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green living

Customers are mainly in the 20- to 35-year-old range and come from all over the world, often on work visas or to study in Toronto.Planet Traveler

When venture capitalist Tom Rand set out to turn a derelict, century-old structure into a cutting-edge green hostel in downtown Toronto, his objective was to find out how far a building could go in terms of carbon reduction. Now, one year after opening, the dream is a reality for Mr. Rand and his business partner Anthony Aarts. The building's carbon footprint is three-quarters less than it would have been without the improvements he made.

"My biggest challenge was in deciding what technologies were going to come into play to get us to that 75 per cent mark," says Mr. Rand. "I didn't know geothermal from a hole in the ground, or anything about buildings when I got into this, so it was really a fast and steep learning curve for me."

Refurbished at a total cost of about $4-million over four years, the green initiatives embedded into the hotel include geothermal heating and cooling, solar power to preheat the hot water, drain-water heat recapture, solar photo voltaic panels to produce electricity (as well as shade the rooftop bar), LED lighting throughout and good insulation.

The biggest savings come from the geothermal pipes that were drilled into a public lane beside the hostel. Instead of a furnace, the building is warmed by heat sucked out of the ground and for cooling, heat is pushed into the ground.

"Everything we used had already been invented," says Mr. Rand, who claims Planet Traveler is North America's greenest hostel. "What we've done that's new is put them all into one building. It turns out that it's not rocket science."

The three-quarters target for carbon production wasn't arbitrary. That's roughly what Mr. Rand believes we need to do globally in about a decade to seriously mitigate the major risks around climate change. But he didn't know when he started if the new hostel could achieve that target. Now that it has, the message he wants to spread to other building owners is that it saves money.

"We did all of this at a profit," says Mr. Rand. "The capital is in the building. Our loan payments for the energy retrofits are less than our energy savings, so we were cash flow positive from day one. Our payback will probably take somewhere between five and six years."

At the start, Mr. Rand saw the building as a bit of a test lab for his own venture capital fund to find out what technologies can deliver in the real estate sector. He ended up investing in (and becoming a board member for) a geothermal company called CleanEnergy Development, which installed the system at Planet Traveler.

Mr. Rand credits Canadian technology, to a large extent, for allowing them to reach their goal.

"This is Canadian engineering, solar thermal, power pipe and LED lighting," says Mr. Rand. "When you retrofit a building, that's not something that you outsource to China. That's here. And we have local companies who have built almost all of this equipment, with the exception of the cells in the solar panels."

He considers his most satisfying achievement to be the fact that people love the building. The 114-bed hostel is getting rave reviews on, a website listing 25,000 hostels in 180 countries. According to online posts, travellers praise the environmentally friendly concept, the rooftop deck, helpful staff and – Mr. Aarts' pasta.

Prices are competitive with other hostels. A dorm bunk goes for $30 a night or less than $80 for a single person in a private room, and all include a full breakfast.

Not everything is perfect – there are some customer concerns about occasionally having lukewarm water for showers and the small size of the rooms. Customers are mainly in the 20- to 35-year-old range and come from all over the world, often on work visas or to study here.

"We give guests the tour, show them the energy room and explain that we have all these different components," says Mr. Aarts, the general contractor and designer of the project, who runs the hostel day to day. "Usually we get them on the LED lighting being the same consumption as a hair dryer. About one in four really get excited about it, and about one in 10 have already read about it online before arriving."

While Mr. Rand says his own motivation comes from his commitment to move the needle on carbon – he describes himself as one of those people who stays up late at night worrying about the heat death of our planet – he reiterates that it's simply good business to use alternative energy.

"All you have to do as a building owner is see energy use, and the cost of energy use, and the risk of increased cost of energy use as core to your business," says Mr. Rand. "The final lesson here is if everybody did what I did – and they could – we'd blow past Kyoto."