Baltimore City is Adopting the IgCC

This evening an ordinance will be introduced in the Baltimore City Council for the purpose of adopting the International Green Construction Code. 

The IgCC will be adopted as an overlay in conjunction with existing building, fire and related codes and will apply when a permit is required, except the new green code will not apply to: 1 or 2 family dwellings, multiple family dwellings that contain no more than 5 units, a structure that is LEED Silver certified or higher, or a structure that is ASHRAE 189.1 compliant.  

It is necessary to appreciate that Baltimore City was an early adopter when it enacted a green building law in 2007 that, prior to this legislation, remains among the most sweeping of that in any major American city. Today the building code mandates that all newly constructed, extensively modified non-residential, and specific multi-family residential buildings, that have or will have at least 10,000 square feet of gross floor area, must be LEED Silver certified or comply with the Baltimore City Green Building Standard.

So, while it was controversial in 2007 when Baltimore mandating that privately owned building must be constructed green, Bill No. 14-0413 sponsored by Councilman James B. Kraft is being warmly received as providing more and better options for developers. That is under the bill a developer may pursue LEED Silver certification, compliance with ASHRAE 189.1 or build to the IgCC. That menu of options allays the concerns of many who will now be able to determine which green building standard is most efficacious for their project.

But make no mistake, Baltimore is not greenwashing. A change in the existing code is necessitated by the USGBC’s June 1, 2015 effective for LEED v4, when projects will no longer be able to register under LEED 2009, because the Baltimore City Green Building Standard piggybacks on LEED 2009 metrics and forms. A change had to be made. Also driving the bill is an unsettled question in the existing code of the definition of what is extensively modified and subject to the green mandate. In the already built out City of Baltimore many projects have not been required to build green that will now fall within the scope of this new IgCC mandate.

The Maryland legislature enacted enabling legislation permitting local governments to adopt the IgCC in 2011 and Baltimore will be the first to do so. Although as this bill is introduced, Montgomery County, Maryland is preparing legislation to repeal its existing LEED centric mandate replacing it with the IgCC. And the State is drafting regulations to allow use of the IgCC on State capital projects, including schools, where the law had previously required LEED Silver certification.  

The first reader version of the bill repeals the current Green Building Standard replacing it with more than 25 pages of modifications to the form 2012 IgCC, and will be available later this week. Significantly for an ordinance that does not grandfather any projects, it contains an uncodified provision where the building code official may grant waivers from the new law for 180 days from its effective date in instances of good cause. Waivers may be key for projects that have been designed, but not yet permitted.

The ordinance boldly describes its purpose to “reduce the negative impacts and increase the positive impacts of the built environment on the natural environment and building occupants.” Mandatory green building has been and remains the law in Baltimore City. This bill makes the flavor of green more palatable.  

The 2015 IgCC Takes a Major Step Forward

We alerted readers of this blog in a post some days ago, All the Cool Green Building People will be in Memphis Next Week. And some thought we oversold the story. But when Britain's Prince William and Prince Harry arrived in Memphis last week for the wedding of Elizabeth “Lizzy” Wilson and Guy Pelly, we felt vindicated.

And while the paparazzi did not take our picture after we ate at Rendezvou, last Thursday night the restaurant was full of code folks having completed a day of Committee Action Hearings on the 2015 International Green Construction Code. 

More than 900 changes to the 2012 IgCC were proposed grouped and ordered in a big code effort into just over 500 “proposed changes” publicly discussed and voted on over 7 days of hearings. Changes ranged from clarifying confusing text to updating provisions to reflect the new and best science.

Much of the chatter among the hundreds of participants in the hearings was about “super habitable” buildings and questioning the efficacy of the proposed emphasis on materials, including EPDs, as being not supported by science and as straying too far from green building and any articulable benefit to building occupants.   

With hundreds in the room, many representing industry interests, the ICC update of the Green Code is a voluntary consensus based process with openness, balance of interests, due process, an appeal process, and consensus. It is not perfect and at this hearing the concrete industries united to oppose the asphalt pavement industry’s attempt to allow asphalt pavement to be used under the IgCC. The existing code all but bans asphalt pavement in favor of concrete products (i.e., the 2012 IgCC mandates heat island mitigation for not less than 50% of site hardscape with material as having a solar reflectance value of not less than 0.30, including not even allowing the use of permeable asphalt); making the IgCC an outlier as the only green standard, rating system or code to effectively ban the use of asphalt pavement.

With the hearings now concluded the Report of the Committee Action Hearings (to accept, reject or accept with modifications each IgCC change proposal) will be posted online on June 6, 2014. A public comment period will be conducted until July 16, 2014, where any member of the public may provide written comments. And this is where the new IgCC gets real.

Public Comment Hearings will be held in Ft. Lauderdale between October 1 and 7, 2014.  Voting on the final action on the public comments will be done by governmental ICC members both at the hearing and for a two week period afterward with the online cdpACCESS.

The resultant document, the 2015 IgCC will be released for use in the calendar year 2015 offering a more robust and greener Green Construction Code that will be a real alternative to LEED and Green Globes, with broader and wider adoption across the country.

The IgCC is moving forward. On June 6, with the posting online of the then current version, the public will have more than a month to comment. Don’t be left behind. Review the proposal and comment. 

Photo credit Reuters

FTC is Pursuing Green Marketing Claims

The Federal Trade Commission announced last Friday that it approved a final order settling charges that American Plastic Manufacturing, Inc. made misleading and unsubstantiated biodegradability claims for its plastic products.  The final order is the fourth resulting from a set of “green” marketing cases the FTC first announced in October, 2013.

The FTC alleged that APM advertised its plastic shopping bags on its website as biodegradable. 

Under the FTC’s final order, APM is prohibited from making biodegradability claims unless they are true and supported by competent and reliable scientific evidence.  The company must have evidence that the entire plastic product will completely decompose into elements found in nature within one year after customary disposal (defined as disposal in a landfill, incinerator, or recycling facility) before making any unqualified biodegradable claim. 

In order to make biodegradability claims, the FTC takes the position that companies must state the time required for complete biodegradation in a landfill or the time to degrade in a disposal environment near where consumers who buy the product live. Alternatively, companies may state the rate and extent of degradation in a landfill or other disposal facility accompanied by an additional disclosure that the stated rate and extent do not mean that the product will continue to decompose or decompose completely. This is a high bar.

In another FTC green marketing case, N.E.W. Plastics Corp., of Wisconsin, has agreed to stop making allegedly unsubstantiated claims about the recycled content and recyclability of two of its brands of ‘plastic lumber’. The company claimed that its “Evolve products are made from 90 percent or more recycled content”, and that its “Trimax products are made from mostly post-consumer recycled content”.

The fake plastic lumber products were used as trim and decorative moldings, including in green buildings, as well as for outdoor decking.

The proposed consent order prohibits N.E.W. from making any statements about the recycled content, post-consumer recycled content, or environmental benefits of any product or package unless they are true, not misleading, and are substantiated by competent and reliable evidence, which for some claims must be scientific evidence.

In an earlier blog post I wrote that the FTC announced in October, 2013 it would begin to ramp up enforcement of environmental claims. It is clearly doing so. The FTC does provide guidance to businesses on environmental claims, including its interpretations of federal law that at times fly in the face of the free flow of commercial information, in its Green Guides. This law firm regularly assists businesses with green claims that can be made with certainty.

The Green Guides and much more will be the subject of the educational session I am presenting tomorrow morning, Tuesday, May 6 at 8:00 a.m., with Ida Cheinman for USGBC Maryland in Baltimore. There is still time to register today for Marketing Green Building: A Competitive Advantage Without Greenwash.   

All the Cool Green Building People will be in Memphis Next Week

The process of updating the 2012 International Green Construction Code moves to Memphis next week.

The IgCC provides model code language, to be adopted by local governments as an overlay to existing codes to establish “baseline regulations for new and existing buildings related to energy conservation, water efficiency, building owner responsibilities, site impacts, building waste, and materials” and other matters. 

It is surprising to some that adoption of the IgCC across the country has not been faster and broader. It may be that mandatory green building codes are controversial and fly in the face on the tenets of green building as voluntary stewardship of the Earth; which would explain the large market share that LEED has, as a voluntary third party green building rating system. But a better explanation may be that the IgCC needs to find its place among standards, rating systems and codes; which is a balancing act between the hard left environmental extremists and the conservative engineering based code officials? And that is what is going to happen in Memphis.

The ICC’s new cloud based code development system “cdpACCESS” will be used for the first time for offsite comments to the 2015 IgCC, but the action will be on the ground in Memphis.

Proposed IgCC changes submitted have been posted online since March 10th for public review. The changes will be heard at two Committee Action Hearings conducted April 27th through May 4th in Memphis. The hearings will also be webcast live.

There are more than 900 changes proposed ranging from clarifying confusing text to updating requirements to reflect the best science evolved since 2012. By way of example, one positive change is GC 159-14, being advanced by the National Asphalt Pavement Association, to revise IgCC section 408.2.4. Pervious and Permeable Pavement, to now refer only to permeable pavements defined as having an air void of at least 15% versus the current measure of a percolation rate of 2 gallons per minute per square foot. Recent research describes how permeable pavements can not only manage stormwater but also mitigate urban heat island effect due to the high air void nature.

NAPA is also proposing GC 156-14 to delete IgCC section 408.2.1 describing site hardscape material as having a solar reflectance value of not less than 0.30. This is significant because the IgCC mandates heat island mitigation for not less than 50% of site hardscape, including that the hardscape materials meet that requirement. Given the growing body of evidence of unintended consequences associated with reflective pavements and the potential negative impact they may have on energy usage, it is time ICC members accept the code may have gotten ahead of the science and be prepared to eliminate provision.

The results of the hearing (to accept, reject or accept with modifications) each IgCC change proposal, will be posted online. A public comment period will then be conducted until July 16, 2014, where any member of the public may provide written comments.

Public Comment Hearings will be held in Ft. Lauderdale between October 1 and 7, 2014.  Voting on the final action on the public comments will be done by governmental ICC members both at the hearing and for a two week period afterward with cdpACCESS.

The resulting document, the 2015 IgCC will be released for use in the calendar year 2015 and will offer a more robust and greener Green Construction Code.

Why You Care About the Revision to OMB Circular A-119?

The U.S. Office of Management and Budget is seeking comments, no later than May 12, 2014, on proposed revisions to Circular A-119, “Federal Participation in the Development and Use of Voluntary Consensus Standards and in Conformity Assessment Activities.”

“Green Globes and LEED are voluntary, consensus based standards” according to Kevin Kampschroer, director of the office of federal high-performance green buildings at the U.S. General Services Administration, referring to the March 2012 U.S. Department of Energy, Green Building Certification System Review.  

That is, both of those green building programs are the very type of “voluntary consensus standards” that will be impacted by the revised Circular A-119.

By way of background, in the National Technology Transfer and Advancement Act of 1995, Congress provided that federal agencies “shall use technical standards that are developed or adopted by voluntary consensus standards bodies, using such technical standards means as a to carry out policy objectives or activities,” except when such use “is inconsistent with applicable law or otherwise impractical.” In response to the enactment of the 1995 law, OMB prepared Circular A-119. In light of changes that have taken place in the world of regulation, standards, and conformity assessment since the Circular was last revised in 1998, it is now being updated.

The revised Circular A-119 proposes to “maintain a strong preference for using voluntary consensus standards in Federal regulation and procurement.”

The reliance on nongovernment standards is not without controversy. That is, created by a particular interest group (arguably a small group of people with shared interests that is exclusive of most people) for a limited purpose at a specific time, be it an ISO, ANSI, ASHRAE or other, standards offer efficacy to a process or product, but can be problematic when the limits of the standard are not appreciated.  

Within the green building coterie much is made of the fact that the Green Building Initiative is an ANSI accredited Standards Developing Organization and that its Green Globes 2010 rating system for new construction was ANSI approved. The LEED ratings systems do not pursue ANSI approval and the U.S. Green Building Council points to the fact that “The Foundations of LEED” allows for a flexible and faster adoption of each new version of LEED than the ANSI Essential Requirements permit. Additionally, the ANSI process doesn't contemplate nor accommodate the participation of thousands of people in a voting consensus body. USGBC expresses pride in offering all its members the right to participate in and vote for each proposed version of LEED.

That ‘inside baseball’ debate within the green building community over the relative merits of ANSI is apparently lost on the federal government that in the 2012 DOE study (described above) determined, Green Globes 2010 and LEED 2009 both contain “the attributes of a voluntary consensus standards body defined in OMB Circular A-119: openness, balance of interest, due process, an appeal process, and consensus.”

Much of the controversy over the emergent Environmental Product Declarations is that most are based on dated European ISO standards originally conceived for other purposes.

Given that the federal government is the largest owner of buildings in North America and is also the owner of more certified green buildings than anyone else, it is of critical importance that any revision to Circular A-119 continue to allow agencies to recognize LEED and Green Globes as voluntary consensus standards.  

All are encouraged to review the Federal Register notice and comment here.  

LEED Law Intersects Miracle on 34th Street

On March 18th the Tomkins County legislature enacted a new local law providing for up to a 10 year property tax abatement for construction achieving LEED certification.

Tomkins County, New York which includes the Ithaca area, was named for Daniel Tomkins. Tompkins may be best known because he was mentioned by Kris Kringle in the 1947 film Miracle on 34th Street. The onscreen line was incorrect, however, in that Kringle said Tompkins served as Vice President of the United States under John Quincy Adams when in fact he was elected on the ticket with James Monroe in 1816 (.. but you knew that). 

In 2012, New York enacted NYCL RPT § 470 enabling local governments to exempt green buildings from real property taxes. For the exemption to apply, the local government must adopt an appropriate ordinance. The state statute describes new construction or improvements and that a project must meet the LEED, Green Globes, American National Standards Institute, or substantially equivalent green building certification standards.

Tomkins County, desiring “to encourage sustainable practices,” enacted Local Law A of 2014, effective on the date of enactment, providing for up to a 10 year property tax abatement for building achieving LEED certification (and the law does not include the other permissible green building rating systems). The amount of the exemption permitted varies by year and by the certification level achieved. LEED Silver, Gold and Platinum projects each are exempted from 100% of property taxes for 3 years and then taxes are re established with a sliding scale over 10 years, with the most generous tax incentives being awarded to Platinum building.

The maximum taxable value to be abated under the proposed law would be $100,000.

The local law was one of the ‘Top 22’ priority projects in the Cleaner Greener Southern Tier Plan, which was developed with input from community residents, businesses, and government to develop a regional sustainability plan to improve the economic and environmental health of the area.

The County is home to Cornell University, Ithaca College and Tomkins Cortland Community College, and these institutions have LEED buildings on campus, but there are no other LEED certified buildings in the Ithaca area.

A real property tax exemption is the most common local government incentive for Green building. In a recent survey of local government green building laws across 100 jurisdictions, overwhelmingly the most often granted incentive for a LEED certified building was an abatement of real property taxes.

All are invited to the symposium “Can Green Building Law Save The Planet?” at the University of Baltimore School of Law this Wednesday, March 26 at 5:30 p.m.  Susan Dorn, general counsel of the USGBC, Abbey Hopper, director of the Maryland Energy Administration, and others will be presenting with me. For details and to RSVP .

Photo 20th Century Fox 1947

You Can Participate in Updating the ICC 700 National Green Building Standard

With nearly 128 million residential housing units existed in the U.S., if green building is going to mitigate the negative impacts that human activity has on the planet, green building must include houses.

Preparations for the development of the 2015 version of the ICC 700 National Green Building Standard are underway and there are opportunities for you to participate. 

The ICC 700 applies to the design and construction of the housing units, including the residential portions of buildings. Today there are more than 30,000 ICC 700 certified homes and lots. By comparison there are over 50,000 LEED for Homes certified residential units; and in an earlier post I blogged that beginning February 1, 2014, LEED for Homes v2008 Update to be Balloted .

Home Innovation Research Labs has issued a call for Consensus Committee applications and proposed changes to the current ICC 700-2012. Home Innovation Research Labs is an affiliate of the National Association of Home Builders and will act as the secretariat of the code development process. While self titled a “standard” the ICC 700 is actually a code that can also be used as a rating system for third party verification of greenness.    

The 2015 version of the ICC 700 National Green Building Standard will be the third iteration of this residential code. It was originally developed by a Consensus Committee and approved in January 2009. The ICC 700 was updated in 2012 and approved in January 2013.

Home Innovation Labs has issued a call for members of the Consensus Committee that will be charged with developing the update, which will ideally include government officials, advocacy groups, home builders, product manufacturers, and other affected industry stakeholders in residential construction. The committee members and other interested parties will be assigned to task groups, each specializing in a different area such as energy efficiency, indoor environmental quality, or lot and site development. Those who would like to apply to serve on the Consensus Committee or a Task Group must submit their applications online by March 16, 2014.

Home Innovation also announced a call for proposed changes to the 2012 edition of the ICC 700. Individuals and groups can submit their proposed changes to the NGBS online by March 24, 2014. Task groups will review the proposed changes and develop committee proposals in early 2014.

The Consensus Committee will hold two hearings in Washington, D.C., in 2014. At the end of the second hearing, Consensus Committee members will take formal action on all proposed changes. Once the committee has completed its work, the newly updated ICC 700 will be submitted to ANSI for approval in early 2015.

In an earlier post I described how ICC 700 Residential Green Certifications Will More Than Double in 2014 creating huge opportunities. You can learn about those opportunities by participating in the new and updated ICC 700.

All are invited to the symposium “Can Green Building Law Save The Planet?” at the University of Baltimore School of Law on March 26 at 5:30 p.m.  Susan Dorn, general counsel of the USGBC, Abbey Hopper, director of the Maryland Energy Administration, and others will be presenting with me. For details and to RSVP .

Do Not Sell the RECs and Claim the Building Uses Renewable Energy

Owners of buildings that generate onsite renewable energy, with solar panels or otherwise, and sell the renewable energy credits (RECs) should not claim the building “uses renewable energy.” The term may be deceptive in that circumstance.

Similarly, building owners should not should not claim they have purchased RECs if the law already requires the activity that is the basis of the renewable energy. 

The uncertainty of the solar panel market and the fast changing industry that is in large measure supported by RECs, constantly raises questions about what marketing claims a building owner can make about renewable energy installations on their property.

The Federal Trade Commission issued revised “Green Guides”, 16 CFR Part 260, in late 2012 that are designed to help ensure that claims made about the environmental attributes are truthful and non-deceptive under Section 5 of the FTC Act, 15 U.S.C. 45.1. The Guides are administrative interpretations of the law. Therefore, they do not have the force and effect of law and are not independently enforceable. The FTC, however, can take action under the Act if a marketer makes an environmental claim inconsistent with the Guides. In a recent post to this blog I wrote FTC To Ramp Up Enforcement of Environmental Claims.

The Guides include specific language with respect to carbon offsets,  .. 

(a) Given the complexities of carbon offsets, sellers should employ competent and reliable scientific and accounting methods to properly quantify claimed emission reductions and to ensure that they do not sell the same reduction more than one time.

(b) It is deceptive to misrepresent, directly or by implication, that a carbon offset represents emission reductions that have already occurred or will occur in the immediate future. To avoid deception, marketers should clearly and prominently disclose if the carbon offset represents emission reductions that will not occur for two years or longer.

(c) It is deceptive to claim, directly or by implication, that a carbon offset represents an emission reduction if the reduction, or the activity that caused the reduction, was required by law.

The Guides offer an example:

An online travel agency invites consumers to purchase offsets to “neutralize the carbon emissions from your flight.” The proceeds from the offset sales fund future projects that will not reduce greenhouse gas emissions for two years. The claim likely conveys that the emission reductions either already have occurred or will occur in the near future. Therefore, the advertisement is deceptive. It may not be deceptive if the agency’s website stated “Offset the carbon emissions from your flight by funding new projects that will begin reducing emissions in two years.”

As onsite renewable energy, including solar installations, become more common so too will questions become more common about what can be claimed about those installations.

All are invited to the University of Baltimore School of Law symposium “Can Green Building Law Save The Planet?” on March 26 at 5:30 p.m.  Susan Dorn, general counsel of the USGBC, Abbey Hopper, director of the Maryland Energy Administration, and others will be presenting with me. For details and to RSVP.

  

 

Model Sustainability and Green Building Initiatives for a More Verdant City and Town

A package of local government bills introduced on January 29th aim to ensure that Montgomery County, Maryland remains at the sustainability forefront. The legislation submitted by Councilmember Roger Berliner is a model for local government environmental and energy initiatives, at a time when there is an anti-LEED v4 bill in the Maryland legislature, and we provide a link to each bill with the thought that these may inspire other cities and counties: 

Bill 2-14 would require owners to benchmark the energy use of certain buildings and retro-commission certain building systems to improve their energy efficiency. Modeled after laws in New York, Chicago, and the District of Columbia, this bill is designed to work with the County’s recently enacted PACE program to create market based incentives for building owners to increase energy efficiency.

Bill 3-14 would require newly constructed buildings of 10,000 square feet or more or extensively modified buildings to achieve a Silver certification in the appropriate LEED rating system. Current laws require those buildings to achieve a LEED Certified certification. 

Bill 4-14 would require any contract that the County enters into to maintain street lights to be with a company that will install LED lights that are more energy efficient and requires less maintenance.

Bill 5-14 would require the County government to submit an analysis of “the social cost of carbon” with certain capital projects in the County capital budget. The bill articulates that the “external” costs of conventional fuels, particularly coal, extracts a cost on society and that those costs should be factored into the cost/ benefit calculations that the County uses.

Bill 6-14 would create an Office of Sustainability.

Bill 7-14 would create a preference for a certified green business in the County's procurement of goods and services.

Bill 8-14 would require new or extensively remodeled buildings for which County government finances at least 30% of the costs, to generate at least 1 kilowatt of renewable energy for every 1,000 square feet of floor area.

Bill 9-14 would require that 50% of the County's electric power usage be supplied with renewable energy by Fiscal Year 2015 and 100% by 2020.

Bill 10-14 would require the County to implement an expedited review process for permits to install rooftop solar photovoltaic systems and charge reduced fees for those permits.

Bill 11-14 would require the County to implement an expedited review process for permits to install electric vehicle charging stations and charge reduced fees for those permits.

The County has also been discussing adopting the International Green Construction Code as an option in addition to the use of LEED, but that legislation is not part of the package introduced.

This local effort needs to be viewed against the backdrop of pending HB 207 in the Maryland legislature, a bill with legs, that would repeal the existing statewide requirement that state funded construction be LEED Silver certified, including schools in Montgomery County (which school community is supporting the bill).  

Appreciate also that Montgomery County, situated just north of Washington, DC,. is the 11th wealthiest county, by household income, in the country. The County Council in all Democrat and very Blue. It may have the highest concentration of LEED projects per capita of any local jurisdiction. It is already a very green place and this legislative package, that admittedly would not (.. and possibly should not) be politically possible most places in the country, will only make Montgomery County more verdant.

EPA Seeks Comment on Ecolabels and Product Environmental Performance Standards thru February 25th

Against a backdrop in early 2014 where by many measures environmental progress in business appears to have plateaued, Environmental Product Declarations are among the hottest topics in sustainability. This blog post is the first of several over the coming weeks about EPDs.

The Environmental Protection Agency is seeking comments on proposed Guidelines for Product Environmental Performance Standards and Ecolabels for use in federal procurement to help federal purchasers select greener products and meet sustainability purchasing goals. 

Some suggest this EPA proposal is not a true “environmental product declaration” program because it does not fit within the ISO International 14040 EPD standards or is not consistent with the USGBC’s new LEED v4 MR Credit Building Products Disclosure and Optimization - Material Ingredients, or otherwise does not match up nicely with some other proprietary system. But at a time when green product development is relatively flat, if not losing ground, possibly those existing measures are failing the marketplace? Or is there a larger problem including that the USGBC abandoned TRACI (used by EPA) when establishing priorities for LEED v4 and the v4 MR credits do not include toxicity reporting, a potentially huge gap in transparency?

Moreover, the United States federal government is one of the world's largest consumers. Indeed, it is the single largest consumer within North America spending over $350 Billion on goods and services each year.

So, when EPA proposes guidelines “for science based, verified and comparable information about environmental performance of goods and services,” (.. it sure sounds like an EPD) the environmental community should listen. EPA’s interest comes from several market places, such as in the raw material supply chain, in product development and green procurement.

Federal agencies are directed by federal laws, regulations and executive orders to make purchasing decisions with the environment in mind. Most recently, these requirements have included Executive Order 13514 - Federal Leadership in Environmental, Energy and Economic Performance (PDF) , which orders federal agencies to use sustainable practices when buying products and services.

“These guidelines will make it easier for federal purchasers to meet the existing goal of 95 percent sustainable purchases while spurring consumers and the private sector to use and demand safer and greener products,” said Jim Jones, Assistant EPA Administrator.

While the EPA environmentally preferable purchasing program will not keep a list of environmentally preferable products, there are existing programs at EPA that do have lists of vendors and products that meet their requirements, including: ENERGY STAR for energy efficient products and services; Design for the Environment for chemical-based products, like all-purpose cleaners, laundry detergents, and carpet and floor care products; and WaterSense for water-efficient products and services.

As the federal government issues new regulations for environmental product declarations and existing regulatory programs come to include the LEED v4 building product disclosures, and the like, it is important that this new and emergent body of law both be transparent (including toxin reporting) and not move more quickly than and get ahead of the scientific and engineering research.

A lot can be learned from reading the draft Ecolabels and Product Environmental Performance Standards and much can be gained by commenting to EPA by February 25th.   

ICC 700 Residential Green Certifications Will More Than Double in 2014

Today there are 29,724 ICC 700 National Green Building Standard certified homes and lots. As the residential green code is on the cusp of eclipsing 30,000 certifications, more than a dozen governments across the country are evaluating adopting mandates or incentives tied to ICC 700. 

In 2007, National Association of Home Builders and the International Code Council partnered to establish this residential green building code. The ICC 700 can be used by any builder for their individual project as a rating system (including third party approval), or be the basis for a local government residential green building code.

The current 2012 version of ICC 700 addresses what may have been the loudest criticism of the earlier version, lax energy efficiency requirements. While the original ICC 700 was tied to the International Energy Conservation Code 2006, the current version uses the IECC 2009 (estimated to result in energy efficient performance that is about 15% higher than the previous 2006 code). And many local governments have already adopted IECC 2012.

While today only a modest number of local government laws refer to the code, the International Green Construction Code (IgCC) requires compliance with the ICC 700 if a jurisdiction chooses to regulate residential buildings four stories or less. As the IgCC more broadly adopted in 2014, so will the ICC 700.   

The four threshold ICC 700 levels, Bronze, Silver, Gold, and Emerald are strikingly similar to the more widely known LEED for Homes.

If the philosophy of LEED for Homes is to impact the top 25% of building, ICC 700 is aiming to bring green to the mainstream. And the scope of LEED for Homes is limited to single family new construction, low and mid rise building while the scope of ICC 700 is all residential building. A recent cost comparison found as a percentage of baseline house costs, LEED Silver cost 5 – 7 % where ICC 700 Silver cost 3%.

Home Innovation Research Labs serves as the secretariat of NAHB’s ICC 700 National Green Building Standard program and tracks implementation. In 2013, there were 2,218 home/building certifications, down slightly from 2,368 in 2012. But the larger story lies in multi family housing, which represents nearly 82% of total units now certified, where 14,312 units were certified last year nearly double the 7,979 certified in 2012. So, total certifications were up in 2013.

North Carolina leads the nation in ICC 700 certifications followed by Virginia, Texas, Indiana and New York. And Maryland, where an ICC 700 home is eligible for a County enacted property tax credit, is quickly gaining.

And the real sweet spot is the number of projects registered and in process. There are 2,022 single family homes in process and 46,269 units within multi family buildings in process which are on track to more than double the number of certifications in 2014 from 2013. 

Thank you Cindy Wasser of the Home Innovation Research Labs for much of this information.   

You Can Change The Green Building Standard Today

ASHRAE standard 189.1 will be republished in 2014 for adoption in the IgCC 2015. You can go online today and participate in meetings, public reviews, and more ..

In an environment of green building standards, rating systems, and codes, it is the republishing of ASHRAE Standard 189.1 that may be the single most significant act in 2014 toward improving the built environment. 

When many consider green building they do so in terms of rating systems like LEED or Green Globes  and codes like the IgCC or CalGreen.

As a rating system, LEED is a green building certification system, providing third party verification thru the private Green Building Certification Institute that a building was designed and built using specific strategies aimed at improving performance. Codes are the law. Think the International Building Code.

Standards are most simply a consensus document developed and published to define minimum values of acceptable performance. ASHRAE, the American Society of Heating, Refrigerating and Air-Conditioning Engineers, develops standards for the refrigeration processes and the design and maintenance of indoor environments.

ASHRAE Standard 90.1 provides minimum requirements for the energy efficient design of buildings. ASHRAE Standard 189.1 provides a “total building sustainability package” to design, build and operate green buildings. From site location to energy use to recycling, this standard establishes how to build a green building. Standards are often the basis of codes and rating systems. By way of example, there are many ASHRAE standards contained within LEED.

For those who think the importance of a republished ASHRAE 189.1 is overstated,  note that the Department of Defense, the largest owner of buildings in North America, that is also the owner or more green building and more LEED certified building than anyone else, based its Unified Facilities Criteria 1-200-02 High Performance And Sustainable Building Requirement on ASHRAE 189.1-2009.

The 189.1-2014 will contain a number of new and updated requirements to reflect new information that has become available since the publication of the 2011 standard. In addition, it will now reference the 2013 versions of Standards 62.1 and 90.1, and incorporate changes reflecting the changes to those standards. And pending final approvals, expect changes requiring quality lighting, filter sealing, materials declarations, and more.

You can effect change and participate in all things 189.1 by subscribing to the listserv. You will be notified about meetings, public reviews, etc.  Go to https://www.ashrae.org/resources--publications/free-resources/listserves.

Photo from www.ashrae.org

IGCC Variant Green Building Standard for Public Buildings in Virginia

The Commonwealth of Virginia requires that new construction and renovation of state government buildings be green. And now Virginia has become the latest government to mandate an alternative compliance path for green building that includes the International Green Construction Code. 

Green building is not new in Virginia. In fact the first Governor’s Executive Order calling for energy performance and water conservation in Executive Branch building dates to 2007, Virginia's quadricentennial year, celebrating 400 years since the establishment of the Jamestown Colony.

In 2008, the Virginia General Assembly, the oldest continuous law making body in the New World, authorized the Department of General Services to create “Virginia Energy Conservation and Environmental Standards” for government building use.

A 2010 Executive Order signed by current Governor, Bob McDonnell, said, all new or renovated Executive Branch buildings, “should conform to LEED silver or Green Globes two-globe standards”.

And now, with the issuance of the 2013 edition of the Virginia Construction & Professional Services Manual, the statutes and executive orders have come together to put Virginia at the forefront of green building. Applicable to “all executive branch agencies and institutions entering the design phase for: construction of a new building greater than 5000 gross square feet in size; or, renovation of greater than 5000 square feet of a building where the cost of renovation exceeds 50 percent of the value of the building”,

New construction or renovation “shall be designed and constructed consistent with either” ..

A. LEED 2009 for New Construction & Major Renovations, Silver certified, or

B. Green Globes, obtaining 2 Globes certification, or

C. The Virginia Energy Conservation and Environmental Performance Standards that is the IgCC, Public Version 1.0, as significantly modified.

Careful observers will note the new 2013 Manual calls to both a LEED and Green Globe standard that are not the most current and an earlier version of the IgCC.

But the real ‘take away’ is the addition of the IgCC variant into the mix of “high performance building certifications” for public building construction authorized under Virginia law. Old Dominion is now at the forefront of an increasing number of governments adopting laws with alternative compliance paths for green building.

On an ancillary note, we alerted readers in a blog post last month that the process of updating the 2012 IgCC has commenced. Proposals for changes to the International Green Construction Code are due by January 10. It is not too late for you to participate.  

Photo not of a green building by Timber Ridge Craftsmen, Inc., Moneta, VA   

EPA Issues New Phase I Standard Effective Immediately

On December 30th, the Environmental Protection Agency took final action amending the “All Appropriate Inquiries Rule” to now reference ASTM International's E1527-13 “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process.” 

In the guidance that accompanied the new regulation, EPA made clear that persons conducting Phase I Environmental Site Assessments “may” [i.e., should] use the procedures included in this new standard to comply with the All Appropriate Inquiries Rule.

The 2006 All Appropriate Inquiries Rule established specific regulatory requirements for conducting inquiries into the previous ownership, uses, and environmental conditions of a property for the purposes of qualifying for certain landowner liability protections under Federal CERCLA (Superfund) laws. Parties must follow the standards set forth in the ASTM E1527-05 Phase I Environmental Site Assessment Process or otherwise comply with the requirements of the Rule to obtain protection from potential liability under Federal (and often State) laws as an innocent landowner, a contiguous property owner, or a bona fide prospective purchaser.

Recall, as described in our earlier blog post, Flummox: EPA Withdraws New Phase I Environmental Site Assessment Rule , on August 15, 2013, EPA published a substantially similar direct final rule also to amend the All Appropriate Inquiries Rule to reference this same 2013 version of ASTM International's E1527, but in response to adverse comments the agency withdrew the regulation.

Having responded to the adverse comments, in the Final Rule issued this Monday, EPA is recognizing the newly issued ASTM E1527-13 Phase I Standard as compliant with the All Appropriate Inquiries Rule. While in EPA's view, the new version provides an improved process the increased bureaucratic reports may increase costs.

Significantly, and different from the earlier regulation in the comments released by EPA is “in the near future, EPA intends to publish a proposed rulemaking to remove the reference to the ASTM E1527-05 standard.” That is, while the earlier regulation would have permitted more than one Phase I standard, EPA has now advised that the standard in use since 2006 will be withdrawn.

Interestingly, the new guidance also addresses comments about changes in the new standard in the instance of vapor releases, or the potential presence or migration of vapors associated with hazardous substances or petroleum products. A surprise to many, EPA notes that “both the All Appropriate Inquiries Rule and the ASTM E1527-05 standard already call for the identification of potential vapor releases or vapor migration at a property.”

The new ASTM E1527-13 standard is available from ASTM International at www.astm.org.

The new regulation is effective immediately. If we can assist prospective land owners, lenders, those pursuing LEED certification, and others in determining what implications this new Phase I standard will have on your business interests do not hesitate to call Stuart Kaplow.   

Defense Authorization Act Lifts Ban on LEED Gold and Platinum

President Obama signed the National Defense Authorization Act for fiscal 2014 in Honolulu last Thursday and while most observers noted that the bill cracks down on sexual assaults in the military and eases restrictions on transferring detainees from Guantanamo Bay, the bill also is a huge win for the U.S. Green Building Council’s LEED green building rating system. 

By way of background, the Air Force, Army, Marines, Navy and other instrumentalities of the Department of Defense own and operate 299,000 buildings and 211,000 additional structures, making it the largest owner of buildings in North America, but it is also the owner or more green building and more LEED certified building than anyone else. 

In the National Defense Authorization Act for the fiscal 2012, section 2830(b)(1) provided, “No funds authorized to be appropriated by this Act or otherwise made available for the Department of Defense for fiscal year 2012 may be obligated or expended for achieving any LEED gold or platinum certification.”

And when the National Defense Authorization Act for the fiscal 2013 was enacted it continued and expanded the limitation of use of funds for LEED Gold or Platinum not just for fiscal 2012 funds and fiscal 2013 funds but all funds whether prior appropriated or not.

So, it is very good news for the U.S. Green Building Council that the National Defense Authorization Act for fiscal 2014, in “compliance with rules of the House of Representatives and Senate regarding earmarks and congressionally directed spending items” provides, in the compilation of

Legislative Provisions Not Adopted .. Continuation of limitation on use of funds for Leadership in Energy and Environmental Design (LEED) gold or platinum certification.”

That is, there are no longer limitations of the Department of Defense pursuing LEED Gold and Platinum certifications. And this is a big deal because the Act includes $ 527 Billion in base defense spending for the current fiscal year.

As we reported in a blog post earlier this month, New Department of Defense Policy Accepts Green Globes it was a major shift in government policy that Department of Defense will now permit the use of both Green Globes and LEED for third party green building certification. But some have suggested that LEED has all but certainly won the bigger battle because allowing the Department of Defense to choose between the two rating systems took the wind out of the sails of the coterie that want to ban LEED from all military and civilian government projects.

If it is not too cynical to look toward a prosperous New Year, .. while this repeal supports the hugely vital mission of the armed forces and is good for the planet, the real winners are all those participating in the environmental industrial complex that will support and share in that more than half a Trillion Dollars that will be expended by the military industrial complex in fiscal 2014.

DoD photo by Master Sgt. Kevin Wallace, U.S. Air Force/Released   

King County Mandates its Green Building be the Greenest, with a Twist

All King County, Washington government construction and major renovations must strive to achieve the top national green construction rating under Ordinance 2013-0324 unanimously approved last week by the Metropolitan King County Council. 

Green building laws generally follow one of three regulatory schemes. The first regulatory scheme is for a government to require that government owned buildings be constructed to an articulated green building standard. A second, and widely admired, regulatory scheme is when a government offers voluntary incentives to private developers, whether as tax breaks, direct grants or loans, or advantages in processing approvals for green building. And third, a modest number of local governments are mandating by law that all construction and renovations, which exceed a certain square footage, whether public or private, must be constructed to a green building standard.

King County has long fallen within that first regulatory scheme. In 2005, Ordinance 15118 required all new County projects with budgets over $250,000 seek the highest LEED certification “that is cost effective based on life cycle cost analysis” and the limits of available funding. In 2008, Ordinance 16147 increased the goal to LEED Gold certification “as long as there is no cost impact to the Current Expense fund and no more than a two-percent cost impact to other funds, as compared to projects not seeking certification.” That law was set to expire on December 31, 2013.

The new Ordinance will be greener and require, each

.. project shall plan for and achieve a [LEED] Platinum rating as long as a Platinum rating can be achieved with no incremental cost impact to the general fund over the life of the asset and an incremental cost impact of no more than two percent to other funds over the life of the asset as compared to a project not achieving a green building or sustainable development rating.

Taking a step back from a LEED only law, other third party certifications will now permitted,

A project may request use of an alternative green building or sustainability rating system in lieu of LEED or the Sustainable Infrastructure Scorecard. Alternative green building and sustainable rating systems include: the Evergreen Sustainable Development Standard, administered by the Washington State Department of Commerce; the Built Green Four-Star administered by the Master Builders Association of King and Snohomish Counties; Sustainable Sites Initiative Program, developed by the American Society of Landscape Architects and Lady Bird Johnson Wildflower Center and United States Botanical Garden; Salmon Safe founded by the Stewardship Partners; or the Living Building Challenge administered by the International Living Future Institute.

Of note by a separate ordinance, the County’s Auditor is reviewing green building, including the balance of dollar cost versus environmental benefit. The Ordinance will be phased in, by August 1, 2014, after revisions in response to the audit.

Jeremy Sigmon at USGBC has written approvingly about the new Ordinance. And King County is applauded by some for joining Greensburg, Kansas (the tornado destroyed town) as only one of two local governments mandating government building to a LEED Platinum standard. But many critically ask, is it a misuse of a “voluntary third party green building rating system” for a government to mandate by law that government owned buildings be constructed to that “voluntary” standard? 

Proposals for changes to the International Green Construction Code are due by January 10

The process of updating the 2012 International Green Construction Code has commenced.

In fact, proposals for changes to the International Code Council’s “Green Construction Code” have been accepted since November and are due not later than January 10, 2014. Proposed IgCC changes are accepted from any member of the public. This is your opportunity to effect change in the environmental industrial complex.

The IgCC first debuted with public version 2.0 in November 2010. 

The IgCC is a collaborative effort of the International Code Council, the USGBC, the American Institute of Architects, ASTM International, the American Society of Heating, Refrigerating and Air-Conditioning Engineers, and the Illuminating Engineering Society to be administered by local code officials as an overlay on existing construction and energy codes in the ICC codes family.

The IgCC provides model code language, to be adopted by local governments as an overlay to existing codes working in tandem with the administrative requirements of other adopted codes, to establish “baseline regulations for new and existing buildings related to energy conservation, water efficiency, building owner responsibilities, site impacts, building waste, and materials” and other matters.

The IgCC contains numerous jurisdictional and project electives that allow adopting jurisdictions and projects to customize code requirements to address local issues and selectively raise sustainability goals.

To date the IgCC is adopted or used as the basis for green building regulations in Richland, Washington; Keene, Hew Hampshire; Dallas, Texas; Maplewood, Minnesota; Fort Collins, Bolder, Carbondale and Snowmass, Colorado; Kayenta Township, Phoenix and Scottsdale, Arizona; Boynton Beach, Florida; Rhode Island; Maryland; Oregon; North Carolina; and, Washington DC.

But it is surprising to many that adoption has not been faster and broader. It may be that mandatory green building codes are controversial and fly in the face on the tenets of green building as voluntary stewardship of the Earth; which would explain the large market share that LEED has, as a voluntary third party green building rating system.

The ICC’s new cloud based code development system “cdpACCESS” will be used for the first time for the development of the 2015 IgCC.

Proposed IgCC changes submitted will be posted online by March 10, 2014 for public review. The changes will be heard by two technical committees in open hearings to be conducted April 27th through May 4th in Memphis.  The hearings will also be webcast live.

The results of the hearing (to accept, reject or accept with modifications) each IgCC change proposal, will be posted online for public review. A public comment period will then be conducted until July 16, 2014, where any member of the public may provide written comments.

Public Comment Hearings will be held during ICC’s Annual Conference in Ft. Lauderdale between October 1 and 7, 2014.  Voting on the final action on the public comments will be done by governmental ICC members both at the hearing and for a two week period afterward remotely. cdpACCESS will allow participation, including voting, when individuals cannot attend in person.

And significantly, ASHRAE Standard 189.1 will be republished in 2014 for adoption in the 2015 IgCC.

The resulting document, the 2015 IgCC will be released for use in the calendar year 2015 and will offer a more robust and greener Green Construction Code.

LEED Certified Residential Building is Now the Law in Key West

On November 6, the City Commission of Key West, Florida unanimously adopted Ordinance 13-19 establishing LEED Certified level certification or Florida Green Building Coalition Bronze level certification as a prerequisite to all residential construction. 

The Ordinance was an update to the existing Building Permit Allocation System creating an application process for the 91 new residential units to be allocated annually. That System ensures residential growth does not exceed hurricane evacuation capacity of the roads in the Florida Keys and Key West has not received new residential units for development since the original 1993 allocation of 1,093 units.

The prerequisites are a local government legislative effort to address the most pressing sustainability issues facing Key West, including potable water consumption, sea level rise and reduction in greenhouse gasses. Developed by City staff in concert with local builders and architects, the aim was “to identify a green building standard requirement that was easy to measure and use, and has been proven successful.”

All new residential units, including additions to existing structures “constituting more than 50% of the value of the building” must be 1.5 feet freeboard, have a rainwater catchment system for the new roof area, and obtain a minimum green building certification.

While it is anticipated most new single family units will pursue LEED for Homes, the Ordinance also authorizes the use of the Florida Green Building Coalition “voluntary green building standard,” which similar to LEED is a credit based third party green building certification system with prerequisites. The Florida standard emphasizes enhanced indoor air quality, water conservation, stormwater management, and affordable and reliable energy.    

Significantly, the Building Permit Allocation System is an annual competitive process where points are awarded for meeting certain goals and “the highest number of points can be achieved by obtaining Green Building Certification, Upgrade 3, which is the equivalent to LEED .. Platinum.” It is anticipated that multi unit development will propose the higher standard.   

And even building renovations that will not trigger the new green building thresholds, must still demonstrate water and energy use at least 15% below the Florida Building Code standards.

It is clear that Key West has embraced sustainability, including mandating green building.  

New Department of Defense Policy Accepts Green Globes

In a tectonic shift in government policy, the Department of Defense will now permit the use of both the Green Building Initiatives’ Green Globes and U.S. Green Building Council’s LEED for third party green building certification. 

This is important news not only because the Air Force, Army, Marines, Navy and other instrumentalities of the DoD own and operate 299,000 buildings and 211,000 additional structures, making it the largest owner of buildings in North America, but it is also the owner or more green building and more LEED certified building than anyone else. 

The new “Department of Defense Sustainable Building Policy” supersedes the October 25, 2010 policy that authorized only LEED. And DoD is USGBC’s largest customer.

That new policy announced in the just released November 10, 2013 memorandum from John Conger, Acting Deputy Under Secretary of Defense provides, in relevant part,

DoD Components are responsible for establishing an auditable process to ensure applicable new buildings and major renovations meet requirements as defined in the UFC. The auditable process shall include green-building certification of those facilities through any of the systems approved for federal use pursuant to section 436(h) of EISA, and appropriate documentation in the Component's real property information management system  ..

(Which is “military speak” for both Green Globes and LEED are approved as third party certification systems for military building use.)

By way of explanation of that key text from the memorandum, the DoD’s Unified Facilities Criteria (UFC) system provides planning, design, construction, sustainment, restoration, and modernization criteria. On March 1, 2013, DoD issued the new UFC 1-200-02 High Performance And Sustainable Building Requirement. The new UFC provides minimum standards to achieve high performance and sustainable facilities that comply with EISA 2007, EO 13423, and the Guiding Principles. That UFC incorporates most of ASHRAE 189.1-2009.

On October 25, 2013, the U.S. General Services Administration administrator reported that in accordance with EISA section 436(h), it had recommended both Green Globes and LEED as the third party certification systems that the federal civilian government will use.

The DoD memo goes on to say, that to validate,

greater energy and water efficiency if the greater efficiency can be shown to: I. reduce total ownership cost of the facility; or 2. preserve or increase mission effectiveness in the face of projected resource scarcity (e.g., competition for limited water resources, or more stringent wastewater discharge limits),

.. the DoD will pursue Green Globes or LEED certification.

There are many details not yet available and “each DoD Component is responsible to develop guidance in support of this policy.”

Watch this blog, www.greenbuildinglawupdate.com for additional information and more analysis of the federal government’s dramatic shift in green building policy.  

First Ever Criminal Prosecution For Deaths Of Birds By Wind Turbine

Fourteen golden eagles and 149 other birds, including hawks, blackbirds, larks, wrens and sparrows were discovered dead at the Campbell Hill and Top of the World wind projects in Converse County, Wyoming between 2009 and 2013. The two wind projects are comprised of 176 large wind turbines.

According to papers filed with the U.S. District Court for Wyoming, wind turbines can cause the deaths of birds in four primary ways: collision with wind turbines, collision with associated meteorological towers, collision with, or electrocution by, associated electrical power facilities, and nest abandonment or behavior avoidance from habitat modification. 

In a criminal information, Duke Energy Renewables Inc., a subsidiary of Duke Energy Corp., was charged with violating the 1915 era federal Migratory Bird Treaty Act in connection with the deaths of federally protected birds at the two of the company wind projects in Wyoming.

Duke Energy plead guilty on November 23, 2013 to 2 misdemeanor counts. “This case represents the first criminal conviction under the Migratory Bird Treaty Act for unlawful avian takings at wind projects,” said Robert G. Dreher, an Acting Assistant Attorney General.

As part of the plea agreement, a $400,000 fine will be directed to the North American Wetlands Conservation Fund. The company will also pay $100,000 in restitution to the State of Wyoming, and perform community service by making a $160,000 payment to the congressionally chartered National Fish and Wildlife Foundation. Duke Energy is also required to contribute $340,000 to a conservation fund for the purchase of land, or conservation easements on land, in Wyoming containing high use golden eagle habitat. The company must apply for take permits and implement a migratory bird compliance plan containing specific measures to avoid and minimize avian wildlife mortalities at company’s four wind projects in Wyoming.

Traditional power companies have long been cited for avian takings and this case represents the first ever criminal conviction for avian takings at a wind project; a significant leveling of the playing field, but still bad public policy if the aim is to save planet earth.

As we suggested in our earlier blog post, Comment on a Permit to Kill Eagles with Wind Turbines, perhaps it is time to reevaluate the 1915 era Migratory Bird Treaty Act. Certainly the drafters of that treaty almost 100 years ago could not have contemplated today’s environmental industrial complex and prosecution of power generators, renewable or otherwise, under the treaty is simply not efficacious.

Photo by Aaron Murray courtesy WMBD 

Green Building (Including LEED-Centric) Laws Spread Over Seas

Mandatory green building laws are spreading internationally from the Philippines to India.

With more than 11 billion square feet across 175,000 projects being LEED certified worldwide, it should not be surprising that most of those new green building laws are LEED centric. At year end 2012, more than 40% of all square footage pursuing LEED certification existed outside the U.S. and when 2013 ends the international use of LEED will have grown tremendously. 

The international growth of LEED presents huge business opportunities when today there are LEED projects in 142 countries and USGBC member companies in 86 countries, from Brunei to Israel and from Mauritius to Mongolia.

Last week, in the Philippines, the Department of Justice authorized the Department of Public Works and Highways to move forward adopting a green building regulation in the National Building Code of the Philippines. In a 9 page legal opinion made public last Wednesday, Justice Secretary Leila De Lima determined the Department has the authority to expand the scope of the existing Building Code to include “eco-friendly” green building regulation “to respond to the needs of changing times.” Additionally, beyond amending the Building Code, the opinion said the Department could also, under “the doctrine of necessary implications” craft a separate code to be known as the Green Building Code to hasten the adoption of mandatory green building regulation.

Appreciate that the opinion sought the Department of Justice’s advice on whether the code would be legally binding or “simply provide for guidelines to professionals concerned on the proper performance of their works.” And the opinion responds that by its express language compliance with the new green building regulation could be made mandatory or directory.

The draft Philippine green building measure would make mandatory that new building meet LEED certifiable minimums for energy and water use.

Last week in India, in Andhra Pradesh, the 4th largest state, an energy efficiency and green building code was signed by the Chief Minister of the Law Department in advance of public notification that is the next step in code adoption.

And while not as far along, the Indian state of Tamil Nadu also announced last week that it had formed a steering committee to adopt a mandatory green building code. Both LEED and the Indian Green Building Council have been successful in advancing the already 1.65 billion square feet of green building in India, but given the great hue and cry to get energy under control, mandatory green building codes at the state level are expected to begin to appear in early 2014.

Mandatory green building laws, including those in the Philippines and India (as well as in the U.S.), requiring that government construction be green and even private sector construction be green, are controversial and fly in the face on the tenets of green building including perverting LEED, which exists as a "voluntary" third party green building rating system, by misapplying LEED as a mandatory code. 

Green Building is Far Too Important Than to Leave to the Government

I will be at the Greenbuild International Conference and Expo this week and would be pleased buy any reader of this blog a cup of coffee or a beer. Simply drop me an email, .. And while I have several speaking engagements during Greenbuild you may want to attend my session “G09: Marketing Green Building: A Competitive Advantage Without Greenwash” on Friday, November 22nd at 8:00 a.m. I commit it will be an informative and fun!

And speaking of green building, last night Will County, Illinois officials held a public meeting seeking input on incentivizing “sustainable and green features” through the voluntary use of the International Green Construction Code. 

Will County is located in northern Illinois in the Chicago metropolitan area.

Some may think a voluntary (non mandatory) green code in an oxymoron, but this proposal is cutting edge and may portend a future for broader environmental policy through a market driven approach to saving the earth.

The County is considering offering incentives to builders to construct structures that exceed the building, energy and plumbing codes, according to published comments by Ray Semplinski, the County chief building official. The County is proposing reduced building permit fees for projects built above minimum standards and include sustainable features.

Related to the threshold matter of offering incentives for green building, the County will accept comments on using the IgCC as the framework for articulating the incentives. Semplinski stressed, “exceeding the code would be done on a voluntary basis only.”

Voluntary incentives offered by government, whether as tax breaks, direct grants or loans, or advantages in processing approvals for green buildings are a non prescriptive non regulatory approach to environmental solutions and energy policy that respond to the overwhelming public sentiment that government has not done enough to protect the planet while not burdening land owners with another mandate. The green building philosophy is a property owner friendly, results oriented, environmental practice that may portend a future for broader environmental policy.

Such is an explanation for how green building evolved from 1.4% of non residential construction in the U.S. in 2005 to more than 44% of construction last year.

Mandatory green building laws, requiring that government construction be green and even private sector construction be green, irrespective of whether the requirement is to build to the IgCC to LEED or the like, remain controversial and fly in the face on the tenets of green building.

Watch Will County in the coming days as they move to incentivize the marketplace to save the earth.

Many believe environmental protection is far too important than to leave to the government. 

IgCC About To Get A Boost In Maryland

Maryland is primed to expand and incentivize use of the International Green Construction Code.  In 2011, Maryland was the first state in the country to authorize use of the IgCC for private and public construction.

It is not surprising the IgCC found Maryland fertile ground. Relative to its population, Maryland has more green building projects than any other state. The first certified LEED Platinum building was in Maryland. Maryland was one of the first states to offer a green building tax credit in 2001. All government construction must be LEED Silver. Today, 14 local governments in Maryland have enacted a green building initiative, including several that have mandatory green construction laws imposed on private building.  

But despite the fact that Maryland was the first state to “enable” local governments to implement the IgCC as a voluntary compliance alternative, not a single local government across the state has enacted the green building code. So, more than 2 years after the legislature acted, the IgCC can still not actually be utilized anywhere in Maryland.

It is anticipated that the situation will change dramatically.

The Maryland Green Building Council (an instrumentality of the state and not associated with the U.S. Green Building Council Maryland Chapter) is expected, before year’s end, to vote on a recommendation that the IgCC is a “cost-effective green building technology the State could possibly require to be used in the construction of State facilities.” This recommendation to the Secretaries of Departments of General Services and Budget & Management will allow newly constructed government buildings including schools, that today must be certified LEED Silver or higher, to alternatively be constructed to comply with the IgCC.

Second, the Council is also expected to recommend legislation be introduced in January 2014 before the state legislature expanding the definition of “high performance building” to also include IgCC projects. That expansion of the definition would allow not only LEED Silver certified private building, but also IgCC compliant projects to be eligible for state and local tax credits and other incentives.

And against that backdrop, it is expected that in early 2014 Baltimore City and Montgomery County, Maryland will each adopt a local IgCC enactment as a voluntary alternative to existing mandatory LEED-centric green building laws.

Maryland is about to expand and incentivize use of the IgCC as a voluntary green code, in a manner that may be an ideal model for other states. 

FTC Cracks Down on Environmental Marketing Claims

The Federal Trade Commission announced six enforcement actions last week, including against companies that marketed supposedly biodegradable plastic rebar cap covers, plastic golf tees, and plastic shopping bags, as part of the agency’s ramped up crackdown on environmental claims.

All of these cases are part of the FTC’s program to ensure compliance with the agency’s revised Green Guides. The Commission publishes the Guides providing guidance as to what constitutes deceptive and non-deceptive environmental claims. 

“It’s no secret that consumers want products that are environmentally friendly, and that companies are trying to meet that need,” said Jessica Rich, Director of the Federal Trade Commission’s Bureau of Consumer Protection. “But companies that don’t have evidence to support the environmental claims they make about their products erode consumer confidence and undermine those companies that are playing by the rules.”

Details of each of the FTC’s plastics matters are available by following the links below.

ECM Biofilms, Inc. based in Ohio markets its additives which allegedly make plastic products biodegradable. According to the complaint, ECM also issues its own “Certificates of Biodegradability of Plastic Products.”

The FTC’s complaints against each of the following companies charge them with misrepresenting that plastics treated with additives are biodegradable. The FTC also alleges that the companies lacked reliable scientific tests to back up these claims. American Plastic Manufacturing  based in Seattle was an ECM customer and advertised its plastic shopping bags as biodegradable. CHAMP, located in Marlborough, Massachusetts, also was an ECM customer, advertised that its plastic golf tees were biodegradable.  Clear Choice Housewares, Inc. based in Leominster, Massachusetts, was a customer of an additive manufacturer called Bio-Tec Environmental. Clear Choice sold what it claims are biodegradable, reusable plastic food storage containers. Carnie Cap, Inc., based in East Moline, Illinois, incorporated Eco-One, an additive manufactured and marketed by Ecologic, into its plastic rebar cap covers which it claimed, with no qualification, made its plastic rebar cap covers “100 % biodegradable.”

The Green Guides provide a company must have evidence that the entire plastic product will completely decompose into elements found in nature within one year after customary disposal (defined as disposal in a landfill, incinerator, or recycling facility) before making any unqualified biodegradable claim.

AJM Packaging Corporation touts itself as a “leading manufacturer” of green paper products. Based on a prior FTC order it was barred it from representing that any product or package is biodegradable unless it had competent and reliable scientific evidence to substantiate the claims, which it did not so the FTC imposed a $450,000 civil penalty.

An earlier blog post Gotcha: FTC Enforcement of "VOC Free" Claims for Paint described how green marketing presents an enormously valuable strategy for increasing brand value – cutting across all sectors, but that the legal implications for environmental marketing claims call for caution.

Environmental claims and much more will be the subject of my educational session at Greenbuild International Conference and Expo in Philadelphia on Friday, November 22nd at 8:00 a.m.  Register today for “G09: Marketing Green Building: A Competitive Advantage Without Greenwash”.

Photo credit Northland Construction

The Most Green Building Friendly Zoning Code in the Nation - Baltimore?

Baltimore City is poised to adopt a new zoning code that is among the most 'green building friendly' land use ordinances in the country.

A green building friendly zoning ordinance is significant when so many local codes including land use ordinances across the country stand in the way of sustainability efforts.

The Baltimore City Zoning Code was last comprehensively updated in 1971. At that time, the focus was on auto-oriented development, separation of uses, and preserving the City’s heavy manufacturing base. In 2008, the City Department of Planning began the current process to rewrite the Zoning Code. Last month, the City Planning Commission approved a draft Code focusing on sustainability recommending adoption by the City Council. 

While sustainability in incorporated throughout the new Zoning Code, there are several concepts that result in a green building friendly enactment: 

·  Solar power (roof and ground mounted) is allowed throughout the City and only a building permit is needed if other general site requirements are met including it must be installed to rise no more than 42 inches from the roof surface.

·  Wind power is allowed throughout the City and again, only a building permit is needed if the maximum height of any ground-mounted wind energy system is 65 feet or 20 feet above the tree line, whichever is greater or 10 feet above roof of primary structure.

·  Community-based alternative energy systems are a permitted and conditional use in all zoning districts.

·  Bicycle parking is now required for apartment buildings, schools, and commercial establishments over 10,000 sf.

·  One vehicle parking space can be eliminated for every twelve bicycle spaces.

·  Reducing the amount of land required for parking by allowing shared and alternating parking.

·  Parking space dimensions are reduced by 10%.

·  Parking lot size can be reduced by land banking, allowing up to 25% of the area required for parking to be held as open space in anticipation of future parking needs.

·  New Transit-Oriented Development Districts are intended to promote new, well-integrated residential and commercial development around transit stations.

·  Rain barrels, compost piles, greenhouses, hoop houses, and recycling collection stations are considered permitted encroachments in the appropriate yard areas.

·  Green roofs are encouraged in Commercial and Industrial zoning districts.

·  Urban Agriculture is now a permitted and conditional use in most zoning districts, and Farmers’ Markets have been added as a permitted temporary uses.

·  Community-Managed Open Space is now a permitted use in most zoning districts.

·  The keeping of livestock and animals is permitted.

It is worthy of note that Baltimore has a mandatory Green building law enacted in 2007 such that all newly constructed, extensively modified non-residential, and specific multi-family residential buildings that have or will have at least 10,000 square feet of gross floor area must achieve a Silver rating in the appropriate LEED rating system or satisfy the Baltimore City Green Building Standard (a LEED-like local enactment).

Zoning ordinances that look favorably upon green building are significant when today so many local codes including land use ordinances across the country stand in the way of sustainability efforts. 

Court Rules Onsite Renewable Energy Permitted In All Zoning Districts

In a hugely important judicial decision advancing onsite renewable energy, the Commonwealth Court of Pennsylvania has found ground mounted solar photovoltaics to be an “accessory use” permitted as of right in all zoning districts.

While the benefits, environmental and otherwise, of onsite renewable energy abound, installations of solar panels and small wind turbines are increasingly meeting challenges from zoning regulations. Traditional public utilities often cause their infrastructure to be exempt or permitted as of right, but local zoning ordinances have increasingly been interpreted to find onsite energy facilities (including solar panels) to be a “second principal use” on a property where zoning only permits a single principal use on any property. Such zoning interpretations risk stalling a key segment of the clean energy sector. 

Northampton Area School District owns 19 acres in an Agricultural/ Rural Residential zoning district. Lehigh Elementary School is located on the property. The school sought approval to install a solar energy field on 4 acres of the property to generate electric power for the school. The solar energy field would consist of 7,000 solar energy panels, divided into 280 individual units, with each complete unit being approximately 13.5 feet wide and 26 feet long.

The Zoning Officer denied the application and opined that the principal use of the property was public education and the proposed use constituted a "second commercial principal use" of the property. The Zoning Officer also concluded that the zoning ordinance did not provide for the proposed principal use and, therefore, the use required a Conditional Use hearing.

The school argued that the proposed use was "to support the existing use," i.e., generate solar energy to be used to meet the energy needs of the school.

The court agreed with the school finding that the plain language of the section of the Zoning Ordinance dealing with “Accessory Uses and Structures” states that solar energy units are permitted as an "accessory use" in any zone, so long as they meet the "requirements of the zone" (i.e., height, area, setback and coverage standards). “That should have been the extent of the .. inquiry.”

The court concluded the school could install the solar panels as an accessory use to the school. The case did not address the implications of the school selling power back to the grid, ground mounted solar photovoltaic as a principal use in that agricultural zoning district, or a host of other possible scenarios.

And while the case is one in a significant trend of allowing onsite renewable energy, many zoning ordinances in the U.S. date back to the early 20th century predating modern alternative energy. With ASHRAE 189.1 making mandatory and LEED awarding credits for onsite renewable energy, it is time to modernize and green zoning ordinances.

The case is Northampton Area School District v. Zoning Hearing Board of the Township of Lehigh 

FTC To Ramp Up Enforcement of Environmental Claims

The Federal Trade Commission will begin to ramp up enforcement of deceptive environmental claims, according to Jessica Rich, director of the commission’s consumer protection bureau.

“A growing number of consumers are looking to buy green products and companies respond with green marketing. But sometimes what companies think green claims mean and what consumers think they mean are two different things,” Rich said at the Advertising Self-Regulatory Council conference last month. 

The coming crackdown on environmental claims follows an update of the FTC’s Green Guides last year that set forth the commission’s current views on environmental marketing to help business avoid making unfair or deceptive claims. 

That ramp up follows three lawsuits, the FTC announced in Federal Register notices in August, settled unsupported claims that products were free of volatile organic compounds.

According to the FTC’s lawsuit detailed in the Federal Register Notice Relief-Mart, falsely advertised its Biogreen memory foam mattresses don’t contain VOCs, have no VOC off-gassing, and don’t have the smell consumers often associate with memory foam.

In the second lawsuit against Essentia Natural Memory Foam Company,  the FTC charged that Essentia didn’t have appropriate proof to back up claims that its mattresses are VOC-free, have “[n]o chemical off-gassing or odor,” and unlike other memory foam mattresses that “can emit up to 61 chemicals”  are “free from all those harmful VOCs.”

In the third case, the FTC attacked Ecobaby Organics’ advertising mattresses as “chemical free,” with no formaldehyde, toluene, benzene, VOCs, or toxic substances. Ecobaby’s promotional materials featured the seal of NAOMI, the National Association of Organic Mattress Industry and the FTC says the ads also falsely conveyed that NAOMI was an independent certifying organization when the truth is that NAOMI is nothing more than Ecobaby itself.

You will want to read the orders for the details (click on the links above), and savvy green businesses will pay close attention to provisions addressing “free of” claims. The orders prohibit the companies from making VOC free claims unless the emission level is zero micrograms per cubic meter or if they have competent and reliable scientific evidence that the products in question contain no more than a “trace level” of VOCs. The “trace level” standard comes from Green Guides.

An earlier blog post Gotcha: FTC Enforcement of "VOC Free" Claims for Paint described how green marketing presents an enormously valuable strategy for increasing brand value – cutting across all sectors, but that the legal implications for environmental marketing claims call for caution.

Environmental claims and much more will be the subject of my educational session at Greenbuild International Conference and Expo in Philadelphia on Friday, November 22nd at 8:00 a.m.  Register today for “G09: Marketing Green Building: A Competitive Advantage Without Greenwash”. 

Green Building is Now the Law in Dallas

Dallas has now accepted the first building permit applications under its green building ordinance. Dallas is one of the first major cities in the nation to implement comprehensive mandatory green building standards for both all new residential and commercial construction.

By Resolution 08-1070 adopted unanimously on April 9, 2008 Phase 1 of the law was effective in 2009 and Phase 2 (originally to be effective October 1, 2011) was fully implemented October 1, 2013. 

All new projects must either: meet the minimum requirements of the Dallas Green Construction Code or be LEED certifiable or be Green Built Texas certifiable or be certifiable under an equivalent green building standard. Projects need only be “certifiable” and not LEED certified nor Green Built Texas certified.

Expedited review is available for projects that are at a minimum Dallas Green Construction Code compliant, LEED Silver certifiable or ASHRAE 189.1-2011 certifiable.

Projects must reduce water usage by 20%. LEED projects may achieve 1 point under the Water Use Reduction (20% Reduction) Credit or projects may use 20% less water than the baseline under the Plumbing Code.

Single family residential may also meet the minimum requirements of ICC 700. Lots must be designed so that at least 70% of the built environment is permeable. Projects must utilize drip irrigation for all “bedding areas” of landscaping.

Significantly, as one of the optional compliance paths a project may comply with the Dallas Green Construction Code, which is an enactment of the International Green Construction Code with local amendments. Many have noted Dallas deleted Chapter 6 of the IgCC, the energy conservation provision, and elected instead to keep existing energy code requirements. Also deleted are the chapters for commissioning and causing the code to apply to alterations of existing buildings.

Dallas also accepts approved third party plan review and inspection for its green building program.

The successful implementation of green building standards in Dallas has been widely heralded across the environmental industrial complex, including on the USGBC website. Although there are some minor rumblings that LEED certifiable versus actually submitting a project for LEED certification violates the terms of usage of the USGBC rating system.

Make no mistake, the new code remains controversial in broader real estate world, including across Texas, as mandating proprietary green building standards on private construction. However, allowing a developer the option of selecting among alternative compliance paths for achieving green building, here in Dallas, in Washington DC and Baltimore, may well portend the future of a sustainable built environment.

Comment on the Permit to Kill Eagles with Wind Turbines

The U.S. Fish and Wildlife Service has announced it is soliciting comments through November 12, 2013 on the issuance of a take permit “for recurring eagle mortalities” associated with the operation of the Shiloh IV wind turbine project in Solano County, California.

To appreciate this take permit some content may be useful. On September 12, 2013, the scientists from Fish and Wildlife published “Bald Eagle and Golden Eagle Mortalities at Wind Energy Facilities in the Contiguous United States” in the Journal of Raptor Research, concluding,

We found at least 85 dead eagles, ..  in 32 wind power plants in 10 states from 1997 to June 30, 2012. Probably our results under represent, perhaps substantially, the numbers of dead eagles in the United States because of the production of wind-generated electricity.

The Bald and Golden Eagle Protection Act allows Fish and Wildlife to authorize a bald eagle and golden eagle programmatic take. The Eagle Act’s implementing regulations define ‘‘take’’ as to ‘‘pursue, shoot, shoot at, poison, wound, kill, capture, trap, collect, destroy, molest, or disturb’’ individuals, their nests and eggs; and ‘‘disturb’’ is further defined as ‘‘to agitate or bother a bald or golden eagle to a degree that causes . . (1) injury to an eagle,  . . (2) a decrease in its productivity, . . "

The Shiloh IV Wind Project will result in recurring eagle mortalities over the life of the project and this take permit has been applied for.

Shiloh IV, is operating a 100 megawatt commercial wind-energy facility, consisting of 50 wind turbines. This project was constructed adjacent to other existing wind-energy-producing facilities. The project was completed in December 2012 and was a “repowering and infill project” entailing the decommissioning and removal of approximately 230 Kennetech wind turbines originally constructed in the late 1980s.

Given that the 50 wind turbines have already been built and that this permit application was drafted to follow Fish and Wildlife’s (White House approved) January 2011 Draft Eagle Conservation Plan Guidance, there is little chance the permit will not be issued.

But it has been suggested that comments should be submitted seeking a revised Guidance from Fish and Wildlife correcting the double standard of issuing permits for killing bald eagles with wind turbines while charging oil companies for drowning birds in their waste pits, and power companies for electrocuting birds on power lines.

Photo credit Hancock Wildlife Foundation

Tree Preservation Ordinance Is Not a Fifth Amendment Constitutional Taking

On November 18, 2011, Brian Novie was charged with violating the Tree Preservation and Landscape Maintenance Law of the Village of Montebello. The then defendant Novie moved to dismiss on the ground that the Tree Law is unconstitutional.

When the defendant and his wife had purchased their house, it included almost an acre of land with trees on the front of the property facing the town road and a backyard area that had been “left unattended and as a result became overgrown with mainly Ash trees.” In 2009, defendant cut down some dead and dying trees, after which the Village of Montebello charged him with violating the Tree Law, which required, among other things, to obtain the Village's permission to remove any tree. 

In February 2010, defendant entered into a civil compromise with the Village by which, in lieu of prosecution, he agreed to pay $250 and to "follow proper procedures with regard to any tree removal." In July 2010, defendant applied for a permit to remove 15 dead ash and elm trees, two oak trees (to which defendant was allegedly allergic), and one birch tree. In August 2010, defendant's application was approved allowing 11 trees to be removed. However, 14 trees were cut down and the defendant was again charged with violating the Tree Law.

Defendant made a Fifth Amendment takings claim, arguing that the Tree Law takes his private property for public use without compensation since it "takes" all trees at least four inches in diameter and gives the Village the right to demand a tree cutting application. The law provides a process by which a property owner can seek a retroactive application for a permit to remove trees and an exception to any other requirement of the law. The Court found the takings claim was unripe, since he had initiated but never pursued that exception process.

Inasmuch as the Village code provides for an exception process, which defendant, admittedly, chose not to pursue voluntarily giving up his right to be heard, his procedural due process challenge was also found not ripe.

The Court also found no merit to defendant’s claims that the Village’s enforcement of the Tree Law violated his First Amendment free expression rights, in this case “to express himself through the landscaping”. He did not show that his desire to landscape his backyard to create a lawn is protected speech or conduct in that it amounts to artwork that is “a quintessential form of expression.”

To the extent that defendant argued that the Village's “preserve woodlands” mandate raises 14th Amendment equal protection concerns because pre-Tree Law property owners are allowed to have lawns, he was held incorrect. The Tree Law givers persons under like circumstances equal protection in enjoyment of their lives, liberty, property and in their pursuit of happiness, ... apparently, a long as happiness does not involve a well manicured lawn.

The September 17, 2013 decision is People of the State of New York v Brian Novie, 2013 NY Slip Op 23315.  

Hastings is Adopting a Unique Green Building Code

Hastings on Hudson, a village with a population of just over 9,400, located east of the Hudson River, less than 20 miles north of Times Square, conducted a final public hearing last evening on its custom written Green Building Code.

The Code is unique because it was written by a group of residents from this village. It is not based on LEED, the IgCC, ASHRAE 189.1 nor any of the national green codes, rating systems or standards. Few other local governments have undertaken the daunting task of writing a green building code from scratch. In point of fact, more than 400 local governments across the country tie their green policies to LEED. 

In Hastings, the 20 page proposal was worked on for three years by volunteers seeking a more sustainable community and provides,

The intent of this Green Building Code is to minimize short-term and long-term negative impacts on the environment; reduce greenhouse gas emissions to mitigate human impact on the climate; and provide owners and occupants with economic benefits from energy and water savings, use of renewable energy sources and sustainable building products and practices.

The Code will apply to all residential and commercial projects that require a building permit.

The custom code regulates a broad breadth of the usual green building requirements, including: stormwater, heat island – non roof, irrigation, native plantings, bicycle racks, electric vehicle charging stations, light trespass, energy monitoring dashboards, reduced interior water use, low VOC paints, reflective White roofs unless vegetated, construction waste recycling and mechanical system commissioning.

In addition to those mandated requirements, the Code delineates a list of ‘greener’ optional sustainable measures. Projects over a minimum size must achieve at least 5 points from the list that includes: rainwater harvesting, economy of wood construction framing, geothermal hearting, photovoltaics, passive solar heating strategies, use of LEDs, salvaged or reused materials, local materials, FSC certified wood, restoring sites with native plants, and other “sustainability measures” suggested by the builder.

While there has been little public comment on the Code, one criticism is that projects in Hastings will apparently not be eligible for New York state’s new property tax exemption for building that meets LEED standards or meets “a similar program for green buildings”.

That observed, the Village Trustees of Hastings are striving to be “at the forefront of best building practices in the country today.”

Green Building Code Proposed in Washington DC is a National Model

The final vote of the District of Columbia’s Construction Codes Coordinating Board on the Green Construction Code (and all of the new construction codes) occurred last week, and today the codes are being transmitted to the Mayor's office. The Mayor will submit the codes to the DC Council for adoption.

The new Green Code is significant, not only for those constructing or renovating buildings within DC, but because it portends a new green regulatory scheme that may well be a national model.

DC is proposing to adopt its first Green Construction Code, which would be mandatory for all commercial projects greater than 10,000 square feet and all multi-family residential construction four stories or larger. The Green Code would apply to new construction and major renovations. 

Significantly, there will be alternative compliance paths for privately owned building to satisfy DC’s Green mandate:

1.  LEED at a Certified level or higher, or
2.  IgCC compliance, or
3.  ASHRAE 189.1-2011 compliance, or
4.  Enterprise Green Communities verified.

Additionally, all non residential new building projects greater than 10,000 square feet must also satisfy 75 points on the Energy Star Target Finder Tool which correlates to performing at a minimum better than 75% of similar buildings across the country.

Moreover, all new building projects are required to comply with the ICC International Energy Conservation Code 2012 (another of the codes proposed for adoption) which in and of itself results in a high performance building.

The Green Construction Code as currently proposed is available at this link. Amendments are likely as the DC Council is expected to vote on the Green Code before the end of 2013 with an early 2014 effective date.

DC was a leader in 2006 requiring new privately constructed buildings meet LEED standards and it is again at the forefront with a regulatory scheme of alternative compliance paths for high performance building. For those who wish to pursue LEED that option remains. However, many private buildings will likely select IgCC compliance as the preferred compliance path. That said, the final analysis of LEED versus IgCC versus ASHRAE 189.1 may be skewed by what the GSA ultimately determines is the federal government’s preferred high performance building type.

Green Building Law Update blog will monitor the DC Green Code enactment.

Gotcha: FTC Enforcement of "VOC Free" Claims for Paint

Green marketing presents an enormously valuable strategy for increasing brand value – cutting across all sectors. And the new emphasis on building materials and product makeup in LEED v4 will greatly favor environmentally conscious brands and businesses, far beyond LEED’s influence on the real estate industry. But the legal implications for green marketing claims call for caution.

The Federal Trade Commission’s Green Guides set forth the Commission’s current views on environmental marketing to help business avoid making unfair or deceptive claims. 

With regard to “free-of” claims, one of a host of terms identified in the Green Guides, as revised in 2012, the FTC says, “depending on the context, a free-of or does-not-contain claim is appropriate even for a product, package, or service that contains or uses a trace amount of a substance …”

The FTC recently analyzed the trace amount test in the context of zero-VOC claims for architectural coatings (i.e., paint). Earlier this year, the Commission issued orders resolving allegations that The Sherwin-Williams Company and PPG Architectural Finishes, Inc. had deceptively advertised their paint products as “zero VOC.”

The orders prohibit the companies from representing that the VOC level of a paint is “zero” unless, after tinting, the VOC level is zero grams per liter, or they possess and rely upon competent and reliable scientific evidence that the paint contains no more than a “trace level of VOCs.”

The orders include a definition of “trace level of VOCs” derived from 16 C.F.R. § 260.9(c) and adapted specifically to address VOC-free claims for architectural coatings such as paint. The orders state that “trace level of VOCs” means: (a) VOCs have not been intentionally added to the product; (b) the presence of VOCs at that level does not cause material harm that consumers typically associate with VOCs, including but not limited to, harm to the environment or human health; and (c) the presence of VOCs at that level does not result in VOC-free marketing claims include, but are not limited to, “zero VOCs,” “0 VOCs,” “no VOCs,” and “free of VOCs.”

Beyond the language in the Green Guides, based on that enforcement experience, the FTC found it in the public interest to articulate the tailored definition of “trace level of VOCs” to all VOC-free claims for architectural coatings.  If a building owner or other marketer makes a VOC-free claim about an architectural coating that contains more than a “trace level of VOCs,” as defined by the Sherwin-Williams and PPG orders and discussed above, or lacks substantiation for such claim, the FTC or some third party may take action. 

The FTC treatment of paint is instructive and a very good example of why the legal implications for green marketing claims call for caution. 

The Green Guides and much more will be the subject of my educational session at Greenbuild International Conference and Expo in Philadelphia on Friday, November 22nd at 8:00 a.m.  Register today for “G09: Marketing Green Building: A Competitive Advantage Without Greenwash”.

A Green Building Game of Thrones

"Winter is coming."  

This is the common refrain in the popular book, Game of Thrones, in which kings vie to take over lands.  As I thought about the green building policy mess of 2012, I couldn't help but draw comparisons to Game of Thrones. 

This was supposed to be the year of the USGBC's new green building rating system, LEED 2012.  But somewhere along the way, the plan went awry and the USGBC had to retreat. 

In assessing the battlefield, I have concluded that the USGBC overextended itself, choosing to fight a two front war without the necessary resources. This is a common tactical mistake and one that has proven costly for the USGBC. Just how costly is yet to be seen. 

The Assault on Chemicals of Concern

Before being pulled, the proposed LEED 2012 rating system went through a lengthy, unexpected vetting process, culminating in a fourth draft.  One particular section of the fourth draft set the green building world on fire: 

New credit for avoidance of chemicals of concern – this credit encourages LEED project teams to specify materials that do not contain chemicals that are known to negatively impact human health (specifically in regards to cancer and reproductive toxicity).

New credit for Environmental Product Declarations - The new EPD credit encourages product manufacturers to engage in disclosure activities that provide specifiers with consistent and complete information about their products enabling specifiers to make more informed decisions.

The negative reaction to this credit was fast and furious. 

The timing of these lobbying efforts coincided with the GSA's release of a preliminary report  indicating that the Green Globes rating system was better suited for new federal construction.  While the report was not tied to the issue of chemicals in LEED 2012, it provided an opportunity for anti-LEED lobbying to push for a new federal green building rating system. 

With a pending final report from GSA this winter, and massive lobbying efforts against LEED at the federal level, don't be surprised if other rating systems are adopted by federal agencies going forward. 

The Wood Siege

The USGBC has also been stuck in a long standing siege with the wood industry. 

On the one side, you have two allies -- the USGBC and the Forest Stewardship Council (FSC).  The USGBC long ago selected FSC wood as the anointed certification for wood products.  On the other side is the non-FSC timber industry -- those wood providers that can't attain FSC certification.  This side prefers the Sustainable Forestry Initiative (SFI) certification.

In July 2011, it appeared the USGBC was willing to negotiate with SFI.  In a LEED Pilot Credit, the USGBC recognized SFI as one of four wood certifications.  

Then the USGBC shifted its tactics.  In the last version of LEED 2012 that was released this past year, the USGBC declared that "(n)ew wood products must be certified by the Forest Stewardship Council or better." 

The "Wood Wars" has left the USGBC bloodied.  In 2011, Congress passed a Department of Defense Reauthorization bill that effectively banned LEED Gold or Platinum certification.  One Senator indicated the LEED ban was in response to the USGBC's failure to adopt non-FSC wood certification. 

USGBC Retreats on LEED 2012

As the two battles on chemicals and wood have raged, the unthinkable happened: the USGBC had to retreat on its latest proposed version of its rating system, LEED 2012, before putting it up for a vote.  I had been tweeting for a number of weeks that things were looking grim for LEED 2012.  If you want to follow the drama, I highly recommend perusing the commentary at the LEED User forum.  

It's hard not to draw a correlation between the chemical industry's negative reaction to LEED 2012 and the USGBC's decision to pull it back.  USGBC CEO Rick Fedrizzi addressed this issue in an open letter to USGBC members:  "To be clear… this change is 100% in response to helping our stakeholders fully understand and embrace this next big step."  

Who Will Win the War?  

This winter, many decisions will be made that will determine the fate of the USGBC for years to come.

  • Will the next proposed version of the LEED rating system include similar Chemicals of Concern and FSC-only credits? 
  • What will be the GSA's final recommendations regarding green building rating systems? 
  • How will the presidential and congressional elections impact green building policy? 

I hope everyone is ready for a long, interesting winter. 

Federal Green Building Code Creates Unnecessary Risks and Costs

Someone recently asked me why I was baffled about the Department of Defense's decision to use both LEED and a green building code.  Here are two reasons: 

1.  The policy is a waste of taxpayer money.

2.  The policy unnecessarily increases risks for government contractors.

LEED + Green Building Code = Duplicative Costs

This concept is so logical to me that I have had trouble articulating it. 

The Department of Defense has proposed a green building code in order to streamline the process of applying for LEED certification. However, obtaining certification and complying with an overlapping green building code will result in duplicative costs, particularly on the administrative side. 

First, a contractor will have to review the green building code, ensure that it is complying with the code, and then submit documentation to the contracting officer to show compliance. 

Second, the contractor will have to review the LEED rating system, ensure that it is complying, and then submit separate documentation to the Green Building Certification Institute (GBCI) to apply for certification.  

Let's assume the best case scenario -- the green building code and LEED rating system requirements completely overlap (this will never happen).  The contractor will still have to compile separate documentation for a contracting officer and a GBCI reviewing authority.  And because the contracting officer and GBCI reviewing authority work independently, each individual will have separate questions, requests for clarifications and interpretations. 

Because the contractor will be working through two separate entities and submitting two sets of paperwork, the contractor will be completing twice as much work.  Twice as much work means the project will get more expensive. 

Two Interpretations Will Lead to Conflicts

It's human nature for two people to interpret the same clause two different ways.  This happens with LEED credits all the time.  When these differing interpretations occur, solutions can be worked out internally with GBCI.

But differing interpretations becomes a more risky proposition if the DoD simultaneously incorporates a green building code and LEED certification requirements in the same contract. 

On a typical DoD construction project, there is one contracting officer responsible for delivering a project on time, according to the contract and specifications.  The contracting officer has final authority to interpret and enforce the plans and specifications. 

Once the DoD institutes its green building code, a contracting officer will be responsible for interpreting and enforcing it. 

Simultaneously, a contractor working on a green building will also have to submit for LEED certification to the GBCI. 

You probably know where I am going with this.  The following scenarios will likely arise: 

  • Example A - Government Contractor is hired to construct a building that complies with both LEED and the DoD green building code.  Both LEED and the code require installation of a particular bike rack.  The contractor installs a bike rack and submits for a LEED credit related during the design phase.  GBCI approves the credit.  At the end of the project, the contracting officer finds the contractor did not install the specified bike rack.  Does the Contractor lose its certification?  Can the Contractor point to the approval of the LEED credit to overrule the contracting officer?  Does the GBCI have inherent authority to interpret a government contract specification? 

Or worse: 

  • Example B - Contractor completes a project that had to comply with the DoD green building code and get LEED certification.  A contracting officer finds the project was completed in accordance with all green building codes, including the installation of a bike rack.  Months later, GBCI finds that the contractor did not install the proper bike rack for LEED certification.  LEED certification is denied.  Who is right?  Did the Contractor breach its contract by not achieving LEED certification even though the contracting officer approved the bike rack?   

I don't know the answer to these questions.  Government contractors will face more risk if they have to comply with both a green building code and overlapping LEED certification.  There will be conflicting interpretations when contracting officers and GBCI reviewing authorities interpret the same requirements.

In short, this could get very messy. 

Not April Fool's: Defense Department to Adopt Green Code and LEED

In last week's post, I stated that the Army was abandoning LEED certification in lieu of a green building code based on ASHRAE 189.1.  But it is now clear to me that I misinterpreted the testimony of Dr. Dorothy Robyn, Deputy Under Secretary of Defense.

Instead, the Department of Defense is going to simultaneously require compliance with its green building code and with LEED certification. 

Confused?  So am I! 

First here's the statement from the DoD that suggested to me that LEED was being abandoned:

In the past, all new construction projects were required to meet the LEED Silver or an equivalent standard and/or to comply with the five principles of High Performance Sustainable Buildings. This year my office will issue a new construction code for high-performance, sustainable buildings, which will govern all new construction, major renovations and leased space acquisition. This new code, based heavily on ASHRAE 189.1, will accelerate DoD’s move toward efficient, sustainable facilities that cost less to own and operate, leave a smaller environmental footprint and improve employee productivity.

I assumed that this statement meant LEED certification was "in the past" and the new construction code would be used in the future. 

Apparently the DoD intends to use both the green building code and LEED certification simultaneously.  Paula Melton reported that according to (Dave) Foster in the Pentagon's Media Relations Division, the Army "will continue to seek LEED certification for our buildings built to that standard and expect to get LEED Silver or better at no additional cost."

I Don't Understand the Difference Between a Code and a Rating System

Before the DoD's announcement, I thought I understood the difference between a green building code and green building certification.  I understood a green building code to be a minimum standard that applied to 100 percent of buildings.  Green building certification, to me, was an aspirational standard that was beyond code and only applied to a subset of buildings. 

But the DoD's use of a green building code to achieve LEED certification is different.  The code will inform the contractor of how to get LEED certification; the certification then confirms the building was built to code.  The USGBC's Lane Burt explained the distinction like this: 

"The code tells you what to do, and LEED tells you how well you did and communicates that to the rest of the world." For building owners, LEED provides third-party validation that "you got what you paid for."

Going forward, federal contractors working with the DoD will have to ensure compliance with both a green building code and then apply for LEED certification. 

I would like to leave with you with a question.  What makes more sense?  

A.  A federal agency adopting a green building code to ensure that its projects are sustainable.

B.  A federal agency adopting a green building code to simplify the process of obtaining a third-party certification to ensure that its projects are sustainable. 

I am baffled. 

Photo Credit:  kalavinka

Army Abandons LEED Certification

Correction:  It is now clear to me that I misinterpreted the testimony of Dr. Dorothy Robyn, Deputy Under Secretary of Defense.  Instead, the Department of Defense is going to simultaneously require compliance with its green building code and with LEED certification.

Read more here:  Defense Department to Adopt Green Code and LEED

 

We have entered a new era of green building policy.  The Army is abandoning LEED certification.

On February 28, 2012, I reported, via a BuildingGreen article, that the Army had reiterated its commitment to LEED certification despite DoD re-authorization legislation that banned LEED Gold and Platinum certification.

Less than one month later, the Army has announced it is abandoning LEED certification. The Army is launching its own building code modeled off of ASHRAE 189.1 in lieu of pursuing LEED certification.

On March 7, 2012, Dr. Dorothy Robyn, Deputy Under Secretary of Defense (Installations and Environment) made the following statements to the House Appropriations Committee (PDF) Subcommittee on Military Construction, Veterans Affairs and Related Agencies:

In addition to retrofitting existing buildings, we are taking advantage of new construction to incorporate more energy-efficient designs, material and equipment into our inventory. In the past, all new construction projects were required to meet the LEED Silver or an equivalent standard and/or to comply with the five principles of High Performance Sustainable Buildings. This year my office will issue a new construction code for high-performance, sustainable buildings, which will govern all new construction, major renovations and leased space acquisition. This new code, based heavily on ASHRAE 189.1, will accelerate DoD’s move toward efficient, sustainable facilities that cost less to own and operate, leave a smaller environmental footprint and improve employee productivity.

The repercussions of this announcement will be widespread. 

For federal contractors, this is a game changer.  The LEED AP credential will be less valuable.  Past performance highlighting LEED certification will be less valuable, if not totally irrelevant.  Construction firms will have to learn to build to ASHRAE 189.1 instead.  

For federal agencies, this signals the beginning of the end for certifying federal buildings.  It's obvious that the Army is taking the DoD legislative LEED ban seriously. I can all but guarantee that the Navy and Air Force follow the Army's lead in some fashion.

Federal agencies have long been one of the most important supporters of LEED certification. The Navy was the first agency to adopt the certification. After the Army, Navy and Air Force stop pursuing LEED certification, how do you think other federal agencies will respond?

For the US Green Building Council, this could be a devastating blow.  Can the USGBC and LEED survive without the support of the federal government?  Because that is the new reality of green building policy.

Photo Credit:  Defence Images

Destiny USA Reaches the Green Bonds Finish Line

I apologize for the recent hiatus here at Green Building Law Update.  If you want to see what I have been up to, check out ClaimKit (www.claimkit.com). 

Now, on to green building legal news.

You may recall that in 2011, I published many, many articles on the Destiny USA project.  Here's a quick summary of the Destiny USA story

In 2007, the developer of a large-scale mall project received $228 million from a federal Green Bonds program in exchange for installing green building and renewable energy technologies.  The developer recently revealed the many of the green technologies will not be incorporated as promised. 

As reported by Rick Moriarty, the Internal Revenue Service (IRS) notified the Syracuse Industrial Development Agency on March 17 (2011) that it would be auditing the Green Bonds issued by the Agency to the Destiny USA developer. . . .

If the IRS were to determine that non-compliance occurred, then the Destiny USA project could have lost hundreds of millions of dollars in estimated tax breaks.  

One year later, the IRS has come out with a ruling on the Destiny USA's compliance with the Green Bonds program: 

The IRS notified the Syracuse Industrial Development Agency Thursday that it has closed its audit of the bonds “with no change to the position that interest received by the beneficial owners of the bonds is excludible from gross income” under federal tax code.

In other words, income received on the bonds will continue to be exempt from federal income taxes.

The ruling also permits the release of $2.3 million that the developer had been required to hold in reserve. If the IRS had found the project out of compliance with the terms of the green bond program, it could have seized the $2.3 million as a penalty.

The IRS ruling fascinates me.  By finding the Destiny USA project complied with the Green Bond requirements, the IRS essentially conceded that the Destiny USA project simply had to promise to deliver green technologies in exchange for the Green Bond financing.  In a February 2011 letter to the IRS, the Destiny USA developer argued that the legislation simply required a promise to deliver the technology:

On February 21, 2010, Syracuse Post-Dispatch reporter Rick Moriarty published a story that disclosed the contents of a draft letter addressed to the IRS by the Syracuse Industrial Development Agency.  In the letter, the Agency and developer first divulge that many of the green building and renewable energy features that were promised as part of the Green Bonds program will not be included in the completed project.  The letter blames the economy for changes to the project. 

...

The letter then moves to the crux of the compliance argument.  The Agency and developer assert that actual installation of renewable energy systems was not required.  Instead, the letter claims the developer was only required to make promises related to renewable energy and LEED certification in order to qualify for the bonds. They conclude that the financial benefits of the Green Bonds program and the forfeiture of the Reserve Account do not depend on actual achievement of the green building and renewable energy goals.

I think it's fair to say the Green Bonds legislation was fundamentally flawed.  I can't imagine that the legislators would have been satisfied with a simple "promise" to deliver green technology in exchange for hundreds of millions of dollars in tax breaks.  

And so ends the Destiny USA debacle. 

Photo Credit:  Ben Sheperd

Army To Continue Pursuing LEED Gold and Platinum

I had been hearing whispers that the Army planned to ignore the recently-enacted LEED ban, and now we have proof.

Back in December 2011, GBLU reported on legislation that banned the Department of Defense from pursuing LEED Gold or Platinum certification.  As reported by BuildingGreen, despite the new law, the Army is reiterating its commitment to LEED certification: 

In a call with reporters yesterday, [Katherine Hammack, assistant secretary], reiterated the Army's commitment to net-zero and LEED and gave an update about some of the progress that's already been made. "We're finding it does not cost more to design and construct to LEED" standards, Hammack said.

How can the Army continue to build to LEED Gold and Platinum? 

The BuildingGreen article does a great job explaining the loophole included in the legislation: 

The legislation in question does have a loophole for LEED Gold and Platinum projects as long as they don't cost more. As we reported at the time, "Exceptions may also be made without a special waiver if achieving Gold or Platinum 'imposes no additional cost'."

That loophole is big enough to blithely drive a tank through without bothering to show ID at the checkpoint. You apparently don't have to prove that it didn't cost more--or the Army is interpreting it that way, at any rate, while working closely with Secretary of Defense Leon Panetta on "educating" Congress.

After giving a green building legal presentation at the American Society of Military Engineers in Fort Leonard Wood last month, I had a chance to talk to contractors about the LEED ban.  They indicated they have been told to simply submit bids that indicate LEED Gold or Platinum costs the same as LEED Silver.  

Is this the end of the LEED ban?  The politics behind the LEED ban have nothing to do with fiscal issues, and everything to do with wood certification, at least according to one Congressman who voted for the legislation.  Do you think Congress will be receptive to the Army's use of the LEED loophole?  

Congress Restricts LEED Spending

It has been a rough year for Congress.  The Republican and Democrats, the House and Senate -- no one can seem to agree. 

Unless we are talking about green buildings. 

In June, I reported on the Department of Defense Reauthorization bill that passed the House of Representatives.  In the legislation, the Department of Defense was banned from pursuing LEED Gold or Platinum certification. 

But would the Senate agree to a similar LEED ban?  

As reported by Lloyd Alter at Treehugger, the Senate passed the House bill with an Amendment that did not mention LEED.  Thus, the Senate passed the House's LEED ban for DoD projects.  You can review the messy details at Thomas.gov.   

Here is the actual text of the LEED ban: 

 

 

 

 

 

 

What is the intent behind the LEED ban?  Is Congress concerned about the financial outlay for LEED certification?  Or is Congress trying to reign in the design and construction of plush government buildings? 

In fact, the intent of the LEED ban stems from a much more contested issue -- the wood wars.   One member of Congress explained that he supported the DoD LEED ban because he believes LEED inaccurately evaluates wood products

Sen. Roger Wicker, R-Miss., helped lead the effort to place the language into the appropriations bill on grounds that the Pentagon needed to think more about building products' green qualities over the course of their entire life--from the moment a product's raw materials are extracted from the earth to when that product's components are tossed out or, even better, recycled. This notion, called "life-cycle analysis," has been gaining much momentum in the green building community. And on this front, some groups--including the Green Building Initiative program, a rival to USGBC's LEED--have embraced life-cycle analysis.

"As the Department of Defense works to improve energy efficiency, it is important that its building standards be based on sound science and incorporate due process in their development and implementation," Wicker said in a statement. "Standards should take into consideration the full life cycle of wood products, including the environmental benefits provided by our domestic reforestation programs. After completing this study, the Department of Defense should use credible standards that more accurately assess U.S. wood products."

After reading that quote, I couldn't help but think of the fateful vote this past year when USGBC members shot down a LEED credit that would have recognized alternative wood certifications.  Under the existing LEED rating system, points are only allocated for wood products certified by the Forest Stewardship Council (FSC).  

I don't think I can overstate how important this LEED ban is for future green building policy.  For example, the Navy was the first federal agency to adopt LEED certification when it did so in 2000.  The Navy will have to rewrite its current LEED policies (or submit waivers for every project): 

The Navy continues to aggressively pursue sustainable development; in May 2011, the Secretary of the Navy announced that all Department of the Navy Military Construction (MILCON) projects will be built to LEED Gold standards. For FY11 and FY12, applicable MILCON projects shall achieve sustainable design and construction equivalent to or above LEED Gold, with certain exceptions. For FY 13 and later, applicable MILCON projects will be required to achieve sustainable design and construction equivalent to, or above, LEED Gold.

The DoD could certainly decide to continue pursuing LEED Gold and Platinum certifications.  But will DoD officials fight for LEED certification while other military programs are facing substantial cuts?  This legislation will likely have a chilling effect not only on DoD green building projects but also on other federal agencies.  Congress has clearly expressed an intent to not support LEED Gold and Platinum projects.  Don't be surprised to see agencies adopting the International Green Construction Code (IgCC) in lieu of LEED certification. 

Do you think federal officials will be willing to ask for LEED waivers? 

Maybe We Should Rethink LEED Laws

For much of 2011, my focus has been the Destiny USA project.  This should not come as a surprise to readers who waded through my thirteen posts on the topic.  I had planned to not write about the Destiny USA project again.  But then I came across a press release while I was at Greenbuild: 

Destiny USA in Syracuse Aims to be America's Largest LEED® Gold Certified Commercial Retail Project; More than 100 Tenant Retail Spaces to Also be Certified

As you may recall, the Destiny USA project received over $200 million in tax-free financing through the federal government's Green Bonds program.  In exchange for the financing, the developer of the project promised, among other things, to get LEED certification and rely on massive amounts of renewable energy. The IRS is now investigating the project because it appears the renewable energy systems were never installed.

I think it's safe to say the Green Bonds program was a failure.  But there is another policy issue that bothered me that I have not previously touched on. 

Did the US Green Building Council act appropriately in assisting the Destiny USA project? 

As I was reading the Destiny USA press release, one passage caught my eye: 

"This project is important to me and to USGBC," said Rick Fedrizzi, President, CEO & Founding Chair, U.S. Green Building Council.  "Not only is it in my backyard but it will also be a showcase in the community for what can be done with green building and LEED.  The visitors who walk through the Destiny USA doors every day will learn about the importance of green building and be able to see today's latest green building strategies in action."

For those looking for an argument that LEED should never be used in regulations or law, I present to you Exhibit A: 

  • The Destiny USA project has to get LEED certification as a condition of a federal law.
  • The USGBC is a non-profit entity responsible for the LEED rating system.
  • The USGBC CEO states the project is important to him and his company because it is located in his hometown of Syracuse, New York.

If a federal official displayed this type of favoritism for a project, he would be removed.  Litigation would certainly ensue challenging the procurement process.

If LEED is going to be used in law, whether it be through incentives or mandates, then the USGBC and its CEO should not get to play favorites with projects.

Of course, this is not what is happening.  And this type of conflict of interest and favoritism could undermine the credibility of the LEED rating system and of the green building movement.  

Did You Miss Greenbuild?

Over the past year, I've been lucky enough to get to know Jeremy Sigmon at the US Green Building Council. Jeremy works to educate the public and government officials about building codes. It has been a busy year for him with the introduction of the International Green Construction Code (IGCC). When Jeremy invited me to sit on a panel at Greenbuild in Toronto, I jumped at the opportunity.

Now you can listen to the audio of our Greenbuild panel.  The audio is available at the USGBC Knowledge Exchange and is the first option ("Greenbuild 2011 Specialty"). 

The panel created a moment of clarity for me and I went on a bit of a rant. Hope you enjoy the podcast and let me know if you any thoughts or questions.

I will also be participating in an upcoming green building legal webinar with the ABA Fidelity and Surety Law Committee. Surety bonds are often misunderstood within the green building industry. Hopefully we can provide some clarity on how surety bonds and green building projects intersect: 

The live audio webinar will take place next Thursday, December 8, 2011 from 1:00 pm - 2:30 pm Eastern. Entitled Keys to Managing Green Construction Risks, Liability and Litigation, this program will focus on the key concerns and solutions to the ever changing green construction culture. With the emergence of new green building codes, updates in green ratings systems, and new legal issues, green construction has become one of the newest areas of risk, liability and litigation for the construction industry. Our esteemed panel brings a wealth of practical experience in managing these risks in contracts, insurance and surety bond issues, including actual case studies from the field of failed green construction.

For more information on this program,
click here
.

I hope to hear from you on the webinar. 

LEED "Pledge" to Replace LEED Bond

One of the very first green building legal conundrums may be resolved. 

The Washington Business Journal reported on October 31 that legislation will be introduced in Washington D.C. that will create an alternative to the much maligned LEED bond requirement in the D.C. Green Building Act of 2006. 

Under the Act, as currently written, as of January 1, 2012, all new construction greater than 50,000 square feet must obtain LEED certification.  Under the proposed legislation, developers will be permitted to make a binding "pledge" that LEED certification will be attained: 

Under the pledge route, if a new building fails to be certified LEED within two years of receiving its certificate of occupancy, the developer would be penalized $7.50 per square foot for buildings under 100,000 square feet, and $10 per square foot for buildings larger than 100,000 square feet.

Notably, the D.C. Council proposed to create an alternative enforcement mechanism instead of correcting the D.C. Green Building Act's many flaws.  Two prominent surety associations outlined these flaws in a white paper for the D.C. Government.  The associations suggested that LEED bonds would be made available if the legislation were to be corrected. 

For design professionals and contractors working in Washington D.C., the LEED Pledge will mean more onerous contract terms.  If developers can be penalized up to $3 million for not achieving LEED certification, these same developers will require guarantees of LEED certification from design professionals and contractors.  Don't be surprised to see penalty provisions in contracts that mirror the LEED pledge penalty. 

What do you think of the LEED Pledge?  

Photo credit: missrivs

The Green Building Code is Too Confusing

ConfusedI have spent just over a year thinking about the International Green Construction Code (IgCC).  I know it has been one year because I received my first copy of the code at Greenbuild 2010.  My conclusion today about the code is no different than it was one year ago: 

The IgCC is unnecessarily confusing. 

Take, for instance, the IgCC's basic setup -- it's two codes in one.  Apparently, trying to figure out one set of building codes is not enough.  Within the IgCC, jurisdictions have the option of adopting either the IgCC code or ASHRAE 189.1.  Yes, I know that that sentence does not make sense, but it is correct. 

Other aspects of the IgCC create more confusion.  Not only does it include mandatory code provisions, but it also contains electives that can be selected by a jurisdiction and a project team.  Why would the code writers have included electives in a mandatory building code?  One theory I have heard is that the code writers wanted to mimic the elective credits in the LEED rating system.

I support the creation of a green building code.  Too many jurisdictions were mandating the LEED rating system as a de facto building code.  The IgCC was an attempt to fill that void with a system more appropriately suited to a building code.  However, the current version of the IgCC will create unnecessary confusion that will result in the following: 

  • Building inspectors will struggle to learn to enforce a complicated building code that changes with each project depending on the electives selected.  This will result in inconsistent building code rulings.
  • Design and construction professionals will have to comply with different building codes depending on the jurisdiction.  This means that professionals may have to learn more than one building code to do work in two adjacent communities. 
  • Insurance and surety companies will struggle to ensure the risks associated with confusing green building codes.  I have already heard one large insurance company state that the adoption of green building codes will change the standard of care for design professionals going forward. 

What do you think of the International Green Construction Code?  

 

Could Solyndra Happen To Green Building Policy?

Of course it could -- it already has.  But first lets recap the Solyndra saga. 

Solyndra is the solar panel manufacturer in California that qualified for a $535 million federally-backed loan.  Since receiving the loan, the price of solar panels has plummeted - good news - which has squeezed the margins of manufacturers like Solyndra.  The result:  two weeks ago, Solyndra announced bankruptcy.  And taxpayers are now responsible for repaying a half billion dollars. 

As I started thinking about the broader implications of the Solyndra collapse, I could not help but draw parallels to a similar federally-funded green project that has not panned out as expected:  Destiny USA.

Destiny USA was a proposed $20 billion mega-mall that was supposed "to be not only the biggest man-made structure on the planet but also the most environmentally friendly."  To support the project, the developer applied for a $2 billion Green Bonds program that Congress passed in 2004.  In 2007, the Destiny USA project qualified for $238 million in tax-free financing through the Green Bonds program.  In exchange, Destiny USA promised to redevelop a brownfield site, use massive amounts of renewable energy, and get LEED certification for 75 percent of the project. 

However, from the outset, there were groups questioning whether Destiny USA could satisfy the Green Bond requirements: 

[Ashok Gupta, senior energy economist at National Resources Defense Council] said he was impressed by the DestiNY team's enthusiasm for the strict guidelines, but wasn't sure the mall builders knew what they were in for. "I have a hard time believing that the DestiNY executives can deliver on their green promise," he said. "These are not developers who have ever attempted a green project, and it's not clear to me that they understand the extent of their commitment, financially and practically." Even developers who have worked on multiple green buildings would find a project of this scale to be extraordinarily challenging, he said.

It appears Gupta was right.  In February 2011, Rick Moriarty reported that the Destiny USA project would not deliver on its renewable energy promises.  Furthermore, it appears that the building itself will not be obtaining LEED certification.  Instead, the USGBC and Destiny USA developers announced that all retail units inside the mega-mall would seek LEED certification: 

“It’s never been done before,” said [USGBC CEO Rick] Fedrizzi as [Destiny USA developers] sat nearby. “When a major, major mall puts together a program creating leases requiring —requiring —tenants to be LEED-certified, it’s a major, monumental event.”

Coming back to our original question, the answer is yes, a Solyndra-type failure could happen to green building policy.  It already has.  And if the Green Bonds that funded the Destiny USA project were part of the American Recovery and Reinvestment Act, I can promise you it would be splashed on the front page of many newspapers.  

What do you think?

What do Hurricanes, Earthquakes and LEED Bonds Have in Common?

Three weeks ago, Washington DC was hit by both an earthquake and a hurricane. But this was not the most shocking development during the week -- at least for me.  

Here's what shocked me the most: I learned there is a chance that LEED bonds could be available in our nation's capital.

On Wednesday, August 24, I attended a meeting of the DC Green Building Codes working group. The topic to be discussed was the DC Green Building Act's LEED bond requirement. For the uninitiated, the DC Green Building Act requires that all new construction in D.C. greater than 50,000 square feet be LEED certified starting January 1, 2012. Project developers have to post a bond guaranteeing the certification. The bonds range from 1 to 3 percent of a project's total cost, and can be as much as $3 million. 

I have been writing about the LEED bond requirement since the first week of this blog. I once compared LEED bonds to unicorns because they only existed in a fantasy world. 

LEED bonds do now exist and have been underwritten to support projects applying for the Arlington County, Virginia bonus density program. But it is unlikely that LEED bonds were going to be underwritten in Washington DC due to problems with the Green Building Act.  At the working group meeting, the SFAA and NASBP issued a white paper (PDF) summarizing the Act's many problem, including:

  • "The regulations should state the developer must furnish the bond"
  • "The regulations should provide for claims less than the full bond amount." 
  • "Consider the relationship between the bond amount and the financial thresholds required by the surety. . . . We suggest that the regulation should set the maximum amount at a lower level that is sufficient to provide the necessary financial protection to the District." 
  • "The regulations should set forth the appeals process by which a developer can appeal a USGBC determination.  Notice of appeal should be provided to surety." 

The last issue is of most interest to me.  The D.C. Department of the Environment (DDOE) has indicated that a party other than the US Green Building Council could determine compliance with LEED certification.  Whether these third-parties would be in the form of a government agency or a for-profit company remains to be seen.  But it would certainly be interesting to have another entity looking over the shoulder of the US Green Building Council. 

The DC government has less than four months to revise the Green Building Act to reflect the suggested changes in the SFAA and NASBP white paper.

Will DC make the necessary changes to the Green Building Act by January 1, 2012?

Photo credit: Cape Town Craig

IGCC Series: Star Gazing in a World of Light Pollution

The International Green Construction Code (IGCC) is a model code for cities seeking to promote sustainable building practices through their building codes. The IGCC promotes transition from the current voluntary green construction certifications, like USGBC’s LEED, to mandatory green construction codes. As the most recent revisions of the IGCC are currently under review, Green Building Law Update hopes to promote awareness by examining some of the code sections.

Section 405.1 Where this section is indicated to be applicable in Table 302.1, uplight, light trespass, and glare shall be limited for all exterior lighting equipment as described in Sections 405.2 and 405.3.

405.3 Light trespass and glare. Where luminaires are mounted on buildings at locations that are within a distance to the lighting boundary, measured horizontally, that is equal to twice the height that the luminaire is mounted, such luminaires shall not exceed the applicable glare ratings specified in Table 406.3(1). All other exterior luminaires shall not exceed the applicable backlight and glare ratings specified in Table 406.3(2). 

In today's society, star gazing is unfortunately more likely to refer to looking at pictures in tabloids than to nights spent staring at a starlit sky. If one were to try star gazing near a city tonight, one would find significantly fewer visible stars than were visible a century ago. The visibility of the stars has significantly decreased in recent years due to excess artificial light commonly referred to as light pollution.

As a recent public art installation on the Hudson River seeks to illustrate, fewer constellations are visible in New York City due to the increasing amounts of excess light forming an orange haze above The City That Never Sleeps. The installation uses solar powered LED lights to "reflect" the constellations in the river that are no longer visible because of increased light pollution.

New York City is not alone in its problem of disappearing constellations. Those who go camping can attest to the vastly greater number of visible stars away from the city lights that have become a fixture of 21st century life. 

Light pollution is not only concerned with the obvious aesthetics and wasted energy. Multiple studies have been conducted to analyze the human health effects of light pollution. However, humans are not the only ones impacted. Animals, especially nocturnal ones, can be easily confused by the excess light and alter their behaviors. Have you ever had a bird chirping at an obnoxious hour of the night? You can blame the excess artificial light for your lost sleep.

Reducing light pollution is an often overlooked aspect of green building. Preventing light pollution does not equate to promoting a return to the Stone Age. Rather, green building professionals concerned with light pollution hope to encourage builders and lighting designers to focus lighting on areas where it is needed (the ground) and prevent wasted light from illuminating the sky. The IGCC advocates this approach through its light pollution control provisions which are provided as an elective code requirement.

The IGCC provides measurements limiting the amount of light fixtures can direct upward as well as the amount of light fixtures can emit horizontally that may "trespass" over property lines. These provisions also provide numerous exceptions for lighting monuments, roads, and athletic fields, among others. Despite the many exceptions and the elective nature of the light pollution control provisions, the IGCC provides a valuable framework for cities wanting to curtail the rapidly increasing rate of light pollution.

The next time you are star gazing, consider this quote by Ralph Waldo Emerson: "If the stars should appear but one night every thousand years, how man would marvel and stare."  The IGCC light pollution provisions aim to ensure this never becomes a reality.

Photo Credit: Girl flyer

Why the D.C. Green Building Act is Fundamentally Flawed and a Solution

I can’t believe it has come to this.

We are just over four months away from January 1, 2012. On that date, the D.C. Green Building Act of 2006 requires that all new construction of non-residential buildings greater than 50,000 square feet be LEED certified. While there are many technical problems with the Green Buildling Act, the very premise of the law is fundamentally flawed. Thankfully, there is a very obvious solution to the Act’s flaws and technical deficiencies.

Why is the D.C. Green Building Act Fundamentally Flawed?

How can I make this claim? Because the D.C. Government does not understand what a LEED mandate actually entails.

I was recently reviewing materials published by the D.C. Department of the Environment (DDOE) regarding the Green Building Act (GBA). One slide caught my attention:

Do you see the problem with this slide? The DDOE views the Green Building Act LEED mandate as a “ceiling.” If the D.C. Government believes it has passed a ceiling then it truly does not understand how the Green Building Act and its LEED mandate will function.

A LEED mandate is not a ceiling. Rather, a LEED mandate is a floor. Because the GBA requires all buildings to obtain LEED certification, it functions as a quasi building code. In other words, LEED certification is a minimum requirement, the very definition of a so-called "floor."

Furthermore, the very premise of putting a "ceiling" on the green building industry is a terrible and nonsensical idea. A ceiling would actually prohibit buildings from being built to be greener or more efficient than LEED. The GBA requires buildings to meet LEED certification and yet there are numerous LEED Platinum buildings in Washington, D.C.. Does DDOE imagine that the GBA will serve as a cap and prevent future buildings from seeking LEED Gold or Platinum certification?

The Solution

The intent of the Green Building Act is to “raise the performance of the District's buildings so that they are environmentally sustainable, healthy, and more efficient to operate” and to “make the District of Columbia a national leader for green building.” The solution to the problems with the Green Building Act seems obvious to me and ensures the intent of the Act is satisfied.

First, the District needs more time to correct the many problems with the Green Building Act. The deadline for implementation of the LEED mandate should be extended to 2013 or later. It is very unlikely that all of the Green Building Act’s deficiencies, which will be discussed in a later post, can be corrected in the remaining four months.

Second, all of the D.C. government’s green building resources need to be applied to green building codes. The International Green Construction Code will be released sometime in 2012. D.C. can be one of the first cities to adopt a mandatory green building code if it starts reviewing IgCC public version 2.0 now. Adopting and implementing this code will raise the performance of District buildings and shine a spotlight on the city as the first to adopt the code.

For those of you interested in learning more about the D.C. Green Building Act, I would recommend that you attend a D.C. Green Codes Working Group meeting next Wednesday, August 24 at 9:30 am. The meeting is at 1350 Pennsylvania Avenue in Room 412. Email if you need more details -- chris@greenbuildinglawupdate.com.

Does the Congressional LEED Ban Make Sense?

One of the great parts about Green Building Law Update is interacting with astute readers. One recent comment has forced me to rethink the proposed Department of Defense Reauthorization Bill ban on LEED certification.

In the comments to last week’s post, reader R. David Chambers asked an important question:

Chris -
your quoted section says '... LEED Gold or Platinum certification ...', which appears to NOT preclude LEED certification at a Certified or Silver Level - I have not read the bill, but it appears from your snippet that if the funds required to achieve Certified or Silver 'backed into' Gold or Platinum there would be '... no additional cost to DOD.'
am i missing something?

No, David, you are not missing anything. And your comment raises an important issue about the policy underlying this bill.

There are two primary reasons why I can see a politician opposing government spending on LEED certification:

1. LEED certification is primarily a marketing tool for green buildings. The federal government does not need to advertise its green buildings. I have always considered this a legitimate policy argument.

2. The government should not be investing in green buildings, period. To me, this argument has less merit. Many studies now find that a green building can be built for the same costs as a non-green building. And green buildings should result in cost-savings in energy and water useage.

If the drafters of the DoD reauthorization bill were concerned with the first policy issue -- the costs of certification -- then presumably they would have banned spending on all LEED certifications.

However, the DoD reauthorization bill only prohibits funding for LEED Gold or Platinum. Buildings that obtain LEED Gold or Platinum certification generally cost more than buildings that obtain Silver or Certified certification. It appears that the DoD reauthorization bill ban on LEED Gold or Platinum certification is based on the policy that the federal government should not be investing in advanced green buildings.

How do you interpret the DOD reauthorization bill ban on LEED Gold or Platinum certification?  Do you think the ban has merit? 

Photo credit: David Reeves

IGCC Series: The Energy Conservation Obstacle to IGCC Adoption

The International Green Construction Code (IGCC) is a model code for cities seeking to promote sustainable building practices through their building codes. The IGCC promotes a transition from the current voluntary green construction certifications, like USGBC’s LEED, to mandatory green construction codes. As the most recent revisions of the IGCC are currently under review, Green Building Law Update hopes to promote awareness by examining some of the proposed code sections.

Section 601.1 - This chapter shall regulate the design, construction, commissioning and operation of buildings and building sites for the effective use of energy.

Section 601.2 - The intent of this code is to ensure the effective use of energy by building and building sites. This chapter is intended to provide flexibility to permit the use of innovative approaches and techniques to achieve the effective use of energy.

With the heat wave currently sweeping the country, the U.S. power grid is being put to the test. As electricity consumption continues to rise, the increased stress on the existing energy infrastructure has the potential to cause major energy challenges. This increased stress on our grid and sources of electricity makes designing energy efficient buildings increasingly important.  

In the IGCC, the International Code Council (ICC) addresses building energy efficiency by relying on its widely adopted International Energy Conservation Code (IECC). Various versions of the IECC have been adopted by the majority of U.S. states and localities. Most states have adopted the 2009 IECC as a federal requirement to be eligible for $3.1 billion set aside in the 2009 stimulus for state energy program grants. 

All IGCC buildings must meet (or sometimes exceed) the IECC building envelope air leakage, mechanical systems, service water heating equipment, and electrical systems codes. In addition to these IECC codes, the IGCC merely adds a requirement that buildings demonstrate energy efficiency through a self-selected compliance path. To incorporate a wide range of energy efficiency techniques, the IGCC provides various compliance path choices including performance-based, outcome-based, and energy use intensity-based options.

Developers are often more inclined to implement green building measures that have a measurable payback. Since energy is a continuous operating cost that is quantifiable and billed on a monthly basis, it is relatively easy to identify direct paybacks from an investments in energy efficiency. 

For the many jurisdictions that have already adopted IECC, the IGCC would largely replicate the IECC requirements. Unfortunately for the IGCC, energy efficiency and the related cost savings is often the best selling point for green construction for both private development and code adoption. By adding little on the topic of energy savings, the IGCC is left with an even tougher hill to climb toward widespread adoption or adoption at all as an actual code and not a voluntary program.

Photo Credit: digitizedchaos

Defense Department LEED Funding to Be Eliminated?

It is not looking pretty for federal green building policy.

Earlier in the year, I speculated that Congress might target green building certification as an unnecessary cost.  Well, it happened.  From the ASHRAE Government Affairs Update

House Passes National Defense Authorization Act for FY 2012 – Would Require Cost-Benefit Analysis & Long-Term Payback for DoD Adopting ASHRAE Standard 189.1

The U.S. House of Representatives passed the National Defense Authorization Act for Fiscal Year 2012 (H.R. 1540) by a vote of 322-96. . . .

The bill would also require a cost-benefit analysis and return on investment for energy efficiency attributes and sustainable design achieved through DoD funds used to receive a Leadership in Energy and Environmental Design (LEED) Gold or Platinum certification.

But here's the real kicker in the legislation: 

The bill would prohibit FY 2012 DoD funds from being used to achieve a LEED Gold or Platinum certification, however these certifications could be obtained if they impose no additional cost to DoD.

As I understand it, LEED certification will always impose an additional cost on the DoD simply because administration fees have to be paid to the US Green Building Council in order to get the certification.  It appears that this legislation, if passed in this form, would bar the DoD from pursuing LEED certification. 

According the ASHRAE update, the Senate will propose its own bill.  It will be interesting to see how the LEED certification funding issue is dealt with in the Senate and in conference committee.

I have often wondered why federal buildings should pursue LEED certification.  I always viewed certification as a marketing tool to demonstrate that a building was green.  But a green building policy wonk recently made an interesting point to me:  by pursuing LEED certification, the federal government receives third-party confirmation that it is getting the green building it contracted for.  

Is this the beginning of the end for federal policy that supports LEED? Should federal buildings pursue LEED certification in the first place? 

IGCC Series: Longevity and Adaptability in Green Building

The International Green Construction Code (IGCC) is a model code for cities seeking to promote sustainable building practices through their building codes. The IGCC promotes transition from the current voluntary green construction certifications, like USGBC’s LEED, to mandatory green construction codes. As the most recent revisions of the IGCC are currently under review, Green Building Law Update hopes to promote awareness by examining some of the code sections.

505.1 A building service life plan (BSLP) in accordance with this section shall be included in the construction documents. The design service life shall not be less than 60 years and the BSLP shall indicate the design service life selected for the building.

505.1.2 A plan to accommodate future re-configuration, dismounting, and disassembly of interior non-loadbearing walls, partitions, lighting and electric systems, suspended ceilings, raised floors, and interior air distribution systems for a minimum of 25 years shall be included in the BSLP. The plan shall verify that the interior materials, components, and assemblies have a minimum service life of 25 years, and are adaptable to future reconfigurations with in the interior spaces.

Among the numerous aspects of green development, building service life is rarely mentioned. Building longevity and adaptability are critical to any analysis of long term sustainability.  Among the various elements that factor into a building's service life are the design, materials, utility, location, and ownership. Due to these competing interests, a universal standard for building service life is difficult to define.

The building service life plan (BSLP) required by the IGCC mandates all buildings have a 60 year life span unless a shorter span of 25 years is approved and justified by community development plans. In response to new technology or unforeseen future needs, the IGCC also requires buildings to include plans for accommodating interior renovations for a minimum of 25 years.

Despite sustainable construction and management practices, if a green building does not serve its intended purpose after a mere ten or fifteen years, its sustainability should rightly be questioned. To illustrate some of the sustainability issues related to building service life it is easiest to contrast two very different projects: a university building and a shopping center. 

Universities typically build on a campus where they plan to own and occupy buildings for the foreseeable future. This anticipated long-term ownership can affect the employment of better building materials and incorporation of sustainability features with a long-term payback. It is no surprise, then, that universities were some of the first to find value in and adopt green building programs.

Retail developers often build shopping centers near new or trendy residential areas. Unlike university buildings, shopping centers are typically built with low cost materials like cinder block, stone, and stucco. Some retail developers do not plan to own a new shopping center for any extended period after it is leased. This short turnaround can disincentivize investment in sustainable features and high quality materials. Many of the savings from sustainable features are realized through lower energy consumption but the tenants typically pay shopping center utilities.

The IGCC’s building service life plan takes a step toward finding a middle ground between these development strategies to increase overall sustainability. Balancing long term development plans with the ability to adapt to the needs of a rapidly evolving society is vital to the ultimate success of a building life plan.

The Schermerhorn Symphony Center in Nashville, TN demonstrates the notable difference when building service life is a top consideration. From the outset, Nashville's new venue was designed to last 300 years. To achieve this goal, the design team incorporated elements of many European performance halls combining classic architecture with modern technology and high quality materials. Nashville's result is a timeless building that is also adaptable to future technology.

Unfortunately, the IGCC fails to account for these differing motivations and incentives for sustainable building across various industries. Symphony halls do not need to adapt to new innovations at the same pace as hospitals. Should a gas station be built to last for 60 years? Or even 25 years? Is that the best use of monetary or natural resources?

Though the current provision needs further conversation and refinement, the IGCC's efforts to account for this often overlooked sustainability issue should be applauded. In addition to sustainable materials, clean energy, and diverted waste, our green buildings must be lasting and adaptable to be sustainable.

IGCC Series: Onsite Renewable Energy Encourages Solar Panels

The International Green Construction Code (IGCC) is a model code for cities seeking to promote sustainable building practices through their building codes. The IGCC promotes transition from the current voluntary green construction certifications, like USGBC’s LEED, to mandatory green construction codes. As the most recent revisions of the IGCC are currently under review, Green Building Law Update hopes to promote awareness by examining some of the code sections.

Section 611.1: Renewable energy systems requirements. Buildings that consume energy shall comply with this section. Each building or surrounding lot or building site where there are multiple buildings on the building site shall be equipped with one or more renewable energy systems in accordance with this section.

There seems to be a new solar energy headline everyday. The DOE recently announced $4.5 billion in solar energy guarantees,  Boeing plans to build the largest solar roof in the U.S., and even President Obama is working to put solar panels back on top of the White House. Nowadays, photovoltaic panels are apparently so affordable that even some of India's poor have given up on India's unreliable grid in favor of solar energy.
 
As new financing options and advancing technologies continue to lower the upfront costs of photovoltaic solar panel installation, solar panel-covered roofs are quickly becoming all the rage. The IGCC requirement for every energy consuming building to have an onsite renewable energy source will likely lead even more building owners to install solar panels.
 
The IGCC allows either photovoltaic solar panels, wind energy, or solar water heating to meet the onsite renewable energy requirement. Wind energy is also growing rapidly but the scale of the wind turbines and various location and wind requirements make it an unlikely energy source for many building sites.  The lack of a viable wind alternative leaves solar power as the most likely energy source to satisfy this IGCC requirement.
 
Like many renewable energy sources, solar panels have been around for years but they have struggled to break into the mainstream energy market. As more cities adopt the IGCC requiring onsite renewable energy, can the IGCC help solar panels go mainstream? Or will this solar trend be as fleeting as President Carter's White House solar panels?
 

Photo Credit: agahran

Are Green Building Codes a Bad Idea?

I was recently given the opportunity to interview Thomas Taylor and I jumped at the opportunity for two reasons.  First, Taylor wrote the forward for the first green building book I ever purchased.  Second, Taylor was involved with the Northland Pines High School project, which I have written about extensively.  Taylor currently works for Alberici’s sustainable consulting service, Vertegy.  This is part two of a fascinating two-part interview.

Chris: How do you feel about the push to develop green construction codes?

Thomas: As a general statement, I think green codes are a bad idea. There are several reasons why I feel this way.

  • Codes have been put in place to protect health and safety. Green buildings do promote some level of health benefits, but it is really not life safety as much as quality of life. Making green building a code issue diminishes all things to the lowest common denominator.
  • Construction firms typically see language in contract documents that state that all of their work will be done in accordance with all applicable codes and laws. A green building code would then force a contractor to build green in order to stay in compliance with the code, even if the contract documents did not contain such features. A contractor cannot use the excuse, “I followed the plans and specifications,” as a defense when it comes to code issues.
  • Most municipalities across our nation are cash strapped. Enforcement of green codes would require a completely new skill set for code officials that currently does not exist. How are jurisdictions going to afford additional training and enforcement when they cannot keep up now? Poorly trained green code officials will only lead to more problems than solutions.
  • I have reviewed many of the proposed green codes. The new proposed federal energy code states that a building owner cannot achieve the final occupancy permit stage until one year after beneficial occupancy of the building and that the building must demonstrate energy performance to code standard. What is a code official going to do if a building does not perform? Condemn the building? Evict the occupants?  Fine the building owner? Lawmakers rush to push for green building codes before they think through the long-term implications.
  • If you have ever tried to get a permit for a project, you know that it is often not an easy task. Can you imagine how much harder it would be if the code officials were also reviewing the plans and specifications for recycled content in building materials and the energy model results to see if the building systems were going to achieve predicted energy conservation?

Chris: How do you feel about various jurisdictions requiring LEED certification as an alternative to green codes?

Thomas: Using LEED certification as an alternative to green building codes is a valid choice. The municipalities that choose to go that route are at least placing the burden for review onto USGBC/GBCI instead of trying to do it themselves. If I had a preference, I would rather see communities use green building as an incentive instead of a mandate. Many municipalities will speed permitting or provide tax abatements for developers who are willing to go green voluntarily.

Chris: How have green building initiatives been received generally in the St. Louis area and the Midwest?

Thomas: The benefits of incentives are not restricted to the Midwest; anytime a developer can get an incentive, they like it.

 

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IGCC Series: Diverting Construction Waste While Cutting Costs

The International Green Construction Code (IGCC) is a model code for cities seeking to promote sustainable building practices through their building codes. The IGCC promotes transition from the current voluntary green construction certifications, like USGBC’s LEED, to mandatory green construction codes. As the most recent revisions   of the IGCC are currently under review, Green Building Law Update hopes to promote awareness by examining some of the code sections.

Section 502.1: Not less than 50 percent of non-hazardous construction waste shall be diverted from landfills, except where other percentages are indicated in Table 302.1. A Construction Material and Waste Management Plan shall be developed and implemented to recycle or salvage construction materials and waste.

There is a silver lining for the Great Recession: less trash.  National waste has dropped causing the annual intake of the nation's largest landfill to fall by 34%.  Reflecting in part the effects of a slowed economy, this precipitous drop also demonstrates the growing trend favoring green waste management. 

As a major producer of waste, construction has been no exception to this green trend. In green building, the ultimate destination of waste leaving a construction site is becoming just as important as the materials coming into the site. In D.C., Jones Lang Lasalle (JLL) diverted 72% of its construction waste last year, adding up to over 1,200 tons.  

Among the cranes and bulldozers, construction sites often contain oversized and overflowing dumpsters. It should be no surprise that the average new construction project yields 3.9 lbs. of waste per square foot while the average building demolition project yields 155 lbs. of waste per square foot.

Through its requirement of a Construction Material and Waste Management Plan, the IGCC strives to reduce construction waste in landfills. Section 502.1 requires at least 50% of construction waste to be diverted to other uses. Under Table 302.1 jurisdictions may opt for more strict requirements of up to 75% waste diversion.

Construction waste includes both demolished materials as well as excess new building materials. Demolition waste can be diverted from landfills using a recycling company, reusing old materials in the new construction, or by donating or selling materials to others. 

In the current economy reuse and recycling is an increasingly popular money saving strategy. Construction projects have used similar strategies and found financial incentives in coordinating waste diversion efforts. 

One builder's trash may be another builder’s treasure. Selling some of their diverted waste can help builders offset some of their costs.  JLL noted that steel waste was especially valuable. Builders can also save money with a comprehensive plan to prevent overbuying and increase the efficient use of materials.

As building codes increasingly encourage the use of recycled goods, builders are encouraged to find the most environmental and economic use for their disposed materials. The IGCC Construction Material and Waste Management Plan promotes and codifies the green waste trend which will hopefully maintain these practices in a better economy.

Photo Credit: ell brown

IGCC Series: Using Trees & Streetscaping to Mitigate Urban Heat Island Effects

 

The International Green Construction Code (IGCC) is a model code for   cities seeking to promote sustainable building practices through their building codes. The IGCC promotes transition from the current voluntary green construction certifications, like USGBC’s LEED, to mandatory green construction codes. As the most recent revisions of the IGCC are currently under review, Green Building Law Update hopes to promote awareness by examining some of the code sections.

404.1 The heat island effect of building and building site development shall be mitigated in accordance with Sections 404.2 and 404.3.

404.2.3 Where shading is provided by trees, such trees shall be selected and placed in accordance with all of the following:

1. Trees selected shall be those that are native to, or non-invasive and adaptive to, the region and climate zone in which the project site is located. Plantings shall be selected and sited to produce a hardy and drought resistant vegetated area;

2. Construction documents shall be submitted that show the planting location and anticipated ten year canopy growth of all trees and that show the contributions of existing tree canopies; and;

3. Shading calculations shall be shown on the construction documents demonstrating compliance with this section and shall include only those hardscape areas directly beneath the trees based on a ten year growth canopy. Duplicate shading credit shall not be granted for those areas where multiple trees shade the same hardscape.

How do trees decrease the urban heat island effects and increase building energy efficiency?

Buildings should not be the only element of our urban cores that are going green. Many U.S. cities are looking to reject their concrete jungle moniker by greening community spaces including public streets. Increased use of tree plantings in streetscaping has gained favor in cities including Houston and Nashville. Houston alone planted over 40,000 trees this past year.

These urban planting projects may seem merely cosmetic to the average citizen. But, in fact, vegetation reduces the urban heat island effect.

The urban heat island effect is the variance of an urban core temperature from its surrounding areas. The increased temperature can vary from an additional 2-5ºF during the day and up to 22ºF at night. The heat island effect is caused in part by the high concentration of heat absorbing hardscape materials (concrete, bricks, etc.) in urban areas.  As hardscape materials are shaded, divert heat, and reflect sunlight the heat island effect can be reduced. 


The IGCC seeks to mitigate the heat island effect by requiring at least 50% of hardscape materials to meet reflective, permeability, or shading standards. Section 404.2.3 allows shade from the tree canopies to factor into a building's heat island mitigation.

These IGCC codes will reward existing streetscape vegetation programs and may encourage increased tree planting efforts. Construction costs may be lowered since trees can serve as both landscaping and shade.

Unlike the other IGCC options for hardscape shading, trees also divert storm water runoff, naturally reduce air pollution, and actively cool the air around them.  

Overall, the shade and cooling provided by trees allow buildings to reduce their energy consumption. One of the most effective ways to green our buildings may be to look at the amount of green (or lack thereof) surrounding them. 

Photo Credit: torontocitylife

 

 

Florida Supports Green Building Code

 

I was recently forwarded an interesting article written by Helen Mason regarding the International Green Construction Code.  She did such a good job reviewing the state of green codes that I wanted to make it available for download (PDF) to my readers and ask her a few follow up questions.  Enjoy! 

Chris: I was fascinated to read in your article that many Florida groups and cities already have indicated support for the IGCC.  Do you anticipate jurisdictions in Florida will start adopting IGCC soon?  

Helen: Yes, I do think the IGCC will be adopted by jurisdictions in Florida. The state has a long history of being a leader in promoting all areas of sustainability. In fact, the Florida legislature has mandated incremental increases in energy efficiency up to 50% by the 2019 Edition of the Florida Building Code and has required the use of the most current version of the International Energy Conservation Code (IECC) as the foundation code. The IECC is also a fundamental component of the IGCC. 

Further evidence that Florida residents are committed to sustainability is shown by the adoption of “ Miami 21 Code” in May of 2010 which requires new buildings greater than 50,000 sq. ft. to be certified “at a minimum” LEED Silver. In addition, the developer must post a performance bond of 2% to 4% of the cost of construction which “shall” be forfeited if the building does not meet LEED Silver within a year of the Certificate of Occupancy. How “soon” the IGCC would be adopted will likely be controlled by the statutory provision that Florida building codes are revised on a three year cycle, generally six months after publication of International Code Council revisions. This would mean that adoption of the IGCC would likely not occur until the 2013 Edition of Florida Building Code.

Chris: Some jurisdictions are adopting IGCC as a "voluntary" code.  What do you think of this development? 

Helen: For many individuals, understanding and implementing the IGCC as a minimum standard will require a dramatic change in approach to their work. Therefore, I think it is reasonable for a jurisdiction to initially adopt the IGCC as a voluntary code to allow adequate time for parties to become educated and to discover any unique issues to a specific jurisdiction. However, the only way to achieve significant, predictable environmental benefits on a large scale is for jurisdictions to adopt the IGCC on a mandatory basis.

Chris: You raise a number of legal issues that may arise from the IGCC.  Which do you think is the most significant and why?  

Helen: When one is asked what “legal” issues may arise, typically you would think who is going to sue whomever; but I think the most significant legal issue arising from the IGCC is that it imposes obligations on owners to improve the energy efficiency of existing buildings. As part of our national security, particularly with the wide unrest in the Middle East, the U.S. must reduce the energy consumption of existing buildings which accounts for 72% of total electricity consumption.

These IGCC mandates for existing buildings can be a first, but important, step in achieving this goal. In addition, these obligations can produce significant public and economic benefits. Requiring periodic improvements will reduce the deterioration of existing building stock; maintain overall quality and value of all construction and thus help to preserve neighborhoods. The public will benefit by maintaining its tax base and having less strain on utility infrastructure. Finally, these provisions can help to create a stable construction job market to meet the retrofitting and compliance obligations of building owners.  

Photo credit: davesag

 

IGCC Series: Transportation Considerations for Green Buildings

The International Green Construction Code (IGCC) is a model code for cities seeking to promote sustainable building practices through their building codes. The IGCC promotes transition from the current voluntary green construction certifications, like USGBC’s LEED, to mandatory green construction codes. As the most recent revisions   of the IGCC are currently under review, Green Building Law Update hopes to promote awareness by examining some of the code sections.

403.3 Long term and short term bicycle parking shall be designated on the site plan by a registered design professional and as specified in Table 403.3. The required minimum number of spaces shall be determined based upon the occupied floor area of each primary use or occupancy of building. Accessory occupancy areas shall be included in the calculation of primary occupancy area. 

403.4.2 Where parking is provided for a building that has a total building floor area greater than 10,000 square feet (929 m2) and that has an building occupant load greater than 100, at least 5 percent, but not less than 2, of the parking spaces provided shall be designated as preferred parking for low emission, hybrid, and electric vehicle

How will these codes affect transportation options and the locations of IGCC building projects?

"Location, location, location."  Everyone involved in real estate hears this adage on a regular basis. But for green building developments, selecting a project site plays a different role.  Location will impact many environmental attributes of a building, including the types of transportation occupants use to get to the building.  

The IGCC requires many buildings to include accommodations for various forms of green transportation. Buildings complying with IGCC must include reserved parking for low emission, hybrid, and electric vehicles under section 403.4.2.  Under section 403.3 the IGCC also mandates bicycle parking.

A building's location can have a significant impact on the transportation choices occupants of a building make. A location far from residential areas may force an occupant to drive and buildings without mass transit access will have a similar effect.

The Environmental Protection Agency (EPA) has recently been in hot water for failing to consider the transportation impact for locating its own offices.  In the Kansas City area the General Services Administration (GSA) has proposed to move the Region 7 EPA Office from downtown Kansas City, Kansas to an office building in the suburbs.  However, the new building has less access to mass transit and other alternative forms of transportation for EPA employees.  

The Region 7 EPA headquarters were built in 1999 to help revitalize a failing Kansas City, Kansas urban core. To compensate for the new suburban location, the GSA has promised that the new building will be upgraded to meet the LEED Gold standard.  GSA’s LEED promise raises an important question: To what extent can a suburban green building compensate for its location in a low-density area with less access to alternate forms of transportation?

Green building is important in all cities whether suburban or urban. However, Kansans are right to question the wisdom behind moving the Region 7 EPA office.

The IGCC requires a building owner to encourage occupants to utilize green forms of transportation. However, the impact of these measures may be reduced if buildings are located outside of a reasonable bicycling distance. 

While the IGCC tries to create incentives for building occupants to choose green transportation, the IGCC, like any building code, does not address sprawl issues.  The IGCC does little for slowing sprawl and encouraging overall green development like the issues raised by the relocation of the Region 7 EPA headquarters.

Obviously, some forms of green transportation are not available or practical for various building locations. Recognizing these transportation limitations points to important green building certification considerations. Should buildings be rewarded for choosing locations with access to certain forms of green transportation (walking, bicycling, carpooling, mass transit, etc.) or, alternatively, should buildings be penalized for failing to do so?

Photo Credit: epSos.de

Green Building Code Webinar Available Now

Many of you have been asking about the availability of the webinar on the International Green Construction Code (IGCC) that I completed with Bob Kobet, and Basic Gov.  The webinar is now available online, although you will have to sync the powerpoints and audio.  If you listen closely, you can hear the panic in my voice as we tried to resolve technical difficulties that were blocking Bob from joining.  

I have been thinking about the complexities of the IGCC since public version two was released at Greenbuild.  To me, the most interesting and unusual aspect of the IGCC is that it is two codes in one.  The IGCC includes both a model code and ASHRAE 189.1:  

The IGCC was developed with the intent to be consistent and coordinated with the ICC family of Codes & Standards: the I-Codes. . . .

The IGCC also allows jurisdictions to choose ASHRAE Standard 189.1 as an alternative compliance path. ASHRAE Standard 189.1, Standard for High-Performance Green Buildings Except Low-Rise Residential Buildings, is an American National Standards Institute (ANSI) standard developed by the American Society of Heating, Refrigeration and Air-Conditioning Engineers (ASHRAE) in association with the Illuminating Engineering Society (IES) and the U.S. Green Building Council (USGBC). 

It will be interesting to see whether the majority of jurisdictions adopt the model code or ASHRAE 189.1.  If I was a betting man, I would put my money on the model code.  The nature of human beings is to seek the most simply solution.  Many jurisdictions will simply rely on the model code because ASHRAE 189.1 is an entirely different document. 

What do you think will be the result? 

IGCC Series: Feasibility of IGCC Non-Potable Water Irrigation Requirement

The International Green Construction Code (IGCC) is a model code for cities seeking to promote sustainable building practices through their building codes. The IGCC promotes transition from the current voluntary green construction certifications, like USGBC’s LEED, to mandatory green construction codes. As the most recent revisions of the IGCC are currently under review, Green Building Law Update hopes to promote awareness by examining some of the code sections.

Section 402.3.3: Water used for outdoor landscape irrigation shall be non-potable and shall comply with Section 406.2.2.

Section 402.3.4: Outdoor ornamental fountains and other water features constructed or installed on a building site shall be supplied with either municipally reclaimed or collected rainwater complying with Section 406.2. Signage in accordance with Section 706.2 shall be posted at each outdoor fountain and water feature where non-potable water is used.

How will builders comply with non-potable water irrigation requirements?

IGCC Section 402 contains various codes promoting the efficient use of natural resources including the use of non-potable water for outdoor irrigation and water features. Utilizing non-potable water can mitigate or prevent some effects of water shortages, like those experienced during recent droughts in Texas. As climates change and populations grow, water conservation will be increasingly important in areas like the western United States where natural water resources are predicted to decline during upcoming decades.

Rainwater is an abundant source of non-potable water yet most of it is routed into gutters and storm sewers. Once the rains have subsided, sprinkler systems filled with treated drinking water are used for landscaping. In Section 402, the IGCC recognizes that our golf courses do not need to be watered using the same filtered and fluoride-infused water we consume and use to cook.

Unfortunately, the high costs of providing a source of non-potable water may become a hindrance for IGCC builders trying to comply with IGCC's non-potable water requirements. In cities where non-potable water can be provided as a municipal service, builders would simply have to install non-potable plumbing systems. Unfortunately most cities in the U.S. do not have non-potable water services.

For most buildings a water collection, storage, and distribution system would be required to provide non-potable water. In addition to increased costs to install this system, IGCC regulation of non-potable water systems is extensive due to the health risks associated with accidental human consumption. These extensive regulations will result in increased costs for both builders and municipal regulators to ensure compliance.

The IGCC requirement for non-potable water use in irrigation is well-meaning but its mandate and relative high cost may prove to be a significant obstacle for IGCC cities and their developers.

Photo Credit: teofilo

Greener Cities: How Cities Across the U.S. are Incentivizing Sustainable Development

This guest post is by Joe Stampone of A Student of the Real Estate Game. Joe is in his final semester at the NYU Schack Institute of Real Estate with a concentration in sustainable development.


The behavioral shift towards sustainable development that we’re experiencing has changed the real estate landscape, however the marketing benefits, performance guarantees, and incentives that accompany green development don’t come without legal risks. If you want to learn about these risks and issues there’s no better forum than GBLU. Chris has been the ‘go-to’ source for all green building legal issues. When I learned that he was accepting guest post submissions I couldn’t pass up the opportunity to be a part of such a great community. 


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Over the last decade there has been a heightened awareness of the environmental impact of new construction and the existing building stock that make up the built environment. 


To minimize the environmental impacts of the built environment, cities have begun to develop a wide spectrum of green building policies which can shape the market from requirements such as Chapter 13C of San Francisco’s Building Code, which enforces large commercial and residential buildings to meet LEED Silver Certification to incentivizing exceptional performance and design. 


This post presents a brief summary of the ongoing research on the various ways cities are incentivizing sustainable development. Based on my research, I found that there are 6 major incentives which are offered in different forms throughout various cities:


Expedited Permitting


The objective of expedited permitting is to create an incentive for developers to incorporate green building practices and achieve specific local sustainability objectives by giving greater assistance and facilitation through the permitting process. This can shave significant time off the permitting process and lead to considerable cost savings. Of the cities I analyzed Chicago, Seattle, and San Francisco utilized an expedited permitting program while Salt Lake City has an expedited plan review. Each city used the LEED rating system as a benchmark. 


However, it’s important to note that emerging alternatives and a growing demand for performance-based metrics may shift policy structures in the future. 


Free Publicity


Offering free publicity to green projects is a cheap way for cities to promote sustainable development. However, to be effective, it requires an aggressive and resourceful marketing effort to get projects noticed in a market cluttered with green projects. 


Washington D.C. is the best example of giving free marketing to private green projects. They have an interactive map and website that highlights environmental points of interest throughout the city including LEED buildings, green roofs, energy star buildings, geothermal sites, wind energy sites, solar energy sites, etc. (www.green.dc.gov/map). 


Washington D.C. is also in the process of creating an interactive “dashboard” providing metrics for measuring the effectiveness of green building and initiatives that looks at how each project is contributing to the goals of their Climate Action Plan.


Financial Incentives


Many cities are experimenting with or considering ways to financially incentivize green building, however as most cities are resource-constrained this is not a viable option. Portland Oregon’s recently completed Green Investment Fund is the best example of a financial incentive. They awarded grants to projects that exhibited a wide range of innovative green building practices from energy efficiency and on-site renewable energy generation to water harvesting and recapture. In addition to the Green Investment Fund, Portland has considered the implementation of a Feebate program; however it has experienced push-back from the development community.


Density Bonus


The objective of a density bonus is to create an incentive for developers to incorporate green building practices and achieve specified local sustainability objectives by permitting additional floor space above the allowable zoning for qualified projects.


Currently, Pittsburgh, Seattle, and Arlington, Virginia offer additional FAR for projects which meet a specific level of LEED Certification. In Pittsburgh, an additional 20% of floor area is awarded for projects that meet LEED Silver Certification while in Arlington various bonuses are associated with each level of LEED Certification. 


Green Building Code Mandates


The objective of the Green Building Mandate is to use a required Green Building Standard as an adjunct to the Building Code to raise the requirements for all aspects of a building’s design that could affect energy performance. 


The best examples of this are Washington D.C.’s Green Building Act of 2006 which requires public buildings to meet LEED Certification and San Francisco’s Chapter 13C of the Building Code which requires large commercial and residential buildings to meet LEED Silver Certification. Austin, Denver, Santa Fe, and Portland among others have green building mandates for public buildings.


Green Building Codes


The objective of a Green Building Code is to redefine the building codes to require all new construction and major renovations to meet green building requirements, including specific requirements for all aspects of a building’s design that could affect energy performance. The best example is California’s recently introduced CALGreen Code. 


CALGreen is the first statewide green building standards code in the nation. It went into effect on January 1st, 2011 and has a number of mandatory and voluntary environmental measures such as planning and design requirements, energy efficiency, water efficiency and conservation, material conservation and resource efficiency, and environmental quality. 


Also, the International Code Council recently released public code version 2.0 of the International Green Construction Code (IGCC) which allows jurisdictions to use their administrative powers to exercise the flexibility inherent in the code. I know Chris and the GBLU team will talk more about the IGCC going forward.


Incentives, mandates, and codes offer cities a great opportunity to encourage green building; however I think it’s necessary to determine the optimal mix of incentives and regulations that balance efficiency goals with constrained municipal budgets. 


Finally, a detailed cost benefit analysis must be conducted to see which incentives and regulations will fit the framework of your city.

IGCC Series: Prohibiting Floodplain Development

The International Green Construction Code (IGCC) is a model code for cities seeking to promote sustainable building practices through their building codes.  The IGCC promotes transition from the current voluntary green construction certifications, like USGBC’s LEED, to mandatory green construction codes.  As the most recent revisions of the IGCC are currently under review, Green Building Law Update hopes to promote awareness by examining some of the code sections.

IGCC Section 402.2.1: “Building and building site improvements shall not be located within a floodplain.”

What is the potential green impact on the community?

Working to remove and discourage new structures within the floodplains of rivers, streams, and lakes is not a new concept. FEMA has required flood insurance for high-risk properties in floodplains since 1968.  However, IGCC Section 402 does not simply discourage building in a floodplain but rather prohibits it completely.  This prohibition takes into account both the high risk of flooding to structures built in the floodplain as well as an increased flood risk to structures outside the floodplain due to the removal of soil surface area that naturally soaks up floodwater.

Floodplain maps (even those used by FEMA and the insurance companies) often fail to fully account for the floodplain extension caused by development, as most maps have not been updated in many years.  In fact, FEMA is currently working to update flood maps as Congress looks into renewing the National Flood Insurance Program (NFIP).

During the 500-year flood that hit Nashville, Tennessee last spring, the consequences of developing in floodplains became apparent to Tennesseans.  Many Nashville area properties were not considered to be in a floodplain and, consequently, property owners did not have flood insurance.  These uninsured landowners learned the hard way that years of development within the floodplains had helped extend the floodwaters to their front doors.   

As a result, Nashville has acknowledged the importance of protecting the integrity of the city’s floodplains.  Nashville has offered to purchase 305 properties in the floodplain through a Hazard Mitigation Home Buyout Program.  The voluntary buyout program seeks to prevent the costs of property loss and the costs to provide emergency services to these high-risk areas in the event of flooding.  Also, by removing structures in the floodplain, the city will create more open space to soak up floodwater and increase green park space.  

The IGCC seeks to mitigate damage in areas similar to the flooded parts of Tennessee through its prohibition on development in established floodplains.  Unfortunately, as the Army Corps of Engineers continues to struggle with the ever-rising Mississippi River, there may be more landowners over the coming weeks who learn the hard lessons that Nashville residents learned just a year ago.  The IGCC floodplain regulation is a prime example of how green building choices often do not only affect the owners and occupants of a particular building but also help to minimize the building’s impact on the land and people around it.

Photo Credit: southerntabitha

Series Introduction: Discussing the IGCC


If the International Green Construction Code (IGCC) is successful, green buildings will soon become the rule instead of the exception.  By codifying green building standards, the IGCC has the potential to make major strides to advance green building practices on a scale that has been unattainable through LEED and other similar voluntary green building standards.


We are currently in the period for public commentary on the proposed International Green Construction Code (IGCC), we at Green Building Law Update have decided to do a series highlighting some of the proposed IGCC provisions.  Most of you do not have time to read the entire 243 page proposed code but that is what interns are for.  

 
Overall, the IGCC seeks to expand on the current voluntary green building certifications (LEED, etc.) by providing a green construction code standard that can be implemented in various jurisdictions while allowing for adjustments for specific local concerns.

 

If your city decides to adopt the IGCC, Green Building Law Update wants you to be prepared and know what it means for you and your business.  Each Wednesday we will post a proposed code section and a short analysis.  Please feel free to discuss the pros and cons of the proposed code in the comments.  Please also note that if you are especially passionate about a certain provision of the IGCC that the public commentary period runs until August 12, 2011.  The IGCC is expected to be finalized by January 2012.

Photo Credit: International Code Council

Caught in the Middle: Tax Implications of an Adverse Green Bonds Ruling

The following post is written by Kirk Dryer, a law student at the University of Missouri.  Kirk is also the first Green Building Law Update intern.  His assistance researching the Destiny USA matter was priceless.  Below, Kirk explains the tax implications of an adverse ruling in the Destiny USA dispute.  If you want to read more on the Destiny USA dispute, please read my short e-book on the subject.  

While Destiny USA stands to lose $122 million in financing costs if the IRS strips the project of it’s green bond tax exemption, an adverse ruling will also result in a significant investment income loss for individual bondholders.  In total, these bondholders purchased $228,085,000 in green bonds for Destiny USA and would owe taxes they were not expecting to pay which would significantly cut into their investment gains.  The tax exemption itself and not green building promises is the means through which the developer was able to offer an interest rate lower than the market rate and remain a competitive investment. Most (if not all) of the individual investors would have chosen an investment with a higher return if the gain had been taxable.  

It is easy to assume that most individual investors with enough income to hold a significant sized investment in the Destiny USA bonds would be in one of the two highest federal income tax brackets which means that any additional income for 2010 would be taxed at either 33% or 35% depending on the investor’s taxable income.  This means that if the IRS takes away Destiny USA’s green bond tax exemption, any gain collected on a bondholder’s investment would be taxed and would cut his/her investment gain by at least a third.

For example: We’ll say an investor, Bob, had an adjusted gross income of $250,000 for 2010 and he held a $50,000 bond in Destiny USA.  The Destiny USA Green Bond interest rate is 4.420% meaning that Bob would have a gain on his bond investment of $2,210.  With the tax exemption, he would not have to pay any income tax on that bond income.  However, if the tax exemption is stripped from the Destiny USA project, Bob would owe 33% of that gain or $729.30 in federal income tax.   If Bob bought his bond at issuance in 2006 he would owe a total of $3,646 in back taxes for his investment gain for the five years (2006-2010) he took the tax exemption.  He would then no longer have the exemption for the next 25 years until the bond matures on January 1, 2036.  Over the life of the bond Bob would pay $21,879 in income taxes he would not have owed if Destiny USA fulfilled its obligations for the Green Bond program.

Ultimately, bondholders like Bob would have legal recourse, but the filing of a lawsuit to recover the money lost on a bond investment is sure to create a domino effect of filings resulting in lengthy legal battles.  If the tax exemption is revoked due to Destiny USA’s noncompliance with IRS Green Bond requirements, the bondholders can sue the Syracuse Industrial Development Agency and Citigroup as the bond issuers.  The bond issuers may then recover their losses from their bond insurer who may then recover its losses from the Destiny USA.  

Overall, Bob is simply an example of a bondholder who purchased one $50,000 bond out of the $228 million.  For simplicity’s sake, if all bondholders were in the same tax bracket as Bob, the bondholders would pay $99,805,434.30 in income taxes over the 30 years of the bond. While the bondholders may ultimately recover their losses, the IRS ruling nonetheless has a large impact on the financial gains of their investment.

 

Free Webinar: The Reality of Implementing Green Building Codes

I have been amazed at the immediate interest generated by the International Green Construction Code (IGCC).  

Despite the fact that the IGCC is still in its infancy, there are a number of states and municipalities closely studying it for adoption.  We have already discussed Rhode Island’s adoption of IGCC for public buildings.  More significantly, legislation was introduced in Maryland just a few days ago to allow statewide adoption of the IGCC.  

Based on the interest in IGCC, I have teamed up with BasicGov and Bob Kobet to present a free webinar related to green building code adoption:

“The Reality of Implementing Green Building Programs in Your City”

The webinar is FREE and will take place on February 23 at 2 pm eastern.  During the webinar we will cover the following topics:

  • The basics of IGCC
  • Best practices for implementation of green building codes
  • Problems that have arisen in jurisdictions that have adopted green building codes

I hope you can join us.  And please pass on the webinar information to your favorite city official or planner.  

Disclaimer:  I am being paid to speak at this webinar. 

 

Does California Green Building Code Signal Future Code Adoption?

Every year, as the calendar turns over, a host of new regulations take effect.  In California, January 1, 2011 marked the introduction of CALGreen, the California green building code.  The California government has produced a guide to CalGreen, which I found informative:

“The 2010 California Green Building Standards Code is a code with mandatory requirements for new residential and nonresidential buildings (including buildings for retail, office, public schools and hospitals) throughout California beginning on January 1, 2011. The code is Part 11 of the California Building Standards Code in Title 24 of the California Code of Regulations and is also known as the CALGreen Code.”

If you are interested in a more thorough review of CALGreen, I would recommend Imad Naffa’s post on the subject.  Here are some quick thoughts I have on CALGreen:

  • Whenever I read about new building codes, I always wonder whether code officials will be prepared to enforce them.  This question is specifically addressed in the guide: “Chapter 7 of the CALGreen Code provides a guideline for minimum inspector qualification criteria.”
  • I noted that CALGreen requires commissioning of new buildings.  Commissioning involves calibrating the building’s systems to make sure they are running as designed.  Commissioning is often cited as one of the more expensive aspects of a green building; but it can also ensure a green building works properly.  It will be interesting to see how the California real estate industry responds to mandatory commissioning. 
  • California is often a bell-weather state for new green building trends.  Will statewide building codes become more common? 
What do you think about CALGreen? 
 

IGCC a "Step in the Right Direction"

I continue to ponder the importance of the release of the International Green Construction Code public version 2.0 (IGCC).  I recently asked Bob Kobet, LEED Faculty member, to provide his thoughts on IGCC.  It's good to see that I am not the only one who thinks the new code is a big step for green building.  

For the last 31 years my professional life as an architect and educator has been linked to codes. Through it all my core beliefs about codes, why we have them and how they get developed and enforced have been reinforced. They include:

1) Architecture is complex, no matter now simple the project may seem. It is very difficult to write codes that apply with equal rationale to a variety of building types in different geographic locals and climate zones.

2) Codes do not lead the technology parade. They follow it.

3) Code officials are generally not known for taking risks or being overly creative in their role as authorities who essentially interpret and enforce the law. Most “go by the book” for a reason, so what is in the book is critically important to the advancement of building performance and environmental stewardship.

From this perspective the International Green Construction Code (IGCC) provides a much needed alternative for advancing environmentally responsible architecture combined with the ability for municipalities to adopt what they believe is most appropriate and important to them.

The IGCC was developed to be consistent and coordinated with the ICC family of Codes & Standards. These are the I-Codes, which include ASHARE 189.1. ASHRAE Standard 189.1, Standard for High-Performance Green Buildings Except Low-Rise Residential Buildings, is an American National Standards Institute (ANSI) standard developed by the American Society of Heating, Refrigeration and Air-Conditioning Engineers (ASHRAE) in association with the Illuminating Engineering Society (IES) and the U.S. Green Building Council (USGBC). The IGCC allows jurisdictions to choose ASHRAE Standard 189.1 as an alternative compliance path. The IGCC is applicable to commercial buildings, including existing buildings undergoing alterations and additions. Traditional and innovative construction practices are addressed.

The IGCC does not replace existing codes or force municipalities to make wholesale administrative changes. Instead it allows jurisdictions to use their administrative powers to exercise the flexibility inherent in the IGCC. This is possible because the IGCC contains a new regulatory framework that allows choice and adaptation to local or regional conditions. Through the use of Baseline requirements, Projective Electives and Jurisdictional Requirements, the IGCC has achieved a balance between traditional safety issues and sustainability. The balance is a result of collaboration between the International Code Council, ASHRAE, ASTM, The AIA, and the US Green Building Council.

Overall I favor the approach the IGC and its partners have taken with the IGCC. I am hopeful it will meet the expectations of those who have worked so hard to make it available. Finally, there is a code emerging that supports renewable energy systems, rainwater harvesting, grey water reclamation, nontoxic design and straw bale construction. There will be those who view the IGCC as just another code to confront. I embrace it is a significant step in the right direction.

IGCC Provides Alternative Green Building Code Option

Back in October 2010, Doug Reiser and I co-presented on the topic of substituting LEED for traditional building codes.  As we were finishing our presentation, I reiterated our primary theme that LEED standards should not be used as a building code.  One of the audience members raised her hand and asked why weren’t we discussing the International Green Construction Code (IGCC).  

That audience member was right--states are beginning to consider the adoption of IGCC as a state-wide green buiding code in lieu of LEED certification requirements.  

The IGCC is available for a free download.  I suggest you take a look at it.  At the front of the code is a “Roadmap to the International Green Constructon Code” that I found to be helpful:

“Chapter 3 is the core of the (IGCC).  It is formatted to: facilitate the customization of this code to address local issues; provide options for construction which exceed the minimum requirements of this code; and provide for the implementation of best practice. . . .

All of the provisions of this code, other than those selected by the jurisdiction in Table 302.1 and those designated as project electives, are mandatory as applicable.”  

Rhode Island was one of the first states to adopt the IGCC.  Interestingly, Rhode Island adopted the code as an “‘equivalent standard’ to meet requirements that all new major facility projects by state agencies be constructed as green buildings.”  

Do you see other states adopting IGCC as an “equivalent standard” to other green building rating systems? 

Builders Association Goes After Washington Energy Code

Last week, we looked at Air Conditioning, Heating, and Refrigeration Institute (ACHRI) v. City of Albuquerque, a case in which a federal court struck down portions of the Albuquerque Energy Conservation Code based on the doctrine of federal preemption.  In a construction code context, federal preemption often means that products and appliances are regulated at the federal level but states regulate building codes.  The decision in the Albuquerque case was not all that surprising as the code clearly went beyond federal efficiency standards for heating, ventilation, and air conditioning (HVAC) products. 

But a more recent case involving similar claims of federal preemption is not so clear. 

On May 25, 2010, the Building Industry Association of Washington (BIAW) and nine HVAC manufacturers and installers, filed a lawsuit in federal court against the Washington State Building Code Council.  The lawsuit alleges that one portion of a new Washington State Energy Code related to single-family residential energy efficiency is preempted by federal law.  The plaintiffs have asked for an injunction against the code. 

Changes to the State Code were passed on November 20, 2009 and the new code went into effect July 1, 2010.  Plaintiffs are particularly concerned with residential energy efficiency requirements under Chapter 9. I would suggest you download a copy of the complaint (PDF) and take a look at the chapter, which is attached as an exhibit starting on page 16.  Here is sample of the table from Chapter 9: 



In order to comply with Chapter 9, a home must achieve one credit from the entirety of Table 9-1.  On its face, the table appears to provide a variety of options for compliance, which would not infringe on federal efficiency requirements.  For example, option 3b in the table requires an efficient building envelope, and does not require specific efficiency for any product. 

According to the plaintiffs, though, the effect of Table 9-1 is that in order to comply, a number of options must be combined with the result that the code mandates product energy efficiency: 

"[T]he menu of 'options' in Table 9.1 is not extensive enough and in effect forces homebuilders to install high efficiency HVAC, water heating and plumbing equipment with performance standards in excess of those set by federal law."

Essentially, the plaintiffs are arguing that all compliance paths under table 9 require the installation of HVAC equipment that is more energy efficient than federal law. 

What do you of the builders associations' challenges of various state energy codes? 

Sordid Green Bulding Litigation Arises in Minnesota

This is as confusing and sordid as any green building dispute I have seen.  Consider yourself warned. 

Over the holidays, Michael Anschel informed me that the the Builders Association of the Twin Cities (BATC) had sued Minnesota GreenStar and filed a restraining order against using a green building standard. 

Despite that simple statement, there is a lot more to this story.  Here is the best summary I can come up with after reviewing the lawsuit filed by the BATC and a blog post by Anschel on the subject. 

The BATC worked with other associations to create a green building standard, called the Green Homebuilding Guidelines.  BATC and the other entities then created a new entity, Minnesota GreenStar, to run the green building standard (much like the Green Building Certification Institute runs LEED).  At some point, BATC became disenchanted with either Minnesota GreenStar and/or the Green Homebuilding Guidelines, and decided to file a lawsuit to essentially take over administration of the Guidelines.  If you believe the complaint, the reason for BATC's disenchantment was Minnesota GreenStar's failure to repay a loan and GreenStar's intent to license the green building standard to other states.  If you believe Anschel's post, BATC's reasons are more sinister and have to do with weakening the Green Homebuilding Guidelines.

Lets start with the lawsuit itself. 

On December 9, 2010, the BATC filed a restraining order and lawsuit against Minnesota GreenStar.  BATC claims that in 2006, it developed the Green Homebuilding Guidelines and further asserts it owns the intellectual property rights to the Guidelines.  BATC also points out it that it contributed $50,000 to develop the Guidelines. 

In 2007, BATC, along with two other entities, formed Minnesota GreenStar, which began using the Green Homebuilding Guidelines.  At some point in 2008, GreenStar filed registered copyrights for the Green Homebuilding Guidelines, which would give GreenStar intellectual property rights to the Guidelines. 

This is where events get a bit confusing.  BATC alleges that in 2010, it provided an additional loan to GreenStar.  Despite this additional loan, BATC claims that GreenStar ran into financial trouble:

"On September 15, 2010, GreenStar conducted a meeting of its Board of Directors and disseminated its Business Plan . . . in which GreenStar relied on continued sponsorships, a one-year deferment on its Promissory Note obligations to BATC, and significant additional funding from BATC. . . . GreenStar also indicated its intent to license the Green Homebuilding Guidelines developed and owned by BATC to other states to raise revenue for GreenStar."

BATC goes on to ask the Court for four things: 

1.  Judgment of $50,000 for an alleged breach of the loan;
2.  Judgment declaring that BATC owns the intellectual property rights to GreenStar and GreenStar is restricted from using or licensing the Guidelines;
3.  Temporary and permanent injunction against GreenStar from using the Guidelines; and
4.  Attorneys fees. 

Taken at its face, the complaint suggests that BATC is concerned about the prospect of licensing the Green Homebuilding Guidelines to other states.  But why would a builders association be concerned about this? 

According to Anschel, BATC's motives are more complicated.  In a blog post at Construction Law Musings, Anschel explains that BATC actually intends to develop a new green building certification program that allows for self certification.  Anschel believes BATC's move is a step backwards for green building in Minnesota.  If BATC intends to create a new green building standard in Minnesota, then it certainly makes sense why it would want to take over and limit Minnesota GreenStar and the existing Green Homebuilding Guidelines. 

What do you think?

Photo credit: Jvstin

Are Challenges to Green Building Codes on the Rise?

Last night I had dinner with a long-time reader of Green Building Law Update.  I was frank with him, and I will be frank with you.  I will be doing two things this year with the blog: 

1.  I am going to stop talking about LEEDigation as much.
2.  I am going to talk more about the green building codes, and the challenges to those codes that are occurring throughout the country.

A trend seems to be developing across the country in the green building world.  Traditional builders and manufacturers are fighting against green building codes and programs.  You can expect an increase in these types of challenges in 2011. 

One of the first reported legal challenges to a green building code occurred in New Mexico with the case Air Conditioning, Heating, and Refrigeration Institute (ACHRI) v. City of Albuquerque.  The case focused on the Albuquerque Energy Conservation Code passed by the city on September 17, 2007.  The goal of the code essentially was to create greater energy efficiency in buildings and products.  As often happens with new regulations, numerous parties were unhappy with the Code.  Three trade associations representing HVAC product manufacturers, distributors and installers challenged the Code, and the case was ultimately decided on September 30, 2010 by Judge Martha Vazquez of the U.S. District Court for the District of New Mexico. 

While the legal challenge focused on many portions of the Code, I am focusing on Volume I, which included requirements for commercial buildings and multi-family buildings. 

In order to comply with Volume I of the code, a building had to satisfy one of three paths:

  1. The building must achieve LEED certification;
  2. The proposed building must be 30 percent more energy efficient than a baseline building; or
  3. The Heating, Ventilation, and Air Conditioning (HVAC) system and equipment must comply with minimum energy efficiency standards.

There is a key difference between the first two compliance paths and the last.  The first two paths can be described as performance-based because the building must perform in a particular manner.  The last path is a prescriptive compliance path, which means it focuses on the products that go into a building. 

Judge Vazquez relied on the legal theory of federal preemption to strike down the code's prescriptive compliance path:

"The Court concludes that the prescriptive provisions of Volume I requiring the use of heating, ventilation, or air conditioning products or water heaters with energy efficiency standards more stringent than federal standards are regulations that concern the energy efficiency of covered products and, therefore, are preempted as a matter of law."

Judge Vazquez pointed to the National Appliance Energy Conservation Act, which expressly preempted product energy efficiency standards: 

"A standard prescribed or established under section 6313(a) of this title shall, beginning on the effective date of such standard, supersede any State or local regulation concerning the energy efficiency or energy use of a product for which a standard is prescribed or established pursuant to such section."

Judge Vazquez went on to uphold performance path one and two because the plaintiffs presented a "cursory argument" and "very few material facts" in support. 

The question remains whether a court could find federal preemption of a LEED-based code if properly argued by a plaintiff. 

Is the Only Solution Public-Private Partnerships?

Many months ago, I promised a two-part series on public-private partnerships.  Part one was previously published and today I wrap up the series with post two.  As we head in to 2011, public-private partnerships will play a vital role in replacing the non-existent state funds for necessary public works projects.  Here is part two on public-private partnerships: 

We have already revealed Secret No. 1 about public-private partnerships: there is bi-partisan support for PPPs.  I promised to reveal Secret No. 2 about PPPs.  In hindsight, I should have probably not labeled this a secret as it is more an observation verging on opinion.  Some of you that do not support public-private partnerships will not agree with this observation. 

Secret No. 2:  There appears to be no viable alternative to public-private partnerships. 


If you work in the construction industry, you probably know that the U.S. infrastructure is in dire need of renovation and repair.  According the American Society of Civil Engineers (ASCE), the U.S. infrastructure is in absolute disrepair based on its 2009 U.S. infrastructure grade card:

2009 Grades
Aviation D
Bridges C
Dams D
Drinking Water D-
Energy D+
Hazardous Waste D
Inland Waterways D-
Levees D-
Public Parks and Recreation C-
Rail C-
Roads D-
Schools D
Solid Waste C+
Transit D
Wastewater D-

America's Infrastructure GPA: D

Further, the ASCE has concluded that an investment of $2.2 trillion would be required over the next five years to improve our infrastructure.  Assuming the ASCE is correct, repairs to our infrastructure will require substantial investments by the states charged with infrastructure upkeep. 

But states have no money. 

Check out the grim outlook for state budget shortfalls from the Center on Budget and Policy Priorities:

The worst recession since the 1930s has caused the steepest decline in state tax receipts on record. State tax revenues were 8.4 percent lower in the 2009 fiscal year than in 2008, and an additional 3.1 percent lower in 2010, while the need for state-funded services did not decline. As a result, even after making very deep spending cuts over the last two years, states continue to face large budget gaps. At least 46 states struggled to close shortfalls when adopting budgets for the current fiscal year (FY 2011, which began July 1 in most states). These came on top of the large shortfalls that 48 states faced in fiscal years 2009 and 2010. States will continue to struggle to find the revenue needed to support critical public services for a number of years, threatening hundreds of thousands of jobs.

From my vantage point, I see an extreme need for infrastructure upgrades and I see public bodies that do not have the financial ability to fund the upgrades. 

If the public sector cannot fund infrastructure improvement, isn't the only other solution private sector investment through public-private partnerships? 

Photo credit:  Barbour

Yellowstone Project Achieves LEED Gold

Today I am interviewing Karen Bates Kress, President of the Yellowstone Park Foundation.  Yellowstone National Park just completed construction of a LEED Gold Old Faithful Visitors Center. The Foundation played an important role in raising funds for the green and educational aspects of the project

.  While this is not a traditional public-private partnership, it is an interesting example of the private sector paying for certification on a public project.

Chris:  Thank you for your time today.  The Old Faithful Visitor Center was recently built in Yellowstone National Park and is both LEED Gold and touted as a public-private partnership. Is the Visitor Center a public-private partnership in the traditional sense? 

Karen: The Yellowstone Park Foundation is the official fundraising partner of Yellowstone National Park. As with other “friends groups,” like friends of your local library, we fund projects and programs that go above and beyond what is possible through the base budget of our government partner.  After covering our own operating expenses, all of the funds we raise are granted to Yellowstone. Since we are a non-profit, we don’t directly profit from the arrangement, other than to re-invest revenue back into protecting, preserving and enhancing Yellowstone.

Chris:  As a National Park Service project, what were your concerns in pursuing a public-private partnership?  Was there resistance to the idea of using the public-private partnership model?  How did you overcome any resistance?

Karen: Concerns from some people always occur in the sense that they believe that a facility like a visitor center should be paid for totally by the government. However, to achieve the margin of excellence with a LEED standard and high quality educational exhibits that exist with the Old Faithful Visitor Education Center, private funding would have to be part of the equation.

Continue Reading...

Public-Private Partnerships Are a Bi-Paristan Issue?

I just finished up a presentation to the Construction User's Roundtable (i.e. users of construction services) regarding public private partnerships (P3s). P3s are defined by the National Council of Public Private Partnerships as:

"a contractual agreement between a public agency (federal, state or local) and a private sector entity. Through this agreement, the skills and assets of each sector (public and private) are shared in delivering a service or facility for the use of the general public. In addition to the sharing of resources, each party shares in the risks and rewards potential in the delivery of the service and/or facility."

In the course of preparing for my speech, I learned two very important secrets about public private partnerships that I want to share with you.

Secret No. 1. P3s have bipartisan support.

One of the first areas I researched for my presentation was the effect the recently-completed election would have on P3s. You may have noticed that the House of Representatives will now be controlled by Republicans, many of which ran on a platform of fiscal austerity. As a result, the new Congress is likely to be less supportive of expensive public works projects. At the same time, our infrastructure - including old buildings - needs significant upgrades. For example, take a look at the abysmal grades given to the U.S. infrastructure in 2009 by the American Society of Civil Engineers (ASCE).

My research uncovered secret number one: support for public private partnerships is bi-partisan. Many politicians on both sides of the aisle have indicated their support for P3s as a means to fix our infrastructure problem. Here are some quotes I used during my presentation:

“That means maintaining strong support for public-private partnerships like NREL. . . . ”

- Rep. John Boehner, presumptive House Majority Leader

“Innovative public-private partnerships are appearing around the country, bringing much-needed capital to the table. It is important to ensure that the public interest is well-served in public-private partnerships, since they are here to stay and likely grow in importance.”

- Rep. Nancy Pelosi, Speaker of the House

And probably most important, Rep. John Mica, the presumptive Chairman of the House Transportation & Infrastructure Committee recently indicated he supports P3s, at least in one instance. In response to questions about the future of an American Recovery and Reinvestment Act high-speed rail project in Florida, Rep. Mica suggested that a public-private partnership should be used to get the project done:

"I want private dollars involved in this," Mica said. "If someone in the private sector puts up $500 million and that's $100 million short – I'm in an excellent position to assist. But I don't want the private sector to see this as a gravy train.”

Along with the Congress, President Barack Obama is strongly supportive of P3s and is pushing a National Infrastructure Bank to support P3 development.

While bi-partisan issues are few and far between these days, public private partnerships appear to have support of both Republicans and Democrats. With growing infrastructure needs and bi-partisan support, P3s may gain in popularity over the next few years.

I will reveal secret number two on Monday.

Photo credit:  Photo Phiend

Do Davis-Bacon Wage Issues Affect Your Stimulus Project?

Across the country, government officials are scrambling to award and spend American Recovery and Reinvestment Act (ARRA) funding before upcoming deadlines.  If you are a contractor or subcontractor lucky enough to work on one of these projects, congratulations! 

Now comes the tough part. 

Working on a federal or state-funded project brings a myriad of regulatory issues that must be resolved.  One of those issues is Davis-Bacon compliance.  As you sort out compliance issues, here are some questions to think about: 

  • Is the project a federal project subject to federal labor laws? 
  • Is the project a state project subject to state labor laws?
  • Is the project both a federal and state project subject to both federal and state labor laws?

Is your head spinning yet?  In some circumstances, depending on the government agencies involved and the source of funding, you may actually be subject to both federal and state labor laws.  I have assisted clients with these confusing issues, so please contact me if you have questions (chris@cheathamconsulting.com). 

Photo Credit:  NIOSH

Warning: This Post May Give You Green Building Legal Nightmares

For this Halloween edition of Green Building Law Update, I thought I would try to scare your socks off by describing circumstances that may lead to the green building legal apocalypse.  Be warned, this blog post is going to give you nightmares! 

Last week, Doug Reiser and I presented at the Green Legal Matters conference on the following topic:

"The Green Building Legal Apocalypse: Why Cities Should Stop Mandating LEED" 

I have received a number of inquiries about the presentation so I published the slideshow.  I am big on not using a lot of words or bullet points on slides so I am not sure how helpful the slideshow will be, but I am happy to answer any questions you may have about it in the comments section. 

There is one central theme of our presentation:  municipal governments should stop mandating LEED certification for private construction.  I could run through all of the reasons - there is no proper enforcement mechanism, there will be increased LEEDigation - but in my mind, the creator of the LEED rating system, the US Green Building Council, makes the most powerful argument for not mandating private-construction LEED certification: 



This picture is taken from the USGBC white paper, "Greening the Codes" (pdf).  The hyphenated vertical line represents the current market.  The updwards sloping, blue area at the bottom represents building codes.  The dashed line above the blue area represents green building codes.  Above the green building codes are LEED Platinum, Gold, Silver and Certified certification levels. 

What does it mean? 

If you need evidence that LEED certification was never meant to be a building code, and should not be a building code, use this picture.  Building codes are the minimum.  By mandating LEED certification for all private construction, a government essentially makes LEED certification a building code, a minimum.  LEED certification is supposed to represent buildings that have gone beyond the building code.  With this picture, the US Green Building Council is telling us not to use LEED certification for private-construction mandates. 

LEED certification is a high bar, and if certification is mandated, not everyone will comply.  Non-compliance means penalties, disputes and litigation.  This is why I say governments that are requiring LEED certification for  private construction are setting the stage for the green building legal apocalypse. 

Illinois Weatherization Program Cited for Poor Workmanship, Erroneous Billing

The likelihood that some American Recovery and Reinvestment Act (ARRA) green building projects would fail should not come as a surprise to Green Building Law Update readers.  Back in February 2009, I wrote about the the difficulties of administering the stimulus funds at state, county and municipal levels.  In January 2010, I highlighted initial problems with the Illinois weatherization program, which was being funded by Department of Energy ARRA funds. 

But the rampant problems with the Illinois weatherization program have not improved. 

The Department of Energy Office of Inspector General recently published a follow up report on the Illinois weatherization program.  The report focuses on 15 homes that were audited.  The conclusions of the report speak for themselves:

Poor Workmanship: At 12 of the homes, CEDA inspectors found substandard work that could have, in some cases, resulted in significant property damage or injury to the homeowners. In one home, 11 of the 14 items that the contractor should have installed or repaired to improve energy efficiency failed inspection. In another instance, while accompanying inspectors, we found that a contractor had not corrected, as required by the home's work order, improperly installed kitchen exhaust ductwork, a potential fire hazard. Although CEDA and certain State officials disagreed that the ductwork problem posed a fire hazard, State building code officials we consulted confirmed the concern. Further, we observed a furnace intake vent pipe that had been improperly installed and found that five of the six tune-ups to heating systems had not been properly performed, allowing the heating systems to either improperly fire or emit carbon monoxide at higher than acceptable levels. Further, CEDA's own inspectors cited contractors for improper insulation of attics, band joists, and walls. In all, 8 of the 10 contractors that had weatherized homes included in our evaluation were cited for poor workmanship.
...


Inadequate Initial Assessments: At eight of the homes, CEDA inspectors found that assessors from within its organization had either called for inappropriate measures or had overlooked key weatherization measures needed to make the homes more energy efficient. In one home, for example, an inspection report noted that an assessor had inappropriately called for attic insulation when sizeable leaks in the roof would have reduced the effectiveness of the insulation. In addition, we found homes where inspectors cited assessors for failing to identify an open sump pump, leaking water lines, and a skylight that had not been properly insulated. CEDA acknowledged that, due to hiring nearly 60 new field personnel who were needed for the increased level of weatherization work funded by the Recovery Act, it had experienced "an inevitable level of inadequate assessments that were not corrected or were incompletely reviewed before the jobs were assigned to contractors."
...

Erroneous Billing: At 10 of the 15 homes we visited, CEDA inspectors found that contractors had billed a total of about $3,300 for labor and materials that had not been installed. For example, a contractor had installed a 125,000 BTU boiler, but had billed CEDA for a 200,000 BTU boiler costing an estimated $1,000 more. Additionally, a contractor had installed one carbon monoxide detector, but had billed CEDA for 3; another contractor had installed 12 light bulbs, but had billed CEDA for 20; and, yet another had failed to install a gas shut-off valve, but had billed for the work. In addition, a contractor had billed for almost four times the amount of drywall actually installed. Billing issues appeared to be pervasive, since 7 of the 10 contractors in our sample were cited by CEDA for erroneous invoicing.

Keep in mind that the DOE and Illinois were already on notice that the program was suffering from severe deficiencies back in January 2010. 

I have absolutely no doubt that this report will be picked up in the press and by politicians in order to cite a failure of the stimulus program.  I have no doubt that Illinois is not the only state that is failing to properly administer the DOE weatherization program.  I have no doubt that other green building stimulus programs are also facing similar issues. 

But as I look at this from a legal standpoint, I see an enormous wave of green building litigation.  I see homeowners filing lawsuits against contractors, engineers, and architects.  And I am advising my clients to be very careful as they proceed with ARRA projects. 

This could get very messy. 

Photo:  BostonBill

Are Net Zero Energy Buildings the Answer?

As part of the evolution of Green Building Law Update, I have started an interview series with leaders in the green building industry. My first interview is with John Kennedy, Autodesk's Senior Manager of Sustainable Analysis Products. My interest in interviewing John was piqued when Autodesk's Vice President called for reform to the federal government's procurement process in order to further support green building developments. I never quite understood the concept of a "net zero energy building" until this interview.

Thanks to John for explaining the concept and being my first guinea pig for an interview.

In the future, I plan to keep these interviews much shorter so please contact me (chris@greenbuildinglawupdate.com) if you are interested in being my guest. And note, John did not mention his company's name once (it's Autodesk) but provided invaluable insight into his specific interest, net zero energy buildings. Well done, John.

---

Chris: What type of regulations do you think could best move the green building industry forward? I tend to think of building codes, incentives, even cap and trade legislation. What would be the best for the green building industry?

John: Well, if you look at a state like California as a model, since the late '70s, they've been ratcheting up their energy code in terms of the efficiency and how efficient a building has to be, and they're targeting by the end of this decade 2020 that all new residential buildings have to be net zero energy and that by 2030 all new commercial buildings have to be net zero energy. And so that's pretty much the end game for targeting green building energy focused regulation is the net zero energy -- are you familiar with that term, Chris?

Chris: If you want to explain it, that would be great.

John: So generally the typical definition is from a site perspective that a building has some means of generating energy typically electricity from renewable sources either photovoltaic electric panels or a wind turbine, and that electricity powers the energy use in the building and if there's excess it goes onto the grid and when those sources aren’t available when the sun is down or the wind isn’t blowing, that building will pull electricity off the grid and over the course of time, typically a year, that meter on the building rotates backwards and forward depending on which way the electricity is going nets out to zero.

And so that really changes the game in a lot of different aspects. Number one, it's very easy for someone to determine whether their building is meeting that performance and then it's very easy for people to understand that concept whereas today if you look at energy codes they typically have reference buildings that you have to build theoretical models of and compare your design to. It's very abstract, very complex, and then it's very difficult for the industry to confirm that that building is really meeting the performance that the law is saying it's supposed to meet.

So, with these net zero energy regulations coming up, the Industry is rushing to try and figure out how to meet them, owners are becoming very cognizant of the risk to their portfolios these building regulations will have. As we see more successful stories of net zero energy building put in place and performing well, these regulations are going to accelerate and we're going to see net zero energy building regulations pretty much mandated everywhere.

Chris: One of the issues that I've seen with green buildings is they're not performing like they were modeled to perform. How does that differ with net zero energy buildings? I think you indicated there is a difference in net zero buildings so that the performance gap is less likely. Can you expand on that a little bit?
 

Continue Reading...

LEED Building Vacated Due to Structural Issues

Construction defects often take a long time to develop.  Take, for example, the Courthouse Square building in Salem, Oregon, which is used for county offices and retail stores.  It was constructed in 2000 and received its LEED certification in 2002. 

As early as 2002, problems were identified at the project, including cracked grouting and loose tiles.  But it was not until July 2010 that the Courthouse Square buiding had to be vacated due to structural problems

"Henderson said the county started monitoring the floor in 2008 after an evaluation by David Evans and Associatesfound floor deflection, stating that 'portions of the original structural floor slab design were inadequate with regard to code requirements'. . . .

The county’s original plan was to stay in the building as the firm did tests on the building’s integrity, but that plan changed when the floors got worse.

'It’s only been in the last short time that the seriousness of these issues have come to light,' said Henderson. 'We had an incident on Friday where we believe one of the post tension cables ruptured.'

The cables are located in the building’s concrete floor slabs to provide rigidity. Several cables are in the slabs for redundancy and backup support, so the county at first did not believe one ruptured cable posed an immediate threat.

But after the rupture, further inspection found that 33 to 35 of the building’s 220 columns where bearing a weight that is more than code allows. The county then decided to vacate the building."

Since the evacuation was the result of construction defects, my initial thought was that LEEDigation was unlikely.  But a blog post at Green Building Elements further piqued my interest regarding potential LEEDigation:

"No one knows, or is saying at least, what is causing all the structural issues.  Cracked walls and ceilings are the hallmark of what appears to be a buckling post-tensioned concrete slab.  The concrete was recently tested and found to not meet the specified strength.  Garbage was found in the slab when samples were taken." 

Would any of the following scenarios be grounds for LEED decertification if the original certification was challenged?

  • Installing concrete slabs that include garbage?
  • Failing to meet code requirements?
  • Having a LEED-certified building deemed structurally unsound? 

What do you think? 

Photo Credit: Oregon.gov

Staying in Step with Carbon Footprinting (and Federal Procurement)

I first met Daniel Moring as an aide to D.C. Council Member Mary Cheh when we discussed the D.C. Green Building Act.  We recently met up to discuss the General Services Administration's proposal to require greenhouse gas emissions reporting and I asked him to write a post on the topic.  Enjoy and have a great weekend.  

By: Daniel Moring

Although a climate bill lies in shambles at the foot of Capitol Hill as the summer recess approaches, a new approach to evaluating federal contracts by the General Services Administration could go a long way to realizing at least some of the goals of the failed legislation.  GSA won’t stop judging based on what vendors are offering and for how much, but they will give extra consideration for the greenhouse gas footprint of offerings.

Or, to put it more simply: The feds are going Wal-Mart. 

Wal-Mart, recognized across the retail industry for its masterful supply chain management and razor-thin margins, decided in 2007 to use its sheer buying power to move the market.  Wal-Mart committed to reduce 20 million metric tons of CO2 from its business operations, targeting the product lines with the highest ‘embedded emissions,’ a measure of environmental impacts across its lifecycle of manufacture, distribution, and disposal. 

To tackle this wide-ranging objective, Wal-Mart enlisted its over 60,000 suppliers to help investigating and implementing improvement of firms’ environmental footprint, starting with energy and climate impact—or risk being dropped as a vendor. 

The Wal-Mart approach does not go as far as federal actions contemplated, but simply creating an awareness of the greenhouse gas footprint implicit in the supply chain can have a transformative impact on the market, particularly as government remains an attractive [if not the best] client due to persistent sluggishness.  The GSA rules only encompass direct emissions from operations and, while not yet mandatory, could garner additional preference in procurement decisions. 

Although environmental footprinting for your firm may seem like just another government mandate, taking into account your business’ environmental impact and associated costs also presents opportunities to identify inefficiencies, prioritize investments, manage risk, and improve performance while gaining a strategic advantage with a very significant market actor.  As the oft-cited saying goes, “you cannot manage what you do not measure,” so it begins with taking stock, taking aim, and taking action on your company’s environmental impact, starting with vehicle and building energy use. 

The standards and requirements are still developing, but the handwriting is on the wall, and smart companies are beginning to understand the language of environmental management so they can read it and take advantage. 

Daniel Moring is Program Manager for the Washington, DC office of IBC Engineering Services, a sustainable engineering firm that specializes in identifying and reducing energy-related environmental impacts for business and government clients.

GSA Pushes For Reforms to Green Bulding Certification

General Services AdministrationThe green building industry has been besieged the last few years with stories about buildings not performing as anticipated.  It appears the federal government has taken notice, and is pushing reforms to green building certification, based on comments by one high-ranking General Services Administration official:  

“'One of the things that I tease the USGBC about is that they really need to re-brand from ‘Leadership in Energy and Environmental Design’ to ‘Leadership in Energy and Environmental Performance,’ and they are picking up on that,' Kampschroer said. 'The GSA is as well, with the idea of continually improving the maintenance of existing buildings.'”

I was surprised to read this comment from a high-profile GSA official.  The GSA relies on the Leadership in Energy and Environmental Design (LEED) rating system to demonstrate that its new construction is green.  Now the GSA is apparently pushing the USGBC to reform its LEED rating system to account for building performance.  

In the article, the Vice President of Autodesk took it a step further and suggested that the federal government needs to completely overhaul the procurement system to ensure improved building energy performance:

"In order to demand more energy-efficient government buildings, he said, federal officials must change their procurement model from the typical system of outlining what they want built, setting an estimated price and awarding a contract to the lowest bidder.

'You have to blow that to smithereens,' said Bernstein, who believes federal officials must start setting broader energy-efficiency guidelines and rethink their incentive structure. 'The government should say, ‘I want this schedule, this LEED rating, this operational efficiency and these design-quality standards,’ and all the profit is a measure of achieving those things.'"

I have no doubt that the USGBC will be revising the LEED rating system in the next few years to include re-certification for new buildings based on energy performance.  The government has been dabbling with performance contracting - contractors that get paid based on reducing energy bills - for some time.   But would the federal government blow up the existing procurement process and require actual energy performance as part of new construction contracts? 

I wouldn't put it past the GSA.  

Are You Prepared to Report Your Greenhouse Gas Emissions?

It's an understatement to say environmentalists were disheartened by Senator Reid's announcement last week that a comprehensive cap-and-trade bill would be tabled for the year.  But, fear not, environmentalists - and, be fearful, unprepared federal contractors - because the federal government will be regulating greenhouse gas emissions in other ways.  

Back in October 2009, we talked about the groundbreaking Executive Order 13514, which set advanced sustainability requirements for the federal government.  One of the most important parts of the Order is Section 13, which asks the General Services Administration to look into the feasibility of requiring  vendors and contractors to report greenhouse gas emissions. 

The GSA recently released its report, which concludes that it is feasible to implement a "phased approach, for the Federal Government to track and reduce its scope 3 supply chain emissions through coordination with suppliers and other stakeholders."  In short, a greenhouse gas emissions reporting requirement will be phased in, and eventually mandated for federal contracts.

For federal contractors - and eventually state and local contractors - tracking, reporting, and reducing emissions will become an important strategy for winning government contracts. 

While much of the focus of Green Building Law Update has been on green building certification, I plan to shift gears in the coming months and focus more on greenhouse gas emissions reporting requirements for federal contractors.  Why?  

My concern is that construction contractors are not prepared to report greenhouse gas emissions.  

Are you prepared to report your greenhouse gas emissions?    

Photo credit: melancholic optimist

Public-Private Partnerships Support Green Building

States are facing significant budget gaps.  These budget gaps are going to negatively affect the green building industry.  States looking to shore up budgets will cut new construction and maintenance of existing buildings in the coming years.  

But there is a solution: public-private partnerships. 
 
Just prior to the economic downturn, the phrase "public-private partnerships" - or P3s - was on the tip of everyone's tongue.  Then the Great Recession hit, and billions of dollars were injected into the economy via the American Recovery and Reinvestment Act (ARRA).  Suddenly, states were flush with cash to pay for infrastructure projects and seemed to forget about P3s.  However, the ARRA funding is running out and states will be looking for innovative ways to finance new construction and major rehabilitations of existing buildings.  

P3s are the answer.  What is a P3?  According to the National Association of Public-Private Partnerships:
"A Public-Private Partnership (PPP) is a contractual agreement between a public agency (federal, state or local) and a private sector entity. Through this agreement, the skills and assets of each sector (public and private) are shared in delivering a service or facility for the use of the general public. In addition to the sharing of resources, each party shares in the risks and rewards potential in the delivery of the service and/or facility."
The classic example is a toll booth that is either constructed, maintained or operated by a private entity in exchange for some of the toll revenues.  

National Nuclear Security AdministrationBut P3 practices are also being used for green building projects.  For example, the General Services Administration recently entered into a P3 lease agreement for a new campus to house the National Nuclear Security Administration's Kansas City manufacturing operations, which are seeking LEED Gold certification:

"The Heartland Region of the General Services Administration on Monday signed the final lease agreement with CenterPoint Zimmer LLC for a new campus to house the National Nuclear Security Administration’s Kansas City manufacturing operations. . . .

CenterPoint Zimmer, a subsidiary of CenterPoint Property Trust of Oak Brook, Ill., will receive annual rent of $61.5 million through the 20-year lease for a total contract amount of $1.23 billion.  Stephen Stanberry, the GSA contracting officer who worked on the lease, said it is a “net of utilities” leasing, meaning the NNSA will pay its own utility costs.

In return for the NNSA lease payments, CenterPoint Zimmer will develop the new campus. . . ."

My friends at J.E. Dunn will be constructing the project.

If you have questions about P3s, please let me know and I will do my best to address them in future posts.

Lessons From the Last Green Building Cycle

Despite my previous suggestion that the USGBC's Greening the Codes could have done without the history of building codes, I do think it offers an interesting history lesson.  This paragraph caught my attention:   

The energy crisis of the 1970s brought yet another topic to the national stage. The soaring costs of energy and a growing concern about pollution and natural resource conservation caused Congress to pass the Energy Policy and Conservation Act that in 1978 would require states receiving federal funds to initiate energy conservation standards for new buildings. That same year, the State of California led the nation by adopting the California Energy Code, recognizing that energy consumption gone unchecked yields societal costs to consumers, to the economy, to the environment and ultimately to public health. It would take a number of compounding factors in the 1990s to revive this interest in building energy efficiency that ended up otherwise largely lost to other priorities in the 1980s.

The more recent surge in support for green building looks eerily similar to the 1970s.  
I have always thought that the most recent green building trend really took hold in 2008, just as gas prices skyrocketed.

Congress then included billions of dollars for the green building and renewable energy industries in the American Recovery and Reinvestment Act that passed in February 2009.  In order to receive some of the stimulus funds, Governors had to make promises to improve state building codes.  At the state level, California became the first state to adopt a mandatory, state-wide green building code in January 2010.

History teaches us that this combination - the federal government and then California push green building codes forward - tends to repeat itself. 

If history repeats itself, what lessons can we learn from the last cycle of green building support?  The 1970s saw a wave of sick building syndrome cases.  After building envelopes were tightened -- but ventilation remained the same -- the occupants grew ill from the indoor environment.  Concerns are already starting to emerge about indoor air quality in this cycle's green buildings.  

Any other lessons I missed?

Photo Credit: Stuck In Customs

"Greening the Codes" Is a Good Start

The United States Green Building Council (USGBC) recently published a white paper entitled "Greening the Codes" that is simultaneously very helpful and somewhat frustrating.  The most important information is buried on page seven after an unnecessary review of the history of building codes.  But if you can get through the first six pages, you will find that the USGBC has made an important statement, although one that could have been made more boldly:  

"Raising the Floor: While green building rating systems such as LEED have been designed to benchmark above-code leadership for buildings that intend to go beyond the minimum, it is equally important to complement this leadership with stronger, more comprehensive building codes. Safer, healthier, and more environmentally responsible codes are at the heart of sustainability planning for raising the floor for the entire community. These codes are a viable new baseline off which incentives for exemplary leadership and commitments for public buildings to pave the way can naturally be built.

For commercial buildings: Consider adopting the International Green Construction Code and its technically rigorous 189.1 compliance path.

For residential buildings: In addition to adopting and implementing the 2009 International Energy Conservation Code, consider a well-established local green homebuilding program in your area. In the absence of such a program, the ICC-700 compliance path of the International Green Construction Code should be considered as a means for jurisdictional oversight for residential buildings."

I wish the white paper had stated in big bold letters on page one "STOP USING THE LEED RATING SYSTEM FOR BUILDING CODES."  But the statement in the white paper is a good start. 

Based on this white paper, I would suggest that it is time to revisit the D.C. Green Building Act before it's too late.  As you may recall, starting in 2012, all private construction greater than 50,000 square feet will be required to achieve LEED certification in Washington, D.C.  The USGBC's white paper all but states that the LEED rating system should not be used as a de facto building code for commercial buildings.  

And there still remains the issue of the unavailable "bonds" required to enforce the Act, but I won't get started on that.  At least for now.  

What are your thoughts on "Greening the Codes"? 

What Is a "Zero Environmental Footprint"?

What Is a "Zero Environmental Footprint"? 

This is an important question for government contractors because the General Services Administration (GSA) recently proposed that the federal government move to a zero environmental footprint.

Unfortunately, I'm not sure anyone has defined this apparently new term.  The GSA's announcement doesn't define "zero environmental footprint."  None of the articles highlighting GSA's proposal defined the term.  The numerous websites that provide greenhouse gas and carbon footprint accounting services do not define zero environmental footprint.  I also couldn't locate a definition through my Twitter, Facebook and LinkedIn friends.  

In the end, I had to rely on a Canadian children's website for a definition.  

The Canadian website Zerofootprint Kids Calculator defines an environmental footprint based on five categories:

(1) Transporation
(2) What you eat
(3) Home & School
(4) What You Use; and
(5) What You Throw Away

If you change "Home & School" to "Home & Work," you actually have a fairly comprehensive list of categories to calculate an adult's environmental footprint.*  

However, contractors will need a better definition of "zero environmental footprint."  The federal government might want to consider defining this important phrase.

*I actually took the YourFootprint quiz and was surprised at my carbon results.  Keep in mind, I live in Washington, DC, I do not own a car, and I live with a environmentally-conscious wife.  Here are my stats:

Carbon Footprint:  Me - 10.4; U.S. average - 9.8
Land:  Me - 1.8; U.S. average - 2.2
Trees:  Me - .3; U.S. average - 4.2
Water:  Me - 1743.2; U.S. average - 1877.9

Photo Credit: isolano

GSA Proposes Zero Environmental Footprint

Executive Order (EO) 13514 continues to have enormous implications for the green building industry.  As you'll recall, EO 13514 requires that federal agencies comply with a number of green building stipulations, including 95% of all applicable contracts meet sustainability requirements.  While the American Recovery and Reinvestment Act (ARRA) invested over $25 billion in green building projects, the Order will have a more long-lasting impact on the industry. 

Why do I say this?  General Services Administration (GSA) Adminstrator Martha N. Johnson's recent statement regarding the GSA's zero environmental footprint goal suggest how far agencies may go to implement the Order:

"Citing the president’s Executive Order 13514, Johnson highlighted the agency’s mission to assist other federal agencies to make greater strides in sustainability, excel at greening initiatives, and increase federal building performance. Johnson proposed that the federal government move to a zero environmental footprint, and she stressed that GSA is setting its sights on 'eliminating the impact of the federal government on our natural environment. . . .'

Johnson outlined a number of areas in which GSA could take the lead toward greening the government. These include cultivating green-centered public/private partnerships, aiming for only green products on the federal supply schedules, and using the federal building portfolio as a green proving-ground for new sustainable building and design technologies. . . ."

Administrator Johnson's statements are a signal of what is to come from GSA and other federal agencies.  Under the Executive Order (pdf), the GSA has broad authority to make recommendations to "green" federal contracting:

"Within 180 days of the date of this order, the General Services Administration . . . shall review and provide recommendations ... regarding the feasibility of working with the Federal vendor and contractor community to provide information that will assist Federal agencies in tracking and reducing scope 3 greenhouse gas emissions related to the supply of products and services to the Government." 

Additionally, under Section 13 of the Order, the GSA has been asked to provide recommendations regarding "using Federal Government purchasing preferences or other incentives for products manufactured using processes that minimize greenhouse gas emissions. . . ."

The GSA is preparing to overhaul the way the federal government purchases services and supplies.  But what exactly is a zero environmental footprint? 

When Should Green Building Regulations Be Vetoed?

I recently co-authored a chapter with Shari Shapiro of a soon-to-be-published book about green building law.  I am a regular reader Shari's Green Building Law Blog and she is one of the authors who helped me launch my own blog.

However, I am going to respectfully disagree with one of her recent posts regarding green building legislation. Shari juxtaposed two "green" regulatory measures - one that passed in Europe and one that was vetoed by the Governor of Wisconsin.  Shari concluded the Wisconsin Governor was in the wrong: 

"On the one hand, Europe has determined that it is not only feasible, but necessary to build its entire building stock to a near carbon neutral level, and Wisconsin has determined that it cannot even make 15% of its public buildings green.  What will the competitiveness of Wisconsin--indeed, the entire United States--be if it is saddled with a portfolio of underperforming building stock contributing to greenhouse gas emissions."

The Wisconsin Governor did not actually veto legislation making public buildings green.  The Governor properly vetoed spending state funds to certify public buildings as green:

"The measure had directed all state building funds to be used for certifying at least 15% of total gross square footage of working space in state-owned and leased buildings to meet green building requirements.  Doyle said he remained committed to green building efforts but that he could not support the bill."

For long-time Green Building Law Update readers, this veto should not be a surprise.  Back in October 2008, I pointed out that states may balk at green building regulations if revenues drop:

"[W]hat will happen to all of those states that passed regulations requiring public projects achieve LEED certification?  As you probably know, during economic downturns, less taxes are collected, which affects state budgets. . . . One area where state agencies may seek budget cuts is through green building programs."
Well, there was certainly an economic downturn, tax revenue declined, and state budgets were affected (subscr. req.):
"The latest biannual NGA-NASBO 'Fiscal Survey of the States,' released on June 3, says that, for fiscal 2010, which ends for 46 states on June 30, state general-fund expenditures will fall an estimated 6.8%, to $612.9 billion."
Buildings can be "green" without being certified as such.   In fact, certification is primarily a marketing tool to signal a building is green.  Why does a state need a certification to tell the world its buildings are green?

Why do states need to be spending money on green building certification?  Isn't that money better spent on actually constructing or retrofitting buildings to be green? 
 
Related Links:
 

Design Flaws Impact Offshore Wind Energy Project

From time to time, I like to step outside the green building industry and look at construction of renewable energy projects.  While windmill construction is nothing new, countries are looking for new opportunities to develop wind energy.  One new type of development has certainly caught my attention from a risk management standpoint. 
 
A recent Wall Street Journal article highlighted offshore wind energy projects being constructed in Europe:
"By offering generous incentives, the U.K. already has built more offshore wind power than any other nation.  Now it is planning a wave of vast new wind farms, in some of Europe's stormiest waters." 
The construction of offshore wind energy will require significant foundations, some of which have already proven problematic:
"Some dismiss the windmills as quixotic. . . . And many more challenges await, judging from those the project at Kent faced, ranging from the need to protect marine worms to a design flaw that causes turbines to sink into their foundations."
As a construction attorney, the two words "design flaw" always catch my eye.  In this case, the design flaw in the windmills could prove costly: 
"Owners of a Dutch wind farm found their turbines had shifted a few inches, the result of a design flaw in equipment connecting the towers to their foundations.  RenewableUK, a trade association, said most of the 336 turbines operating in the U.K. waters could have the same fault, and would cost about $250,000 each to fix."  
A $250,000 fix for 336 turbines would cost $84,000,000.
 
It is certainly important to develop new renewable energy sources.  But it's also important to understand that new risks and liabilities will almost certainly emerge from new types of renewable energy construction.
 
What do you think?    
 
Photo credit:  K2D2vaca
 
Related Links: 
 

Fly Ash: Green Building Material, Hazardous Waste?

My first legal case involved "fly ash."  I had no idea what fly ash was so I looked it up in the dictionary.  Fly ash is a "coal-combustion by-product" (CCB) that is often used in concrete as a replacement for portland cement.  When used in massive concrete structures, like dam construction, fly ash can result in a significant cost savings.  

Despite all of my work with fly ash, I had never read or heard anyone mention that fly ash could be the "new asbestos."  That was, until I read an ENR article titled "Fly Ash Looms as the 'New Asbestos":

"Concrete groups are on tenterhooks, waiting for the U.S. Environmental Protection Agency to publish a proposed rule that aims to designate fly ash and other coal-combustion by-products as hazardous waste. The concrete sector is concerned even about the ramifications of a 'hybrid' rule that would allow beneficial uses of CCBs to continue."

But what does fly ash have to do with green building?  According to the Portland Cement Association, fly ash can be used in green buildings to achieve an innovation point:
"[T]he USGBC has issued a credit interpretation that allows for an innovation credit if 40% less cement is used than in typical construction, or if 40% of the cement in concrete is replaced with slag cement, fly ash, or both."
A ruling that fly ash is a hazardous waste could reduce the amount of the material used in future construction.  Additionally, handling of existing structures that contain fly ash will become more complicated and costly.  

What do you think?  
 
Related Links

 

Will Green Building Regulations Force Corporations Overseas?

On Thursday, I had the honor of presenting on green building legal issues to the Texas Young Lawyers Association.  I graduated from the University of Texas School of Law, so it was surreal to be invited back for the opportunity to speak on the law. 

Whenever I speak, I leave time for questions and this time I received a new question, something no one had ever asked me.  During my presentations, I often review the government trend in support of green building regulations.  Thanks to the United States Green Building Council for providing these helpful statistics:
"Various LEED initiatives including legislation, executive orders, resolutions, ordinances, policies, and initiatives are found in 45 states, including 202 localities (138 cities, 36 counties, and 28 towns), 34 state governments (including the Commonwealth of Puerto Rico), 14 federal agencies or departments, 17 public school jurisdictions, and 41 institutions of higher education across the United States."
After my presentation, one of the audience members asked the following question:
"With all of these green building regulations that add costs to construction, why won't corporations build overseas in China?" 
 
After thinking about the question and doing some research, here is my response: 
Multinational corporations investing in China are building green voluntarily
"While the government seems to be driving energy efficiency initiatives in public buildings, local developers and companies are lagging behind. However, multinational companies have taken the lead to promote green buildings in China by pursuing more stringent LEED certification. . . . In fact, multinational companies, driven by their global corporate responsibility policies, have built eight of the total 15 LEED certified buildings in China so far. . . .

'At this point, the Chinese companies don’t feel the same sort of pressure to demonstrate corporate social responsibility that the multinational companies feel,' says Geoffrey Lewis, a Fulbright Fellow at Tsinghua University’s Department of Building Sciences who closely monitors China’s green building progress." 
Maybe we have just hit the point where green building is the cost of doing business for corporations?  
 
Photo Credit:  Steve Webel
 
Related Links

Federal Construction To Require Project Labor Agreements

For many in the green building industry, federal projects have provided an opportunity for much needed work as private development has stalled.  However, contractors should be aware of a significant change to federal construction contracts coming down the pike.

On April 13, President Barack Obama issued an Executive Order that will result in new requirements for project labor agreements:

"The Obama administration is set to issue a rule Tuesday that will allow federal agencies to require that contractors on large-scale public construction projects agree to union representation for workers. . . . The rule doesn't mandate that federal agencies require contractors to bargain with unions on all jobs, but it clears the path for government agencies to make such agreements a requirement for contractors on jobs costing $25 million or more."

If you are a contractor or subcontractor still looking to get involved in federal green building projects, it is important to consider the implications of this Executive Order.  Projects greater than $25 million will likely require some sort of project labor agreement.   

Is your company prepared for the requirements associated with a union project? 

Related Links: 
 

Buiding Not LEED Anymore, Eh?

On Saturday, I was having a leisurely breakfast with my wife when I foolishly flipped on my blackberry, opened my email and stared at the following headline:

Comox Rec Centre not LEED anymore

Breakfast was essentially over.  Never before had I seen the potential for LEEDigation stated so clearly in a headline.  

The Comox Recreation Centre is located in Comox, Canada.  According to the story at Canada.com, the project was originally pitched to receive LEED Platinum certification: 

"The expansion of the main entrance area and the older multi-purpose was expected to be built to the highest level of LEED certification, or LEED Platinum when it was awarded $950,000 in federal grants last fall.

But Comox Mayor Paul Ives says that certification was never realistic given the project's smaller budget and that the retrofit had to be built on the existing footprint.

'If we'd gone through LEED, we were going to be hard pressed to get LEED Silver, probably not Gold and definitely not Platinum because of the rating scale,' said Ives."
Like many cities and towns in America, the Canadian town proclaimed its desire to build green through a resolution:
"Town council held in camera meetings March 23 and resolved to build 'an environmentally responsible and as energy efficient building as the budget allows', a downgrade of an earlier resolution that called for LEED platinum 'or a similar standard with financial limits.'"
So we have a federally-funded project in a Canadian city that received funding because it unrealistically promised LEED Platinum certification?  
 
Could you imagine the consequences if this project was in the United States?  The Department of Energy is distributing over $6 billion in American Recovery and Reinvestment Act funds for "green" projects.  What would happen if a city receives funds for a green building project and then drops promised LEED certification?  Such a result could lead to a GAO audits and negative press.  

And what are the consequences if a Government in this scenario proceeds with the project and continues to demand LEED certification from a contractor or architect? 
 
I think I am losing my appetite again.

Related Links: 

Comox Rec Centre Not LEED Anymore (Canada.com)

Los Angeles Times Assails Weatherization Program (GBLU)

Photo credit:  Antony Pranata

Energy Efficiency Deduction Could Benefit You

I spend a good deal of time discussing federal green building projects, so it only seems natural that I pass on information regarding what could be a very beneficial program in that arena. 
 
Chris DeVolder at 360 Architecture (the designers of the JE Dunn Headquarters) recently informed me about a tax incentive program stemming from the Energy Improvement and Extension Act of 2008. A report prepared by RSM McGladrey provides a succinct summary (.pdf) of the program:

"If your company owns or leases commercial buildings and you have constructed or retrofitted the property to be more energy efficient, you may be eligible for an accelerated deduction for part or all of the costs associated with the property. Incentives are available for:

  • Interior lighting systems

  • Heating, ventilating and air conditioning (HVAC) and hot water systems

  • Building envelope

  • Interior lighting systems

  • Heating, ventilating and air conditioning (HVAC) and hot water systems

  • Building envelope"

 These incentives allow for the potential immediate expensing of costs that would otherwise be capitalized and depreciated over 39 years.  For contractors, architects and engineers involved in federal green building projects, here is the most important part:
"In the case of energy efficient commercial building property installed on or in a property owned by a Federal, State or local government entity, an allocation of the deduction can be made to the person primarily responsible for designing the property in lieu of the owner of such property. This designer could be an architect, engineer, contractor, environmental consultant or an energy services provider who created the technical specifications for making the building energy efficient."

You should consult with an attorney or tax consultant to ensure that you comply with all requirements. But the tax incentive provides a tremendous opportunity to capitalize on green building components that are incorporated into federal green building projects.

Related Links: 

Improving Cash Flow With the Energy Efficiency Deduction (RSM McGladrey)(.pdf)

 

What are the Broader Implications of DC's Green Performance Bond?

I recently had the pleasure of sitting down with Chris Birk of Surety Bonds Insider to discuss surety issues and the green building industry, particularly related to the D.C. Green Building Act.  

As a quick reset, the D.C. Green Building Act of 2006 requires owners put up "performance bonds" that guarantee LEED certification for certain projects.  The surety industry has raised concerns that these types of bonds do not exist.  My favorite question was when Chris asked me about the implications of the D.C. Green Building Act "performance bond" issue for the broader green building industry:

Chris Birk:  "What sort of long term, beyond the District implications are there in this?"

Chris Cheatham:  "This same issue will pop up wherever there is a green building regulation being proposed or pushed forward.  Whenever you are mandating some type of certification, some type of green building certification, you have to have an enforcement mechanism.  Because if you don't then people won't comply and its pointless to have the regulation.  You have to have some type of penalty." 
I appreciate the opportunity to work with Surety Bond Insiders on this interview.  Please take a listen and let me know what you think.  What other issues should Chris and I discuss surrounding
the surety, construction and green building industry. 

Related Links: 

Surety Bonds Sit-Down: The Future of Green Building with Chris Cheatham (Surety Bonds Insider)

A Green Building Performance Bond (GBLU)

White House, Agency Spar Over PACE Program

A nation-wide Property-Assessed Clean-Energy (PACE) bond program has been proposed, but not without its critics.  

As you may recall, PACE bonds are a new financing mechanism that can be used to retrofit homes and commercial buildings, or install renewable energy:

"PACE is a bond where the proceeds are lent to commercial and residential property owners to finance energy retrofits (efficiency measures and small renewable energy systems).  OWNERS then repay their loans over 20 years via an annual assessment on their property tax bill. PACE bonds can be issued by municipal financing districts or finance companies and the proceeds can be used to retrofit both commercial and residential properties."

The White House is now pushing its own PACE bond program:

"Under the program, homeowners would borrow money from their local government to pay for energy improvements—from high-efficiency furnaces that cost a few thousand dollars, to solar-panel systems that can cost more than $30,000. They would then repay the loan over 15 to 20 years through a special assessment added to their property-tax bills. Local governments would get the funding by selling municipal bonds to investors

This debt would be senior to existing mortgage debt, so if the homeowner defaults or goes into foreclosure, it would be repaid before the mortgage lender gets any money. While property-tax assessments are usually senior to existing property debt, cities have traditionally used their assessment authority for community-wide improvements like sewers and roads—not for upgrades that homeowners elect to make on their own homes."  

As with any new governmental program, there are critics of the PACE program.  The critics of the White House's PACE program are opposed to the first-lien rights:  

"Alfred Pollard, general counsel for the mortgage companies' regulator, the Federal Housing Finance Agency, said he was worried about the problems that a first-lien, or first-in-line, loan could create. 'The goal of enhancing energy efficiency, which we share, should not overcome the need for prudent underwriting,' he said."

There appears to be no easy solution to appease the PACE bond critics.  Government agencies are comfortable pushing PACE bond programs for the same reason that banks and mortgage companies are uncomfortable with the programs:  the agencies take first-lien rights.  

Do you see a resolution?

PACE NOW (PACEnow.org)

Fannie and Freddie Resist Loans for Energy Efficiency (WSJ)

Photo: afagen

Is the Energy Star Program Doomed?

I have previously written about informal complaints regarding the Environmental Protection Agency (EPA) and Department of Energy's (DOE) Energy Star Program for appliances.  Based on recent findings of a Government Accountability Office report, it seems much larger systemic problems exist within the Program:
"In a nine-month study, four fictitious companies invented by the accountability office also sought EnergyStar status for some conventional devices like dehumidifiers and heat pump models that existed only on paper. The fake companies submitted data indicating that the models consumed 20 percent less energy than even the most efficient ones on the market. Yet those applications were mostly approved without a challenge or even questions, the report said."
One of the fictitious products submitted to and approved by the Energy Star Program was a "gasoline-powered alarm clock."  

This report has me rethinking my ideas related to the green building industry.  To me, there is one looming question: will similar problems arise with the Energy Star for Buildings program that certifies buildings as energy-efficient?  The description of the program has me concerned:
"Did you know that a building or manufacturing plant can earn the ENERGY STAR label just like your refrigerator?" 
 But the Energy Star for Buildings program requires a verification process, unlike the Energy Star appliance program: 
"Commercial buildings achieving a score of 75 or higher using Portfolio Manager and verified by a professional engineer are eligible to apply for the ENERGY STAR. To get started, enter the required data into Portfolio Manager. The tool will tell you if your building may qualify for the ENERGY STAR. If it does, your next step is to complete the verification process and submit your application." 
Are you confident that the Energy Star for Buildings program will avoid similar problems? 
 
 

Conflicts Between Anti-Terrorism Standards and Green Building

On Monday, I discussed conflicts between military construction and green building certification.  Green building certification was originally created for commercial office buildings, which can create some odd applications in military construction.  While we have have already discussed energy efficiency, bicycle racks and HVAC systems, there is one component of military construction that conflicts directly with many green building components:  anti-terrorism.  

I never imagined someone had completed a study of these conflicts:

The LEED®-DoD Antiterrorism Standards Tool addresses the security implications of strategies used to achieve each LEED credit with regard to their inter-relationship (i.e., potential conflicts and synergies), from the Department of Defense (DoD) perspective. Information is presented within a color-coded matrix based on the U.S. Green Building Council's Leadership in Energy and Environmental Design Green Building Rating System (LEED-NC Version 2.1) cross-referenced with the applicable standards in Unified Facilities Criteria (UFC) 4-010-01, DoD Minimum Antiterrorism Standards for Buildings. As such, critical areas are easily identified, prompting the project team to work collaboratively, using a 'whole building' approach, to develop successful, efficient solutions for a high performance, secure building.

For a government contracts attorney focused on green building legal and regulatory developments, the Standards Tool is a remarkable discovery.  My eye was immediately drawn to the "conflicting requirements" in the Standards Tool.  According to the Standards Tool, the following LEED credits are in direct conflict with Anti-terrorism Standards: 

  •    SS-2 Development Density
  •    SS-5.2 Reduced Site Disturbance, Development Footprint
  •    SS-6.1 Stormwater Management, Rate and Quantity

In future posts, I will be exploring the conflicts between these LEED credits and the Anti-terrorism Standards Tool.  Have any of you worked with a building trying to comply with both LEED certification and the Department of Defense Anti-Terrorism Standards? 

Related Links:

LEED DoD Antiterrorism Standards Tool (WBDG)

Conflicts Arise Between Military Construction and Green Building (GBLU)

Do LEED APs Get Higher Wages?

Douglas Reiser, who publishes at the Builders Counsel Blog, recently posted an interesting question regarding Davis-Bacon wage determinations for green building projects:

"What do you think about Davis-Bacon worker/payment classifications for 'green building' specialists or professionals? Should there be a classification for your project's LEED AP? How about for any independent raters?  I am thinking that there might be a debate about HVAC, electrical, and plumbing workers who are trained in sustainable practices - do they require higher wages than your normal subcontractors?"
I have previously discussed the delay to the Department of Energy's weatherization program caused by the Department of Labor's wage determinations.  In December 2009, the Department of Labor came out with new wage determinations for weatherization work. 
 
In its Virginia wage determinations (PDF), the Department of Labor explained that it "does not issue separate wage determinations based on a worker's skill, experience or individual training."  As LEED AP involves a workers "skill, experience, or individual training," I do not anticipate the Department of Labor will adjust wage determinations for LEED AP status. 
 
The wage determinations are broken down into six categories that constitute a number of "green jobs":
  • Weatherization worker
  • Doors & windows replacement worker
  • HVAC, furnace, heating & cooling repair, installation and replacement worker
  • Carpenter
  • Electrician
  • Plumber
Contractors working on federal green building projects need to be aware of new wage determinations that will impact your project. 
 
Related Links: 
 

Virginia Residential Weatherization Wage Determination

(DOL)(PDF)

Why Do Federal Agencies Seek Green Building Certification?

I had never quite understood why federal agencies were so focused on green building certification.  That was, until I read this:

"U.S. agencies are required to have 15 percent of their existing building inventory incorporate sustainable elements by 2015 under Executive Order 13423, signed by George W. Bush in 2007.  

To comply with the order, the Department of Veterans Affairs aims to have 21 facilities reviewed and rated by third-party green building systems by the close of this year.

'Reaching the goal of 21 third-party certifications in 2010 will make VA a leading example of green achievement,' said Secretary of Veterans Affairs Eric K. Shinseki in a prepared statement. 'We will proudly reach and surpass the 15 percent requirement before 2015.'"
In order to demonstrate sustainable elements in its existing building stock and satisfy Executive Order 13423, Veterans Affairs is obtaining Green Globes certification for existing buildings.  As we move closer to 2015, obtaining green building certification for a federal building will be an important step towards an agency's compliance with Executive Order 13423.

The consequences are growing for failing to achieve green building certification.  Simultaneously, the importance of negotiating a balanced green building contract is also growing.

Related Links:

Photo credit: cisc1970

Federal Agency Adopts Green Globes Certification

During green building presentations that include legal views, I usually expect that someone in the crowd will not agree with my views of the green building industry.  Usually, the unhappy audience member cannot fathom that there are potential risks associated with green building.  Last week, though, I received a much different reaction when I presented to the National Research Council.  

A number of the federal agency employees in attendance voiced dismay that I focused exclusively on federal agencies' adoption of the United States Green Building Council's (USGBC) LEED rating system.  Some audience members expressed concern that federal agencies had wholesale adopted LEED certification in order to build green. 

These concerns reminded me of a recent news article highlighting alternative green building certification adopted by a federal agency:
"Fifteen Veterans Affairs Medical Centers in 10 states have received Green Globes green building ratings under the assessment system administered by the Green Building Initiative.

The GBI's third-party review system certifies buildings at four levels with ratings ranging from a single to four Green Globes.

All but two of the 15 VA medical centers that were recently certified received ratings of three Green Globes. The Los Angeles Ambulatory Care Center and the Durham VA Medical Center in North Carolina each received a rating of two Green Globes."

In describing the U.S. Department of Veterans Affairs' Green Globes buildings, Rob Watson, the Father of LEED, argued that Green Globes was continuing to "penetrate its mid-market target.

The use of non-LEED rating systems is a new development in federal policy, and one that may continue to gain in popularity for different building markets.  On Thursday, we will look at why green building certification is so important to federal agencies.

Is it possible that two green building rating systems can live harmoniously in federal policy? 

Related Links:

15 Veterans Affairs Medical Centers Attain Green Globes Certification (GreenerBuildings)
 
Yogi Berra Was Right (GreenerBuildings)

Does Your Construction Project Require Davis-Bacon Wages?

[I have said many times that the legal principles that will apply to green building projects will be very similar to existing legal principles in the construction law field. Going forward, on Fridays we will be reviewing legal developments from the construction industry that most likely will be applied to green building projects.]
 
If you are working on a construction project funded by the American Recovery and Reinvestment Act (or you have any hint that you are), you need to be aware of your responsibility to pay Davis-Bacon wages.
 
Section 1606 of the American Recovery and Reinvestment Act (ARRA) sets out the Davis-Bacon wage requirements:
"Notwithstanding any other provision of law and in a manner consistent with other provisions in this Act, all laborers and mechanics employed by contractors and sub contractors on projects funded directly by or assisted in whole or in part by and through the Federal Government pursuant to this Act shall be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code."
The Department of Labor (DOL) has broadly interpreted Section 1606 (pdf) of American Recovery and Reinvestment Act (ARRA):
"Section 1606 of ARRA plainly indicates that the Davis-Bacon prevailing wage requirement broadly applies to ARRA-appropriated construction projects. . . . [The ARRA] also extends the prevailing wage requirements to projects 'assisted in whole or in part by and through the Federal Government pursuant to this Act' thus encompassing any assistance provided for ARRA projects through grants, loans, guarantees, and insurance."
In short, if any ARRA dollars are funding your construction project, Davis-Bacon wages are required (barring very limited exceptions). If you are working on a construction project in 2010, particularly one funded by a governmental entity, it is important that you ask if the project is being funded in any amount by ARRA funds.  If ARRA funds find their way into your project and you have not accounted for Davis-Bacon wage requirements, a change order may be necessary. 
 
Related Links
 

GSA's Green Building Role in the Federal Government

While preparing for my presentation "Legal Considerations When Building Green" for the National Research Council, I contemplated what proposals I wanted to make to the federal agency representatives that would be in attendance. 

The federal government is pushing federal investment in green buildings through $25 billion allocated from the American Recovery and Reinvestment Act and through the Executive Order 13514, which includes numerous building efficiency requirements. As federal agencies attempt to implement green building programs, it is important to facilitate and share green building knowledge across the numerous federal agencies.

In my view, the General Services Administration (GSA) is in the best position to facilitate a cohesive federal strategy for green building. The GSA has been developing and constructing LEED certified buildings since 2002. Last year, the New York Times profiled a GSA building in Ohio that failed to achieve energy savings despite receiving LEED certification in 2002. The GSA has experience, both good and bad, with green buildings that can significantly benefit other federal agencies that are just now starting out with green buildings.

As I contemplated making what I thought was a drastic proposal, the GSA released the following information:

"GSA has made significant changes that will strengthen its role in helping the Obama Administration make the federal government a leader in sustainability.

First, the Office of Federal High-Performance Green Buildings has been moved from PBS [Public Buildings Service] to the Office of Governmentwide Policy. . . .

As part of governmentwide policy, the Office of Federal High-Performance Green Buildings will expand its reach to provide federal agencies with measurement tools and policies to meet its sustainability mandates."
To me, this seems like a move in the right direction.  But what do you think?  Is the GSA the best agency to coordinate federal green building policy?
 
Related Links
 

 

Los Angeles Times Assails Weatherization Program

Back in January 2010, I said this:  "Government officials and citizens are going to expect results form the significant investments in the green movement (particularly in an election year). In 2010, the nation will begin to decide if investments in the green building and renewable energy industries were worth it."

Not one month later, it appears that media critiques of American Recovery and Reinvestment Act(ARRA) green building programs have begun.  Last Thursday, the Los Angeles Times ran the following headline:  

"Obama's federal government can weatherize your home for only $57,362 each"

How did the Los Angeles Times come up with this number?  The Times did some very simple math to calculate how much money had been spent per home so far. 

"The Energy folks did tell ABC they've so far spent 522-million Recovery Act dollars on the program. So, let's see, about 9,100 homes divided into that chunk of stimulation change to believe in is -- gee! -- about $57,362 worth of very expensive weatherstripping for each home fixed up so far."

Of course there is more to the Times' blog post.  The Energy Department had to resolve Davis-Bacon wage determinations prior to starting the weatherization program.  At the end of the Los Angeles Times post, the Energy Department's response was included:  

"The GAO report cites figures from September 2009 -- almost five months out of date. Since then, we have resolved Davis-Bacon wage issues in all 50 states, clarified how states should handle historic preservation and worked with states to resolve any remaining barriers. As a result, by the end of 2009, our programs had weatherized about 124,000 homes in total, and we are on track to weatherize more than 250,000 this year. In fact, since September 2009, we have tripled the pace of Recovery Act funded home weatherization. The report also erroneously implies that our goal was to weatherize 593,000 homes in 2009. That is wrong. The goal has been to weatherize that number by March 2012, and we are on track to meet that goal."

The Los Angeles Times article suggests the media is going to comprehensively cover the progress and accounting of ARRA green building projects in 2010.  While this Los Angeles Times article may have relied on stale statistics, you can bet that the Department of Energy's weatherization program, and the contractors taking part in it, will be under additional scrutiny. 

 Related Links
 
 

 

Where the Heck are the Green Jobs?

I often get the same question about the American Recovery and Reinvestment Act: where are the green jobs and projects?  A recent Wall Street Journal article sheds light on that question:

"The Obama administration's economic-stimulus program has delivered about a third of its total $787 billion budget during its first year, much of that to maintain social services and government jobs and to provide tax cuts for workers. Now, the pace and direction of stimulus spending are about to change.

Infrastructure spending is set to step up in the second year of the stimulus program, which should mean more money flowing to private-sector employers."

Infrastructure spending includes the green building projects that will be administered by the General Services Administration, the Department of Defense and the Department of Energy.  A large portion of the $180 billion set aside for infrastructure projects has not been spent: 

"During year one of the stimulus, only about $20 billion of money was handed out for infrastructure projects.

'I think we'll see a lot more stimulus money get into actual contracts and actual hiring in 2010 than we did in 2009,' said Kenneth Simonson, chief economist of the Associated General Contractors of America."  

If you are looking for ARRA green building projects, 2010 appears to be the year.  

Photo:  vividbreeze

Related Links:

Bulk of Stimulus Spending Still to Come (WSJ)

ENERGY STAR Leaders Program Proves Successful

What would you tell the federal government about green building law if you had the opportunity?

This past weekend, I contemplated this question as I prepared for a presentation that two colleagues - Catherine Kunz and Stephen McBrady - and I will be giving to the National Research Council and 15 federal agencies that will be in attendance.  While preparing for the presentation, I came across new information and resources that I will share with you over the coming weeks.  

While my presentations often focus on legal pitfalls facing the green building industry, I like to start each presentation on a positive note, by pointing out the benefits of the green building industry.  For the presentation to the National Research Council, I will begin with this headline:



What is the ENERGY STAR Leaders Program and why has it worked? 

"Owning a building that achieves top energy performance is a sign of good management, but owning a portfolio of buildings that achieves continuous improvement in energy performance demonstrates superior management and environmental leadership. Those ENERGY STAR partners who demonstrate continuous improvement organization-wide, not just in individual buildings, qualify for recognition as ENERGY STAR Leaders. . . .

An ENERGY STAR Leaders designation helps you leverage your management success, as organizations with strong energy management often outperform their competitors by as much as 10%. Associations, financial analysts, and other stakeholders can use the Leaders designation as an objective way to distinguish leading organizations from their peers. In addition, with more than 68% of U.S. households recognizing ENERGY STAR as the national symbol for protecting the environment through energy efficiency, ENERGY STAR Leaders can promote their energy efficiency improvements to customers and clients."

While I have concerns about other federal green building programs and regulations, the ENERGY STAR Leaders program is successfully promoting energy efficiency in the nation's building stock. 

What other governmental green building programs would you deem a success? 

Related Links:

Become an ENERGY STAR Leader (EPA)

EPA's ENERGY STAR Leaders Quadruple Energy Savings in One Year (EPA)

Update: Energy Department Concerned About Geothermal Earthquake Risk

When you think of green energy projects, what sort of results do you anticipate?  New energy sources?  Reduced energy costs?  Green jobs? 

What about earthquakes?

Geothermal energy, a widely-touted green energy source, involves drilling miles-deep wells into underground reservoirs in order to tap steam and hot water that can be used for energy applications.  I have previously referenced a geothermal energy project that was shut down by the Swiss government for allegedly causing earthquakes in 2006 and 2007. 

Apparently, the potential for earthquakes triggered by geothermal energy projects is also a concern for the U.S. Department of Energy, as detailed in a December 30 DOE letter: 

"The United States Energy Department, concerned about earthquake risk, will impose new safeguards on geothermal energy projects that drill deep into the Earth’s crust.  The new policy is being instituted after a project in California that used the new technology was shut down by technical problems and encountered community opposition, federal documents indicate.

The project, by Seattle-based AltaRock Energy, would have fractured bedrock and extracted heat by digging more than two miles beneath the surface at a spot called the Geysers, about 100 miles north of San Francisco. The company ran into serious problems with its drilling and faced accusations from scientists and local residents that it had not been forthcoming enough about the earthquake risk. AltaRock denied those accusations."

Most striking to me is that on September 11, 2009, the DOE downplayed the potential for earthquakes caused by the California geothermal project: 
"In a second document dated Sept. 11, 2009, but not previously disclosed, the department concluded that earthquakes that would have been set off by the AltaRock project would 'not have a significant impact on the human environment.'”

Just another example of how new, green technologies will result in unintended consequences.  How can you extrapolate this example to the green building industry?

Photo Credit:  peripathetic

Related Links:

Green Energy Project Causes Earthquakes? (GBLU)

Geothermal Basics (DOE)

Geothermal Drilling Safeguards Imposed (NYT)

Tysons Corner Bonus Density Program Criticized

I used to work in Tysons Corner, Virginia. It is a fascinating place for many reasons, not the least of which is the fact that the area supports 105,000 jobs but only 17,000 residents. One of the consequences of this job-to-resident ratio is a daily traffic jam as workers leave for the day.

Government officials want to remake Tysons Corner into a more sustainable community by increasing density and residential options. As you can probably imagine, there are many competing proposals put forward by varying interest groups. One of the proposals involves permitting density bonuses to developers if a building seeks LEED certification:

"As far as density bonuses, a 10 percent bonus is proposed in return for LEED platinum certification, and bonuses are to be compoundable. For example, if a developer obtained a 20 percent density bonus for offering 20 percent affordable housing, the additional bonus for LEED certification would be for 10 percent of the resulting density cap, for a total bonus of 32 percent."

The proposed density bonus program is similar to the Arlington bonus density program. Not everyone supports the Tysons Corner bonus density program though:

  • “Representing the Town of Vienna, Town Council member Laurie Cole said the ‘implementation entity’ that is to oversee the fulfillment of the plan should include residents of the surrounding communities. ‘The future of Tysons Corner affects us directly and deeply,’ she told the commission. Cole advised against density bonuses for LEED (Leadership in Energy and Environmental Design) certification, as well as the compounding of density bonuses, saying that such policy was ‘testing the surface tension of what Tysons Corner can contain.’”
  • “[Jonathan Cox of AvalonBay Communities] also said recommendations for LEED certification would be punitive to residential redevelopment, as LEED standards were developed for office and commercial buildings and not for residential developments.”

What do you think of these criticisms of the proposed Tysons Corner bonus density program?

 
Related Links
 

Arlington County Revises Green Building Density Program (GBLU)

Photo:  Shanghai Steve

D.C. Keeps PACE To Support Energy Efficient Homes

Do you remember Property Assessed Clean Energy (PACE) bonds? If you recall, in a June 2009 post, I proclaimed my undying affection for PACE bonds, which can serve as a financing mechanism to retrofit homes and buildings:

“PACE is a bond where the proceeds are lent to commercial and residential property owners to finance energy retrofits (efficiency measures and small renewable energy systems). OWNERS then repay their loans over 20 years via an annual assessment on their property tax bill. PACE bonds can be issued by municipal financing districts or finance companies and the proceeds can be used to retrofit both commercial and residential properties.”

My hope was that jurisdictions across the country would use PACE bonds to finance retrofits of homes and buildings. Turns out, PACE bonds have been proposed in my own backyard.

In December 2009, District of Columbia Mayor Adrian Fenty announced his "administration is preparing an application for a federal grant to create a $35 million revolving fund that would make loans to District homeowners and commercial property owners for energy efficiency improvements."

There are two basic steps to establish a PACE bond program. First, a state must pass enabling legislation. Second, the state must secure seed money for the revolving fund that will finance the PACE bonds. The D.C. government is proceeding forward with both steps:

"[T]he Council of the District of Columbia is expected to take up legislation that would create not only an administrative mechanism for running the program, but would create a 'property assessed clean energy' (PACE) bond program, that will ensure sustainable funding for this initiative in coming years. The legislation would allow the District to issue a series of conduit bonds up to $250 million. The federal funds would initially seed the fund and future bond sales would be backed by future tax collections.

The average age of a building in the District is about 72 years old, or about 30 years older than the national average. Given the age of the city’s building stock, officials see a greater need for energy efficiency retrofits and program managers expect the property owners could collectively save about $10 million in utility costs during the program’s first three years."

As an owner of a hundred-year-old row house, I am looking forward to the opportunity to apply for a PACE bond.

What do you think of this program?

Related links:

A Green Building Breakup (GBLU)

District Seeks $35M Grant for Energy Efficiency Fund (DC)

PACEnow (PACEnow.org)

Photo:  edwhitaker

Can a Green Schools Program Be Inequitable?

In Ohio, there is LEEDigation brewing.  But it's not the LEEDigaiton that I anticipated.  

The Ohio School Facilities Commission (OSFC) requires that new OSFC-funded schools achieve LEED Silver certification.  The Washington-Nile school district is balking at the additional costs incurred as a result of the LEED certification requirement.  

When a school project is pursuing LEED certification, OSFC provides three percent more funding than the estimated project costs in order to pay for the incremental costs of certification.  According to Washington-Nile Superintedent Patricia Ciraso, 3 percent is insufficient to cover the costs of LEED certification in her school district (red dot in the picture on the left):  

"'It might cover it in Columbus, or Cleveland, where you have people that deal with LEED constantly. These contractors down here, this is new to them and they’re going to have to deal with it. They’re probably going to have to bring in some people, or at least have some people trained,' she said.

To help prove the need for greater LEED funding at smaller, isolated districts, the school has retained an attorney in Columbus, with experience in school projects, to research the equity of LEED funding for schools in Ohio. Ciraso said the outcome of this battle could have local impact on LEED funding for school projects at New Boston and Clay also.

'If you are co-funding these projects and you have said silver is the appropriate LEED certification, why would you not want to fund to that level?' she asked."

I had always assumed LEEDigation would involve post-construction disputes when a project failed to achieve its green building certification.  A pre-construction dispute involving public funding for certification is a new issue, and one that could impact other state green building programs.  

Did you see this coming? 

Related Links: 

LEED Funding for Green School Causes Construction Delay (GBLU)

LEED Funding for Green School Causes Construction Delay

Last Thursday, during a webinar on green building legal issues, I stated the following:

"I really believe schools will be a hotbed for green defect claims, in terms of energy efficiency, and other green building components.  Schools rely on tight budgets. . . .  Be careful what you are promising on these green school projects."

On Friday, I read an article titled "Construction Delayed at West School," which led with the following paragraph:

"Construction is at a stand-still at Washington-Nile School, where issues surrounding state-mandated LEED (Leadership in Energy and Environment Design) elements have placed the new middle school building project over-budget. Now attorneys working for the school are researching the equity of LEED funding for schools in Ohio; the outcome of which could also affect building projects at New Boston and Clay."

I was close.  

In Ohio, the Ohio School Facilities Commission (OSFC), administers the state’s Kindergarten through 12th Grade public school construction program and helps school districts fund, plan, design, and build or renovate schools.  In a previous post, we highlighted the OSFC's green buiding requirement for Ohio schools:

"OSFC Resolution 07-124 . . . mandates that all newly constructed or substantially renovated school buildings that are state funded achieve a minimum of Silver certification in the US Green Building Council's LEED-Schools (Leadership in Energy and Environmental Design) rating system with emphasis in energy conservation."

As highlighted in the article, the OSFC accepted the Washington-Nile School (tiny red dot in the photo to the left) as a special-needs project.  Because of the district’s low wealth base, the OSFC agreed to provide 98 percent of the funding for a new $16 million middle school. The remaining 2 percent (about $320,000) was paid from the school’s General Fund.

By accepting the OSFC funds, the school district is required to build the new Washington-Nile School to LEED Silver certification.  But the bids for the school were over-budget despite numerous changes made to the design:  

"'We knew a little about LEED. We didn’t know much, so they (the OSFC) educated us and they did a very good job. We bought into that and we designed accordingly. We made sure we had some educational LEED credits,' Washington-Nile Superintendent Patricia Ciraso said. She explained that while striving to meet these LEED requirements, the school had to give up other features they had hoped to add. By choosing to cut-back on windows, the school had change its lighting system, which means redesigning the entire electrical system — and what they ended up with still was estimated at least $1.2 million over-budget."

On Friday, we will look at allegations by the Washington-Nile school district that the OSFC is not properly funding the necessary LEED-certification costs.  You will want to check back, as these allegations include a creative legal challenge to the state's funding of green schools, which could have broad implications for other state green building programs. 

Related Links: 

Sensible Interview:  OSFC (GBLU)

Live Webinar (GBLU)

Construction Delayed at West School (Portsmouth Daily Times)

 

Important Revision to the D.C. Green Building Act

In December 2009, an Amendment to the D.C. Green Building Act of 2006 was introduced by the D.C. Council.  Labeled the "Green Building Technical Corrections, Clarification, and Revision Amendment Act of 2009," this Amendment includes many revisions to the original Green Building Act.  One of those revisions involves the "performance bond" requirement:

"'Sec. 6. Bond requirements.'.

(2) Section 6 is amended by striking the phrase 'performance bond' wherever it appears and inserting the word "bond" in its place."

That's it.  This feels anti-climatic.  We have been discussing this same issue since the dawn of Green Building Law Update.  Back on August 15, 2008, one of my very first posts pointed out the performance bond issue.  So what does this fix? 

1.  Replacing "performance bond" with "bond" will eliminate the confusion that was certain to ensue in the construction and surety industry.  Performance bonds guarantee a contractor will building according to the plans and specifications.  Here, a developer has to guarantee that a project will achieve green building certification. 

2.  I still have concerns about the bigger issue of whether these "bonds" will be available.  Bond instruments guaranteeing green building certification simply do not exist in the market.  Maybe a surety will develop these bonds, maybe they will not. 

In the end, I applaud the D.C. City Council for addressing the "performance bond" issue. 

What do you think about this revision?  Disaster averted? 

Related Links:
 

Hitting Reset on the D.C. Green Building Act

Back in April 2009, I took a vow of silence.  I promised to stop writing about the "performance bond" requirement in the D.C. Green Building Act.  I had faith the D.C. Council would address the issue.  Thankfully, it appears our long nightmare may be coming to an end.

Today, I am going to reset the "performance bond" issue (I have not written about it since April 2009!).  On Monday, I will discuss the "Green Building Technical Corrections, Clarification, and Revision Amendment Act of 2009" (pdf) and the proposed revision to the "performance bond" requirement. 

As background, for every green building mandate, you need an enforcement mechanism. The D.C. Green Building Act of 2006 requires that "after January 1, 2012, all new construction of projects 50,000 square feet or greater must comply to the LEED certification level."  Here is how I described the enforcement mechanism in a previous white paper:

"One of the most controversial provisions in the Green Building Act is the performance bond requirement.  After January 1, 2012, an applicant for construction of a privately-owned building must provide a performance bond which is due and payable prior to receipt of a certificate of occupancy.  Thus, after January 1, 2012, if a construction project must meet green requirements in the Green Buildings Act, the 'applicant for construction' must also provide a performance bond guaranteeing satisfaction of the green requirements." 

There are two primary problems with the D.C. Green Building Act "performance bond" requirement. 

1.  "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."

2.  "Let me make this clear: no bond or insurance instrument has been created that guarantees green certification.  This type of security instrument does not exist.  I have discussed the issue with sureties, surety industry groups, insurance companies and insurance brokers.  None of them know of a security instrument that guarantees green building certification."

So what did the D.C. City Council correct either of these problems?  Check back on Monday as I continue this discussion. 

Related Links:
 
 
Photo:  Henry Stern

3 Reasons Why Your Green Building Regulation is a Problem

On Wednesday, I posited that codifying the LEED rating system, or any other third party green building rating system, is not a viable option for an entire state.  

Why?  Here are three primary considerations:  

1.  There are troubling antitrust issues associated with the LEED rating system.  These antitrust issues are significantly exacerbated by the incorporation of LEED into regulations or building codes.

2.  The LEED rating system was never intended to be codified.  In fact, the LEED rating system is meant to apply to only 25 percent of new construction starts

3.  I believe the USGBC has recognized the problems associated with codification of the LEED rating system.  In response, the USGBC, along with other groups, is quickly pushing along publication of ASHRAE 189.1P, which codifies many of the elements of the LEED rating system.  This is just a hunch, but I anticipate that the USGBC will start urging jurisdictions to adopt ASHRAE 189.1P instead of the LEED rating system.

Can you think of any other reasons?    

Related Links:
 
 
 

Photo: ilaria gallo

Green Building Groups Oppose Green Building Regulations

These are strange times for the green building industry.  Last week, California prepared to vote on new green building codes that would improve energy efficiency, water use and waste reduction in the construction industry.  Normally you would anticipate that environmental groups and green builders would applaud these measures, right?

Not quite.  

"[P]arts of the state's new code, which would take effect in January 2011, would amount to 'a setback for California's leadership on green building,' according to a Dec. 22 letter from six groups. They included the Sierra Club, the Natural Resources Defense Council and Global Green, along with two nonprofit certification groups, the Green Building Council and Berkeley-based Build It Green. 

The groups largely applaud the code's mandatory rules as a baseline minimum standard.  But they take issue with its two-tier labeling system for stricter voluntary measures, CalGreen, saying it would be open to conflicting interpretations and be unenforceable by local building inspectors.

'The tiers cause confusion in the marketplace and the potential for builders to label their buildings green without substantiating their claims,' said Elizabeth Echols, director of the Green Building Council's Northern California chapter. Many local officials who would be responsible for verifying builder claims do not have the technical expertise that LEED and other third-party verifiers provide, she added."

I am puzzled by these groups attempts to thwart passage of the California green building code.  Pushing for the LEED rating system, or any other third party green building rating system, to be codified for an entire state is not a viable option.  Next post I will give you three reasons to consider. 

What do you think about the environmental groups' attempts to block the California green building code?  

Related Links: 
 

Photo:  mars discovery district

Corps of Engineers Translating LEED for International Projects

[Please join us on January 20 for the next Green Professionals Happy Hour.  See details in the attached flyer.]

Many federal agencies are applying the LEED rating system to buildings in the United States, but one agencies unique use of the system recently caught my attention.  The Army Corps of Engineers is attempting to modify the LEED rating system for international application: 

"Translating the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) Silver certification into a standard for all international construction—which the U.S. Army Corps of Engineers has pledged to do—may be impossible.

Creating high-performance facilities is not the issue, but holding to a LEED rating is problematic. “LEED is a very U.S.-based standard, and trying to take that and apply it overseas is difficult. But the Army mandate is ‘do it,’” says Jeanette Fiess, who represented the Corps’ LEED Sustainability Directorate of Expertise at a November 'LEED Awareness' workshop for Corps staffers in Oberammergau, Germany. The directorate, a virtual entity with experts in many Corps districts, is trying to figure out how to comply."
When I recently told someone about the Army's mandate to the Corps of Engineers, the immediate response from the individual was that other countries have LEED rating systems that can be used.  Apparently, though, applying different LEED rating systems depending on the country is too confusing: 
"Part of the problem is many countries in which the Corps builds have their own versions of LEED, and they don’t line up well enough in philosophy or detail to map from one to another. The Japanese have the Comprehensive Assessment System for Built Environment Efficiency (CASBEE), South Korea has its mandatory Green Building Certification Program, and Germany has the DGNB, or Deutsche Gesellschaft für nachhaltiges Bauen e.V, from the German Sustainable Building Council."

What do you think of the Corps of Engineers’ attempts to modify the USGBC’s LEED rating system for other countries?

Related Links:

Building To LEED-Silver May Not Survive First Encounter (ENR)

Green Building Regulations To Face Increased Scrutiny

A coalition of forest product companies ("the Coalition") has filed a complaint with the Federal Trade Commission (FTC) regarding, in part, the United States Green Building Council’s preference for Federal Stewardship Council-certified (FSC) wood products. The Coalition has asked the FTC Bureau of Competition to provide guidance to the USGBC and other rating systems regarding the endorsement of product certifications.

If the FTC decides to provide such guidance, the USGBC’s LEED rating system will obviously be affected.  I am particularly interested in the implications of FTC action for green building regulations that have incorporated the LEED rating system.

In its complaint, the Coalition takes a shot across the bow aimed at federal agencies that have adopted the LEED rating system:

“The favoritism shown FSC-certified products by USGBC is inconsistent with the American National Standards Institutes's (“ANSI”) due process requirements and OMB Circular No. A-119, which establishes the principles that voluntary, private sector standards must meet if federal agencies wish to use them, including openness, balance, due process, an appeals process, and consensus.”

In short, the Coalition is arguing that federal agencies are improperly requiring LEED certification for the design and construction of federal buildings. This allegation is not a new one.  Most green building regulations that require LEED certification also permit “an equivalent” certification in order to avoid antitrust issues like the ones raised by the Coalition’s complaint.

But many federal agencies exclusively require LEED certification for federal projects. The most obvious example is the General Services Administration, which builds and maintains a large percentage of federal buildings.  The GSA's website describes its LEED mandate:

“As a means of evaluating and measuring our green building achievements, all GSA new construction projects and substantial renovations must achieve Silver certification through the Leadership in Energy and Environmental Design (LEED®) Green Building Rating System of the U.S. Green Building Council.”

If the FTC were to find that the USGBC’s preference for FSC-certified wood products constitutes anti-competitive behavior, hundreds of green building regulations across the country and in Washington D.C. will have to be re-written.

The implications of the FTC action on the complaint are staggering.

What other implications do you see?

Related Links:

Photo:  Eighty734

USGBC Accused of Anti-competitive Practices

We may be settling into 2010, but one unresolved legal development in 2009 could have a broad impact on the future of the green building industry. On October 20, 2009, the Coalition for Fair Forest Certification ("the Coalition") filed a complaint with the Federal Trade Commission (pdf), alleging anti-competitive behavior by the Forest Stewardship Council (FSC) and the United States Green Building Council (USGBC):

"[T]he Coalition asks that the FTC investigate through the Bureau of Consumer Protection the deceptive and unfair trade practices arising out of FSC’s forest certification standards; investigate through the Bureau of Competition concerns about anticompetitive activities and monopolization arising out of USGBC’s LEED rating system and preference for FSC-certified products; and provide guidance to standard-setting organizations concerning behavioral standards for compliance with antitrust law."

My law firm represents many of the forest product companies involved in this complaint (another law firm submitted the letter), so I will not be discussing the allegations made against the FSC. Nor will I debate the merits of one wood certification versus another. But I will continue to keep you updated on the status of this complaint and I will be discussing allegations made against the USGBC and the potential impact of these allegations on green building regulations.

First, some background on the connection between USGBC, LEED and FSC:

"Under the LEED system, points can be awarded in five categories: sustainable sites, water efficiency, energy & atmosphere, materials & resources, indoor environmental quality, and innovation & design process. Credit 7 under the materials & resources category addresses the issue of certified wood, with the intent of encouraging environmentally responsible forest management. The requirements for the credit are:

'Use a minimum of 50% (based on cost) of wood-based materials and products, certified in accordance with the Forest Stewardship Council’s Principles and Criteria, for wood building components including, but not limited to, structural framing and general dimensional framing, flooring, finishes, furnishings, and non-rented temporary construction applications such as bracing, concrete form work and pedestrian barriers.'"

According to the Coalition’s complaint, forest product companies that do not supply FSC-certified wood can not contribute to LEED materials & resources Credit 7: "[T]he three standards most widely adopted by forest owners in the U.S. and Canada - SFI, the Canadian Standards Association ("CSA") Sustainable Forest Management Standard, and the American Tree Farm System - receive no points under LEED, creating a substantial disadvantage for American-sourced wood products."

Among other actions, the Coalition has asked the FTC's Bureau of Competition to investigate the USGBC’s preference for FSC-certified wood:

"The Coalition also believes that the exclusionary actions of USGBC and its exclusive endorsement of FSC-certified products . . . warrants investigation by the Bureau of Competition concerning issues of possible monopolization, attempt to monopolize and conspiracy to monopolize the fast-growing certification marketplace. In examining the issue, the Coalition invites the FTC to use USGBC as a case in point to provide specific guidance to USGBC and other standard setting organizations."

It’s this last sentence that has really caught my attention.  

How do you think the FTC should respond to the Coalition's complaint?

Related Links:

Photo:  Travelin' Librarian

Illinois at Fault for Weatherization Program Oversight Failures

The Department of Energy will remain busy in 2010 with American Recovery and Reinvestment Act projects. In addition to $3.1 billion for the State Energy Program, the DOE is also responsible for $5 billion distributed to states for the weatherization of homes.
 

Federal stimulus funding has provided $242 million to Illinois to weatherize more than 25,000 homes, but poor oversight of that work puts the funding at risk and in some cases puts the residents of poorly weatherized homes in danger, an audit report warns.

In an interim report released today, the Energy Department's Inspector General warned that oversight of the Illinois program is failing at many levels.

The inspector general report says the state of Illinois has failed to inspect any weatherized units completed by seven of the 35 local agencies carrying out the work. The state also lacks a system for tracking major findings of its inspections and has not inspected 5 percent of DOE-funded weatherized units, as required by DOE.

The DOE did not escape criticism either as the auditor found the federal agency had not conducted mandatory monitoring visits in the state. The auditor's findings were part of an interim report, and three other states - North Carolina, Pennsylvania, and Virginia - face similar audit reviews.
 
States like California and Illinois will face intense pressure to rigorously monitor, audit, and investigate ARRA green building projects. But federal agencies, like the DOE, also will spend significant resources to monitor ARRA projects.
 
Furthermore, as ARRA projects begin to wind down, the media will begin reporting on the results. This reporting will likely quickly latch on to failed ARRA projects and programs.
 
In short, many entities, all with different interests, will be closely examining ARRA green building projects.
 
Related Links:
 
 
 

California Risks Losing Green Stimulus Funds

The American Recovery and Reinvestment Act (ARRA) included $250 million for a "RAT" board (pdf) established to audit and investigate stimulus-funded programs and projects. In addition, states have established their own auditing programs.
 
These auditing programs have started to reveal some problems with ARRA green building programs (subscrip. req.).
 
The Department of Energy received $3.1 billion to distribute to State Energy Programs for the green building, energy efficiency and renewable energy projects of the state's choosing. With fifty states trying to manage unprecedented funding levels for the State Energy Programs, some states were bound to have trouble managing the funds. 

California risks losing $226 million in federal stimulus funds for energy projects for failing to quickly spend the cash and establish a system to track its use, a state auditor said today.

Auditor Elaine Howle said a state commission created to spend money from the American Recovery and Reinvestment Act "has been slow in developing guidelines, issuing requests for proposals and implementing the internal controls needed to administer" the funds. . . . The $226 million was given to California as part of $3.1 billion made available under the stimulus law's State Energy Program."

The audit of the California State Energy Program concluded that the state has failed to create a system of internal controls adequate to ensure that those funds are used appropriately.
The implementation of "internal controls" to monitor ARRA projects is no surprise, but states that review this report may see a need for additional or more strenuous controls. Contractors participating in ARRA projects should certainly be prepared for onerous oversight and audits from states.
 
What are your experiences with state oversight of ARRA projects?
 
Related Links

Photo: Wikipedia

Green Building Industry to Face More Scrutiny

The green building industry is entering an interesting period. In 2009, the green building movement was embraced as a solution to economic and environmental problems. "Green jobs" were touted as a way to improve the economy while reducing unemployment. Investment in renewable energy and energy efficiency measures was championed as a way to reduce greenhouse gas emissions and increase energy security.
 
With the nation buying into the green movement, the Obama Administration and Congress were able to pass a $787 billion American Recovery and Reinvestment Act (ARRA) that included at least $25 billion for renewable energy and energy efficiency projects.

Government officials and citizens are going to expect results form the significant investments in the green movement (particularly in an election year). In 2010, the nation will begin to decide if investments in the green building and renewable energy industries were worth it.
 
Back in February 2009, I pointed out the potential issues that may arise when states and local jurisdictions attempt to manage ARRA-funded green building programs.  Stories are beginning to emerge of states mismanaging energy efficiency funds from the ARRA. Federal agencies are expressing confusion with new green mandates. In 2010, states and federal agencies will face pressure to monitor, investigate and audit ARRA green building and renewable energy projects. On Wednesday and Friday, we will look at two states and a federal agency that have been criticized for lack of oversight of ARRA green building programs.

As government entities face pressure to closely monitor ARRA projects, contractors involved in ARRA green building projects must remain diligent to ensure compliance.

Related Links:

The Stimulus: Now for the Hard Part (GBLU)

New York City Backs Off Retrofit Requirement

Well, that did not last long.  Two weeks ago, we wrote about Mayor Michael Bloomberg's plan to require retrofits of existing buildings.  After vehement opposition, Mayor Bloomberg has backed off of his plans to require retrofits:  

"The plan, which the owners said was too costly, called for all buildings of 50,000 square feet or more to undergo audits to determine which renovations would make them more energy efficient, and for owners to then pay for many of those changes.

The mayor wants to go forward with the proposal to require energy audits, but now is leaving it up to the building owners whether to undertake the changes called for by those audits."
Not surprisingly, opponents cited the economy as one of the prohibitive factors to implementing the mandatory retrofitting:
“It’s another unfunded mandate, and this is just not the time for it,” said Stuart Saft, chairman of the Council of New York Cooperatives and Condominiums, an opponent of the plan. “Come back in five years when we’re past this recession. At this point it’s just a slap in the face.”
Green building legislation has developed quickly over the last ten years.  Cities like New York City and Washington, D.C. previously pushed the envelope by requiring all new construction achieve green building certification.  The New York City proposal would have taken the next step in requiring existing buildings to incorporate green building features, like energy efficient windows and HVAC systems.  

Opposition to the New York City legislation suggests the real estate industry is not prepared to retrofit all existing building stock.  The legislation was an enormous leap for an industry that continues to wobble through the recession.  

What do you think the rejection of the New York City legislation suggests?  
 
Related Links: 
 
 
 

Green Energy Project Causes Earthquakes?

It's always amazing to me the unexpected consequences that result from apparently benign activities.  As new green building and energy innovations and materials are incorporated into projects, there is always the possibility of an unexpected consequence.  

Take for instance a geothermal energy project in California.  

Geothermal projects involve mile-or-more-deep wells drilled into underground reservoirs to tap steam and very hot water that can be brought to the surface for use in a variety of applications.  The Department of Energy is investing millions in geothermal projects.  But one of the DOE projects was recently halted:  

The project by the company, AltaRock Energy, was the Obama administration’s first major test of geothermal energy as a significant alternative to fossil fuels and the project was being financed with federal Department of Energy money at a site about 100 miles north of San Francisco called the Geysers.

But on Friday, the Energy Department said that AltaRock had given notice this week that “it will not be continuing work at the Geysers” as part of the agency’s geothermal development program.

The timing of the announcement coincides with another project recently shutdown due to earthquake concerns:  

"The project’s apparent collapse comes a day after Swiss government officials permanently shut down a similar project in Basel, because of the damaging earthquakes it produced in 2006 and 2007. . . .  [T]he type of geothermal energy explored in Basel and at the Geysers requires fracturing the bedrock then circulating water through the cracks to produce steam. By its nature, fracturing creates earthquakes, though most of them are small."

This geothermal project highlights the unexpected consequences that can result from new technologies.  As the construction industry pushes forward to locate new sources of renewable energy and energy efficiency savings, contractors must also be mindful of unintended consequences.  
 
Related Links
 
 
 
Photo:  Earthwatcher

Impact of EPA Endangerment Finding on Green Building

On December 7, the Environmental Protection Agency (EPA) issued a finding that greenhouse gas emissions pose a danger to human health and environment.  The finding sets the stage to allow the EPA to regulate these emissions.  

What impact will this endangerment finding have on the green building industry?  

In my view, the endangerment finding will not immediately impact the green building industry.  Instead, greenhouse gas standards for automobiles will likely first be promulgated based on the endangerment finding:
Along with its final endangerment finding, the EPA also sent to OMB the agency's final finding on whether cars and trucks "cause or contribute to that pollution," [EPA Administrator Lisa] Jackson said.

Such a finding would allow the federal government to regulate tailpipe emissions by increasing vehicle mileage requirement[s].

Jackson said the government is facing a "hard deadline" of next March to let automakers know of any required increases in fuel economy standards that would affect vehicles built for the 2012 model year.
Once automobile greenhouse gas emissions are regulated, then greenhouse gas emissions will be a "regulated pollutant" under the Clean Air Act, which will trigger permitting requirements for stationary sources.  

As the Clean Air Act is currently written, stationary sources would include many commercial buildings and large residential homes.  The EPA is hoping to avoid the regulation of buildings and homes, though, by proposing the "tailoring rule":  
"In late September, the agency announced a proposed “tailoring rule” that limits regulation of climate-altering gases to large stationary sources like coal-burning power plants and cement kilns that produce 25,000 tons or more a year of carbon emissions."
While the EPA continues down the path of regulating greenhouse gas emissions, the Senate, at some point in 2010, likely will vote on energy legislation that includes cap-and-trade policy to restrict greenhouse gas emissions.  The Obama Administration would prefer that Congress, and not the EPA, regulate emissions:  
"The administration has used the finding as a prod to Congress, saying that if lawmakers do not act to control greenhouse gas pollution it will use its rule-making power to do so. At the same time, the president and his top environmental aides have said that they prefer such a major step be taken through the legislative process."
The House of Representatives' energy bill contained significant programs that would benefit the green building industry and any Senate bill is likely to include similar programs.  An EPA ruling restricting greenhouse gas emissions, on the other hand, likely would not create programs for the green building industry.  Instead, its effects would likely reverberate in the green building industry by increasing energy costs and making energy efficiency strategies more appealing. 

Which governmental body do you think will first regulate greenhouse gas emissions?  
 
Related Links
 
 
 
Photo:  Kempton

Cities Will Soon Regulate Energy Use

The future of green building regulations usually starts in big cities. Cities like San Francisco, Washington, D.C. and New York City were some of the first to incorporate green building certification into regulations and building codes. The next frontier in green building regulations will be energy performance and New York City seems to be at the forefront. The New York Times recently reported this anecdote about future New York City green building policy:

The New York City Council is drafting a law that will dispatch auditors to measure large buildings’ energy use, with potential fines for landlords who fail to retrofit their systems.

There are other examples of regulations focused on energy efficiency:

The United States Green Building Council is also modifying its LEED rating system to reduce actual energy usage. With the launch of LEED 2009, the USGBC now requires the reporting of energy data. As we reported in September, Scot Horst, USGBC executive, has stated that the LEED certification will eventually require buildings to achieve a specified level of energy performance.

The eyes of the green building industry are focused on energy efficiency. You should be too.

Related Links:

In Washington, DC, Energy Star Benchmarking Law Arrives (CoStar Group)

The Future of LEED: Re-certification (GBLU)

So Who Left the Lights On? The System Knows (NYT)

Super Star Green Label Proposed (GBLU)

White House Developing Emissions Reporting for Contractors

On Friday, we discussed Navy contracting requirements for tracking "energy efficiency" and "energy footprints."  When I first learned of these requirements, I was reminded of Executive Order 13514.  We have already discussed Executive Order 13514 in terms of the green building industry, but the Order also contains provisions relating to greenhouse gas emissions. I don't usually include extended regulatory text, but in this case, the regulation emphasizes the Obama Administration's focus on greenhouse gas emissions: 
Sec. 13. Recommendations for Vendor and Contractor
 
Emissions. Within 180 days of the date of this order, the General Services Administration, in coordination with the Department of Defense, the Environmental Protection Agency, and other agencies as appropriate, shall review and provide recommendations to the CEQ Chair and the Administrator of OMB's Office of Federal Procurement Policy regarding the feasibility of working with the Federal vendor and contractor community to provide information that will assist Federal agencies in tracking and reducing scope 3 greenhouse gas emissions related to the supply of products and services to the Government. These recommendations should consider the potential impacts on the procurement process, and the Federal vendor and contractor community including small businesses and other socioeconomic procurement programs. Recommendations should also explore the feasibility of:
 
(a) requiring vendors and contractors to register with a voluntary registry or organization for reporting greenhouse gas
emissions;
 
(b) requiring contractors, as part of a new or revised registration under the Central Contractor Registration or other tracking system, to develop and make available its greenhouse gas inventory and description of efforts to mitigate greenhouse gas emissions;
 
(c) using Federal Government purchasing preferences or other incentives for products manufactured using processes that minimize greenhouse gas emissions; and
 
(d) other options for encouraging sustainable practices and reducing greenhouse gas emissions.
Eventually, the federal procurement process will include measurement of greenhouse gas emissions.  The first step, which is part of Executive Order 13514, is the creation of a voluntary greenhouse gas emissions reporting system for government contractors and vendors. 
 
A contractor's ability to measure and minimize greenhouse gas emissions will become an important factor in winning government contracts.  The creation of such a complicated, new contracting requirement is certain to lead to confusion and new risks for government contractors. 

Has your company considered measuring and reducing greenhouse gas emissions?

Related Links: 

President Obama signs an Executive Order (White House)

Energy Reductions in the Navy (GBLU)

Does Executive Order Signal Shift in Green Building Regulations (GBLU)

 

Energy Reductions in the Navy

My colleague Steve McBrady and I recently presented “Green Building in the 21st Century” at the national conference of the Construction Users Roundtable. Our slideshow is available below. Our primary message was that the federal government's investment of $25 billion in green building projects, through the American Recovery and Reinvestment Act will prop up the green building industry for the next few years.  Other presentations by government officials regarding federal construction projects further highlighted this message.

For example, during the first day, Vice Admiral Michael K. Loose, U.S. Navy, presented “How CURT and the Industry Help the U.S. Navy Deliver Fleet Readiness.” Throughout his presentation, the Vice Admiral emphasized that the Navy is focused on reducing its energy consumption through sustainability measures. The Navy intends to reduce its energy usage by using renewable energy sources, requiring LEED Silver certification for new construction and focusing on contractors’ life cycle costs and energy footprints, as required by a recent Department of Navy proclamation included in Vice Admiral Loose's presentation:

“Effective immediately, the Navy and Marine Corps will incorporate life cycle costs as an evaluation factor when awarding contracts. The Department will develop a methodology to evaluate energy efficiency and energy footprint.”

The evaluation of “life cycle costs” and “energy footprints” was a recurring theme throughout the conference and, to me, is a new development in government contracting.

How is your company going to measure its “life cycle costs” and “energy footprint"?  How will the government evaluate those factors?

"Super Star" Green Label Proposed

A major overhaul to the Energy Star program, which currently certifies and labels products that are energy efficient, is imminent. How this overhaul occurs remains to be seen.

On the one hand, the two current agencies responsible for the Energy Star program- the Environmental Protection Agency (EPA) and the Department of Energy (DOE) - are trying to revise the program internally. But it's not clear if the agencies' actions will be enough:

"In response to complaints, the Senate Committee on Energy and Natural Resources included provisions in its American Clean Energy Leadership Act of 2009, introduced in July, that would require improvements to the Energy Star program ... Senator Jeff Bingaman, the Democrat of New Mexico who introduced the clean energy legislation and is chairman of the Senate energy committee, says the changes are inadequate."

'There are questions about stakeholder involvement in this process and effects on D.O.E. and E.P.A. staffing and budget,' Mr. Bingaman said in a statement to Green Inc. 'I’m going to ask the agencies to go back and take into account the views of the Congress and external stakeholders.'"

A key difference between the two proposals is that the EPA and DOE proposed the EPA take over the products portion of Energy Star; Senator Bingaman has proposed that the DOE remain involved in Energy Star products and specifically oversee the solid state lighting portion of the program. Two questions immediately come to mind when reviewing the proposed overhaul plans to Energy Star.

First, why is the DOE willing to give up Energy Star products to the EPA? Turns out, the DOE has focused on a new building labeling system:

"[Cathy] Zoi, [the DOE's new assistant secretary for energy efficiency] pointed out that while D.O.E. has lost some of its Energy Star territory in the deal, it gained ownership of a new program that will develop an efficiency rating tool and labeling scheme for assessing energy in buildings — a major source of infrastructural inefficiency."

Second, how many more green labels can be created before consumers can no longer discern between them? Among the many plans put forth by the EPA and DOE, the agencies have proposed a "'Super Star' label to identify products that perform in the top five percent of any given category."

Are you confused by the myriad of green building and product labels yet?

Related Links:

Congress and Agencies Debate an Overhaul to the Federal Energy Star Program (New York Times)

Can Green Building Regulations Keep Up?

The Energy Star program, responsible for certifying energy efficient products, is about to undergo some major changes. Recently, the program, run by the Environmental Protection Agency (EPA) and the Department of Energy (DOE), has come under fire from a number of groups:

"Various stakeholder groups, such as manufacturers, utilities and even Consumer Reports , the monthly magazine published by the Consumers Union, have complained in recent years that Energy Star . . . is too inclusive. An internal audit of the program by the Department of Energy found that there is inadequate tracking of whether the appliances have actually met the required specifications for energy efficiency."

The New York Times article lists three primary complaints with the Energy Star program:

1. Too many products are achieving the Energy Star rating, casting doubt on whether evaluations have been properly performed.
2. The program has been slow to keep up with technical advancements.
3. The program has been hamstrung by jurisdictional disputes between EPA and DOE.

The complaint that the Energy Star Program has failed to keep up with technical advancements was of particular interest to me, as it may foreshadow problems with green building regulations that incorporate rating systems. Like green products and appliances, the green building industry and building rating systems are constantly evolving through technical advancements. For example, with the launch of LEED 2009 (which replaces LEED 2.2), the United States Green Building Council's LEED rating system will now be revised every two years.

Here's my concern: as I have written about numerous times, many green building regulations require LEED or other green building certification. Many jurisdictions have created green building regulations that incorporate the previous version of the USGBC's LEED rating system, LEED 2.2.

How will these jurisdictions keep up with advancements in green building rating system?

Related Links:

Congress and Agencies Debate an Overhaul to the Federal Energy Star Program (New York Times)

The Beginnings of a Federal Green Building Rating System

It is very rare to read a green building regulation and not see a mention of a green rating certification. When I started reviewing Executive Order 13514, I was certain that the LEED rating system would be included. On Friday, we saw that new green federal contracting requirements did not rely on independent green rating certifications.
 
Surely another section of the Executive Order mentions a green building rating system. Lets look at Section 2(g)(ii) and (iii):
[T]he head of the agency shall ... (g) implement high performance sustainable Federal building design, construction, operation and management, maintenance, and deconstruction including: (ii) ensuring that all new construction, major renovation, or repair and alteration of Federal buildings complies with the Guiding Principles for Federal Leadership in High Performance and Sustainable Buildings (Guiding Principles); (iii) ensuring that at least 15 percent of the agency's existing buildings (above 5,000 gross square feet) and building leases (above 5,000 more gross square feet) meet the Guiding Principles by fiscal year 2015 and that the agency makes annual progress toward 100-percent conformance with the Guiding Principles for its building inventory . . . .
Again, no mention of a green building rating system.
 
What about the Guiding Principles for Federal Leadership in High Performance and Sustainable Buildings (PDF)? While it reads a lot like the green building rating systems out there, the Guiding Principles do not mention a specific green building rating system. Instead, numerous green building strategies are included:
  • Integrated Design
  • Commissioning
  • Energy Efficiency
  • Measurement and Verification
  • Conservation of Indoor and Outdoor Water
  • Ventilation and Thermal Comfort
  • Moisture Control
  • Daylighting
  • Low-Emitting Materials
  • Protect Indoor Air Quality During Construction
  • Recylced Content
  • Construction Waste
  • Ozone Depleting Compounds
After reviewing Executive Order 13514 and the Guiding Principles, I am convinced that the federal government is moving away from non-governmental green building rating systems, like LEED.
 
What do you think? Should the federal government create its own green building rating system?
 
Related Links

Does Executive Order Signal Shift in Green Building Regulations?

Executive Order 13514 requires that, going forward, 95 percent of federal buildings must comply with "sustainability requirements." Section 2(h) of the Executive Order provides more details on the new green federal contracting requirements: 
[T]he head of the agency shall . . . advance sustainable acquisition to ensure that 95 percent of new contract actions including task and delivery orders, for products and services with the exception of acquisition of weapon systems, are energy-efficient (Energy Star or Federal Energy Management Program (FEMP) designated), water-efficient, biobased, environmentally preferable (e.g., Electronic Product Environmental Assessment Tool (EPEAT) certified), non-ozone depleting, contain recycled content, or are non-toxic or less-toxic alternatives, where such products and services meet agency performance requirements . . . .
 It is interesting that there is no mention of a green building rating system in this section. President Obama has already signaled an interest in having the White House LEED certified. Federal agencies have shown a penchant for requiring LEED certification. For example, the General Services Administration is now requiring that all projects achieve LEED Silver certification. Generally speaking, lawmakers across the board have drafted green building regulations to require some type of rating system certification.
 
Does Executive Order 13514 signal the federal government's intent to move away from green rating certifications for federal buildings?
 
Related Links:

Executive Order Will Require More Federal Green Building

President Barack Obama recently signed Executive Order 13514, which sets numerous green requirements for the federal government. The EO will certainly impact the green building industry. According to the White House's Press Release, the Executive Order requires agencies to meet a number of energy, water and waste reduction goals:
  • 26% improvement in water efficiency by 2020;
  • 50% of construction, recycling and waste materials will be diverted from landfills by 2015;
  • 95% of all applicable contracts will meet sustainability requirements;  
  • Implementation of the 2030 net-zero-energy building requirement;
  • Implementation of the stormwater provisions of the Energy Independence and Security Act of 2007, section 438; and
  • Development of guidance for sustainable Federal building locations in alignment with the Livability Principles put forward by the Department of Housing and Urban Development, the Department of Transportation, and the Environmental Protection Agency.
Agencies will be required to go through the rulemaking process to implement EO 13514. There are a number of steps to the rulemaking process:
  • agencies must inform the public of proposed rules before they take effect;
  • the public can comment on the proposed rules and provide additional data to the agency;
  • the public can access the rulemaking record and analyze the data and analysis behind a proposed rule;
  • the agency analyzes and responds to the public's comments;
  • the agency creates a permanent record of its analysis and the process;
It will be very interesting to see the initial rules proposed by the various agencies and how various players weigh in during this green building rulemaking process.
 
How do you think interested parties are going to react?
 
Related Links: 

Photo: Chuckumentary

How Far Should the GSA Go With Green Building Certification?

If you have been reading Green Building Law Update for any length of time, you have read about the $4.5 billion that was given to the General Services Administration through the American Recovery and Reinvestment Act.  The GSA has announced plans to use the $4.5 billion to create high performance, green government buildings. 
 
The GSA currently requires that all new projects achieve LEED Silver certification.  Is it possible that the GSA is going to push for even higher green building certification levels?  We will soon find out according to a column by Bill Gormley in the Washington Business Journal: 

The government is expected soon to issue new directives on green procurement.  Michelle Moore, the new federal environmental executive, is pushing hard for green standards – particularly for third-party certifications to help provide some kind of proof that green actually means something to vendors and government buyers. 

Are we at the stage where the GSA should require LEED Gold, or even LEED Platinum on all new construction?

Government Moves to Define "Green" Contracting

(WBJ) (subscription req.)


GSA - Sustainable Design Program

(GSA)


GSA Building Underperforms

(GBLU)


GSA's Green Stimulus Projects

(GBLU)

Four Steps to Green Contracting with the Government

The Washington Business Journal (a fantastic newspaper) recently ran an informative column by Bill Gormley titled "Government Moves to Define ‘Green’ Contracting" (subscription req.). There was so much information that I am going to spend the next two days discussing it.

In the article, Gormley ran through a list of actions that should be taken by green service or product companies wishing to contract with the government. Here are some highlights:

  • "Know the lingo. . . . Know what kinds of requirements and regulations government agencies face, and do your best to help agencies meet them."
  • "Be specific. Many companies struggle with explaining how they're green or how they can offer the government an advantage by buying their green-capable service or product. . . . Make your message clear, concise, and specific so your buying audience can clearly see why your service or product offers more green value than your competitor’s."
  • "Get public acknowledgment. . . . Because it is so difficult for the government buyer to differentiate between products and the green value they provide vendors should be prepared to provide some type of third party acknowledgment that they are truly green. . . . If you are able to say you’re providing your green service or product to another government agency, that is worth your company weight in gold."
  • "If you’re trying to sell green services or products to the government, get on the appropriate GSA Schedule that represents what you sell commercially."

The government is the preeminent developer right now, particularly in the design and construction industry. As more agencies start coming out with green building bidding opportunities, it is important that you are strategically prepared to address the needs of the government. Of course, once you get that green building contract, you must also ensure compliance with the government's regulatory requirements.

But you can worry about that another day.   

Related Links:

Government Moves to Define "Green" Contracting (WBJ) (subscription req.)

A Recipe for Green Building Litigation (GBLU)

Photo:  DeltaMike

The Year of the Retrofit in New York

The other day, a reporter contacted me regarding my prediction that this is the year of the retrofit. I stood by my prediction, pointing towards stimulus funding that supports retrofits of existing buildings. I wish I had been able to point out the $1 billion lending program in New York to retrofit existing buildings that was just announced:

The Community Preservation Corporation (CPC), a non-profit affordable housing lender, today announced a new public/private partnership to provide $1 billion in construction and mortgage loans to multifamily housing owners for energy efficient upgrades and property retrofits. CPC announced the program together with government chartered mortgage investor Freddie Mac, City and State public employee pension funds, several private financial institutions with Deutsche Bank acting as agent bank, State and City government agencies and utility companies.

I am particularly interested in the fact that this fund was established as a public-private partnership (PPP). PPP's are the wave of the future (PDF) of the construction industry:

PPPs are organizational structures by which the private sector finances, builds, rehabilitates, maintains, and/or operates specific public sector activities in exchange for a contractually specified stream of future returns.

The CPC Program is a perfect example of a PPP. Both public and private entities have come together to collectively provide financing opportunities for a particular sector:

The $1 billion includes $500 million available from Freddie Mac, $300 million from the New York State and New York City public employee pension funds, $150 million from private lenders -- with initial investments of $15 million from Deutsche Bank, $10 million from HSBC, plus additional investments from other major institutions, including up to $10 million from Morgan Stanley -- plus $50 million from CPC participating lending institutions. The State of New York Mortgage Agency (SONYMA) is providing critical mortgage insurance for the pension funds, and the New York City Department of Housing Preservation and Development will also be supporting the initiative through its Participation Loan Program (PLP).

Supporters of the CPC Program hope similar programs are created in other cities. Based on the strong interest in improving energy efficiency and the tight credit market, mimicking the CPC program will be an attractive option for other cities.

Do you think this type of program can work? 

Photo:  serdir

Allegations Emerge of High Formaldehyde Levels in Green Buildings

When I have previously speculated as to green building lawsuits, I never imagined that an industrial hygienist would play a significant role.

Industrial hygienists are scientists and engineers who study health and safety of people in the workplace and the community. Linda Kincaid is an industrial hygienist in California. She is also a citizen-reporter for the San Jose Environmental Health Examiner. Turns out, Kincaid has recently been testing Los Altos homes for formaldehyde. Kincaid alleges that Los Altos homes are emitting more formaldehyde and that a green building rating requirement may be the culprit:

[According to Kincaid], of homes with more than 100 ppb formaldehyde, nine out of eleven were in Los Altos. Of homes with more than 120 ppb formaldehyde, three out of four were in Los Altos. Over half of the homes tested in Los Altos had more formaldehyde than the 77 ppb average in the Katrina FEMA trailers.

Initially, we could not understand why homes in Los Altos were different from homes in nearby communities. Construction practices and construction materials should be similar throughout the county. The difference, [according to Kincaid,] was a green building ordinance passed by the City of Los Altos in late 2007. Beginning in January 2008, all new homes in Los Altos were required meet the criteria for GreenPoint Rated.

Kincaid's accusation is a big one. She is alleging that homes that are certified under the GreenPoint Rated system, which is mandated by the City of Los Altos, have higher levels of formaldehyde.

Kincaid's first article of September 8 drew a swift response. The
Formaldehyde Council, Inc. published a scathing critique of Kincaid's analysis, as did Build it Green, publishers of the GreenPoint Rated certification system. From the Build it Green website:

Build It Green found the information in the articles quite inflammatory and simplistic, with an elementary perspective on the realities of any green building rating system and the US construction marketplace. Ms. Kincaid also severely misrepresents the standards and intent of California’s regulatory safeguards in place to help protect homeowners from actual risks of formaldehyde offgassing. Ms. Kincaid’s testing methodology is highly questionable, her conclusions overly simplistic and spurious. Her articles do the opposite of supporting the need for good comprehensive information regarding the realistic dynamics occurring in today’s homes.

There is, of course, more to the story, which we will discuss on Friday. If residents were hypothetically getting sick from formaldehyde in green certified homes, could a green building rating system be responsible? Could a city or county, which mandated the green building certification, be responsible? Architects and contractors who built the homes also have to be concerned about liability implications.

What is your take?

Related Links: 

What is an Industrial Hygienist?  (AIHA)

Elevated formaldehyde in new Los Altos Homes (Examiner)

FCI Reponds to Linda Kincaid Articles (FCI Blog)

Build It Green Responds to Recent Articles by Linda Kincaid (Build It Green)

Photo:  timlovesbrian

Green Building Pop Quiz

[Ed. Note:  On Monday, I promised breaking news on the green building risk front.  The news is still breaking so I am holding off on posting the story for now.  Sorry for the delay.  We are going live with the story on Friday.]

Here's a green building law pop quiz for you.  What is missing from this policy?

“4.4. ... [N]ew development is encouraged to at a minimum, achieve Leadership in Environmental and Energy Design  certification.  A floor area ratio (FAR) of up to 7 may be allowed if the proposed structure achieves a level of “Silver” LEED certification.” 

If you were preparing to develop a project, what else would you want to know?  First correct answer will be featured on this blog post. 

UPDATE:  You may have noticed that there were a lot of right answers to the quiz.  In fact, all of the responses in the comments section are correct.  But there is one answer that I was looking for specifically:  what's the enforcement mechanism?  Attorney William E. Kelley saw the issue 

The presumption is that if your project achieves LEED Silver certification, then your structure may have a FAR of up to 7.  What is not said is what happens if the project does not achieve LEED Silver (e.g., it only achieves LEED Certified level or it does not achieve LEED certification at all).  The allowable FAR would be integral to the development of the design plans, and the building would be constructed before LEED certification occurs.  So, if the project does not achieve LEED Silver, and if the project was further constructed with a FAR of 7, then what is the consequence to the developer for the failure to achieve LEED Silver?  The policy, as written, ties allowable FAR levels to "achieving" LEED Silver certification.  Perhaps better for the developer would be a policy where FAR is tied to a project with a "goal" of achieving LEED Silver.

That's the first issue that comes to my mind, but I'm confident there are probably other questions about the policy.       

Photo:  LShave

 

GSA Building Underperforms

Something very important popped out at me when I re-read the New York Times article about the green buildings not performing as anticipated.  The green building highlighted for poor energy performance is a General Services Administration building: 
"The building’s cooling system, a major gas guzzler, was one culprit. Another was its design: to get its LEED label, it racked up points for things like native landscaping rather than structural energy-saving features, according to a study by the General Services Administration, which owns the building."
Why would I bring up the New York Times article yet again to point out the GSA's ownership of the building?  The GSA received $4.5 billion from the American Recovery and Reinvestment Act for construction and renovation of federal buildings.  The GSA also requires that all new projects be LEED Silver certified, with a preference for LEED Gold certification.  That means $4.5 billion is being spent on new GSA projects that could fail in the same manner as the building in the New York Times article. 
 
Next week we will look at why design professionals and contractors want to avoid ARRA green building project failures.  My colleagues at Crowell & Moring have done a tremendous job analyzing the ARRA, including funding for the investigation of fraud, waste and abuse.
 
Related Links:
 

Photo: wilkins lee

District of Weatherization

Reminder:  Don't forget to register for Green Building Law Update's Birthday Happy Hour

Sometimes, my fair city of Washington, D.C. can drive me crazy. There is no doubt we have our issues.

But one thing Washington, D.C. has going for it is its push to become more green. D.C. is at the forefront of the green building movement and it is taking full advantage of American Recovery and Reinvestment Act funding:

The District of Columbia will receive $8.1 million in federal funds to support its weatherization programs for low-income residents. The funding is part of a United States Department of Energy grant to the District under the American Reinvestment and Recovery Act. It will allow the District to weatherize an additional 785 homes over the usual workload of about 400 in the same period.

I have received a number of inquiries about the requirements for eligibility under the weatherization program. Here are the income requirements in D.C.:

If you have questions about eligibility for the weatherization program in your region, I would recommend reviewing the website dsireusa.org.

Finally, here is a great video put together by the White House about the D.C. weatherization program. This has me feeling (gulp) hopeful. Watch this and tell me Van Jones is not the coolest environmentalist on the planet.

 

Links:

District To Weatherize Hundreds of Additional Homes (DDOE)

Database of State Incentives for Renewables & Efficiency (DSIRE)

Green Jobs for a Green Future: Weatherization (YouTube)

GSA Awards Over $1 Billion in Green Stimulus Projects

Reminder:  Don't forget to register for Green Building Law Update's Birthday Happy Hour

If you are looking for green building projects resulting directly from the American Recovery and Reinvestment Act, then the General Services Administration is the agency for you. The GSA received $5.5 billion to support its High Performance and Sustainable Buildings program. Previously, I had reported that the GSA was requiring LEED certification and preferred LEED silver certification. Turns out, those requirements have changed:

As a means of evaluating and measuring our green building achievements, all GSA new construction projects and substantial renovations must achieve Silver certification through the Leadership in Energy and Environmental Design (LEED®) Green Building Rating System of the U.S. Green Building Council. Projects are encouraged to exceed LEED® Silver and achieve LEED® Gold.

Back in April, we reported on an initial list of ARRA projects published by the GSA. Since then, very little information was available regarding these projects. Bisnow recently reported on the first GSA ARRA project award that I have seen:

[C]ongrats again to sponsor Grunley Construction for landing a renovation contract for the Mary E. Switzer Building at 330 C St., SW. Having completed Phase I in 2008, GSA put Grunley back to work using Recovery Act funding. The project includes: interior construction removal (including Hazmat); a "green roof system"; renovated elevators; and, three 2-story atriums, like the one above. Work is underway, due in July 2011. Designed by HNTB, it's aiming LEED Silver.

The Grunley-GSA contract is just the tip of the iceberg. ENR recently reviewed tremendous progress made by the GSA in awarding ARRA projects:

After taking about six weeks just to produce its list of stimulus projects, GSA has shifted into overdrive. It has awarded contracts totaling nearly $1.1 billion for projects involving about 120 buildings. Twenty of those projects account for more than $940 million of that total.

Most of those funding commitments came in a burst of awards announced since early July, according to Anthony Costa, acting commissioner of GSA’s Public Buildings Service. “At least 20 of the 120 projects are already under construction,” he told the House Transportation and Infrastructure Committee at a July 31 hearing. “The rest will begin soon.”

Even more GSA recovery-act work is on the way. Costa says the agency plans to award another $1 billion in ARRA contracts by Dec. 31, with the goal of having 91% of the $5.5 billion under contract by Sept. 30, 2010.

Of course, it's nearly impossible to report on stimulus projects without highlighting the fact that bids are much lower than anticipated. In the case of GSA ARRA projects, bids are coming in 10 to 15 percent below government estimates. I have serious concerns about bids coming in below government estimates, which I will discuss in more detail next week.

Links:

GSA Sustainable Design Program (GSA)

Grunley! (Bisnow)

New GSA Contracts Starting to Surge (ENR)

DOE Stimulus Project Opportunities Are Available

Note:  Don't forget to register for Green Building Law Update's Birthday Happy Hour

This week we will be taking a look at green building and renewable energy funding available through the American Recovery and Reinvestment Act. While the opening of the stimulus spigots has been slow, there has been a noticeable uptick in news the last few weeks.

Today we will look at the Department of Energy; Wednesday we will check in on the General Services Administration; and Friday, we are going local to see how Washington D.C. is using weatherization funding.

If you are in the renewable energy sector, you may want to take advantage of a recently announced loan guarantee program made available by the Department of Energy:

The Energy Department is making available $36 billion in loan guarantees for renewable energy projects and for modernizing the electricity grid.The department said Wednesday it will accept applications for the financing support over the next 45 days.

The government-supported loans are expected to help companies involved in solar, wind, biofuels and other renewable energy projects get private financing. It also aims to spur investments in power grid improvements. 

To learn more about the Department of Energy's loan guarantee program, check out their loan guarantee website.

In addition, other opportunities remain available at the Department of Energy.

DOE's Energy Efficiency and Renewable Energy Program Office is reporting that of the $16,796,000,000 it was allocated, only $3,534,031,000 has been obligated and $63,362,000 has been spent. Many of the deadlines have already passed for the DOE projects so check in now to see where you can benefit.

Anyone had any luck with DOE stimulus projects?

Links:

Department of Energy Loan Guarantee Program

DOE Makes Available Energy Loan Subsidies

Recovery and Reinvestment at the Department of Energy: Welcome

Recovery and Reinvestment at the Department of Energy: Funding Opportunities

Green Building Law Update: Stimulus

Photo:  rebuildingdemocracy

Reporting Green Jobs is Tricky

If you are a contractor lucky enough to have won a stimulus project, one of the pesky requirements attached to the project is reporting the number of new jobs created by the project.  Many builders and contractors have been wondering how exactly to do that.  Finally, at long last, the White House has provided clarity

''Just count the people being paid out of Recovery Act dollars,'' said Rob Nabors, deputy director at the White House budget office.

 

Wait, that didn't answer all the questions out there.  If someone was already working for you, do they count?  What about subcontractors?  If you receive multiple stimulus contracts and employ the same person for both jobs, is that one job or two?  Maybe there is further clarification:  

''This whole thing is tricky. I'm not going to pretend it's not,'' Nabors said. ''This whole effort is virtually unprecedented.''

Oh, now I get it!

The reporting of ARRA jobs is going to be an extremely confusing and important issue for all parties. Back on June 22, I wrote:  "As we draw closer to the 2010 election cycle, you can bet that politicians who supported the ARRA will be looking to tout green jobs that were created." 

Turns out, the federal government isn't the only one hoping to tout good job creation numbers:

If the numbers are to be reliable, however, states, cities and contractors must report honestly. White House officials know there are political and financial incentive to cheat: Contractors can use job-creation data as a public relations ploy. Local politicians can turn job numbers into campaign literature. And states that use the money well could be in line to get more of it.
 
In the absence of these rules, some states have announced jobs based on out-of-date formulas, leading to implausible estimates. Ohio officials, for instance, have estimated that a $20 million bridge construction project will create or save 10,500 jobs.

As funds for green building projects start flowing from the General Services Administration and the Department of Energy, everyone will be paying attention to the number of green jobs created by these agency projects.  If you have to report green jobs, be extra careful that you follow the reporting requirements, whatever those requirements may be.

Photo:  talkradionews

Would the Founding Fathers Have Supported LEED Mandates?*

You may be relieved to learn that I am temporarily done discussing LEED de-certification.  The USGBC will be releasing an addenda to the Minimum Project Requirements, at which time we will discuss this issue anew.  Until then, lets move on...to another LEED legal discussion. 

One green building legal development that I, and others, have been concerned about is the inclusion of LEED into government regulations, particularly when applied to private projects.  Is it constitutional to require private parties to comply with a third party rating system, namely the USGBC's LEED rating system?  What other legal issues arise from LEED mandates? 

Brad N. Mondschein's green energy blog raised an interesting case study regarding Connecticut's recently passed LEED mandate.  Under the regulation, the State Building Inspector is required to revise the State Building Code to incorporate LEED standards. 

Turns out, the State Building Inspector is very concerned about revising the State Building Code to incorporate LEED:

The state Department of Public Safety is still trying to write building-code language that reflects the new requirements for commercial projects.

“We don’t have the framework in place to implement it properly,” said Lisa R. Humble, the state building inspector.

After the law was passed, the State Building Inspector asked for an opinion from the Attorney General regarding the legality of the mandate.   

Andrew Falk did a great job finding a copy of the Attorney General's informal opinion letter (PDF) to the State Building Inspector.  From Janet Ainsworth from the Connecticut Department of Public Safety: 

The attached is the informal advice (PDF) received from the Office of the Attorney General. The AG opinion does not address the constitutionality of the legislation.  Rather, it discusses whether the statutory provisions may be enforced in the absence of applicable language in the State Building Code.  The Department of Public Safety is engaged in the development of the applicable language to be added to the State Building Code.  At this time, I am unable to estimate when the amendment to the State Building Code to address the green building requirements of the Connecticut General Statutes will be enacted.

Check out the letter (PDF) as we will be discussing it in future posts.  What's your take on the letter?

*Turns out, the Attorney General letter does not address constitutionality of LEED mandates, as originally thought.  We will save this issue for another day. 

Has Canada Figured Out Green Roof Insurance, Eh?

A few weeks ago, Toronto announced a mandatory green roof requirement, which my fellow bloggers dutifully covered.  When I read about the green roof mandate, I thought of another Canadian city with a similar program. 

You remember the Vancouver Catch-22, right

Many British Columbia jurisdictions, including Vancouver, began mandating green roofs.  Simultaneously, the Homeowner Protection Office required homeowner's insurance covering roofs for new developments.  A resourceful government official with the Homeowner Protection Office did some digging and sent out a letter emphasizing that insurers would not issue policies covering green roofs.

In the end, the Homeowner Protection Office had to call a meeting with the insurers, the building industry and government officials to find a solution.  Quite embarrassing. 

When I read about the Toronto green roof mandate, I thought to myself "good for Toronto, they ironed out all of the insurance and liability issues associated with green roofs."

Not so fast

Marks says, however, that green roofs built to the Toronto construction standard won’t be able to pass Underwriters Laboratories of Canada’s CAN/ULC S107-03, Methods of Fire Tests of Roof Coverings. “Under the flame-spread test, they shoot a flame across the top of a traditional roofing membrane,” says Marks. “There isn’t one green roof that will pass that test — the vegetation will burn, and the City of Toronto has been aware of this.”

Marks notes that the insurance sector is generally reactive to emerging issues, not proactive.

“The insurance industry hasn’t caught up with this yet,” he says. “They may need to experience some losses and claims before clueing in.”

I am no engineer but I am pretty sure grass catches on fire if you shoot a flame at it. 

The green building industry is a brave new world.  How long will it be before the insurance industry can assess the risks associated with green roofs and projects?  

Photo:  Earth Hour Global

Are You Ready for the Year of the Retrofit?

You have to have a short memory to write for a blog.  There is no point getting attached to a blog post because it will soon be relegated to the archives.  With that said, sometimes I am reminded of a blog post that deserves revisiting. 

After reflecting on the Waxman-Markey bill over the weekend, I am reminded of a prediction I made at the beginning of the year:

"Green" was the buzz word in 2008.  In 2009, Green Building Law Update predicts that green buzz words will become more nuanced and the focus will be on "energy efficiency," "retrofits," and "existing buildings."

One of the three factors cited for the retrofit prediction was cap-and-trade: 

Finally, climate legislation in the form of cap-and-trade is coming.  Early investments now to reduce energy use through retrofits will pay off for big businesses. 

Not bad!  But you know what I missed?  I never anticipated that the cap-and-trade legislation would be full of financial support for retrofits. 

The post last Friday highlighted three different financing mechanisms for energy efficiency upgrades:  (1) SEED funds; (2) the REEP program and (3) the GREEN ACT, which establishes a green bank. 

Over the next five years, energy efficiency upgrades and retrofits will be big business.  How is your company responding? 

Green Building Guide to Waxman-Markey

[Today's post is a collaborative effort with Shari Shapiro highlighting green building provisions in the Waxman-Markey bill. You didn't think I was going to read through a thousand page bill all by myself, did you? I have also made the article available as a white paper for download since it is a bit long.]

Green Building Guide to Waxman-Markey
By: Shari Shapiro and Chris Cheatham

Today, the Waxman-Markey bill, otherwise known as the American Clean Energy and Security Act (H.R. 2454), is set to be voted on in the House of Representatives. The very fact that the vote is occurring means this bill will pass in the House. This monumental bill would establish a cap-and-trade program to cut global warming pollution. Of course, a cap-and-trade program faces an even more difficult path in the Senate.

So what is a cap-and-trade program exactly (PDF)?

The cap: Each large-scale emitter, or company, will have a limit on the amount of greenhouse gas that it can emit. The firm must have an “emissions permit” for every ton of carbon dioxide it releases into the atmosphere. These permits set an enforceable limit, or cap, on the amount of greenhouse gas pollution that the company is allowed to emit. Over time, the limits become stricter, allowing less and less pollution, until the ultimate reduction goal is met.

The trade: It will be relatively cheaper or easier for some companies to reduce their emissions below their required limit than others. These more efficient companies, who emit less than their allowance, can sell their extra permits to companies that are not able to make reductions as easily.
Companies will be required to purchase the emissions permits from the federal government, which in turn results in a sizeable revenue stream to the federal government. Much of the back room politicking that has occurred over the last few weeks regarding the Waxman-Markey bill has involved how this revenue stream will be allocated to government programs.

In addition to establishing an overall Cap-and-Trade program for carbon emissions, the Waxman-Markey bill contains several provisions which involve green building, and many green building and energy efficiency programs will be funded by the cap-and-trade revenue. Below is a summary of some of the major provisions regarding green building contained in the Waxman-Markey bill.

Details after jump.

Continue Reading...

Contractors Must Report Green Jobs

Here's an update on "green job" requirements created by the American Recovery and Reinvestment Act. Previously, I wrote

To my knowledge, there is no requirement or guarantee in the American Recovery and Reinvestment Act to create a certain number of "green jobs."

While this is still the case, there are job creation reporting requirements that will likely be used to categorize the number of green jobs created by the ARRA.

Federal agencies must report more than 40 separate pieces of data regarding their stimulus spending to a central repository — and contractors are required to submit similarly detailed reports for all work funded in whole or in part by the stimulus legislation.

The deadlines are clear. What’s less clear is how to submit reports and arrive at certain calculations, such as the number of jobs created or saved by the stimulus-funded work.

The Office of Management and Budget should be coming out with reporting requirement guidelines for contractors soon.

If you are a contractor lucky enough to have successfully bid a stimulus project, pay close attention to future guidelines released by OMB. As we draw closer to the 2010 election cycle, you can bet that politicians who supported the ARRA will be looking to tout green jobs that were created.

Of course, the big question remains, will the ARRA result in a surge in green jobs? I'm not an economist but I can report I have noticed a surge in green startups the last two months. As we slowly emerge from the recession, and as green stimulus funds finally start to flow, look for huge opportunities and resulting success stories from startup green companies.

My money is on a lot of new green jobs being created.

A Green Building Breakup

The BreakupDear Feebate,

I'm sorry to be writing this.  First, I have to say, it's not you, it's me. You have done nothing wrong.

I remember when we met back at Greenbuild '08. The Portland officials were very eager to show you off and I fell for you hard. You were everything I dreamed of in a green building regulation. You weren't quite a mandate, but you strongly encouraged green building certification. Projects that did not achieve LEED certification were penalized; projects that achieved LEED Gold or Platinum certification received a reward.

It has been a long distance relationship and my eye has wandered. I have become increasingly focused on retrofits to existing buildings. How are we going to improve the energy efficiency of existing building stock?  You always refused to answer this question when I asked.

Then, she appeared.  PACE.

PACE bonds - Property Assessed Clean Energy bonds. PACE bonds are just so beautiful to me. What is a PACE bond you ask?

PACE is a bond where the proceeds are lent to commercial and residential property owners to finance energy retrofits (efficiency measures and small renewable energy systems).  OWNERS then repay their loans over 20 years via an annual assessment on their property tax bill. PACE bonds can be issued by municipal financing districts or finance companies and the proceeds can be used to retrofit both commercial and residential properties.

My dear Feebate, PACE bonds are everything you are not.  PACE bonds focus strictly on creating a market for energy efficiency retrofits or renewable energy. PACE bonds are not mandates; instead, individuals must willingly agree to opt in. PACE bonds can be set up by private companies or government entities. The best part, though, is that a PACE bond can turn into a revolving fund that creates even more retrofits.

So Feebate, thanks for everything. It's been a nice ride and I wish you luck.

Best Wishes,

Green Building Law Update

Virginia to Establish Renewable Energy Incentive

On Monday we highlighted "headaches" that may arise from climate-related stimulus funding.  Cities and towns are struggling to come up with worthy programs for the funds.  Furthermore, the Department of Energy has warned officials that funding should go towards the long-term establishment of programs: 

"Don't use the entire amount of this money to set up a single capital fund that when that fund is done, your program is done," Bailey told local officials. "Because you will have potentially, I think, wasted an opportunity to set in motion a program that could last five, 10, 15, 20 years."

Virginia should heed this advice.  The state recently announced plans to use stimulus funding from the DOE to create a long-awaited financial incentive program for renewable energy development:

After years of zero financial incentives for alternative-energy enthusiasts, Virginia is bursting out of the starting gate with tens of millions of stimulus dollars just for renewable-energy aid.

The state plans to set aside $39 million from its $70 million share of the federal stimulus package to help residents, businesses, nonprofits, schools and government agencies summon electricity and heat from the sun and wind.

Funding is expected to start flowing for the program, if approved, in July.  The incentive program will be a great short-term solution for renewable energy development in Virginia.  Turns out, though, the long term prospects for a state funding to continue the incentive program are unclear:

That money runs out in September 2010, and Jurman, a self-described eternal optimist, acknowledges that he could still have trouble getting legislative backing then. . . .

Energy advocates worry about the consequences if the incentives disappear after merely a year.

“It looks like we’re going to grow very easily, but it’s not going to shrink easily,” said Peter Lowenthal, executive director of the Maryland-District of Columbia-Virginia Solar Energy Industries Association, which is advising the Virginia agency on the renewable-energy rebate program. “It will be a shot in the arm. People will get some training, so that’s a good thing. But it won’t really meet the goals of the stimulus in order to create permanent job growth.”

Are there better ways to setup renewable energy development incentive programs for Virginia?

Some Cities Are Not Ready for Green Stimulus Funding

Back on February 20, 2009, I said the following about the American Recovery and Reinvestment Act:

While Republicans, Democrats and the President argued over the stimulus package for weeks, the real battle may arise when state agencies and officials attempt to divide up the stimulus funding and choose the projects that receive funding.

The real battle is now upon us.

The New York Times has written a fascinating article highlighting the benefits, and potential troubles, associated with clean-energy stimulus funds that will soon begin flowing to cities and towns. The article really paints a picture of potential waste and "headache" that may result from these funds. I was particularly struck by this section:

But the sudden flow of federal funding is raising questions about whether many of these communities are really ready for it.

Some 1,000 cities and counties have direct access to the new entitlement account, the Energy Efficiency and Conservation Block Grant Program. They have until June 25 to submit plans, but that's a challenge, because most haven't received federal grants for energy projects before.

Many communities are having trouble retaining enough police officers, let alone hiring sustainability professionals who understand how to establish energy efficiency programs that will evolve into long-term savings in power and money, experts say.

"Some cities are ready for this, others aren't," said Mark Wolfe, executive director of the Energy Programs Consortium, which helps state energy programs establish efficiency policies.

Many cities are using the stimulus funding for energy efficiency retrofits or even LEED certification:

  • "Las Cruces expects to receive $888,000. Henry said it will help pay for a solar array and "all the green stuff" on an old adobe bank the city is converting into a natural history museum that will be certified under the U.S. Green Building Council's Leadership in Energy and Environmental Design (LEED) guidelines. The project will cost about $6 million."
  • "Take El Paso, Texas. The sprawling city is due to receive $5.8 million in energy efficiency grants. It will use $3 million of that to help finance a $15 million "performance contract" program aimed at cutting energy use 30 percent in 52 public buildings."

According to the article, in a recent meeting, the DOE also suggested that cities and towns could use the funds to create "carbon trading markets." I don't know about you, but municipal officials new to environmental policy might be better served retrofitting existing buildings instead of creating a complicated, regional carbon trading market.

Complaints About Green Stimulus Projects Emerge

It’s no surprise that there is intense competition for stimulus projects.  Competition can be good and result in more efficient construction.  But competition can also lead to complaints, disputes and even litigation.  

Connecticut is experiencing intense competition for stimulus funding.  

"There's nowhere near the amount of money for individual projects that people thought there was," one senior lobbyist lamented.

Still, advocates and their clients ask whether putting solar panels or a geothermal roof on a planned new building would qualify them for some energy funds (it might); they ask about the permit process (a bill to expedite project approvals has yet to be passed by the legislature); and they want to know how the feds define a stimulus 'job' (still not clear). 

When I read this article, I couldn’t help but notice the complaints about the "green" stimulus projects:  

In her meeting with Fritz, Cheri Quickmire, director of Common Cause of Connecticut, noted that a portion of the stimulus money must go to create "green jobs."

"How does a road-paving project create a green job?" Quickmire said last week, recounting her conversation with Fritz.

To my knowledge, there is no requirement or guarantee in the American Recovery and Reinvestment Act to create a certain number of "green jobs."
 

Stimulus funding for green building projects will help the industry grow.  Complaints about the administration of green building stimulus funds, though, should be of concern to the industry.  Complaints mean bad press.  Complaints mean bid protests.  Complaints mean litigation. 



 

Have you heard any rumblings about green stimulus projects?

Weatherization Funding Announced, Competition Fierce

Back in March, I highlighted that $5 billion in funding had been dedicated to weatherization assistance as part of the American Recovery and Reinvestment Act.  Six short months later, the weatherization funding is scheduled to begin flowing:  

Final applications for the federal weatherization funds were due this month, with the first $2.5 billion expected to reach the states by September. Ohio has announced tens of millions in federal spending and plans to begin spending money for weatherization projects June 1, providing former workers such as Posey hope that they can regain their $18-an-hour assembly-line jobs.

When I ask people about stimulus projects, I keep hearing the same thing:  competition is fierce.  Here’s anecdotal evidence of the intense competition for stimulus projects in Ohio:  

More than 25,000 proposals have been filed on Ohio's stimulus Web site alone. "There's got to be $50 or $100 in requests for every $1 we've got," the state budget director, J. Pari Sabety, said several weeks and several thousand requests ago.

Are you seeing intense competition for green building stimulus projects?

Feebate, Stretch Code Options for Dillon's Rule States

In previous posts I have talked about Dillon’s Rule and the impact this rule has on green building regulations in Virginia.  Dillon’s Rule provides that the state retains all powers except those specifically carved out for municipalities and counties.  You can think of this as the reverse of the federal system, where all powers not enumerated in the Constitution to federal authorities are then devolved to the states.  So if a Dillon’s Rule state has a statewide building code, like Virginia, cities are limited in the green building regulations they can enact. 

Arlington County has found a way to implement a green building policy despite Dillon's Rule.  What other options are out there for municipalities located in Dillon's Rule states? 

You may recall that I have highlighted the Portland Feebate system as a common sense green building regulation that others should mimic.   After reading more about the Feebate structure, I recently learned that the Feebate system works particularly well for Dillon’s Rule states:

According to Vinh Mason at the Portland Bureau of Planning and Sustainability, the new policy came about in part because Portland cannot institute a building code that is more stringent than the statewide code.

Lets not stop there, though.  I also came across another option for Dillon’s Rule states looking to implement green building regulations when reading Green Building Law Blog's post regarding a new Massachusetts building code.  According to the Board that passed the new code, implementation would be optional at the city level:

[T]he stretch code would be incorporated into the Massachusetts building code as an optional appendix.  Towns and cities in Massachusetts would then be able to choose between remaining on the base energy code or adopting the stretch energy code as their mandatory energy code requirement.

Which option do you prefer, the Feebate or the stretch code?  Got any better ideas? 

OUR Green Building Mission

I took away a very important, very big thought from my conversation with Rob Watson.  This big, important thought was based first on a comment from Watson himself:

"We are in a 'you bet your species' proposition with unmanageable climate change, so more rapid penetration of LEED is not a problem, rather a prerequisite with regards to solving this global problem."
The second thing that led to my big, important thought was the book Tribes.  Here is a particularly salient excerpt:
"Initiating is really and truly difficult, and that's what leaders do.  They see something others are ignoring and they jump on it." 
Do you see where I am going with this? 

The USGBC was created to improve the built environment because its founders believed our current method of design and construction threatened the planet.  That is a huge task.  When you are undertaking a project like that, of course you are creating new and bigger risks. 

The USGBC is not ignoring risk.  Watson's statements in previous posts clearly show that LEED rating system risks are on his radar.  The risks associated with green building aren't the primary concern for the USGBC; losing the planet to global warming and other environmental risks are. 

On the other hand, I am most concerned about the risks associated with green building.  While Watson sees green building as a solution to our environmental problems, I see risks stemming from green building projects as a factor that could eventually drag down the green building movement.  This is why I want to reduce the risks associated with green building. 
 
If the USGBC or the green building industry does not get my message, or your message, on how to reduce green building risks, then shame on us.  We aren't properly conveying our message.  Or we aren't working hard enough to convey our message.

As an attorney and an independent analyst,  I see it as my role to make that standard work better, with less risk to all parties.  We can't wait for the USGBC to undertake that task - that is