Kathie Barstnar is Exec Dir of NAIOP Colorado. We'll discuss their lawsuit challenging the legality of Denver's insane and expensive new energy requirements that could end up costing more to retrofit a building than the building is worth. (Or least that's a claim they make.)
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
With all the news going on in the world, it's
probably understandable that I end up spending a fair bit
of time talking about international things and Trump and national things.
But we're koa and we want to make sure. I
want to make sure that we've got you covered here
in Colorado and Denver and all that. And so the
next thing we're going to talk about here is a
local Denver story. It's a big deal with national implications.
(00:23):
And I'll just share.
Speaker 2 (00:25):
With you.
Speaker 1 (00:27):
The title of an editorial from the Denver Gazette, and
it's addressed to a federal national attorney General, the US
Attorney General, Pam BONDI, please stop Colorado from eating itself.
And then a news article from the same publication, Colorado
commercial building owners refile lawsuit to quash energy regulations, joining.
Speaker 2 (00:48):
Us to talk about it.
Speaker 1 (00:49):
My friend Kathy Barstnar a fellow graduate of the Leadership
Program of the Rockies, and she is executive director of NAIOP,
which is a big association of commercial real estate developers.
Speaker 2 (00:59):
H Kathy, good morning, Ross.
Speaker 3 (01:02):
How are you good.
Speaker 2 (01:03):
It's good to talk to you. It's been a while.
Thanks for being here.
Speaker 1 (01:06):
We only got about six five or six minutes, so
let's jump in with what what are the Denver regulations
that you object to?
Speaker 3 (01:17):
Well, let me back up this a little bit ross.
The lawsuit not only impacts Denver's the Energized Denver program,
but it also would impact the Colorado Energy Office Regulation
twenty eight, which seeks to implement the same sort of
building performance energy efficiency standards that Denver has across the state.
(01:43):
So the lawsuit that was filed by the Apartment Association
of Metro Denver, Colora Apartment Association, Hotel Lodging Association, and
NAYOP seeks to stop both of those.
Speaker 2 (01:56):
Let me just let me just interject for one second.
Speaker 1 (01:59):
I had Will I had Will Tour who runs the
Colorado Energy Office on the show about a week and
a half ago, and he made a comment. He said, well,
we're not a regulatory agency and we don't make the
rules or make, you know, regulations. We just enforced the
regulations other people make. But now you're telling me that's
not true.
Speaker 3 (02:18):
Well, the Energy Office drafted and put Regulation twenty eight
through the Air Quality Control Commission, So I would argue
that he might.
Speaker 2 (02:31):
Be misleading a little bit. Okay, a little bit a
little bit.
Speaker 1 (02:37):
So what are the key objectionable provisions of the Denver
law that some other folks or regulation that some other
folks may be trying to apply to the whole state.
Speaker 3 (02:48):
Right. So, the problem is that Denver and the state
are trying to reduce Colorado's greenhouse gas emissions by limiting
the amount of energy that commercial buildings and which include
multi family housing. They want to limit the amount that
(03:11):
you can use. What they're trying to do is require
all of these commercial buildings to reduce their energy use intensity.
They really are wanting to eliminate, or at least Denver
is because I sat on the Energized Denver Task Force
and they made it clear that they want to eliminate
(03:31):
the use of natural gas in the city and County
of Denver. So they really want you to electrify all
of these buildings and multi family housing units. And it's
just not practical and even if we were able to
do it, it would make no impact on global greenhouse
(03:52):
gas emissions. It would make a very minimal impact on
Colorado greenhouse gas emissions. And so what we're tending in
the lawsuit is that these policies violate the Energy Policy
and Conservation Apps, which is a federal policy that is
meant to standardize energy use and equipment throughout the country.
(04:17):
And because these requirements are going to force buildings to
replace heating and plumbing and air conditioning units that are
perfectly good and working but work off natural gas, and
they want to replace them with electricity.
Speaker 1 (04:32):
Yes, So that was a question I was going to
ask you, is do the regulations apply only to new
construction or do they want you to retro fit?
Speaker 2 (04:39):
And you just said they they want you to retro fit, right.
Speaker 3 (04:43):
Yes, Yes, And that's primarily what we're talking about. Now.
We could get into the new construction discussion, but I
think that's a separate discussion about whether or not the
grid could handle a complete net zero building stock across
(05:04):
the state. Yeah, and I think we all know the
answer to that, right.
Speaker 1 (05:08):
Okay, so we got we got about two minutes left here,
so let me just dig in a little bit more
on the retrofitting. I have no idea how much it
would cost to remove all the natural gas heating for
let's say, a large apartment building or an office building
or whatever, but it wouldn't be cheap.
Speaker 2 (05:26):
And I wonder.
Speaker 1 (05:28):
Possibly two different ways to ask the same question and
It depends on the quality of the building and all this,
But I wonder what percentage of the value of a building,
the whole building that you would have to spend just
a retrofit its energy. And I wonder if in some
cases the cost of retrofitting the energy might be maybe
close to as much as the whole building is worth.
And another way to ask the question would be how
(05:49):
much would rents go up if you had to do this?
Speaker 2 (05:52):
We got about a minute go ahead, Yeah.
Speaker 3 (05:55):
Rent would absolutely go up. And honestly, Ross, I've heard
some anecdotal reports from people who own businesses or build
a commercial buildings downtown, and it would be cheaper for
them to shutter the building, i e. Eliminate all of
their tenants, move them all out, and close down the building.
(06:15):
It would be cheaper for them to do that than
to absorb the cost of the retrofit. And you have
to layer all of this over the top of the
fact that commercial buildings are already in financial trouble. Downtown
Denver Post article a couple of weeks ago that three
and ten commercial mortgages are delinquent for office buildings in Denver,
(06:38):
So even if they wanted to do all of this.
They can't possibly get the funding. We don't have the
labor to be able to install it, even if you
could get the equipment. So and as you said before,
all of this would result in higher housing costs. So
at the time when you know, nearly every elected official
(06:58):
you speak to, you know, points out the fact that
we're not affordable. You know, we have a housing crisis.
These types of programs, which really aren't going to have
a significant benefit, will do nothing but increase the cost
of housing. It'll increase the cost of lease rent or
businesses downtown who are already struggling. So I just don't
(07:23):
see how it accomplishes really what they what they want.
There's a breakdown between the aspiration and the actual implementation
of these policies.
Speaker 1 (07:33):
And there always is when it comes to so called
climate related policy.
Speaker 2 (07:36):
Kathy Barsnar is.
Speaker 1 (07:37):
The executive director of NIOPNAIOP, which is a big association
of commercial real estate developers and owners. Kathy, let's keep
in touch on this as the lawsuit progresses. I appreciate
your time, well do Thanks so much, Ross, Thank you
With all the news going on in the world, it's
probably understandable that I end up spending a fair bit
of time talking about international things and Trump and national things.
But we're koa and we want to make sure. I
want to make sure that we've got you covered here
in Colorado and Denver and all that. And so the
next thing we're going to talk about here is a
local Denver story. It's a big deal with national implications.
(00:23):
And I'll just share.
Speaker 2 (00:25):
With you.
Speaker 1 (00:27):
The title of an editorial from the Denver Gazette, and
it's addressed to a federal national attorney General, the US
Attorney General, Pam BONDI, please stop Colorado from eating itself.
And then a news article from the same publication, Colorado
commercial building owners refile lawsuit to quash energy regulations, joining.
Speaker 2 (00:48):
Us to talk about it.
Speaker 1 (00:49):
My friend Kathy Barstnar a fellow graduate of the Leadership
Program of the Rockies, and she is executive director of NAIOP,
which is a big association of commercial real estate developers.
Speaker 2 (00:59):
H Kathy, good morning, Ross.
Speaker 3 (01:02):
How are you good.
Speaker 2 (01:03):
It's good to talk to you. It's been a while.
Thanks for being here.
Speaker 1 (01:06):
We only got about six five or six minutes, so
let's jump in with what what are the Denver regulations
that you object to?
Speaker 3 (01:17):
Well, let me back up this a little bit ross.
The lawsuit not only impacts Denver's the Energized Denver program,
but it also would impact the Colorado Energy Office Regulation
twenty eight, which seeks to implement the same sort of
building performance energy efficiency standards that Denver has across the state.
(01:43):
So the lawsuit that was filed by the Apartment Association
of Metro Denver, Colora Apartment Association, Hotel Lodging Association, and
NAYOP seeks to stop both of those.
Speaker 2 (01:56):
Let me just let me just interject for one second.
Speaker 1 (01:59):
I had Will I had Will Tour who runs the
Colorado Energy Office on the show about a week and
a half ago, and he made a comment. He said, well,
we're not a regulatory agency and we don't make the
rules or make, you know, regulations. We just enforced the
regulations other people make. But now you're telling me that's
not true.
Speaker 3 (02:18):
Well, the Energy Office drafted and put Regulation twenty eight
through the Air Quality Control Commission, So I would argue
that he might.
Speaker 2 (02:31):
Be misleading a little bit. Okay, a little bit a
little bit.
Speaker 1 (02:37):
So what are the key objectionable provisions of the Denver
law that some other folks or regulation that some other
folks may be trying to apply to the whole state.
Speaker 3 (02:48):
Right. So, the problem is that Denver and the state
are trying to reduce Colorado's greenhouse gas emissions by limiting
the amount of energy that commercial buildings and which include
multi family housing. They want to limit the amount that
(03:11):
you can use. What they're trying to do is require
all of these commercial buildings to reduce their energy use intensity.
They really are wanting to eliminate, or at least Denver
is because I sat on the Energized Denver Task Force
and they made it clear that they want to eliminate
(03:31):
the use of natural gas in the city and County
of Denver. So they really want you to electrify all
of these buildings and multi family housing units. And it's
just not practical and even if we were able to
do it, it would make no impact on global greenhouse
(03:52):
gas emissions. It would make a very minimal impact on
Colorado greenhouse gas emissions. And so what we're tending in
the lawsuit is that these policies violate the Energy Policy
and Conservation Apps, which is a federal policy that is
meant to standardize energy use and equipment throughout the country.
(04:17):
And because these requirements are going to force buildings to
replace heating and plumbing and air conditioning units that are
perfectly good and working but work off natural gas, and
they want to replace them with electricity.
Speaker 1 (04:32):
Yes, So that was a question I was going to
ask you, is do the regulations apply only to new
construction or do they want you to retro fit?
Speaker 2 (04:39):
And you just said they they want you to retro fit, right.
Speaker 3 (04:43):
Yes, Yes, And that's primarily what we're talking about. Now.
We could get into the new construction discussion, but I
think that's a separate discussion about whether or not the
grid could handle a complete net zero building stock across
(05:04):
the state. Yeah, and I think we all know the
answer to that, right.
Speaker 1 (05:08):
Okay, so we got we got about two minutes left here,
so let me just dig in a little bit more
on the retrofitting. I have no idea how much it
would cost to remove all the natural gas heating for
let's say, a large apartment building or an office building
or whatever, but it wouldn't be cheap.
Speaker 2 (05:26):
And I wonder.
Speaker 1 (05:28):
Possibly two different ways to ask the same question and
It depends on the quality of the building and all this,
But I wonder what percentage of the value of a building,
the whole building that you would have to spend just
a retrofit its energy. And I wonder if in some
cases the cost of retrofitting the energy might be maybe
close to as much as the whole building is worth.
And another way to ask the question would be how
(05:49):
much would rents go up if you had to do this?
Speaker 2 (05:52):
We got about a minute go ahead, Yeah.
Speaker 3 (05:55):
Rent would absolutely go up. And honestly, Ross, I've heard
some anecdotal reports from people who own businesses or build
a commercial buildings downtown, and it would be cheaper for
them to shutter the building, i e. Eliminate all of
their tenants, move them all out, and close down the building.
(06:15):
It would be cheaper for them to do that than
to absorb the cost of the retrofit. And you have
to layer all of this over the top of the
fact that commercial buildings are already in financial trouble. Downtown
Denver Post article a couple of weeks ago that three
and ten commercial mortgages are delinquent for office buildings in Denver,
(06:38):
So even if they wanted to do all of this.
They can't possibly get the funding. We don't have the
labor to be able to install it, even if you
could get the equipment. So and as you said before,
all of this would result in higher housing costs. So
at the time when you know, nearly every elected official
(06:58):
you speak to, you know, points out the fact that
we're not affordable. You know, we have a housing crisis.
These types of programs, which really aren't going to have
a significant benefit, will do nothing but increase the cost
of housing. It'll increase the cost of lease rent or
businesses downtown who are already struggling. So I just don't
(07:23):
see how it accomplishes really what they what they want.
There's a breakdown between the aspiration and the actual implementation
of these policies.
Speaker 1 (07:33):
And there always is when it comes to so called
climate related policy.
Speaker 2 (07:36):
Kathy Barsnar is.
Speaker 1 (07:37):
The executive director of NIOPNAIOP, which is a big association
of commercial real estate developers and owners. Kathy, let's keep
in touch on this as the lawsuit progresses. I appreciate
your time, well do Thanks so much, Ross, Thank you
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