Building a LEED Gold Dealership Was Neither Cheap Nor Easy For LaFontaine Automotive Group

However, the Michigan family business has been repaid, and then some, in utilities savings and favorable publicity. BY MARY WELCH

Ryan LaFontaine estimates an LEED gold certification added $1.5 million to $2 million to the price tag his family owned dealership group paid to build a store in Highland, Mich., a northern suburb of Detroit. However, he says the ROI has been remarkable, both in savings on utilities and in positioning the Cadillac-Buick-GMC dealership as an environmental destination for customers, one that “seven years later, we’re still talking about.”

Headquartered in Highland, LaFontaine Automotive Group runs 22 dealerships in 16 Michigan cities. In 2007, its Cadillac-Buick-GMC store had outgrown its 24,000-square-foot building, so the group bought 34 acres to build a new, 63,000-square-foot store.

“At the time, there was a lot of push about electric vehicles and green buildings – not just from the general public but from the manufacturers – so we thought, ‘Why not?’” recalled Ryan LaFontaine, the group’s CEO. While he described the six family members involved in the business as “environmentally aware,” none would have advocated for a green building, much less a gold-certified LEED facility, purely on philosophical grounds. A positive ROI and a “wow” factor for employees and customers would have to drive the decision.

“We wanted to show our customers that we were putting our money where our mouth was about electric cars [the Highland dealership sells the Cadillac ELR], and as we investigated and did our due diligence, we just realized that we were making a long-term investment and expected the return to be long term.”

PRICE OF GOING GREEN NOT CHEAP

Between costlier materials and the cost of applying for LEED gold status, the total construction price tag rose to around $16 million vs. $14 million to $14.5 million for a less environmentally friendly facility. Ryan LaFontaine expected to break even on the building in seven years. Instead, between utilities savings and increased sales he attributes to customer goodwill over the company’s environmental statement, it took five years “and I couldn’t buy the amount of publicity.”

LEED (leadership in energy and environmental design) certifications are awarded by the U.S. Green Building Council (USGBC) in silver, gold and platinum levels. The USGBC’s website lists a $900 initial registration fee for silver or gold applications and a project gross floor area application cost of 45 cents per square foot, among other charges. So, that would have made LaFontaine Group’s LEED application fee at least $29,250.

One of LaFontaine group’s first steps with the project (which Ryan LaFontaine recommends that other dealers replicate) was to hire an architect and contractors who work frequently on “green” projects and know the suppliers and how to meet strict LEED requirements.

NO SHORTAGE OF CHALLENGES

With this project, the foundation – which already had been poured before the decision to seek LEED gold status – had to be re-engineered to accommodate a $600,000, 64-well geothermal system that captures energy 350 feet beneath the ground and provides heat and cooling. In addition, some vendors already under contract had to change and purchase only materials that were eco-friendly, recyclable or made from recyclables themselves.

Ryan LaFontaine had to quickly educate himself about allowable building materials, heating options, bathrooms, lighting and the correct way to position doors so that hot or cold air wouldn’t escape. And, the pure scope of the project was a real challenge.

“We had to achieve a look that was comfortable while promoting green products,” he explained. In other words, in addition to green features, the new dealership had to off er convenience-oriented customers “wow” factors including a flower shop, hair salon, café, eight 42-inch flat-screen TVs, and work- stations with power outlets and Wi-Fi. Throw in Ryan LaFontaine’s cancer diagnosis in 2008 (he shaved his hair in the new showroom’s hair salon) followed by the GM bankruptcy fi ling months later, and you have the recipe for major life stress. “I got the biggest education ever in cash flow management,” he said. “I learned a ton.”

MANY CHANCES TO USE RECYCLED

Looking at the Cadillac-Buick-GMC building and grounds in more detail, its metal framing has 20 percent recycled content, the metal decking 60 per- cent, the exterior masonry 40 percent and its steel 75 percent. Even the 328 tons of construction waste material wound up saved and recycled. The dealership’s doors are made from corn stock, and its furniture is LEED-certified.

More examples: The store uses composite materials from 3M Co. as weights for wheel balancing rather than traditional lead weights. LaFontaine opted for Envirobase High Performance paint from PPG Industries for repairs rather than solvent-based paint. About 90 percent of water used in the car wash is filtered and recycled.

Plus, the company wanted to openly repair vehicles in a more environmentally friendly way. When the dealership went with a vegetable oil lubricant for its 33 in-ground hydraulic lifts, rather than caustic fluids, the 16 body shop techs were skeptical to say the least. To convince them there would be no noticeable difference in effectiveness, Ryan LaFontaine brought in a manufacturer’s rep to explain.

STAFF, PUBLIC ARE INTERESTED

He also led all of the employees (the staff rose to 300 from 90 in the old facility) on a two-hour tour so they not only would understand the rationale for the environmental features but also be able to explain and promote them to customers.

As the first LEED gold-certified dealership in the GM network, with a green education center for customers, the new store attracted a lot of attention in local and national consumer media, as well as construction, environmental and auto trade media. Interested businesses, contractors and architects have toured the dealership, as have college classes and Scout troops.

LaFontaine Group continues to blog about its green dealerships on its website and Facebook pages and post YouTube videos about its enviro-friendly construction. In recent years, the company also has opened a Chevrolet dealership in Ann Arbor/Dexter and a Volkswagen store in Dearborn, both of which are LEED silver-certified (owing to the more stringent and costly regulations vs. a few years ago). The company soon will start construction on a new Ford dealership and is exploring LEED options “as we speak,” Ryan LaFontaine said.

UTILITIES COSTS GO DOWN

While floor space has tripled in the newer building, he estimated that total heating and electric bills have remained about the same, which would mean utilities on a per-square-foot basis in turn cost only about a third of what they did. Water bills are running a little higher, he said. The company did receive a one- time state tax credit of $1.85 per square foot, which comes out to about $117,000.

In terms of lessons learned, Ryan LaFontaine said a dealership should make sure it has enough computer capacity to run light controls. When the dealership was rebuilt, LED light fixtures were too costly, he added, but that is not the case today. Wind turbines and solar panels likewise would get more consideration now.

Sales at the Cadillac-Buick-GMC dealership are running about 550 to 600 cars per month; in the old building, sales were about one-third that figure, so again it tracks the gain in square footage. Interestingly, however, Ryan LaFontaine said service business has increased at least ten-fold.

He is convinced that the sales increase has the building features to thank, as well as added capacity.

“We’re showing consumers that we stand behind what we believe in. We also created an environment where people are proud of coming to work here, which really does affect the customer experience. We’ve also distinguished ourselves from our competition.”