduction in energy usage
accomplished solely through improvements to the heating, cooling, ventilation, hot water, and
interior lighting systems. Partial deductions of up to $.60 per square foot can be taken for
qualifying measures.
•A list of additional energy incentive programs available in Utah can be found HERE.
2.Interest Rate Reductions. Both the Board and the RAC have asked staff if the proposed interest rate
reductions are sufficient to incentivize net zero projects. Reviewing hypothetical RDA projects, a 1%-
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2% additional interest rate reduction could provide significant cost savings for both small and large
loans as detailed in Attachment B. While there are premiums to participating in utility tariff programs to
meet off-site net zero standards, these costs should be partially offset by the energy efficiency of the
building. Rocky Mountain Power indicates that their Subscriber Solar program could potentially reduce
electric bills for some customers during the summer when solar block rates are less expensive.
There may also be a premium to installing on-site renewables such as solar. These costs vary from
project to project; however, there are existing incentives and energy rebates as discussed earlier to help
with these initial costs. In addition, reduced monthly energy costs could increase a project’s net
operating income, resulting in a higher debt coverage ratio and more favorable terms for the project’s
primary loan.
For the case that the policy’s standard interest rate reductions do not provide enough savings for a
project to be feasible, language has been added to the policy that allows the RDA to consider additional
reductions down to a minimum interest rate of 1%. This language aligns with the RDA’s Housing
Development Loan Program, which states:
Projects are eligible for one sustainability-related interest rate reduction, with the ability to reduce the
interest rate to a minimum of 1%. Interest rates are subject to an adjustment, of up to a 1% deviation,
based on project cash flow and debt coverage ratio calculated at time of application and underwriting.
To note, existing RDA loans will not be able to apply for this interest rate reduction retroactively.
Noncompliant Projects. A project’s energy model and building plans should confirm that the building
meets all applicable policy standards before it is built. Still, modifications can be made throughout the
construction process, especially if a certain building element is not required for life safety reasons.
There are many issues that could arise during construction that weren’t anticipated during planning. For
example, certain energy efficient appliances may get swapped out for others with different specs or a
project may not be to accommodate as much on-site solar as originally planned.
The policy previously dictated that projects had two years to achieve an ENERGY STAR score within 5
points of projected score and two and a half years to come into compliance with all other sustainability
requirements. The policy has since been updated to remove the latter time limitation of two and a half
years as terms of default will be detailed in all RDA agreements. However, because ENERGY STAR
requires at least a year’s worth of operational data to submit into the program, additional time has been
allocated for projects to achieve their projected score.
Additional Information –
1.Solar on Covered Parking. The RDA Board asked how this policy promotes the use of solar panels on
covered parking structures. The “On-Site Net Zero” requirement can be met by installing solar panels on
covered parking structures. Free standing solar structures could also be utilized. There are no real
limitations as to how the on-site requirement must be met in terms of the type of renewables or where
they are installed. However, projects must supply at least 50% of their annual energy needs with
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renewables, or, install renewable infrastructure equivalent to the square footage half of the project’s roof
space on site.
2.Cooperation with Rocky Mountain Power. Agency staff met with representatives from Rocky
Mountain Power (RMP) to discuss the proposed Sustainable Development Policy and its potential
impact on RMP’s infrastructure. RAC members and industry professionals expressed concern that there
may not be sufficient infrastructure in place to support all-electric buildings. RMP indicated that this
policy should not overburden their infrastructure’s capacity as there is not a large difference between
supplying energy to traditional buildings vs. all-electric buildings.
RMP did indicate that developers should connect with them early in the development process before a
building permit is issued. If a project has a large cumulative electrical load, a system impact study may
be required that can take 30-45 days to complete. RMP is also in the process of drafting equipment
room design standards to help developers plan for infrastructure space needs on a given site. In addition
to reviewing individual project needs, RMP goes through a new infrastructure planning process at least
once a year. They indicated it would be helpful if the City informs them of areas in the city where dense
development is planned.
3.Redevelopment Advisory Committee Recommendation. Agency staff presented the most-updated
sustainable development policy to the RAC at their November meeting. The RAC had no questions and
unanimously voted to forward on a positive recommendation of this policy to the RDA Board.
Next Steps – If adopted, the Threshold Requirements must be met by all projects that submit an application to
the RDA after the policy’s adoption that anticipate receiving a building permit on or after January 1, 2023. This
may accommodate some emergency loan requests submitted in 2022 that do not meet the requirements and
allows time for the RDA to publicize the new requirements. The Program-Specific Sustainability Measures will
become effective immediately.
PREVIOUS BOARD ACTION:
Reviewed policy draft at October 12th, 2021 Board meeting.
Attachments:
•Attachment A: RDA Board Resolution/Sustainable Development Policy
•Attachment B: Sustainability Interest Rate Reduction Scenarios
•Attachment C: October Board Memo
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REDEVELOPMENT AGENCY OF SALT LAKE CITY
RESOLUTION NO. _____________
Sustainable Development Policy
RESOLUTION OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY
OF SALT LAKE CITY ADOPTING A SUSTAINABLE DEVELOPMENT POLICY
WHEREAS, Salt Lake City adopted a joint resolution establishing renewable energy
and carbon emission reduction goals for Salt Lake City (“Joint Resolution”). The Joint
Resolution details the negative effects of climate change and commits to the reduction of
community greenhouse gas emissions by at least 50% by 2030 and at least 80% by 2040
relative to the 2009 community emissions baseline (“Sustainability Goals”).
WHEREAS, the Redevelopment Agency of Salt Lake City (“RDA”) recognizes the
great impact development has on increased greenhouse gas emissions and local air quality.
WHEREAS, in an effort to reduce emissions and help achieve the Salt Lake City’s
Sustainability Goals, the Board of Directors of the Redevelopment Agency of Salt Lake City
(“Board”) desires to formalize a policy to promote environmentally sustainable development
projects.
WHEREAS, this Sustainable Development Policy is intended to modify existing RDA
policies including the Loan Program Policy, the Tax Increment Reimbursement Program
Policy, and the Real Property Disposition Policy.
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Redevelopment
Agency of Salt Lake City shall adopt the following Sustainable Development Policy:
1.PURPOSE
The purpose of the RDA Sustainable Development Policy is to promote a built
environment that incorporates sustainable building practices and technologies to reduce
building-related greenhouse gas emissions, improve local air quality, preserve natural
resources and enhance community resiliency. As detailed below, certain RDA projects
must meet the Threshold Requirements (as detailed in Section 3) as well as the applicable
Program-Specific Sustainability Measures (as detailed in Section 4).
2.APPLICATION OF POLICY
The Threshold Requirements must be met by all projects that submit an application to the
RDA after the adoption of this policy that anticipate receiving a building permit on or after
January 1, 2023. Projects receiving a loan that meet the Threshold Requirements and obtain
a building permit before January 1, 2023 shall be eligible to earn a 1% interest rate reduction.
The Program-Specific Sustainability Measures (requirements and incentives that include
meeting Threshold Requirements) shall be effective immediately.
Attachment A: RDA Board Resolution/Sustainable Development Policy
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3. THRESHOLD REQUIREMENTS
The Threshold Requirements are as follows:
a. Enhanced Energy Performance - All new construction building projects
(including site acquisition) and building projects that receive, or are anticipated
to receive, two hundred thousand dollars ($200,000) or more in RDA funding
shall be designed to achieve a “Designed to Earn ENERGY STAR” score of 90
or higher or a Design Target Site Energy Use Intensity (EUI) value
corresponding with such a score that is generated by the Designed to Earn
ENERGY STAR tool and participate in the City Sustainability Department’s
Elevate Buildings Program. The EUI target shall be based on the Designed to
Earn ENERGY STAR tool or comparable source.1
b. Emission-Free Building Operation - In addition to meeting the Threshold
Requirement for enhanced energy performance, all new construction building
projects (including site acquisition) and building projects that receive, or are
anticipated to receive, nine hundred thousand dollars ($900,000) or more in
RDA funding shall also be designed to operate without on-site fossil fuel
combustion (i.e., propane, natural gas).2
4. PROGRAM-SPECIFIC SUSTAINABILITY MEASURES
In addition to the Threshold Requirements, Program-Specific Sustainability Measures are
required or incentivized as determined by the applicable program type listed in Table 1. If
an RDA program type is not listed, no further sustainability measures will be required
beyond the Threshold Requirements.
TABLE 1: Program-Specific Sustainability Measures
Program Type Sustainability Measures –
Requirement or Incentive as Indicated
Tax Increment Reimbursement
Program (TIR) over $500,000 • On-Site Net Zero building status is required
Land Dispositions
• Off-Site Net Zero is required
• On-Site Net Zero will receive higher
rankings for competitively marketed projects
RDA Loan Programs – applicable to
any RDA loan*
• Off-Site Net Zero will be eligible to receive
interest rate reduction of 1%
• On-Site Net Zero will be eligible to receive
interest rate reduction of 2%
* Projects are eligible for one sustainability-related interest rate reduction, with the ability to reduce the
1See ‘Designed to Earn ENERGY STAR’
program: https://www.energystar.gov/buildings/resources_topic/commercial_new_construction/achieve_designed_earn_e
nergy_star
2 Projects may utilize the All-Electric provisions of the New Building Institute’s Building Decarbonization Code or
comparable standard. See: https://newbuildings.org/resource/building-decarbonization-code/
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interest rate to a minimum of 1%. Interest rates are subject to an adjustment, of up to a 1% deviation, based
on project cash flow and debt coverage ratio calculated at time of application and underwriting.
a. Net Zero Building Standards –
Projects must meet the 2021 IECC Zero Energy Appendix standards or obtain a
third-party certification to achieve Off-Site or On-Site Net Zero status.
Examples of code-based and third-party certifications for net zero buildings are
included in Table 2. Alternative code-based or third-party certifications not
listed in Table 2 will be considered by RDA staff on a case-by-case basis.
i. Off-Site Net Zero – To be eligible to purchase RDA-controlled
property or receive an RDA loan sustainability-related interest rate
reduction, projects must meet the Threshold Requirements and source
100% of the project’s total estimated annual electricity consumption by
participating in a utility-sponsored renewable electricity program/tariff
such as the Blue Sky or Subscriber Solar programs.
ii. On-Site Net Zero – To be eligible to receive the benefits of a TIR,
purchase RDA-controlled property, or receive an RDA loan
sustainability-related interest rate reduction, projects must meet the
Threshold Requirements and supply 100% of the building’s electricity
needs with renewable energy. Renewable energy must include on-site
renewable energy that:
1) Supplies at least 50% of the project’s total estimated annual
electricity consumption (measured as kWh/year); or,
2) Utilizes at least 50% of the project’s available roof space for
on-site renewable energy generation.3
Any remaining renewable energy generation that can’t be
accommodated on site must be procured through off-site renewable
energy generation, including utility-sponsored renewable electricity
programs or tariffs.
3 “Available roof space” means roof spaces that are flat or face South, East, or West, are not shaded by trees or structures,
or not obstructed by building architectural features. This requirement can be met through installation of an equivalently
size solar array on another structure on the property (carport, ground mount, etc.). Roof space is exempt from being
considered part of the “available roof space” if it is so shaded that solar panels would produce less than 70% of th e
energy they would generate without shading. For example, if 20% of a project’s roof is so shaded that solar panels would
generate less than 70% of their intended output, then a project can still meet the requirement by installing solar on half of
the other 80% that is suitable for solar, i.e. 40% of the roof total.
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TABLE 2: Examples of Code-Based or Third-Party Certifications for Net Zero Buildings
CODE
COMPLIANCE/
CERTIFICATION
OPTIONS
OFF-SITE
NET ZERO
ON-SITE
NET ZERO
BUILDING
TYPE
INTENT
Code-Based Pathway to meet Net Zero Building Standards
2021 IECC
Appendix CC Zero
Energy Commercial
Building Provisions
(LINK)
Meets required
EUI targets
and 100% of
renewable
electricity is
supplied by
offsite sources
approved in
the 2021 IECC
Appendix CC.
Meets required
EUI targets and
includes as much
onsite solar as
defined in Section
4(a)(ii), with the
remaining
renewable
electricity
supplied by offsite
sources approved
in the 2021 IECC
Appendix CC.
Any building
subject to the
IECC
Commercial
provision
(generally 4+
stories).
This is a code-based
performance approach
to achieving net zero
energy in a project that
is determined through
compliance with the
Zero Energy
Commercial code
language rather than a
third-party
certification.
Third-Party Certification Pathways to meet Net Zero Building Standards
Passive House
(LINK)
Passive House
with 100%
offsite
renewable
energy.
Passive House
with as much
onsite solar as
defined in Section
4(a)(ii), with the
remaining
renewable
electricity
supplied by offsite
sources approved
in the 2021 IECC
Appendix CC.
Any building
type.
This approach adds a
renewable energy
requirement to a
project that uses
Passive House
strategies for ultra-low
energy use.
Enterprise Green
Communities
Certification Plus
2020 (LINK)
EGC
Standards 5.4
(Zero Energy)
with offsite
and 5.5b (Zero
Carbon).
EGC Standards
5.4 (Zero Energy)
and 5.5b (Zero
Carbon). Projects
must include as
much onsite solar
as defined in
Section 4(a)(ii),
with the
remaining
renewable
electricity
supplied by offsite
sources approved
Any affordable
housing project.
Enterprise Green
Communities is a state-
and nationally-
recognized affordable
housing sustainability
certification. The 2020
criteria awards
increased points for
projects that achieve
energy-related
innovations, including
Zero Energy status
(100% on or off-site)
and Zero Carbon status
5
in the 2021 IECC
Appendix CC.
(all-electric).
Enterprise Green
Communities is
recognized in the Utah
Housing Corporation’s
Qualified Allocation
Plan for Low Income
Housing Tax Credits.
U.S. Green Building
Council LEED Zero
(LINK)
LEED Zero
Energy
certification
(building with
100% of
source energy
supplied or
offset with
renewable
energy over
12-month
period
(LEED Zero
Carbon also
qualifies).
LEED Zero
Energy
certification
(building with
100% of source
energy supplied or
offset with
renewable energy
over 12-month
period – with at
least 50% of
renewable energy
being located on-
site)
(LEED Zero
Carbon also
qualifies).
Any building
with LEED
New
Construction
(NC) or
Existing
Buildings (EB)
certification, or
seeking these
certifications.
This approach utilizes
the U.S. Green
Building Council’s
LEED Zero program
for projects already
certified as LEED or
seeking LEED
certification.
International Living
Future Institute
N/A Zero Energy
certification.
(LINK)
Any building
type.
This standard requires
the elimination of on-
site combustion and
100% on-site
renewable energy.
Zero Carbon
certification.
(LINK)
Any building
type.
This standard allows
off-site renewable
energy in certain
situations.
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5. COMPLIANCE
All projects must verify compliance with Threshold Requirements and Program-
Specific Sustainability Measures as follows:
a. Threshold Requirements
i. Enhanced Energy Performance – A Statement of Energy Design
Intent (SEDI)4 verifying that the project has been designed to meet a
Designed to Earn ENERGY STAR target of 90 or higher or a
corresponding EUI target must be submitted to the RDA. A year after
the building has received a certificate of occupancy (C of O), the
project must submit building operations data on an annual basis to the
RDA and the City’s Sustainability Department similar to the
benchmark reporting requirements in the City Sustainability
Department’s Elevate Buildings Program5. If the project does not meet
an ENERGY STAR score within five (5) points of what was originally
projected within two (2) years of receiving C of O, building updates
will be required aimed at achieving the target score.
ii. Emission-Free Building Operation – A letter from a licensed
architect or engineer verifying that the project has been designed and
constructed without on-site fossil fuel combustion and describing the
energy system(s) utilized must be submitted to the RDA.
b. Program-Specific Sustainability Measures
i. Net Zero Building Standards – Projects must meet the 2021 IECC
Zero Energy Appendix standards (verified in a letter by a licensed
architect or engineer) or obtain a third-party certification to submit to
the RDA as indicated within Table 2. Where certifications are not
issued until after the building has been put into service, a letter from a
licensed architect or engineer verifying that the building has been
designed to meet certification standards and noting the anticipated
certification date must be submitted to the RDA. The completed
certification checklist must also be attached to the letter.
4 An ENERGY STAR Statement of Energy Design Intent (SEDI) document includes the Design Target ENERGY STAR
Score and the Design Target Site EUI. Energy modeling will be necessary to estimate the annual energy consumption of
a building, which is required to input into the ENERGY STAR Portfolio Manager and complete the SEDI. An example
SEDI document can be accessed
here: https://www.energystar.gov/sites/default/files/tools/SEDI_Sample%281%29.pdf?f4b0-a781
5 See ‘Elevate Buildings’ Program: https://www.slc.gov/sustainability/elevate-buildings/
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ii. Off-Site Net Zero – An energy bill verifying participation in an
available renewable energy utility tariff program must be submitted to
the RDA within three (3) months of receiving a C of O.
iii. On-Site Net Zero – A letter from a certified renewable energy system
designer illustrating that the project meets at least one of the On-Site Net
Zero renewable energy generation requirements (from 4(a)(ii)) must be
submitted for RDA approval.
c. Noncompliance – Projects that are not in compliance with applicable
Threshold Requirements and Project-Specific Sustainability Measures may
either be in default, be required to repay the RDA incentive that was granted,
or provide any other remedy as detailed in the specific terms of the agreement
between the RDA and the beneficiary (including, but not limited to, damages).
6. EXCEPTIONS
The RDA Board of Directors, by a majority vote of those present, may waive
requirements or make exceptions to the foregoing criteria and procedures with a finding
that the RDA’s mission and values will be furthered by such waiver or exception. RDA
staff will prepare a written recommendation and statement regarding the waiver or
exception. The statement will be placed in the project file.
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Passed by the Board of Directors of the Redevelopment Agency of Salt Lake City, this _______
day of ________________, 202 .
________________________________
Ana Valdemoros, Chair
Approved as to form: __________________________________
Salt Lake City Attorney’s Office
Allison Parks
Date:____________________________
The Executive Director:
____ does not request reconsideration
____ requests reconsideration at the next regular Agency meeting.
________________________________
Erin Mendenhall, Executive Director
Attest:
________________________
City Recorder
11/22/2021
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Attachment B: Sustainability Interest Rate Reduction Scenarios
The following scenarios illustrate the amount of interest a project could save over the life of an RDA loan by implementing
off-site and on-site net zero sustainability measures. These projections are approximate.
1.Hotel Project:
a.Total loan amount – $7,000,000
b.Loan terms – 12-year term; 20-year amortization; 2.39% interest
2.Local Distillery Project:
a.Total loan amount – $850,000
b.Loan terms – 10-year term; 20-year amortization; 2.87% interest
3.Community Garden Project:
a.Total loan amount – $250,000
b.Loan terms – 30-year term; cash flow loan; 2.5% interest
*Assumes savings are applied as cash flow payments to the RDA.
Original Loan (2.39%) Off-Site Net Zero
(-1% =1.39%)
On-Site Net Zero
(-2% = lowest 1%)
Total Interest Paid ($) $1,476,236 $842,878 $601,828
Savings ($) n/a $633,358 $874,408
Original Loan (2.87%) Off-Site Net Zero
(-1% =1.87%)
On-Site Net Zero
(-2% = lowest 1%)
Total Interest Paid ($) $191,927 $123,244 $65,012
Savings ($) n/a $68,683 $125,915
Original Loan (2.5%) Off-Site Net Zero
(-1% =1.5%)
On-Site Net Zero
(-2% = lowest 1%)
Total Interest Paid ($) $100,233 $49,885 $30,642
Savings ($) n/a $50,348 $69,591
Loan Paid Off* 26 years 23 years 22 years
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4. Affordable Housing Project:
a. Total loan amount – $1,000,000
b. Loan terms – 30-year term; 30-year amortization; 2.25% interest
Original Loan (2.25%) Off-Site Net Zero
(-1% =1.25%)
On-Site Net Zero
(-2% = lowest 1%)
Total Interest Paid ($) $371,890 $198,505 $157,149
Savings ($) n/a $173,385 $214,741
SALT LAKE CITY CORPORATION
451 SOUTH STATE STREET, ROOM 118 WWW.SLC.GOV · WWW.SLCRDA.COM
P.O. BOX 145518, SALT LAKE CITY, UTAH 84114-5518 TEL 801-535-7240 · FAX 801-535-7245
MAYOR ERIN MENDENHALL
Executive Director DANNY WALZ
Director
REDEVELOPMENT AGENCY of SALT LAKE CITY
DATE: September 24, 2021
PREPARED BY: Lauren Parisi and Cara Lindsley, RDA Project Managers
RE: RDA Sustainable Development Policy
REQUESTED ACTION: Briefing and discussion on Agency’s draft Sustainable Development Policy
POLICY ITEM: N/A
BUDGET IMPACTS: N/A
EXECUTIVE SUMMARY: The Redevelopment Agency of Salt Lake City (“RDA”) recognizes the great
impact development has on local air quality and is working to promote smarter, more sustainable growth across
the city and to become a model for the state. Under the current RDA loan program, projects that meet certain
sustainable building certification standards receive a .5% interest rate reduction. However, achieving City and
the RDA climate goals will require a sustainable development policy that applies to almost all RDA-funded
projects.
The RDA’s proposed sustainable development policy can be broken down into two categories:
1)Threshold Sustainability Measures that are required of all new-construction projects and other
building projects that receive a certain level of RDA funding; and,
2)RDA Program-Specific Sustainability Measures that are either required or are used to further
incentivize sustainability in projects participating in RDA loan programs, the tax increment
reimbursement program and RDA land dispositions.
Threshold Sustainability Measures require sustainable building design and efficient energy systems for projects
receiving over $400,000 in RDA funding, and emission-free operation for projects receiving over $900,000 in
RDA funding. Program-Specific Sustainability Measures require 100% of a building’s electricity to be supplied
with off-site or on-site renewable energy, depending on the RDA program, and net-zero certification.
The attached draft sustainable development policy is proposed for the RDA Board of Director’s (“Board”)
review and initial feedback. RDA staff will incorporate the information contained herein along with feedback
from the Board into a formal policy resolution for consideration at a future date.
ANALYSIS: According to 2020 U.S. Census data, Utah was the fastest-growing state in the nation from 2010
to 2020, at 18.4%. Much like the State, Salt Lake City is also experiencing record growth. This growth comes at
a time when our community continues to face air quality challenges and the detrimental impacts of climate
change including increased temperatures, changes in water systems and extreme weather events. In Salt Lake
City, electricity consumption accounts for 50.4% of greenhouse gas emissions and natural gas combustion
accounts for 26.3%. (Climate Positive 2040, 2016). Both sources are primarily consumed in buildings and
together account for three quarters of all greenhouse emissions within the city – much more than what is
produced by the transportation sector. Electricity, and building energy in general, offer the greatest opportunity
for emissions reductions (SLC Community Carbon Footprint, 2010).
Attachment C: October RDA Board Memo
2
The RDA recognizes the great impact development has on local air
quality and is working to promote smarter, more sustainable growth
across the city and become a model for the state. Under the current
RDA loan program, projects that meet certain sustainable
development certification standards receive a .5% interest rate
reduction; however, in order to meet both the City’s and the RDA’s
climate goals, sustainable development strategies must be considered
for all RDA-funded projects. Similar organizations to the RDA across
the U.S. require sustainable technology to be incorporated in all
government-funded projects. Thus, the attached draft sustainable
development policy has been proposed for the Board’s review.
City Goals – In 2016, the City passed a Mayor-Council joint resolution (updated in 2019) to achieve the
following sustainability goals derived from the Climate Positive 2040 plan:
1. 100 X 2030: 100% Renewable Energy for Community Electricity Supply by 2030
2. 80 X 2040: 80% Reduction in Community Greenhouse Gas Emissions by 2040, Compared to 2009
Baseline (Goal includes at least 50% reduction in community footprint by 2030)
RDA Target – Additionally, as directed by Mayor Mendenhall, the RDA will target:
• Emission-Free Buildings by 2023
This means that the RDA will support the development and rehabilitation of buildings without on-site fossil fuel
combustion (i.e. propane, natural gas) that receive a building permit from 2023 onwards.
With these goals in mind, the overarching purpose of the RDA’s sustainable development policy, once adopted,
is to promote a built environment that incorporates sustainable building practices and technologies to reduce
building-related greenhouse gas emissions, improve local air quality, preserve natural resources and enhance
community resiliency.
Proposed Sustainable Development Policy – The RDA’s sustainable development policy can be broken down
into two categories, including 1) Threshold Sustainability Measures that are required of all new construction
projects and other building projects that receive a certain level of RDA funding, and 2) RDA Program-Specific
Sustainability Measures that are either required or are used to further incentivize sustainability in projects
participating in RDA loan programs, the tax increment reimbursement program, and RDA-owned land
dispositions.
To allow time for developers to meet all threshold requirements, this policy will apply to all projects receiving a
building permit on or after January 1, 2023, except for projects that receive a tax increment reimbursement
agreement for which this policy becomes effective immediately. Projects seeking an RDA loan that meet the
Threshold Sustainability Measures before January 1, 2023, shall earn a 1% interest rate reduction.
1. Threshold Sustainability Measures:
Enhanced Energy Performance –
• Applicable Projects – All new construction projects and building projects that receive over
$400,000 in RDA funds, no matter the RDA program.
• Requirement – Projects shall be designed to achieve a “Designed to Earn ENERGY STAR”
score of 90 and above or a Design Target Site EUI value corresponding with such a score that
is generated by the Designed to Earn ENERGY STAR tool. Once the building is operating,
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projects shall also participate in Salt Lake City Sustainability’s Elevate Buildings program and
submit building operation data to the city on an annual basis.
• Goal of Standard – This first “level” of the threshold sustainability measures has been proposed
to encourage RDA-funded projects to take a step towards more sustainable building design
through the incorporation of efficient energy systems (i.e. heating, cooling, lighting, appliances,
insulation, etc.). An ENERGY STAR score and energy use intensity (EUI) are well-known
industry metrics that applicants can calculate for free with the Portfolio Manager tool from
ENERGY STAR; however, some energy modeling will be required to input into the Portfolio
Manager tool. A building with an ENERGY STAR score of 75 and above indicates that it
performs in the top 25% of similar building types nationwide, which some building codes
require. Certain building types may not qualify for the “Designed to Earn ENERGY STAR,”
which is why achieving a similar EUI target is an alternative option.
The City Sustainability Department’s Elevate Buildings program will be utilized to ensure RDA
projects maintain projected ENERGY STAR scores. This program is currently in place and
requires all qualifying commercial buildings 25,000 square feet and larger to submit ENERGY
STAR data to the city on an annual basis. Per the RDA’s proposed sustainable development
policy, if the project does not meet an ENERGY STAR score within five (5) points of what was
originally projected within two years of receiving a certificate of occupancy, building updates
will be required aimed at achieving the target score.
Emission-Free Building Operation –
• Applicable Projects – All new construction projects and building projects that receive over
$900,000 in RDA funds, no matter the RDA program.
• Requirement – Projects shall be designed to operate without on-site fossil fuel combustion (i.e.,
propane, natural gas).
• Goal of Standard – This second “level” of the threshold sustainability measures aims to hit the
RDA’s target of supporting emission-free buildings by 2023 and achieve the City’s overarching
climate goals of increasing the renewable energy supply and reducing greenhouse gas
emissions. This measure would eliminate the use of natural gas in buildings for heating and
cooking. Natural gas contributes to 26.3% of Salt Lake City’s greenhouse gas emissions
(Climate Positive 2040, 2016). While the majority of today’s electricity supply is generated
from fossil fuels, the intent of building electrification is to prepare buildings for carbon-free
operation when the electricity supply is entirely powered by renewable sources such as solar,
wind and geothermal energy.
2. RDA Program Specific Sustainability Measures: To be eligible for certain RDA incentive programs
or to receive larger incentives, “Off-Site Renewables” or “On-Site Renewables” will be required in
addition to the Threshold Sustainability Measures as follows:
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RDA Program Sustainability Measures –
Requirement or Incentive as Indicated
Tax Increment Reimbursement
Program – applicable to tax increment
reimbursements over $500,000
• On-Site Net Zero building status is required
Land Dispositions
• Off-Site Net Zero is required
• On-Site Net Zero will receive higher rankings
for competitively marketed land dispositions
RDA Loan Programs – applicable to
any RDA loan
• Off-Site Net Zero will receive interest rate
reduction of 1%
• On-Site Net Zero will receive interest rate
reduction of 2%
Off-Site Net Zero – Because the electrical grid is not sourced by 100% renewable energy, this measure
encourages supporting or paying a premium to utilize off-site renewable sources. To meet this measure,
projects must follow the 2021 IECC Zero Energy Appendix standards or obtain a qualifying
certification for “off-site net zero” and participate in available renewable energy utility programs/tariffs.
Energy utility programs are sometimes referred to as “green tariffs.” A green tariff is a price structure,
or an electricity rate, offered by a local utility that allows eligible customers to source up to 100% of
their electricity from renewable resources. Here in Utah, the Blue Sky and Subscriber Solar green tariffs
are in place, but more programs are on the horizon, including Utah 100 Communities that aims to
increase renewable energy infrastructure for localities to utilize.
On-Site Net Zero – This measure promotes the incorporation of on-site renewable energy (such as on-
site solar) in RDA projects that receive larger incentives and requires that projects follow the 2021
IECC Zero Energy Appendix standards or obtain a qualifying certification for “on-site net zero” and
supply 100% of the building’s electricity with renewable energy. Renewable energy must include on-
site renewable energy sufficient to:
1) Supply at least 50% of the project’s total estimated annual electricity consumption; or,
2) Utilize at least 50% of the project’s available roof space for on-site renewable energy
generation.
RDA staff acknowledges that some properties may not have the capacity to supply 100% on-site
renewable energy due to lot constraints, lack of sunlight, etc. Thus, any remaining renewable energy
generation that can't be accommodated on-site must be procured through off-site renewable energy
generation, including utility-sponsored renewable electricity programs or tariffs. To support the
implementation of both RDA program measures, a limited amount of funding may be made available
for certification fees during the first year that this policy is in place.
Compliance – To meet the Threshold Enhanced Energy Performance requirement, a Statement of Energy
Design Intent shall be submitted verifying an ENERGY STAR score of 90 and above. To meet the Threshold
Emission-Free Building Operation standard, a letter shall be submitted from a licensed architect or engineer
verifying the absence of on-site fossil fuel combustion and detailing the proposed energy system to be utilized.
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To meet the Off-Site and On-Site Net Zero requirements, a letter shall be submitted from a licensed architect or
engineer verifying compliance with the 2021 IECC Zero Energy Appendix standards or the project must obtain
one of the following third-party certifications as listed within Table 2 of the policy document: Passive House;
Enterprise Green Communities; aU.S. Green Building Council LEED Zero; or International Living Future
Institute. If participating in a utility program, the RDA will require that projects submit an energy bill from the
utility sponsor verifying participation within three months of receiving a certificate of occupancy.
Projects that are not in compliance with applicable RDA Sustainability Measures within 30 months of receiving
a certificate of occupancy may either default on the RDA agreements and/or be required to pay back all or a
portion of the RDA incentive that was granted. Terms of default shall be specified in associated contracts
between the RDA and beneficiary.
Exceptions – The RDA Board of Directors, by a majority vote of those present, may waive requirements or
make exceptions to the foregoing criteria and procedures with a finding that the RDA’s mission and values will
be furthered by such waiver or exception.
Community Engagement – Three roundtable discussions were held with local stakeholders on May 25th and
26th. Participating stakeholders had backgrounds that included engineering, architecture, development, finance,
construction management, and affordable housing. Notes and key takeaways from these meetings are provided
in Attachment B. The most substantive change to the draft policy resulting from stakeholder engagement was to
eliminate the “On-Site Net Zero” requirement or participation in utility tariffs as a threshold, and instead, make
it an optional RDA program requirement.
Redevelopment Advisory Committee (“RAC”) Review – RDA staff reviewed the proposed policy with the
RAC during their August meeting. The policy was relatively well-received, but multiple members expressed
concern regarding the lack of existing infrastructure to support all-electric buildings. They noted there can be lot
constraints when working to accommodate new electrical infrastructure on a site, which has been occurring
more often as electric vehicle (EV) chargers are being incorporated into projects. One RAC member suggested
the city be more flexible in terms of where electrical boxes can be located. In response to these concerns, RDA
staff sent Rocky Mountain Power the draft policy for review and has requested to meet with a representative to
explore ways the RDA can support changes that would facilitate the implementation of new city sustainable
development requirements.
The RAC was also in favor of applying the sustainable development requirements to all affordable housing
projects as a matter of environmental justice. All Salt Lake City residents should benefit from the positive
environmental impact of this policy, not just those within market rate housing. Due to increased building
efficiency, residents should see a decrease in their monthly energy bills. The RAC also asked what could be
done to promote other environmental benefits such as green space, water conservation, walkability and more.
The RDA’s livability benchmarks do work to promote these public benefits, but more could be done in
collaboration with other city departments. RDA staff will return to the RAC to ask for a formal recommendation
in November.
Policy Questions –
1.The Threshold Sustainability Measures (‘a’ & ‘b’) will apply to both new construction and
rehabilitation projects. Because there is some inherent sustainability associated with rehabilitation
projects, should these requirements only apply to new construction?
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2.Should funding be made available to supplement energy modeling costs and sustainable
certification fees to facilitate compliance with this policy?
3.Because sustainable building technology is ever evolving, should the RDA be required to review
and update the policy every 2-3 years?
PREVIOUS BOARD ACTION: None.
ATTACHMENTS:
A.RDA Sustainable Development Policy Draft
B.Notes from Professional Roundtable Discussions