We are doing an energy efficiency assessment for Brick + Mortar to identify where there may be unnecessary energy-related costs and how to reduce those costs. This assessment can be further analyzed through two economic lenses. There is the broader economic vision of the Simon Silk Mill and there is the more specific Brick + Mortar’s economic context. The Silk Mill has strategically taken advantage of an excellent opportunity by converting the historic, abandoned silk mill into an exciting location for residents and business owners to grow their lives in. It perfectly encompasses Easton’s community and their growing image for an intertwined art and historic faction. Similar to the Karl Stirner Arts Trail, the Silk Mill is located just outside Easton’s Centre Square, alongside the distinguished Bushkill Creek, and amidst the pure nature of Lehigh Valley. Modernizing a location like this is bound to excite the nearby community, and hopefully those outside of it too. An initial market study reported that the mill could potentially draw 80,000 to 120,000 visitors a year, locally and from beyond a 60-minute radius (Lippincott). Not only does this draw attention to the Simon Silk Mill, but it is also bound to drive traffic towards Centre Square and benefit the many small businesses located there.
The urban revitalization project of the Simon Silk Mill can also serve as a model for future projects in and around Easton. Effectively integrating art and industrial features to successfully drive economic prosperity is a creative, appealing initiative that should be replicated or used as inspiration for future projects in the area, albeit a costly investment. The Simon Silk Mill is a massive project made possible by Easton. The project had an estimated $23 million in costs. The city had help by being given “an interest-free $250,000 line of credit to help fund redevelopment costs” by the Northampton County Industrial Development Authority. Additionally, Historic Rehabilitation Tax Credits were given by the National Register of Historic Places. For these tax credits to be justified, the Silk Mill needs to continue to hold its place on the National Register, one of the main proponents for keeping energy inefficient features of the mill (Lehigh Valley Economic Development Corporation). The National Park Service can provide up to a 20% tax credit for the “rehabilitation of historic, income-producing buildings that are determined… to be certified historic structures,” which the Simon Silk Mill is (National Park Service). This brings our question for VM Development group and Easton to surface: are the tax credits worth the extra energy costs? This is another tradeoff that needs to be economically analyzed. A quantifiable difference needs to be calculated and presented to the necessary decision makers. This debate also sprinkles directly down to the tenants of the mill, like Brick + Mortar. So then it becomes a question that encompasses all of the contexts we analyzed for Mr. Hampton: are the building’s aesthetics worth keeping to maintain the high costs of which the landlord is impelled to charge for the sake of historical benefits?
The purpose of assessing Brick + Mortar through an economic lens is to identify potential alternatives that can result in energy-related savings. It’s first important to realize why Mr. Hampton was so keen on moving into the Simon Silk Mill. As noted before, he liked, and still likes, the space. Though something else he must have had in mind is the appeal of the mill to the public. For a growing arts community, Easton has an opportunity to explore their interests at an incredibly exciting new location. The creation of foot traffic specifically geared toward art is bound to generate revenue for Brick + Mortar. Although a seemingly perfect fit to generate revenue, energy-related expenses cut into their income.
We were provided by Brick + Mortar their 2018 September through October billing statements for heating and electricity. Combined for the gallery and studio, they paid UGI, their natural gas provider, $77.15 during the 30 day period. Last winter, from December 2017 to May 2018, they used $2,086.42 worth of gas. Their electricity provider, Met-Ed, billed Brick + Mortar $45.48 for their 29 day period from mid-September to mid-October. Brick + Mortar used 229 kilowatts during that time at a cost of roughly 6.34 cents per kilowatts. The last 12 months billed $764.02 in electricity. The total energy usage is relatively low compared to average households in Pennsylvania, though. Pennsylvania homes consume, on average, 10,402 kWh of electricity for a cost of roughly $1,350, which is almost double what Brick + Mortar paid in the last year (Household Energy). The building’s use of natural lighting is a reasonable explanation for this. Natural lighting is one of the most cost-effective investments for energy because natural lighting alone can reduce total energy use by as much as 25-30% (Gago). It’s important to note, though, Brick + Mortar doesn’t have nor need any appliances like a washing machine, a dryer, or a household refrigerator. On the other hand, Mr. Hampton does use power tools for his art.
Our most immediate and seemingly feasible alternative is seen in the lighting. Based on 2 hours per day usage with an electricity rate of 11 cents per kilowatt-hour, Brick + Mortar’s type of lighting costs $3.50, annually, whereas CFLs and LEDs cost $1.20 and $1.00, respectively, annually (Department of Energy). Something to consider for changing the light bulbs in the gallery is all forty-five fixtures would also need to be changed to accommodate the new bulbs. While each fixture costs roughly $30, the long-term cost savings would outweigh the current costs (AcuityBrands). The payback period can be calculated through an economic analysis. An alternative that would require a more extensive payback analysis is a new HVAC system. In order to conduct a payback analysis on these solutions, we would need to know the net annual cash flows generated by the investment. As we do not have this information, we are presenting the framework in which an economic payback analysis could be used in this situation. Mr. Hampton claims that the HVAC system often gets clogged from general dust and dust from his art-making tools. Not only does it cost money to get it serviced when clogged, but the clogging creates inefficient air flow. Mr. Hampton did not distinguish whether the shape of the ductwork had an impact on the dust intake. HVAC accounts for 39% of the energy used in commercial buildings and upgrading to a higher performance HVAC can result in 10% – 40% in cost savings, which makes it essential for Mr. Hampton to consider a change in his system (Graham).
The HVAC systems, along with alternative lighting and building materials, are some of the technical features that we propose to be further analyzed by doing a cost-benefit economic analysis. This information can then be presented to Mr. Hampton and VM Development Group to help balance the tradeoff between Brick + Mortar’s social needs and their energy-related costs.