Green Bond Coming to a City Near You...

In a previous post, GBLU referenced problems with a green building performance bond requirement in Washington D.C.’s Green Building Act.  So what are the apparent problems with this green performance bond? 

On August 13, 2007,  the Surety and Fidelity Association of America and the National Association of Surety Bond Producers detailed the problems with the bond requirement, pointing out that the Act “includes bond requirements that, if not clarified significantly, may make sureties reticent to issue such bonds.”  The SFAA and NASBP outlined several perceived problems with the Green Building Act’s performance bond requirement, including:

•    The Act incorrectly uses the term “performance bond” as the bond described in the Act “seems to function more in the manner of a license or compliance bond, which typically guarantees compliance with a law or code.” A performance bond typically assures one party that another party will perform the contract in accordance with its terms and conditions.

•    The Act does not designate which party is to furnish the performance bond.  The letter argues that “the building owner or developer, as the originator of the building project that retains the design professional and contractor, hold the ultimate responsibility for whether the building achieves compliance with the Act’s requirements.” 

The SFAA and NASBP’s primary concern with the Act is that contractors and performance bonds are improperly suited for guaranteeing green building compliance.  The Government of D.C. so far has continued to incorporate the green performance bond in building codes and rules used to enforce the Green Building Act.  September 2008 is going to be a big month in D.C. for green building codes and the green performance bond.  GBLU will continue to keep you apprised.

D.C. Provides Green Roof Subsidy

As part of GBLU’s monitoring of green building regulations and codes, GBLU will provide timely information regarding government green building programs that may be of interest to you.  Below is information about a Green Roof subsidy being offered by the Government of the District of Columbia, District Department of the Environment.  Please note, applications are due September 9th. 
   
D.C. plans to make major changes to the stormwater regulations in the near future that will encourage incorporation of green roof technology.  Subsidies such as this one are a good step to promote green roofs in advance of these stormwater regulation changes, which we will discuss in a later post.  Thanks to Scott Kowalski and Brian Cashmere for providing information regarding this subsidy. 


Green Roof Subsidy Grant Program 2008
Contact Info: Office 202-518-6195
email: nora@dcgreenworks.org

DDOE District Department of the Environment

The Green Roof Grant Program applies to:
• Extensive or intensive green roofs
• New roofs and roof retrofit
• Innovated green roof design
• Educational value of demonstration
• All Properties within the Combined
  Sewer Overflow Zone (CSO) are eligible
• Geographic and building use diversity
• Size of Projects with priority given to
  spaces larger then 3500 square feet
• Retrofits

The Green Roof Subsidy Program (the Program) is funded wholly, or in part by the Government of the District of Columbia, District Department of the Environment, Watershed Protection Division with the purpose of subsidizing and encouraging green roof projects in the District of Columbia within the Combined Sewer Overflow Zone.

The purpose of the project is to demonstrate greenroof technology, encourage its use and illustrate the feasibility of greenroofs to help manage storm water – to reduce excessive runoff and to improve water quality. The grants are intended to partially defray the additional costs of a greenroof. The subsidy will be in amounts that approximate up to $3.00 a square foot of the greenroof cost for each qualified building with a cap of $12,000 per property.

Applications are due September 9th.

For more information and to download an application go to www.DCGREENWORKS.org or http://web.mac.com/trees14/Site/About__Green_Roofs.html

MAIL APPLICATIONS TO DC GREENWORKS 3030 12TH STREET N.E. WASHINGTON, DC 20017
 

Chinese City Goes for Carbon Emissions Gold

As most individuals involved with green building probably know, green building is just one strategy to combat the overall global warming and carbon emissions issue.  Green building strategies, it is believed, reduce CO2 emissions, thus helping combat global warming.

Numerous cities, states, entities and individuals have pledged to become carbon neutral.  A pledge of carbon neutrality means that the entity pledges to “balance the amount of greenhouse gases it emits through industry and other human activities with the amount of greenhouse gases it eliminates.”  A recent article highlights a Chinese city, Rizhao, which has declared its intentions to become carbon neutral.  

So how exactly does a city become carbon neutral?  Not surprisingly, the push for carbon neutrality in Rizhao required changes to existing building codes and construction practices: 

“The first important measure was to popularize solar hot water," says Wang Shugang, chief of Rizhao's EPB. Nearly every building in Rizhao now supports dark arrays of tubing to heat the water, or grill-like units beneath the ubiquitous enclosed terraces of most apartments.

Obviously, not every building will voluntarily agree to install new “tubing and grill-like units” to deliver solar hot water.  Mandatory changes in construction practices to incorporate green building strategies require changes to existing building codes.  Cities throughout the United States are currently making similar, but less stringent green building changes to building codes.  

While changes to green building codes may be feasible in the United States, the second step undertaken by Rizhao seems less plausible:

The second important step, according to Wang, was to "shut down many small-size enterprises [that] are really high consumers of coal as well as use central heating. New enterprises don't need their own boilers."  Industries that shut down or moved as a result of the go-green effort include cement, papermaking and steel.

Could you imagine the constitutional challenges that would occur if a United States city attempted to re-locate high-polluting industries?  Based on these potential legal challenges, it may be some time before we see a United States city pledge carbon neutrality.

It appears that Rizhao has recognized some legal constraints on its push for carbon neutrality: 

Rizhao is the ninth biggest port in all of China, according to Fan, exporting seafood and other goods to Japan and South Korea. It's difficult to make such shipping carbon-neutral, he notes. "We can't do anything for those ships because they do not belong to us."

At some point, a United States city may pledge to become carbon neutral.  The relevant legal issues and challenges will set an important precedent for the construction industry.  

 

Aspen Codes Ahead of the Green Building Curve

As green building becomes more popular, new green building regulations continue to pop up in U.S. cities.  The Aspen Daily News recently highlighted proposed changes to the Aspen Commercial Building Codes that will incorporate very progressive green building strategies.  Among the green building strategies, the proposed codes will “require either a photovoltaic solar panel system [solar panels] or payment into a renewable energy fund to offset exterior features such as snowmelt systems and heated pools.”  The City Council’s proposed enforcement mechanism for the green building codes is particularly of interest.

In the article, Aspen’s chief building official describes the proposed building codes as “all carrot and no stick,” meaning that the codes will rely on incentives instead of penalties for enforcement.  For example, commercial projects will receive from the city “triple the credit for energy generated by the solar panels rather than through payments into the [renewable energy fund].”  Essentially, commercial projects can either invest in solar energy or pay three times as much into the solar energy fund.  Quite the incentive to invest in solar energy. 

The Aspen City Council made a major change to the proposed code by eliminating “a requirement that buildings larger than 25,000 square feet submit to an energy audit every five years, and that the results of that audit be used to apply credit or debit to a particular building’s energy target.”  Good decision, Aspen City Council.  Could you imagine trying to enforce this provision? 

Aspen’s chief building official stated that the city “can find no examples of other municipalities that have implemented a program that requires owners to pay if they do not meet efficiency targets.” I can think of one…

Welcome to Green Building Law Update

It has been a long time coming, but Green Building Law Update (“GBLU”) is finally launching today.  GBLU is a legal blog dedicated to monitoring green building trends, regulations and codes, and potential disputes and litigation. 

Green Building Law Update is based on the premise that new and unique legal issues will arise as green building becomes more commonplace.  For example, a recent AIA study recently reported a 400% increase in County Green Building Programs.  Not surprisingly, construction industry groups recently filed the first challenge in federal district court to a green building codes.  GBLU will anticipate, analyze and react  to this and other legal challenges as they emerge.  

The plan is to post a weekly update regarding green building issues but posts will become more frequent as these issues increase. GBLU would welcome any green building, construction or legal questions or comments.  With your permission, these questions may be used as a post topic. Also, GLBU invites you to take advantage of RSS feeds or email updates by signing up on the right hand side of the website under “SUBSCRIBE.”  Thanks for reading GBLU! 

Litigation Involving "Green" Nationals Stadium

   
Did you know the Washington Nationals stadium is the first LEED certified stadium built in the United States?  An interactive USA today article highlights some of the green building practices that helped the stadium obtain certification.  Among the green building practices incorporated into the stadium are green roofs, air cooled chillers and low flow faucets and toilets.  Despite successfully obtaining LEED certification, it appears the City and Owners will end up in significant litigation. 

    On July 11, the Washington Post ran an article about protracted disputes between the City and Washington Nationals' Owners over the construction of the Nationals stadium: 

"Although each side needs the other to make the stadium a success, neither appears willing to back down. The fight centers on whether the ballpark was 'substantially complete' by March 1, when the city, which oversaw the construction, was contractually obligated to hand the keys to the Lerners."

    I wonder if the dispute over "substantial completion" centers around green building features?  GBLU will keep you updated as more develops. 

A Midsummer Night's Green

On August 7, I had the pleasure of attending the USGBC National Captial Region's annual event, a Midsummer Night's Green.  This year, the event was held in the stunning World Bank Atrium.  Tyler Coffey of Sigal Construction did a great job choosing the venue and organizing the event. 

Bisnow on Business has a good summary of the award winners from the event:

Winners assembled on stage: Nationals Park won for best large project; PN Hoffman's Alta condo for best medium project; a yoga studio in Clark County, Va., for best small project; Tower Companies for member firm of the year in the client category (ie, the ones who decide about green goals) and SmithGroup in the consultant category (the ones who implement); the Pentagon library renovation for best federal project; the Chesapeake Bay Foundation headquarters in Annapolis for best legacy; and consultant Paul Tseng for individual member of the year.

Whenever I attend events like these, I am reminded just how long some people have been involved with green building.  It was quite an impressive crew. 
 
 

A Green Building Performance Bond

    When people ask me about green building lawsuits and legal issues, I usually start with Washington D.C.'s Green Building Act of 2006
  
    The Green Building Act is a very progressive Act that requires both that private and public projects comply with specific green measures.  I have written more extensively about the Act in the article "What's Your Green Construction Strategy" available here

    The biggest problem with the Green Building Act is the green performance bond requirement.  When I read this performance bond requirement I literally gasped so I am going to post portions of it word-for-word.  Please note that "section 4" details green building requirements for privately-owned construction projects: 

    (b)  On or before January 1, 2012, all applicants for construction governed by section 4
shall provide a performance bond, which shall be due and payable prior to receipt of a certificate
of occupancy.

    (g)  All or part of the performance bond shall be forfeited to the District and deposited in
the Green Building Fund if the building fails to meet the verification requirements described in
sections 3 and 4.

Did you gasp?  If not, make sure you catch my later posts detailing the potential problems with this green performance bond.
 

400% Increase in County Green Building Programs

    Green building is growing in popularity at a rapid pace.  One reason for the increased popularity are states, cities and towns that have passed laws, regulations and ordinances mandating green building.  These green building laws, regulations and ordinances will also result in an increase in green building litigation. 

    Want  evidence of the popularity of green building?  According to the AIA, counties with green building programs have increased over 400%.  Even more interesting, the AIA study only looked at 200 of the most populous counties and found that 39 of them had green building programs, while 9 more are developing green building programs. 

    With more green building programs, chances of legal challenges increase.  This litigation could be in the form of a challenge to a county's program.  Or parties may fail to comply with the green building programs, resulting in litigation with the county or the party responsible for failing to comply. 

    Among the counties recognized as having "solid best practice examples of programs" is Montgomery County, Maryland.  We will take a look at Montgomery County's program later
 

Green Building Law is coming...

    During a recent Green Building Institute Webinar, I had the pleasure of hearing Dan Murphy, Senior Vice President of Environmental Systems Design, speak about potential liability resulting from green building projects.  Dan poignantly stated what I have been thinking for awhile:

"There has been no significant green building litigation, yet.  I emphasize the word yet."  

    Dan is right.  So far, the green building world has avoided major litigation.  Some green building claims have arisen but were subsequently settled.  Major litigation has been avoided because those undertaking green building did so for non-financial reasons (e.g. the environment or goodwill).  Two factors will result in the beginning of significant green building litigation:

•    Parties undertaking green building projects for purely financial reasons will expect to make a profit
•    Cities and states will require (unwilling) parties to build green

Cities and states can require green building?  How can they do that?  More later…