Henderson, Nev.–When it comes to protecting the environment for future generations, everybody wants to be on board. But when it comes to building your hotel so it consumes less energy and emits less waste, every hotel developer faces one factor in particular: cost.

Developers always have been challenged to present lenders with the most cost-efficient construction plans in order to receive funding. Building a sustainable hotel does cost more upfront. But, in March at the UNLV/JMBM Hotel Developers Conference at the Green Valley Ranch in Las Vegas, speakers made it clear that in a few years, the cost of not being green will be far more significant.

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"I certainly take a business approach to what the investments are going to be in the property, but it's difficult to determine what the calculation is going to be in the near future," said Phil Sherburne, president of Sherburne Development Group, which currently is constructing the Bardessono Inn and Spa, a 62-room luxury property in Napa Valley, Calif. "If you have a carbon tax, the return on investment of some energy projects starts to really change. So I've opted to make decisions that incorporate the potential that the cost of not being green is going to be higher in the future than it is today."

Many green developers echoed that statement. Several speakers gave the nearly 200 developers in attendance something they haven't seen yet: real figures on what it costs to build a green property.

"Over time, the issue of building green is becoming cost neutral," said Lance Williams, executive director of the U.S. Green Building Council's Los Angeles chapter.

He outlined what percent of total construction costs USGBC has determined it takes to build a Leadership in Energy and Environmental Design-certified building, depending on which level of certification you strive to attain:

Platinum: 6.8 percent above cost

Gold: 2.2 percent above cost

Silver: 1.9 percent above cost

Certified: .66 percent above cost

Gary Golla of SERA Architects described using the LEED Green Building Rating System to refurbish a building in Portland, Ore., that will open this summer as The Nines, a 331-room property in The Luxury Collection, a Starwood Hotels and Resorts Worldwide brand.

"This is how you want to look at LEED when you use it for a building," Golla said. "You want to use it as a framework to make the best building that works for you and your product."

Golla outlined 35 points targeted throughout construction that would earn them LEED credits, but also reduce utility costs and earn the developer tax incentives.

"We're looking at more than $100,000 a year savings in energy costs with a 28-percent reduction in consumption," he said. "In construction and waste management, we were able to divert from landfills over 22 million pounds of debris."

In the end, developer Sage Hospitality paid nearly $530,000 extra to purchase products and fixtures that would reduce energy and water consumption, and another $200,000 for LEED certification paperwork. That represented about 1.2 percent of total construction costs.

Golla described some incentives that could offset those costs.

"This is also key to making these projects work: understanding the incentives that are available, understanding them early in your project, and designing your project to maximize those incentives," he said.

After incentives (Oregon has more available than most states), Golla said The Nines cost a premium of about $150,000 to be LEED certified, which represented .25 percent of construction costs.

"If we played that out against the utility savings, it pays back in 19 months and, after 10 years, the building will save almost a million dollars in utility costs," Golla said. "Being in Portland, we were able to get away with a lot less premiums than most buildings were, however, this does support this 1 to 3 percent [premium to build a sustainable hotel] that's often talked about."

Still, presenting uncertain long-term savings and returns on investment may not persuade a lender to provide those extra upfront costs, said Tom Corcoran, chairman of the board for FelCor Lodging Trust.

Even the greenest of hotel owners and operators see the dilemma.

"What happens frequently is that developers build a hotel and flip it before or right after it's finished, so the real value of a green building does not come to fruition until the building has had one, two or three years of operations under its belt," said Stefan Mühle, g.m. of the Orchard Garden Hotel in San Francisco. "As long as buildings are being turned as frequently as they are, it's very difficult for short-term investors to realize the gains that would actually materialize over time. For the long-term investors, however, it is a very, very viable solution."