Sustainable Feature #1 // Xeriscaping

We will take a look into incorporating Xeriscaping into our RED Church Development.

Xeriscaping is a landscaping alternative that reduces or eliminate the need for supplemental water from irrigation. It is promoted in regions that do not have easily accessible, plentiful, or reliable supplies of fresh water, and is gaining acceptance in other areas as climate patterns shift. (Wiki) Most Xeriscape installations rely on local vegetation and plant life for the plant selection. Xeriscaping follows 7 guidelines when planning for a xeriscape. These guidelines are:

1. Planning and Design
2. Soil Improvement
3. Appropriate Plant Selection
4. Practical Turf Areas
5. Efficient Irrigation
6. Use of Mulches
7. Appropriate Maintenance

Xeriscaping is a word originally coined by a special task force of the Denver Water Department, Associated Landscape Contractors of Colorado and Colorado State University to describe landscaping with water conservation as a major objective. The derivation of the word is from the Greek "xeros," meaning dry, and landscaping-thus, xeriscaping. Source: Colorado State Extension

Costs will vary for installation of a xeriscape. Sophisticated irrigation systems may be needed and may cost more than traditional systems but the payback period may be short due to less water use, fewer maintenance requirements, and the potentially lower cost of installation. Sustainable Cities Institute

--------------

I was dependent upon obtaining a quote from a professional landscaper, but was unable to do so in a timely manner. It was assumed that the professional landscaper would share the costs of installation and any cost savings due to reduced water consumption and usage for irrigating the property. We are unable to make a professional estimate of these costs without employing the expertise of a landscaper. The Xeriscaping installation was assumed to be comparative in price or slightly more, but the savings would be drastic resulting in a positive net benefit. 

After Its All Said and Done

After reviewing the required revenues and expenses, I have found that I have had to make many assumptions in each blog in order to evaluate and "practice" planning and projecting for each target of analysis. In a real world situation, I will conclude that it is not feasible to go forward with development. The revenues from Church giving do not exceed the necessary amount to operate. This analysis lends more insight into why volunteering is so crucial with many ministries and other non-profit organizations that rely on the benevolent and philanthropic giving of its congregation and proponents. 

Facilities Management

An initial plan for Facilities Management has been put in place. A Property Management Company will be utilized for providing many of the resources and services that the tenant RED Church will need. A collaborative approach will be taken in that some of the responsibilities will be shared between the Property Management Company and the Administrator at RED Church. This has resulted in a lower negotiated Property Management Fee of 4% of the Effective Rental Income which is payable by the property owner.

• Property Management fees of 4% of the ERI payable by Property Owner
• A Property management Company is utilized for their resources, connections, and expense management and rent collection

All Expenses Listed below are paid by RED Church and coordinated with the Property Managements Companies assistance. 

• Administrator for RED Church will be $12/hr for 40 hours a week
• Handles Light Cleaning, Paperwork, and any other coordination of services and events
• Security
• $15/hr for 5 hours on Wednesday evening (5:30pm-10:30pm) and Sunday Morning (8am-1pm)
• Lawn care
• Mow, Edge, Clean Parking Lot, Gather Debris
• $125 every 2 weeks
• Janitorial and Custodial
• Bathrooms, Vacuuming and Floor Cleaning, Windows, Sanitizing
• Cleaning once a week at $150
• $600 /month

This list is not meant to exhaust all of the required expenses for operating RED Church and the Property. It is purely for the sake of Facilities Management and the expenses that can be identified from surface-level planning. 

Marketing Plan

The Marketing Plan for RED Church will include some assumptions which were not included in our initial development analysis. We will assume that the property will be leased from a property owner as opposed to the new construction and financing for RED Church. We will be leasing at a rate comparable to the surrounding area. We will also assume that the asking rent is feasible in providing the property owner with his required rate of return for development and property ownership. We will be using the 1 acre lot and 5,500 sqft building option.

Leasing Terms

• Triple Net Lease (NNN). All expenses are paid by the Lessee.
• 5 Year Fixed Lease. Afterwhich, (2) 2-year Renewal options at current contract rent.
• $13.50 sf/year of built area (5,500 sqft) paid monthly
• 3% Rent Adjustment each year

Leasing Commissions

• 4.5% per month of Lease Payment

Comparables for Rent

• Indian Restaurant - 9,667 sqft Building, Land, and Parking Lot $14.40 /sqft/yr
• Other Office and Retail uses are leasing for $10-$15 in surrounding areas. Includes building only. Not full use of entire property. 
• Source: LoopNet

The annual rate of $13.50 was chosen since the property is not in the immediate area of many of the comparables, though it is relatively close. Though, the property does retain full usage of the building and site.

Sustainable Feature #3 // Flooring

We will be looking at the possible options of flooring which include Hardwood Flooring, Bamboo Flooring and Stained Concrete. 

Intro and Descriptions

Wood Flooring is a type of flooring made from the timber of hardwoods, or of spruce or hard pine. There are two basic manufactured types of hardwood. Wood flooring comes unfinished, and once installed is sanded, then finished on site.  More modernly, the product is pre-finished in a factory.  The products that are pre-finished are often a polyurethane finish tat has added aluminium oxide, however some companies use titanium dioxide or other oxides instead. These metal oxide finishes are used in various types of floor coverings and increase the wear a hardwood floor can handle.

Bamboo Flooring is growing in availability and popularity in the United States. Although bamboo has a number of attributes that make it a suitable flooring option, one of the primary marketing points has been its perceived environmental benefits. Bamboo is a tree-like grass. There are thousands of species of bamboo that grow around the world, including some in the United States. Some species of bamboo can grow well on poor and unstable sites, which makes it a useful crop alternative. Bamboo has the potential for rapid growth: shoots have been observed to grow over 3 feet in a single day.  It is the rapid growth and natural regeneration properties of Bamboo that are primarily responsible for the "green" reputation for bamboo. The Bamboo plant grows so fast that it matures to reach market in about four years. With the exception of quick-yield trees, hardwood species take about 60 or 70 years to reach harvesting age.

Stained Concrete and Decorative Concrete flooring is a perfect example of the synergy of beauty, sustainability and economy, giving a durable, low-maintenance floor that will last the life of a home. Concrete floors, when left exposed, conserve resources by functioning both as a foundation slab and finished floor.  This eliminates the need for carpeting and other floor coverings that would eventually require replacement. In addition to conserving materials, decorative concrete flooring offers many other environmental benefits, such as contributing to better energy efficiency, improving indoor air quality, and design versatility. 

Assumptions

We will assume that the space to be analyzed for flooring will be 400 square feet, which is an estimate for (2) bathroom areas and the potential office space (pending architectural design). 

Comparative Cost

Lowes experts were employed for providing an estimate on potential flooring costs which includes the cost of installation. Note that these costs are purely an estimate based on comparable alternatives. Actual figures will vary based on the type, quality, and extent of detail. For the sake of this analysis we will go with the figures provided as they will sufficiently display the costs in comparison to one another.

Locking flooring was chosen as a comparison between Hardwood and Bamboo Flooring.

Hard Flooring / Wood Flooring

     Brand: Bruce Hardwood Floors
     Type: Gunstock
     Lifetime Warranty
     Price: $3.78 /sqft
     Boxes needed for 400sqft: 19 @ $83.16 equals approximately $1710
     Moisture Barrier: $.50 / sqft equals $200
     Installation is $1.99 per sqft
     Installation for 400 sqft = $796

          Total: $2706

Bamboo Flooring

     Brand: Natural Floors
     Type: Natural Bamboo
     25 Year Warranty
     Price: $3.28 /sqft
     Boxes Needed for 400 sqft: 24 @ $55.44 equals approximately $1440
     Moisture Barrier: $.50 / sqft equals $200
     Installation is $1.99 per sqft
     Installation for 400 sqft = $796

          Total: $2436

Stained Concrete

     Product: Quikrete Staining Kit
     Price: $99
     Installation: Approximately $250

          Total: $349

These costs represent the initial costs of product and installation.

Considerations

Some considerations that need to be made are about maintenance costs. Bamboo is still a relatively new alternative to traditional Hardwood flooring and the longevity and maintenance are not fully determined. The principle of "what you pay is what you get" is applicable. Bamboo is reported to be softer than hardwood, but is certain species are comparatively as dense as hardwood. Maintenance revolves around refinishing and protecting the floor. Preventative maintenance such as cleaning debris and mopping help to reduce the potential costs of maintenance.

Conclusions

At this point, it is purely a decision of preference by RED Church. Each product offers it's own benefits and psychological satisfaction. The Hardwood flooring is traditional and proven. The Bamboo Flooring is a more modern approach to flooring and considered environmentally sustainable. Stained flooring is the cheapest alternative and uses the least products. Whatever the choice, RED Church will end up with handsome flooring.

Sustainable Feature #2 // Photovoltaic System

Photovoltaic System

We will be analyzing the use of a Photovoltaic System for RED Church to determine of this sustainable feature will be feasible and/or desirable to include in the development process. The system analyzed will be a 5 kW system. 

What is a Photovoltaic System?

Photovoltaic Systems (PV system) use solar panels to convert sunlight into electricity. A system is made up of one or more solar panels, usually a controller or power converter, and the interconnections and mounting for the other components. A small PV system may provide energy to a single consumer, or to an isolated device like a lamp or weather instrument. Large grid connected PV systems can provide the energy needed by many customers. 

Assumptions

We are assuming a 5kW system. We are unable to assess at this time what the actual electricity usage is for the property but believe that 5kW will be a good base of implementation of this sustainable feature. The energy output from the PV system will offset the energy consumed by RED Church from traditional energy sources. 

Analysis

A cost/benefit approach will be utilized. The PV system produces a projected amount of energy each month to offset energy consumption from the "grid". The idea of the analysis is that there is an initial cost to purchase and install the system and then there is a cost savings (benefit) every month which will be the payback of the investment. 

Rates

Local rates are averaging at $.084 per kWh.

Dallas Electric Rates

Tax Credits

No tax credits are available for Churches, Religious Organizations, and other Non-Profit Organizations since no taxes are paid initially.

Initial Costs

Average costs which include the PV System plus installation are $30,000. 

Solar Power Authority

Calculate Cost Savings (Benefit)

A formula for to calculate the benefit of the PV system is provided through the "Energy Savers" website.

1) Calculate the Electricity Production from the PV System

          = (kW of PV System) * (kWh/kw-year) = kWh/year

          = (5 kW) * (1700 kWh/kW-year)

                    ***1700 kWh/kW-year is based upon geographic location and can be found on the Energy                    

                    Savers website***

          = 8,500 kWh/year

2) Calculate the Electric Bill Savings

          = (kWh/year) * (Residential Rate)

          = (8,500 kWh/year) * ($ .084 /kWh)

          = $714 Savings per year

          = $59.50 per month

Conclusion

Based on our Financial Analysis, we obtain an annualized $714 savings per year ($59.40 per month) from our grid electricity consumption. The resulting payback period is 42 years. As a matter of opinion, this is not an aggressive payback period from an investment perspective. At this point, the decision will be at the choice of RED Church to include the PV System in its initial development. 

It is notable that many Religious Organizations and Non-profits invest in sustainable features not just for their sustainable benefits such as reduced expenses, environmental conservation, etc., but for the image displayed to the public. Many organizations have found favorable treatment in receiving grants and other monetary gifts based upon the development, sustainability, and independence of the organization. Organizations receive praises when they strive to reduce their expenses through initial development efforts and inclusion of sustainable features like the currently discussed PV System. 

Sustainable Features

A determination has been made by the development committee at RED church to examine the potential utilization of 3 distinctive sustainable features. A summary will be provided with some background information for each feature as well as a Cost/Benefit Analysis for each feature. The goal is to find features that can be included in the development of the Church Property that will provide future cost savings and other tangential benefits. 

These features include:

• Xeriscaping
• A Photovoltaic System
• Wood Flooring vs Bamboo Flooring vs Stained Concrete Flooring

For the sake of this analysis we will assume that the property was feasible to develop. For each feature, other assumptions will be made. Please keep an eye out for these assumptions. Any analysis on an individual feature will be viewed as an isolated feature and measured using an incremental DCF (Discounted Cash Flow) Approach.