Steve Teitelbaum practices real estate with Jones Day in their Washington DC office. Steve speaks frequently on real estate topics, particularly leasing, and has become a leading lecturer on "green" leases.  Since we have not covered green leases much on this blog, I thought Steve would make for a great interview.  Enjoy! 

Chris: What is a green lease? 

Steve: To my mind a green lease is a lease that tries to help the landlord and the tenant improve the building.  The improvement can take the form of operational matters such as enhancing energy and water efficiency, instituting recycling programs, improving indoor environmental quality by requiring the use of less harmful chemicals and banning smoking, reducing operating costs, allocating capital costs, and encouraging the parties to collaborate in other ways to act more sustainably.  

Another improvement can be requirements imposed on either party or both parties to build the building or the tenant's premises in accordance with some sustainability standard, most frequently the US Green Building Council's LEED standards or occasionally a Green Globes standard, whether or not actual certification is also required.  A green lease also helps the parties comply with Energy Star requirements and third party sustainability standards, and anticipates the growth we're now seeing in municipal and State laws that require disclosure, and therefore sharing, of sustainability information. 

Chris: How do you differentiate a green lease from a standard lease? 

Steve: Standard leases rarely address any of these issues, except perhaps recycling and a ban on smoking.  It's important to understand that a standard lease that doesn't address sustainability issues isn't a "green lease" even if it's used in a green building; a green building can be operated in a non-green manner.  Conversely, a green lease can be used even in a building that isn't green because the lease helps improve building operations and, if desired, could help the building ultimately achieve some third-party green operational standard. 

Chris: Is there an optimal property type or location for utilizing a green leasing program?

Steve: Single tenant buildings, office or warehouse, are optimal, particularly since a lot of the push has come not from landlords but from tenants with corporate sustainability programs.  But the real impact will have to be in the more common multi-tenant arena, where adoption of green leasing is both more difficult because of the need to phase it in and more important because of the prevalence of the property type. 

Chris: Where do you see the growth of green leases in 5 years? 20 years?

Steve: The CoStar Group announced that 2008 was "the year of the green lease," yet we've seen very little application of green leasing in the field. That may be due to inertia, amplified by the recession, the reduction in both leasing activity and construction, and the landlords' reluctance to impose additional lease terms on scarce prospective tenants.  But as green standards become more commonplace, as more landlords and tenants understand that there isn't a "cost premium" to green and that sustainability can actually save them money or even make them money through enhanced productivity or faster lease-up, as companies like much maligned Walmart impose sustainability standards on their vendors, and as more and more green governmental mandates are imposed, I think green leases will become more common.  I hope that in five years we won't need to be having this conversation.  In 20 years sustainability will be so mainstream, at least in metropolitan areas, that this conversation will seem like something out of ancient history.

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When I give green building presentations, I make it a point to explain that the LEED rating system does not certify products.

I'm not going to be making that statement anymore.

Two weeks ago, the US Green Building Council announced the launch of LEED Pilot Credit 43: Certified Products (PDF).  As you might have guessed from the name, the pilot credit allows projects to obtain LEED credits if products meeting specific certifications are included.  Here's the credit requirement (PDF): 

Specify and install non-structural products and materials with attributes described below for a weighted value of at least 10% of the total value of all non-structural materials and products. ISO Type I and III Declarations qualify for this credit. Compliant certifications are those consistent with the draft LEED Standard for Standards.

In short, this credit allows projects to obtain LEED points if at least 10 percent of the non-structural products are certified.  Immediately upon reading about this credit, I wondered if it would apply to wood certifications. The USGBC has been embroiled in a long-standing feud regarding its recognition of Forest Stewardship Council (FSC) certified wood products.  Other wood certification systems, most notably the Sustainable Forestry Initiative (SFI), have been pressing for similar recognition.

The LEED Pilot Credit is a convenient way for the USGBC to recognize other wood certifications.  In the appendix to the pilot credit, four new wood product certifications, including SFI, are recognized.  Although this pilot credit only applies to non-structural products, this change could provide a transition to structural wood products as well.  It's interesting that the USGBC decided to create this LEED Pilot Credit a few months after its members rejected a credit that tried to expand recognized wood certifications.

Even more important, this LEED Pilot Credit means that the USGBC is becoming more involved in certifying products. With many more product and material certifications available for LEED credits, it seems the process of LEED certification will become much more complicated.

What do you think?

Photo credit: chrislang

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I have already written about the short-term opportunities for contractors that focus on rebuilding our crumbling infrastructure.  But long-term opportunities will also arise in infrastructure construction as a result of flooding along our coastal areas. 

The Wall Street Journal recently highlighted two reasons why coastal cities prone to flooding, like New York City, are making changes to infrastructure: 

Sea levels could rise by 0.59 meters and storm intensity is set to increase, according to the Intergovernmental Panel on Climate Change's 2007 report. Furthermore, building on flood plains could expose infrastructure valued at $35 trillion (€24.4 trillion) to floods by the 2070s, according to a recent Organization for Economic Cooperation and Development report on port cities. "Even if sea levels are not rising – the expected annual damage is rising," says Robert Nicholls, a coastal engineer from the University of Southampton and an OECD report contributor.

What type of construction opportunities will arise from flood planning? 

New York City is making changes to its existing infrastructure in preparation for increased flooding.  For example, the city is in the process of lifting power generators at wastewater plants above predicted flood levels.  For those of you that watched the recent Japanese nuclear saga, you may recall that many of the problems arose because backup power generators were knocked out by flood waters. 

However, lifting infrastructure above flood levels is probably not enough.  Instead, many cities have resorted to constructing expensive flood barriers: 

[O]ther cities without flood defenses are building barriers. Among them is Venice, which floods several times a year, and St. Petersburg, which has been waiting for flood barriers since 1979. Venice is building a flood barrier designed for 60 centimeters of sea level rise, due to be finished in 2014. St. Petersburg is due to open its flood barrier in 2011.

The United States is completing a similar $14.5 billion flood barrier project to protect New Orleans in the event it faces another Hurricane Katrina. 

The cost to build a flood barrier around New York City would certainly exceed $14.5 billion.  In coastal cities like New York City, contractors that can assist with our short-term infrastructure construction needs will also likely find long-term opportunities in the same sector. 

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This is a cross post from my new legal blog, Construction Claims Playbook (www.constructionclaimsplaybook.com). 

I hate traffic.  Some of the happiest months of my life occurred when I did not own a car and relied on public transportation in Washington, D.C. Most people I know despise traffic but accept it as one of life's nuisances. 

But did you know many of our traffic problems are the result of aging or outdated infrastructure?  While many authors have decried the poor state of America's infrastructure, a recent Economist article paints a picture of how our daily lives are affected:

• Major disasters, including the New Orleans floods and the Minnesota bridge collapse, were the result of deficient infrastructure. 
• Americans spend more time commuting than all but two European countries. 
• The road fatality rate in America is 60% above the European average.
• America's trains are sluggish compared to European counterparts: "America’s fastest and most reliable line, the north-eastern corridor’s Acela, averages a sluggish 70 miles per hour between Washington and Boston. The French TGV from Paris to Lyon, by contrast, runs at an average speed of 140mph." 

In order to remain a functioning society, America must fix its infrastructure problems.  The process of fixing our roads, highways, bridges, trains, airports, levees and sewers will result in new opportunities for a starving construction industry.

But there's a catch. 

Our federal and state governments face the prospect of deficits and budget shortfalls for years to come.  We will need new funding mechanisms to support infrastructure construction. 

My money is on public-private partnerships as the system that will fund infrastructure development. I will be discussing the use of public-private partnerships to address green infrastructure and building needs in an upcoming free webinar: 

Funding Green Cities
Live Webcast May 24, 1 PM ET / 10 AM PT

Reigister Now!

I hope you can make it. 

Photo credit: izahorsky

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There are a number of LEED-policy articles floating around the internet these days.  Fast Company wrote an article bashing LEED for poor energy performance.  Lloyd Alter responded at Treehugger with an article bashing the Fast Company article. 

It's time to move the discourse forward. 

How Does the USGBC Intend to Improve Building Performance?

One of the key issues facing the USGBC is addressing buildings that get LEED certification but do not deliver energy savings.  Originally, it seemed as if the USGBC was going to propose a decertification system.  Here is how USGBC CEO Rick Fedrizzi described it last September: 

"Once a LEED plaque is assigned to a building, and there is proof that the building is no longer performing the way that it should, there's a very good chance that that information will then result in the ability for USGBC to remove the certification from the building — most likely on our website," he says.

In the current LEED 2012 draft -- the proposed new rating system -- there is no mention of LEED decertification.  But in a November 2010 Greenprints article, Vandana Sinha confirmed that LEED 2012 will include a component to address energy performance:

To [Scot Horst, Senior Vice President for LEED,] the biggest difference [green buildings can make] comes down to managing energy. That means connecting the next iteration of LEED even more with energy savings (or the latest among ambiguous-sounding eco-friendly buzzwords: building performance). He envisions what’s being dubbed LEED 2012 to include an annual report card for all LEED-certified buildings — basically a statement of their energy consumption compared with other LEED counterparts to separate the energy dieters from the hogs. Those that meet energy-saving marks will get an updated plaque for that year. Those that don’t won’t get their plaques revoked, Horst assured multiple times (he called the whispered rumors of rampant decertification in LEED’s future “fear-mongering”). But those less-than-stellar-building owners will have to settle for, and undoubtedly explain to potential tenants, what would appear to be a past-due date on the property’s green-ness.

“If you don’t stay in the system, no one’s going to take the plaque away, but people will start to understand that a 2002 plaque would mean something a lot different from a 2010 plaque,” Horst said. “It’s about showing that you are performing the way you are designed to perform.”

If you compare the Fedrizzi and Horst statements, you will notice an important shift in proposed policy.  Fedrizzi described removing the certification from a building -- which sounds a lot like decertification to me; Horst describes providing new plaques to energy efficient buildings -- or LEED recertification. 

The legal implications of LEED decertification would have been very messy.  The idea of LEED recertification is a more manageable process that mirrors the current Energy Star rating system.  And if the recertification system truly works as described, then a market should develop for the most recently certified LEED buildings. 

Look for LEED recertification language to be included in the Minimum Program Requirements that are included with LEED 2012 when it is released for round two of comments.

Do you think LEED recertification will properly address the energy performance issue?

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As famous Chicagoan Harey Caray would say, Holy Cow!  That Greenbuild was the most productive, most informative, and most exciting on record, at least for me.  Keep in mind, I have only attended two Greenbuild conferences. 

If you want a recap of key Greenbuild events as I saw it them, then check here, here and here as I was live blogging from Chicago last week. 

On Friday, the last day of the conference, I was absolutely exhausted.  I had met with green building enthusiasts from Italy, Canada, and Cuba.  I had looked at products, written blog posts, tweeted, sat on the innaugural Greenbuild Legal Forum panel, and attended countless stimulating talks.  It was nirvana for my green building brain.  But I was exhausted and it was going to take something special to catch my attention.

I found something special. 

As I was meandering through the convention center floor, a television screen drew my attention.  I mindlessly walked up to the screen and started watching a bar graph and dots appear.  Then I began to process the information.  Here is a link to what I was watching (thanks to Stuart Kaplow for sending me this link) and the following description:  

"The Green Building Information Gateway (GBIG) is a novel information technology that provides an unprecedented view of the green building landscape and reveals trends, patterns and processes in green building practice. GBIG allows for the investigation and analysis of data about LEED-certified projects and the larger green building universe as a whole, and enables users to view green building in the context of other spatial and temporal factors.
 
The GBIG Illinois Pilot represents the first phase of development and a subset of functionality under development for the full portal."

The GBIG appears to be the start one of the most comprehensive attempts to study LEED growth trends.  The pilot currently focuses on LEED growth in Illinois, presumably because the project was unveiled in Chicago.  The GBIG should be the key to deciphering the future of the green building industry.  Through the GBIG, we should be able to track growth of LEED certifications and green buildings by city, state or region once the project is fully developed.   

What uses for the GBIG can you imagine? 

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I honestly can't wait for Greenbuild this week.  Here are a few reasons why.

Sustainable Cities Collective

In addition to publishing Green Building Law Update, I recently became an advisory member of Sustainable Cities Collective (SSC).  SSC is a helpful website because it aggregates articles and blog posts from some of the top green and environmental authors throughout the world.  I am honored to be part of the advisory board with other luminaries like Kaid Benfield and Geoff Wilkinson. 

As part of my new role, I will be writing for SSC this week from Greenbuild.  Look for my posts on Wednesday, Thursday and Friday over on the SSC website.  Additionally, I will be tweeting under the twitter name "Sustaincities".  If you want live updates throughout Greenbuild, feel free to review the SSC twitter feed and let me know what you want to hear about. 

Greenbuild Legal Forum

I have already written about the Greenbuild Legal Forum that I will be participating in on Thursday.  The topic of my short presentation will be LEEDigation.  Feel free to download my LEEDigation white paper (pdf), and let me know what you think.  You can also bet that my co-presenters - Shari Shapiro and Stephen Del Percio - and I will discuss the Gifford v. USGBC lawsuit.  Whether you are an attorney or not, I think the Legal Forum will be extremely valuable and I hope you will consider attending. 

Greenbuild Meetup

Finally, and most importantly, if you are going to be at Greenbuild, I would like to meet you.  An informal meetup has been scheduled for Tuesday, November 16, at 5:30 pm at the Gage (24 South Michigan Avenue).  If you can't make that meeting, please email me (chris@cheathamconsulting.com) or call or text me (202-553-3181) so we can arrange a separate meeting.  I look forward to meeting as many of you as possible.

Photo credit:  jikatu

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I will be taking a break from blogging over the next two weeks for a vacation.  But I promise you that I will be thinking about green building - much to the chagrin of my wife.  I will be thinking about green building because I am more excited than ever by the opportunities that are out there.  Two recent encounters opened my eyes to these opportunities.

I have been in the Midwest this week meeting with contractors and attorneys about green building and construction issues.  As I sat down with one contractor, he told me about a school he was building that would hopefully be the city's first LEED school.  The first!  You can't throw a rock in Washington, D.C. without hitting a LEED building.  He also told me about the local United States Green Building (USGBC) chapter that had recently launched in his city.  As I looked out the window at the downtown, I imagined all of the green buildings that would be developed in the coming years.  And I grew very excited.   

Later in the week, I visited my friend Kim, her husband and her six-month old baby.  We started talking about our old high school friends and their crazy Facebook status updates, which inevitably led to my green building blog.  "What exactly is a green building?" she asked.  Its not a question I get very often in Washington, D.C.  I pointed to the windows in her home.  Imagine that you seal those windows to prevent drafts.  I pointed to the roof.  Imagine if you insulated your attic and walls to reduce the amount of heating and cooling you needed.  That is green building.  I then explained that the LEED rating system was being used to identify green buildings, particularly in the commercial sector. 

"Oh yea, I have heard of that, that is for people that want to brag!" her husband exclaimed. 

As I stifled laughter, I also thought about the fact that green building simply is not an accepted practice in the Midwest - yet.  LEED certification is "bragging."  Cities are just now getting their first LEED projects and launching USGBC chapters.  Its important to realize the state of green building, and the perceptions about it, outside of our bubbles, like mine in Washington, D.C. 

That is what I will be thinking about the next two weeks.  How about you?

Photo credit: tlindenbaum

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This week, I have been morbidly fascinated with stories about the state of the economy and construction.  Not surprisingly, the construction downturn has dramatically decreased the number of projects registering for green building certification in 2010. 

The Business Journal recently came out with an excellent analysis of LEED registrations in 2010 and the results were not pretty:

"Where there were 367 LEED projects registered in North Carolina in all of 2009, only 57 were added to the pipeline in the first five months of 2010. Nationally, there were 10,498 registered projects in 2009, and only 3,071 so far in 2010.

One major cause for the drop is undoubtedly the overall contraction in commercial construction. According to estimates by industry research firm McGraw-Hill Construction, commercial and industrial projects in North Carolina fell by 19 percent in 2009, and are expected to drop by another 16 percent in 2010.

LEED registrations were still increasing in 2009 even as that broader decline took hold, but many of those projects were likely already far along in the planning process by then."

Predictions that the economic downturn would not effect the green building industry are not panning out.

In coming weeks, we will be discussing construction industry statistics and likely recovery scenarios.  Unfortunately, it's not going to get better any time soon.  

Photo Credit: Hillarie

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The Green Building Certification Institute's (GBCI) use of third-party certification bodies did not last long.  

"LEED certification became so popular that the USGBC had to begin allowing certification through independent certification bodies. . . . The USGBC responded to the backlog by delegating certification to the Green Building Certification Institute (GBCI), which will then be responsible for ten additional "certification bodies."  The ten independent companies will interpret LEED credits and apply them to projects seeking certification."

One of my primary concerns with the use of independent certification bodies was inconsistent application of the LEED rating system.  If you have two people from the same organization review construction documents, the two may come to different conclusions.  If you have two people from different organizations reviewing construction documents, the likelihood that the individuals will come to different conclusions increases.  

"GBCI is bringing the technical review of project documentation in house over the next two years rather than continuing to manage the process exclusively through other certification bodies. This move will allow us to have closer technical oversight of reviews and more direct communication with our customers to ensure consistency and clarity throughout the process. This doesn't change anything project teams are doing now."
 

I immediately focused on the phrase "to ensure consistency and clarity throughout the process."   

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As long time readers know, I am originally from Kansas. While green buildings have been common in DC for some time, the Midwest is just now starting to develop its own green building market.  I was extremely excited to get an opportunity to tour one of the newest green buildings in Kansas City.  

Tim Dunn at JE Dunn Construction, one of the largest construction companies in the Midwest, recently showed me around the firm's green headquarters.  At the time of my tour in December 2009, the construction team was anxiously awaiting word from the United States Green Building Council (USGBC) regarding its application for LEED Gold certification.  Last week JE Dunn announced the building successfully achieved Gold certification and Tim was kind enough to send me some photographs.  

One of my favorite components of the building is the exposed concrete.  The building feels like it should be the headquarters of a modern construction company.  

But here's why the new LEED-certified building really makes sense for JE Dunn:  

"JE Dunn used its headquarters, which it describes as the first LEED Gold certified corporate headquarters in the city, to demonstrate its green building practices and standards."  

I often hear the same question from contractors and subcontractors:  how do I break into the green building industry?  One option is to build your own green building to demonstrate your expertise.  If you can't afford to build a new building, why not demonstrate some retrofitting techniques on your existing building?  When clients come in, show off your green components.  

How else can a contractor demonstrate its commitment to the green building industry?  

Related Links:

JE Dunn Construction headquarters gets LEED Gold certification (KC Biz Journal)

JE Dunn Construction (JE Dunn)

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If you participate on building projects that are seeking LEED certification, this news may come as a relief to you.  According to Marian Keeler of Simon & Associates, the United States Green Building Council (USGBC) is reconsidering its decision to stop making Credit Interpretation Requests (CIRs) public.  

I have previously described a CIR as follows:  
 

In June 2009, I reported that the USGBC had announced that, effective June 26, 2009, a CIR would only be applicable to the project that submitted it.  At the time, I suggested that "[w]ithout public CIRs, architects, engineers and contractors are going to have more trouble interpreting credits and determining strategies that will successfully achieve a LEED credit."

It appears that the USGBC is now reconsidering its decision and plans to implement a new CIR system:

I will reach out to the USGBC for further information.  Why do you think the USGBC is reconsidering?

Related Links:

Why Do Non-Public CIRs Mean LEEDigation? (GBLU)

CIRs and Precedence Policy (LEEDuser)

Photo credit: eddiewls

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This year is going to be the year of the green professional.  Green professionals are going to be providing instrumental services, particularly in the D.C. Metropolitan area, which is serving as an incubator for numerous green programs.  In order to bring all of you like-minded green professionals together, we are reviving the Green Professionals Happy Hour. 

Nearly thirty green professionals got together in August for a similar event.  Among the group were two published authors, multiple government employees and some of the more successful green contractors in town. 

The plan is to host bi-monthly Green Professional Happy Hours in 2010.  Ethan Landis of Landis Construction has been kind enough to volunteer to host our first event in 2010.  I have been to his headquarters and was blown away by all the features of his green building. Here are the details (or take a look at the flyer)(pdf):

Who:  Green Professionals (feel free to invite others)
What:  Green Professionals Happy Hour
Where:  Landis Construction Headquarters
   7059 Blair Road Northwest
   Washington, DC 20012
   (202) 726-3777
   Nearest metro:  Takoma Park - Red Line
   Plenty of parking available
When:  Tomorrow - Wednesday, January 20, 6 to 8 pm

Please send me an email if you have any questions or would like to RSVP:  chris@greenbuildinglawupdate.com

I look forward to seeing you tomorrow. 

Photo:  Limonada

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2009 was my first full year blogging at Green Building Law Update. It was a difficult year for the construction industry, but the green building movement continued to grow.

I recently went back and reviewed the Green Building Law Update stories from 2009. Below are some of my favorite quotes from my favorite posts. If you have a moment, go back and check out some of these posts, as we will continue discussing these topics well into 2010.

• "'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.'"  Prediction: It's All About the Retrofit

• "A security instrument guaranteeing LEED certification is the unicorn of the green building industry."  The Green Building Unicorn

• "The stimulus package is going to result in increased levels of green building litigation. I hope I am wrong, but I think it is inevitable."  The Stimulus: Now for the Bad Part
   
• "I have a new term for the green building and legal industries:  LEEDigation."  LEEDigation
   
• "Twitter is going to be all the rage in 2009, you should jump on board now."  All A-Twitter About Green Building Law

Thanks for taking the time to read Green Building Law Update this year. On Wednesday, we are going to look at the most important green building legal story of the year and on Friday we will look at the green building legal story that will have the most impact on the industry in 2010.

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I often argue there are three primary non-environmental reasons for seeking green building certification: profit, regulatory compliance and press/goodwill.  An article in the Minneapolis/St. Paul Business Journal recently looked at diminishing press for buildings that achieve LEED certification: 

A few years ago, it was a big deal when any building announced it was LEED certified. There were regular tours, speaking engagements, white papers, awards and news stories.  Today, when a building like Orion Associates new headquarters attains Leadership in Energy and Environmental Design status, it may or may not be noticed by anyone besides the building owners and tenants, regardless of what level or type of LEED certification it attains -- bronze, silver, gold or the most rigorous level, platinum.

The only cause for dwindling attention is the sheer number of projects that have been designated LEED. In Minnesota, that number (at all levels, from certified to platinum) has exploded from nine to 98 over the past two years. In September 2007, there were 89 projects registered and awaiting certification. Today, there are 262.

The marketing benefits that result from seeking green building certification can depend on the number of certified buildings in the region.  The fewer certified green buildings in the region, the more likely the owner will receive positive press for achieving certification. 

Have you noticed less positive press for buildings that achieve LEED certification?  

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[Ed. Note: written by Steve McBrady]

Starbucks coffee has always been an integral part of what we do here at Green Building Law Update. Until now, it was primarily a means of keeping our readers awake while we write endlessly on Green building and sustainable development in government contracts and in commercial construction, or discuss emerging Green regulatory issues.

Today, however, Starbucks has moved front-and-center for another reason – the announcement, on November 12, 2009, that as of 2010 all new Starbucks stores will be LEED certified:

Over the next six months, Starbucks will build or renovate a minimum of 10 pilot stores in six different bioregions around the world. Once the pilot stores’ environmental strategies are audited and approved, they can be replicated elsewhere. This capability will allow Starbucks to reach its goal of achieving LEED certification for all new company-owned stores worldwide beginning in late 2010.

(Starbucks Press Release)

This is a major development for several reasons, and not simply because of the improved Indoor Environmental Quality our readers will enjoy as they wait in line for a grande skim chai latte (sans foam). Starbucks’ announcement comes on the heels of Marriott International Inc.’s announcement this week that it will dramatically expand its green hotel portfolio over the next five years by introducing a new LEED® hotel prototype for its Courtyard brand.

The green hotel prototype, which will be available in April 2010, will save owners approximately $100,000 and six months in design time, and reduce a hotel’s energy and water consumption by up to 25 percent, based on national averages. These savings, combined with incentives offered in many jurisdictions, could provide a payback for the LEED building investment in about two years.

(Marriott Press Release)

In 2010, Marriott also plans to roll out similar green prototypes for its Fairfield Inn, Residence Inn, SpringHill Suites and TownePlace Suites.

So, what does this voluntary move toward LEED mean for Green building law? Well, in the distant past, we discussed the D.C. Green Building Act of 2006, which at the time was considered ground-breaking legislation because it required private developers to meet certain LEED criteria on buildings over 50,000 square feet. What these announcements signify, however, is the emergence of a Green building movement within the private sector.

How will federal, state, and local governments react to being out-Greened by the private sector? Stay tuned.

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The Top 100 Green Contractors for 2008

The Top 100 Green Contractors for 2008

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I generally don't like numbers.  But I have never seen such compelling proof that the green building industry is here to stay (ENR - subscription req.):

The Top 100 (green contractors) generated $38.69 billion in revenue in 2008 from projects registered with or certified by third-party rating groups under objective environmental or sustainable development standards.  This marks a startling 70% [increase from] $22.76 billion [in revenue generated] for the group in 2007. 

You may recall that 2008 was the start of the recession and the construction industry began taking hits.  Despite this, the top 100 green contractors saw their revenues from green building projects increase. 

Here's one other incredible statistic for you:

The 2008 (green building revenue) figure amounts to 26.2% of the Top 100's total contracting revenue for 2008. 

In 2009, this number will increase dramatically.  The American Recovery and Reinvestment Act is funding many of the new construction projects - and most of the new building projects involve green and energy efficiency standards. 

If you are a contractor, you need a plan to build green.  This is not a fad. 

Related Links
The Top Green Contractors 2008 (ENR-subscription req.)

Photo:  gepiblu

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I hope everyone is having a great Labor Day.  No new post today.  Instead, I would suggest you read or re-read the New York Times article about LEED and energy performance. 

The article is one of my most important to come out on green building in awhile.  As I said on Friday, the most interesting part is the USGBC's suggestion that re-certification will be required in the future. 

What do you think? 

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I found a YouTube video of a green roof being set on fire that I planned to post today.  You know another topic would have to be very important to pre-empt a green roof fire video. 

Such a topic has revealed itself. 

On Wednesday, we started talking about the New York Times LEED energy performance article.  Many who understand the LEED rating system know that there has been some problems with LEED buildings not performing as anticipated in terms of energy consumption.  What interests me most is what the USGBC plans to do to resolve these problems going forward.  Scot Horst, USGBC senior vice president, revealed some important plans in the article: 

For regular readers of Green Building Law Update, the concept of re-certification may sound familiar.  Here's what I had to say on the topic back in July:

 

I wish I had simply had the guts to say the USGBC will require LEED re-certification for future projects.  Because it is going to happen. 

Links

Some Buildings Not Living Up to Green Label (NYT)

Could LEED NC and LEED EBOM Join Forces? (GBLU)

Photo: suttonhoo

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No substantive news today.  Instead, here are the details about the blog birthday party happy hour coming up on August 20: 

Who:  All of the Green Building Law Update readers and friends
When:  August 20, 6:00-8:00 pm
Where:  Darlington House, 1610 20th St. NW , Washington, D.C.
Why:  So we can finally meet each other.  Or so you can complain about my blog to me.  Or both! 

Check out the nifty flyer (PDF) I put together for all the details. 

I am really excited about the happy hour.  I have teamed up with my friends over at the Horinko Group for a great night at one of our favorite local bars, the Darlington House (formerly the Childe Harold, if you are a DC local).  Hopefully, I will get to meet a bunch of you at the event. 

Six people have already RSVP'ed before the details were even put together.  Those six people will be receiving a very special party favor in the mail.  Fourteen more of you who RSVP to attend can get in on the free gift as well.   So don't wait!  And please invite your friends. 

Have a great weekend everyone. 

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Last week, my blog had one of those moments when I realized it was growing up before my eyes. 

Robert J. MacPherson is the Chair of the ABA Forum on the Construction Industry.  In the recent issue of The Construction Lawyer (the Forum's Journal), Mr. MacPherson published a farewell column as outgoing Chair (PDF).  I was stunned to read the following:



I was stunned that an established construction lawyer who is chair of the ABA Construction committee would use his farewell column to recognize my blog.  I was stunned to even learn that Mr. MacPherson was reading my blog.  And I was honored. 

I am honored that all of you continue to read this blog and I want to thank you. 

On August 13, Green Building Law Update will turn one year old.  So I am going to throw a blog birthday party on August 20.  The party will be located somewhere in Washington D.C. after work hours. 

The best part?  There will be party favors!  For the first 20 people to RSVP, I will send you one party favor consisting of my new favorite book.  If you would like to RSVP, just send me an email or respond in the comments section below. 

More details on birthday party to follow.  Hope to see you there. 

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[Sometimes I get great emails from readers and we discuss a green building topic or blog post.  Then I sit on the topic for a while, waiting for the right time to share with the Green Building Law Update readers.  Now seems like the right time to share an email I received from a reader.  

I received this great email from a reader who manages the operations and maintenance of a LEED Gold Certified building.  What follows is his response to my question "how are the green building efforts going?"]
 

At its best the going is very slow. At its worst... we're kind of afraid to go.

Photo:  Jim at Sonicchiken

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With the recent announcement that LEED certified projects will have to report energy performance data, the USGBC has signaled its intent to take on under performing green buildings.  LEED 2009 requires the reporting of energy performance data, but does not include actual energy performance requirements.  I have no doubt that the USGBC will require some minimum levels of actual performance in the next version of LEED. 

Just look at the USGBC's recent press release (PDF): 

USGBC will be able to use the performance information collected to inform future versions of LEED. 

“Building performance will guide LEED’s evolution. This data will show us what strategies work – and which don’t -- so we can evolve the credits and prerequisites informed by lessons learned,” said Brendan Owens, USGBC’s vice president of LEED technical development.  

I guess it is prediction time.  At the very least, the next version of LEED will require more post-construction, post-substantial completion strategies for certification. 

Or the USGBC could simply merge two rating systems: LEED for New Construction with LEED for Existing Buildings Operations and Maintenance (LEED EBOM).  With LEED 2009, the two rating systems are already on the same point scale.  And one of the ways to comply with Minimum Project Requirements is to achieve LEED EBOM certification every two years. 

What opportunities and pitfalls does this approach present?

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Love might be too strong of a word but you get the point.  The idea of LEED de-certification has touched off a firestorm of comments, some in support and others in objection.  I think a follow up post is warranted. 

First, I want to clarify one important piece of information as I noticed some were heading down the wrong path.  The LEED 2009 Minimum Project Requirements (MPR) require, among other things, that projects report energy performance data.  If projects do not report energy data, then LEED certification may be revoked (i.e. de-certification).  The USGBC has not stated that LEED certification will be revoked for poor energy performance itself.  Go take a look at the USGBC's MPR webpage if you get a moment.

Furthermore, the USGBC's decision to require energy reporting and threaten LEED de-certification makes sense.  Why?

The number of people complaining about LEED certified projects that were not reporting energy performance reductions was growing everyday.  Ever heard of Henry Gifford?  He actually engaged in an open debate with the USGBC in March 2009 about the merits of LEED certification.  This was not good press.  This was  not a good development for the USGBC.  

In response, the USGBC took a dramatic step to fix the problem.  The USGBC has taken what I think is only the first step to ensure improved energy performance.  Additionally, the USGBC used the only "stick" (i.e. enforcement mechanism) it had available:  LEED de-certification. 

On Wednesday, there was a great piece in ENR regarding the LEED energy reporting and de-certification.  Both an American Institute of Architects representative and a Building Owners and Managers Association representative came out in favor of the reporting requirements.  Of course, there was some criticism in the ENR article regarding LEED de-certification: 

The “bottom line” is, these conditions “may end up doing more harm than good for the future vitality” of LEED, says attorney Edward B. Gentilcore, a partner of Duane Morris LLP, Pittsburgh. “This would be a significant loss in light of the accomplishments to date,” he adds.

Mr. Gentilcore is a fellow construction attorney.  Us attorneys are going to be worried about any new requirement that creates additional risk and liability.  That is why we are here.  We are here to worry about your risks and liability.

The moral of the story?  As LEED 2009 changes are implemented, your contracts need to change as well.  Let us do the worrying for you.

Photo:  JonBen

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I'm impressed.  In one fell swoop, the USGBC has stepped up to the plate to address the primary criticisms of the LEED rating system.   

Kudos to Scot Horst and the USGBC for acknowledging an issue that has bothered many users of the LEED rating system: 

“Today there is all too often a disconnect, or performance gap, between the energy modeling done during the design phase and what actually happens during daily operation after the building is constructed,” said Scot Horst, Senior Vice President of LEED, U.S. Green Building Council.  “We’re convinced that ongoing monitoring and reporting of data is the single best way to drive higher building performance because it will bring to light external issues such as occupant behavior or unanticipated building usage patterns, all key factors that influence performance.”

In order to address the performance gap, projects seeking LEED certification must agree to comply with one of the following ongoing requirements:

1. The building is recertified on a two-year cycle using LEED for Existing Buildings: Operations & Maintenance.

2. The building provides energy and water usage data on an ongoing basis annually.

3. The building owner signs a release that authorizes USGBC to access the building’s energy and water usage data directly from the building’s utility provider.

There are serious liability and risk issues implicated by this decision, but I am going to ignore those for now.

Instead, I would like to recognize the USGBC for transparently addressing the primary critique of the LEED rating system.  

What will happen to projects that don't comply with an ongoing requirement?

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I wanted to take a moment and thank all of the Green Building Law Update readers.  You all have been blowing my minds the last few weeks.  There has been a surge in comments and discussions that take place after my original post.  Many times, these comments and discussions are much more important than the post itself. 

Don't believe me?  Go back and look at the comments after last weeks post on the USGBC's decision to no longer make CIRs public. 
 

• Eli S. made a great point that without public CIRs, the USGBC and GBCI may be limiting their liability. 
• Rich C. followed up on Eli's comment with the point that the USGBC may face less liability, but internal disputes among project teams may actually increase. 
• Christopher Hill argued that one possible solution is to build more CIRs into any contract.  I agree.
• Tim Hughes made a fantastic point - someone is likely to set up a third party website or clearinghouse where projects still share CIRs.  Who is going to start this? 
• Finally, Robert Newcomer pointed out that my case law analogy may have been flawed because facts are never identical from case to case or CIR to CIR. 

Why am I highlighting these comments?  Two reasons.

First, if you aren't reading the comments and, more importantly, taking part in the discussions after the blog posts, you are missing out.

Second, the comments above are proof that attorneys can, in fact, contribute to the green building industry.  Each of the commenters is a construction attorney.

Of course, we always value non-legal contributors too.

Have a great Fourth of July. 

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As I mentioned in my June 24 post, starting June 26, the USGBC eliminated public CIRs in order to improve the functionality of the LEED rating system.  The USGBC's Peter Templeton provided the following explanation for eliminating the public CIRs:

Under the new LEED certification model, standards development and project certification responsibilities are divided between USGBC and GBCI respectively to improve capacity and timeliness. CIRs will be issued by certification bodies under the guidance of GBCI and will continue to fulfill their primary purpose of providing project-specific clarifications regarding the LEED requirements. An unavoidable consequence is that rulings will no longer be made by the LEED Technical Advisory Groups and, therefore, cannot be applied universally.

In short, LEED certification became so popular that the USGBC had to begin allowing certification through independent certification bodies.  Vandana Sinha, over at the Washington Business Journal, recently highlighted the LEED backlog that had resulted in 5 month waits for certification determinations.  

The USGBC responded to the backlog by delegating certification to the Green Building Certification Institute (GBCI), which will then be responsible for ten additional "certification bodies."

With that change, the council employees who touched every LEED design and construction application will turn the job over to 150 trained reviewers who will manage the process from first draft to final award for an expected 3,000 certifications this year. The affiliates foresee ramping up by an additional 50 to 75 people next year, when projections call for up to 3,600 new certification requests.

The USGBC no longer controls certification responsibilities.  Instead, ten independent companies will interpret LEED credits and apply them to projects seeking certification.  Since the USGBC will not  directly oversee the ten companies, the USGBC could not review the CIRs.  As a result, the USGBC was no longer comfortable with universal application of CIRs.

The Washington Business Journal also reported that the GBCI calculated that the LEED backlog will be wiped out by June 26. 

That was last Friday!  Did this happen? 

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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."

"Initiating is really and truly difficult, and that's what leaders do.  They see something others are ignoring and they jump on it." 

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 OUR task.

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I have been spending a lot of time recently thinking about two posts I made regarding the LEED 25 percent premise and why this will be problematic for green building mandates.  Why did I reconsider these posts?  Rob Watson told me I was wrong. 

Watson knows LEED better than you and I.  He was one of the original members of the USGBC.*  When he tells you your post about green building "does not add up", you listen.  Watson made some great points that I would like to share with you. 

The general premise of my post was that the USGBC intends for only 25 percent of the building stock to attain LEED certification.  As more cities mandate LEED certification, which requires 100 percent compliance, some projects will fail to achieve LEED certification.

Watson was kind enough to explain the 25 percent premise to me in more detail.  In short, it is not as simple as adding up all the building stock, determining how much new stock achieves LEED New Construction certification and coming up with a percentage. 

This was the incorrect equation floating around in my head:

Based on this description, it is now clear to me that the 25% guideline would only apply to new construction starts, not the entire building stock.  Here's the simplified equation:

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[You may notice a new tab up above: Green Jobs. As part of our continuing experimentation here at Green Building Law Update, I am creating a makeshift green jobs board. See details below. Please take this free opportunity to share your green jobs!]

"It's hard to define what a green job actually is."

I hear a lot from people interested in obtaining a green job.  Once upon a time, I was asked "What is a green job?" in an interview and fumbled around for an answer.  
 

You know what? I don't care how to define this phrase.  It may matter to someone conducting a census of jobs, but it does not matter to me and it does not matter to the people looking for "green jobs." 

Instead of trying to define a "green job," I want to help connect my readers to these jobs.  So I am going to start a makeshift green jobs board. 

If you are interested in publishing your green job, post it in the comments section below using the following format: 

Name of job
Contact Information
Job description:  100 words or less. 

Happy green job hunting.  And check out the first job - it's a good one! 

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I have had another green building epiphany.  Actually, a series of epiphanies. 

But before we get to the epiphany, we have to review a simple premise.  I have to thank Will Clark over at Multi-Family Guide for pointing out this premise to me.  So here it is: 

The LEED rating system was created to only apply to the top 25 percent of the market. 

It's true.  After doing a little digging, I found an interview from February 2008 with Rob Watson, the "Father of LEED," where he states the premise.   

VL: Here in the US, LEED is becoming mainstream and expanding to cover homes, schools, banks, businesses, neighborhood development, etc. Ultimately, how far do you think LEED can go?

RW: LEED is designed to fully reach the top 25 percent of the market in terms of the number of square feet—so a quarter of new buildings will be built to LEED specifications. The rest of the market will catch up eventually as green practices become more mainstream. So as we reach our target 25 percent (currently about 10 percent of new building square footage is LEED certified), LEED will get more stringent so it will be a moving bar. Unless the engine is moving, the train following it won’t move, either. So we want to keep raising the bar as the knowledge gets greater and the technology availability gets greater. We want to bring in ever greener and greener buildings.

I would venture to guess that most people don't realize LEED is only supposed to apply to "the top 25 percent of the market."  There are all sorts of ramifications, or epiphanies, we will get to in later posts that are the result of this premise. 

But for now, does anyone know the percentage of square footage that is LEED certified currently? 

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According to a recent Washington Post article, “Construction firms are so eager for work in the sagging economy that project bids are coming in much lower than expected.”

Great news, right?  Not necessarily.  Lower bids can be a good thing if they are the result of increased efficiency in the construction process.  But lower bids can also be the result of increased competition.  These lower bids can be just that - too low - and result in delays and litigation. 

What factors are causing the lower bids on stimulus projects?  According to Kenneth Simonson, chief economist for the Associated General Contractors of America: 

"Wherever I go, I hear of projects that used to attract two to three bids just a couple of years ago, now it's 20 or 30," Simonson said. "Many [contractors] are coming down on the minimum size of projects they will bid on, and ones who didn't do schools now are bidding on schools. Others are coming from out of state to a new region just to keep busy. And they are essentially giving away their services just to keep their key employees busy."

Why should this be a concern to the green building industry?  As I have detailed, the stimulus is providing nearly $25 billion for green building projects.  The green building industry is newer, the parties more inexperienced, and the technology relatively untested.  The opportunity for underbidding these green building projects is tremendous.  Projects that can't be completed at the promised cost could lead to LEEDigation. 

Be careful with your bids. 

Photo:  Jim Frazier

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Regular readers of this blog know I am from Kansas. Overland Park, Kansas to be exact. I love my hometown but I am also concerned for my hometown. Last time I was in Overland Park, my Dad and I were navigating the sprawling suburbs and strip malls that make up the city. I looked around, and simply asked "can this type of development continue?" It was a weird feeling questioning the very foundation of my hometown.

The way in which cities are planned and developed is important. Overland Park consists primarily of strip malls and single family homes in big neighborhoods. It takes a minimum of 15 minutes to drive anywhere and walking is non-existent. This type of development works if people are willing to continue buying new homes. But we now see what happens when homes aren't sold. You see headlines like this:

Ghost malls are scaring suburbs

...

“Residential was expanding and people were consuming at a high rate, and therefore developers and retailers were expanding at a high rate,” said Owen Buckley of Lane4 Property Group, a Kansas City developer and broker with retail projects in several Midwestern states. “They got caught.”

...

About 3.2 million square feet of retail space is vacant in metro Kansas City.

I am worried about the suburbs of my hometown. But I am not a smart growth expert. So here are two questions that I hope you weigh in on:

1. Will these types of developments re-establish themselves when the economy recovers
2. If these developments do not regrow, what can be done with these spaces?

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A while back, I read a blog post describing how to prepare for a conference.  I am going to the ABA Construction Forum's Talking Green Blues event in New Orleans this week and decided to apply one idea to my conference preparation.

There are two questions in the forefront of my mind and I am not leaving New Orleans without the answers:

1.  What are people doing with contracts involving green building?
2.  How should I start studying up in order to become a renewable energy expert?

If you have answers to any of these questions, email me.  If you are going to be at the event and would like to meet up for a chat, a drink or some gumbo, email me.  If you have an answer to any of these questions and you will be in New Orleans this week, you have to email me.

Seriously. 

Photo:  Phillipe Leroyer

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My friends over at Sensible City recently offered me the opportunity to interview Eric Corey Freed.  It's not everyday I get to interview someone who was just interviewed by the New York Times so I jumped at the chance.  Even better, Eric is an "organic architect" and studied under a former student of Frank Lloyd Wright.  I am getting married in October at Wright's Arizona home, Taliesin West, so I couldn't pass up this opportunity. 

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Update:  For a rundown of green building provisions in the stimulus pacakge, see this post.

Thank you to everyone who attended Rutherfoord's "Trends in Green Building" seminar yesterday and listened to my "Green in the Stimulus" presentation.  It was great to recognize so many faces in the crowd.  If you came up and spoke to me about speaking engagements or green building legal programs offered by my law firm, please follow up with me so we can make it happen.  For those of you who missed the event, I will post the powerpoint I presented to Green Building Law Update (hopefully with a voiceover) on Monday. 

Now for the bad part. 

The stimulus package is going to result in increased levels of green building litigation. I hope I am wrong, but I think it is inevitable. 

In my "Green in the Stimulus" presentation, I highlighted three factors that will contribute to an increase in green building litigation.  The first factor is an influx of inexperienced parties attempting to build green.  There are many state and local governments that, to date, have not been substantially involved in the green building industry.  These entities, with the help of the stimulus funding, are now going to require green building projects through regulation.  Here is an example.  These state and local governments will be required by the timelines of the law to fast track these green building developments.  Do you see the problems that can arise from this scenario?

The second factor will be the requirement that projects attain LEED certification.  The website of the General Services Administration states:

As of 2003, all new GSA building projects must be certified through the Leadership in Energy and Environmental Design (LEED) Green Building Rating System of the U.S. Green Building Council, and Silver LEED rating is encouraged. 

The GSA will not be the only entity requiring LEED certification for projects.  Who will be responsible for achieving the LEED certification?  What happens if the project fails to achieve the LEED certification?

Finally, the third factor that will result in more green building litigaiton is the emphasis on energy efficiency.  The drive to build green primarily centers around the desire to reduce building energy use.  However, it is very difficult to anticipate how a building will actually perform.  Under the LEED rating system, energy efficiency is modeled through ASHRAE.  Buried deep in a ASHRAE appendix (ASHRAE 90.1, Appendix G, Section G1.2, Note 2) is the following disclaimer:

"Neither the proposed building performance, nor the baseline building performance are predictions of actual energy consumption or costs for the proposed design after construction. Actual experience will differ from these calculations due to variations such as occupancy, weather, energy use not covered by this procedure, changes in energy rates between design of the building and occupancy, and the precision of the calculation tool."

Not every government or municipality will see or understand this caveat.  Heck, many of the entities requiring certification don't even understand the acronym for the LEED rating system.  What happens when the new green buildings don't actually reduce energy usage? 

I am not the only one concerned about these issues.  Real Life LEED initially raised factor three.  Are we wrong?  Tell me. 

Related Links:

• LEED Risk Management:  Crossing the Model/Reality Chasm (Real Life LEED)
• "The Stimulus:  Now for the Hard Part" (GBLU)
• The Stimulus:  Green Building Provisions (GBLU)
• The Stimulus:  "LEEDS"ing the Way (GBLU)
• The Stimulus:  FedBizOpps Has Green (GBLU)
• The Stimulus:  States Have Green Too (GBLU)
• The Stimulus:  Build Relationships Now (GBLU)

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Update:  For a rundown of green building provisions in the stimulus pacakge, see this post.

I am wrapping up my "Green in the Stimulus" presentation for tomorrow and wanted to provide more information that may benefit your company as you seek out green stimulus projects. 

As you prepare to bid federal and state projects, relationships will be key.  You will need relationships with general contractors or subcontractors to facilitate your bid.  Relationships with the government officials that are creating or letting the government projects can also be helpful.  I am convinced that in the stimulus bidding process, information is power.  Government officials can provide information about requirements and preferences for green stimulus projects. 

How do you develop relationships with these government officials?  Here is an idea. 

Like Virginia, Maryland has developed a stimulus website .  Unlike the Virginia stimulus website, Maryland does not provide information about proposed stimulus projects.  But other information on the website may prove valuable. 



The Governor's office will be providing "Workshops for Local Leaders" related to the stimulus package.  The event is free.  You do not have to register. 

If you are in Maryland and you want to learn about stimulus projects and talk to the officials in charge of these projects, why would you not go to one of these events? 

Related Links: 

• "The Stimulus:  Now for the Hard Part" (GBLU)
• The Stimulus:  Green Building Provisions (GBLU)
• The Stimulus:  "LEEDS"ing the Way (GBLU)
• The Stimulus:  FedBizOpps Has Green (GBLU)
• The Stimulus:  States Have Green Too (GBLU)

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Update:  For a rundown of green building provisions in the stimulus pacakge, see this post.

This week, in preparation for my "Green in the Stimulus" presentation, I have been providing what I hope is interesting and useful information about the stimulus.  Today we are briefly going to review a new website in Virginia, Stimulus.Virginia.gov, which is vitally important to anyone expecting to take part in Virginia projects resulting from the stimulus. 

According to Stimulus.Virignia.gov, the "website is a forum for citizens, localities, and others to submit project proposals to be considered when federal stimulus funds become available."  In its current iteration, the most interesting aspect of the website is the "Reports" section .  This section lists projects that have been submitted to the website by municipalities and individuals.

I have skimmed this list and was amazed to see that the very first project was a school seeking LEED certification. 

Do you realize the opportunity that Stimulus.Virginia.Gov, along with FedBizOpps.gov, provide?  Through these two websites, you can inventory all of the potential projects you would want to bid on and begin preparing for these projects now.   Plenty of other states have similar stimulus websites (Ohio and Michigan, for example) so these actions aren't limited to Virginia. 

How do you prepare for these projects now?  What are the risks that have to be accounted for and what should your contracts look like?  You will have to come to my presentation on Tuesday to find out!  (Or check back on my website when I make my slideshow, and possibly the video of the presentation, available).

Related articles:

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"The General Services Administration (GSA), Region 7, is seeking a contractor to perform as the CMc (Construction Manager as Contractor) for the construction of the New United States Land Port of Entry (LPOE) in Tornillo, Texas. The site is located in El Paso County, Texas. It is situated approximately 30 miles east of El Paso and is adjacent to the current Fabens Port of Entry facility, which will be demolished as part of the construction option in this contract.  An estimated 115 acres will compose the new LPOE.

This project must be certified through the U.S. Green Building Council (USGBC) Leadership in Energy and Environmental Design (LEED®) green building rating system. The target USGBC LEED® rating for this project is Silver level."

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Update:  For a rundown of green building provisions in the stimulus pacakge, see this post.

Yesterday, while preparing for my "Green in the Stimulus" talk, I came across something both hilarious and frightening. 

StimulusWatch.org has provided an inventory of proposed projects that could benefit from the stimulus.  The list was prepared from a list of shovel-ready projects prepared by the U.S. Conference of Mayors .  While reviewing the list for "LEED" projects, to my great horror, I made the following discovery:



If an entity is seeking "LEEDS" certification, is the project really "shovel-ready"?  And no, that is not a rhetorical question. 

Related Links: 

• "The Stimulus:  Now for the Hard Part" (GBLU)
• The Stimulus:  Green Building Provisions (GBLU)

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• Stimulus: now for the hard part (CNN)
• Earmark-Free Stimulus Bill Lacks Spending Direction (NPR)
• Democrats Among Stimulus Skeptics (Wash. Post)

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Update:  For a rundown of green building provisions in the stimulus pacakge, see this post.

Thomas C. Mawson - U.S. Green Building Council
Executive Director, National Capital Region Chapter
2009 LEED Rating System Changes and their Impact on Property Owners and Developers

Richard M. Silberman - Healthy Buildings International, Inc.
Chief Executive Officer
Earning the Ventilation-Related Credits Within LEED-NC

Eric M. Oliver - EMO Energy Solutions
President
Looking for Energy Savings In All The Right Places

Bobby C. Christian - Tangible Software Solutions, Inc.
President  
Simplifying Energy – Buy. Use. Manage.

Did I forget anything? 

Related Links:

• Highlights of $787 billion stimulus plan (AP)
• Stimulus: Now For the Hard Part (CNN)

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• D.C. Green Building Act
• SFAA and SBP Letter Regarding "Performance Bond" Requirement 
• Related GBLU "Bond" Posts

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Recently, I took part in an interview with LexBlog, the company responsible for creating this and many other legal blogs.  Today's "Sensible Interview" includes three of my favorite questions from the LexBlog interview.  If you would like to read the full interview, go here. 

---

Lisa Kennelly: Is the blog helping you become a better lawyer?

Chris Cheatham: Yes. I write about green building law, which is really an emerging legal practice. As a result, I have to point out where the legal issues are going to arise. I don't have case law to rely on. Having to point out potential green building law issues has helped me recognize issues and problems that my clients may face down the road.

Lisa Kennelly: Is the blog helping further enhance your reputation from a client development standpoint?

Chris Cheatham: Most definitely. A perfect example occurred in a client conference call a few months ago. Before the conference call began, we were all exchanging greetings. Out of nowhere, our client's general counsel says, "Chris, I have really enjoyed reading your green building blog." I was stunned for a minute and finally stammered out a thank you. Other clients and prospects have invited me in to do green building presentations. The client interaction created by the blog is great.

Lisa Kennelly: What's been most rewarding about blogging?

Chris Cheatham: The most rewarding part of blogging is seeing something happen that you have been talking about. I can think of a couple examples. In December, the DC City Council announced that they were going to revise a component of their green building act that was problematic for the surety industry. One of my first posts, and many subsequent posts, discussed the problems with the specific component of the act. That was very rewarding, to think that I contributed to the change in the act (even if I didn't!).

The other example was actually the emergence of the first instance of green building litigation. The general premise of my blog is that the green building industry is going to have legal issues that need to be resolved. In one of my first posts, I predicted the emergence of significant green building litigation very soon. Low and behold, a few months later, I learned of the first example of green building litigation. I like to think that I am helping my readers avoid this type of litigation as they get involved in green building projects.

Related Links:

• LexBlog Q & A:  Chris Cheatham (LexBlog)

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Last week, we talked about the William & Mary Environmental Law Review Symposium "It Ain't Easy Building Green."  Today, I am going to try yet another new blog trick and make my slideshow available from the Symposium. 

If you have any questions or would like to discuss any of the slides in detail, just post a comment and I will be sure to respond.  If your company or organization would be interested in hosting this or a similar presentation, please contact me (chris@greenbuildinglawupdate.com). 

So what do you think? 

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[Green Building Law Update is achieving another first:  our first guest post!  Christopher G. Hill is a Virginia construction attorney and recently started a legal blog, Construction Law Musings.  I first met Chris through Twitter and I appreciate his willingness to discuss green building legal issues.]

Aside from the governmental impetus to learn green building techniques, two factors require that Virginia contractors learn to build green.  These two factors are simply 1.  project owners want green buildings and 2.  those contractors that do not keep up with the “greening” of construction are likely to fall behind and struggle to stay afloat in today’s economy.

Project owners want green buildings for many reasons.  Owners want to be seen as environmentally friendly and civic minded.  Additionally, and possibly more importantly, owners save money (both initially and over time) by building green.  As an example, use of integrated green building methods requires less up front costs for irrigation piping and the like and leads to use of less than one quarter of the water that a non-green building uses according to a recent study.  Lower water usage means lower operating costs.  Couple these factors with tax incentives and the like provided by the government and the benefits of green building to owners are obvious.

Because of the environmental benefits and cost savings inherent in a green building approach, contractors versed in green building can sell their services more readily than those that do not.  First of all, a “green” contractor will be among a limited set of contractors to whom an owner seeking green certification for its building will look.  Second of all, if an owner asks you for input, you can sell him or her on the benefits of your services over a comparable non-“green” contractor.  In both of these instances, being knowledgeable in green construction and its benefits will serve your business well.

As always, be sure to consult with a legal professional regarding the contract requirements on such a project before bidding on the job to avoid headaches at the end of the project.  As with any new area of business, you are better off anticipating issues rather than responding to them.   

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I met Elaine Lipman Barnes through Twitter (elbarneshouse).  Soon I learned that she manages a billion dollar green schools program in Ohio.  Since green schools are an emerging industry, I thought Elaine would be perfect for a Sensible Interview.  She didn't disappoint.  Enjoy! 

---

Chris:  Can you tell me about the green building program you manage?

Elaine: I manage Ohio's Green Schools Initiative at the Ohio School Facilities Commission (OSFC).  In 2007, Governor Ted Strickland issued Executive Order 2007-02S (Coordinating Ohio Energy Policy and State Energy Utilization) that mandated that, among other things, all state agencies improve energy efficiency in both the buildings they use and the programs they run.  Our response eventually became known as OSFC Resolution 07-124 which 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.

We estimate that we will provide $4.1 billion in school funding over a 3 year period to begin the construction process of at least 250 schools in Ohio.  My responsibility is to guide our design teams in their process of achieving this standard of excellence.  As of February 1st, we had 97 school projects registered with the US Green Building Council  and expect to have around 180 registered by the close of this state fiscal year.

Chris:  One area where I see potential green building disputes is green schools.  School districts are building green schools, in part, because of the energy efficiency and related cost savings.  How important a factor is energy efficiency for the Ohio green school program?  How do school districts incorporate projected energy efficiency savings into school budgets?

Elaine: Our mandate stems from a desire to make schools energy efficient and to reduce long term operating costs.  Because we have set a high standard for integrating technology into the classroom, and because our average school that will be replaced is over 70 years old, we are buildings schools that have significantly higher energy costs than what the districts are used to. The associated increases in consumption are often 200-1000% greater than the old buildings and many districts have difficulties affording these costs. Further, there are cases where the increase in consumption means an increase in energy rates per kWh (or Btu) and so the costs skyrocket.

We have increased our master plan budgets for all schools that fall under Resolution 07-124 by 3% to account for the new design process and emphasis on potentially greater first cost to reduce long term operating expenses.  Additionally, OSFC has developed provisions for districts to use our Energy Conservation Program (aka 1986 Am. Sub. HB264), which allows the district to incur bonded indebtedness with unanimous approval of the school board without public vote provided the energy conservation measures have a payback period of less than 15 years, to cover incremental costs increases of more expensive systems, renewable energy installation, and co-generation.

The question of how schools incorporate the energy savings into their budgets is interesting.  Traditionally, there is no direct process for that because a school's capital budget and operating budget are both restricted.  HB264 allows for operational savings to pay off capital expenditures over the approved project period.  Governor Strickland and his Energy Advisor, Mark Shanahan are working with the Ohio Department of Education to develop a process of better managing the connection between these budgets and ensuring that districts are able to reinvest their savings into staff, capital expenses, and, of course, the classroom.

Chris:  A portion of the economic stimulus funding is supposed to go to modernizing schools.  Does this mean making schools green?  Do you anticipate seeing some of the stimulus package money designated to your green schools program?

Elaine:  It appears as though both the House and Senate versions of the economic stimulus package have language requiring the school modernizations to be green.  It isn't clear how they will define "green."  It also appears that the stimulus funds will be either offered directly to the districts or to the districts via the Department of Education (ODE).  We will work with ODE and the districts to provide technical support and are currently working with our partners across the state to begin to determine what that might look like.

***
Elaine Lipman Barnes is the Energy & Environment Administrator for the Ohio School Facilities Commission.  For more information about OSFC or Ohio's Green Schools Initiative, visit http://osfc.ohio.gov  or call 614.466.6290

Related Links: 

• Sensible Interview:  AIA President Marvin Malecha (GBLU)

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Last week, I had the pleasure of speaking at the William and Mary Environmental Law & Policy Review symposium "It's Not Easy Building Green."  The students did a fantastic job and the audience was large and engaged. 

In particular, Mark Pike organized an interactive web 2.0 experience for the symposium that was quite impressive.  Many of the symposium participants used Twitter to discuss the event.  Additionally, Mark set up a blog (in less than 12 hours!) and live blogged each of the presentations.  From what I have heard, the event was even taped and should be made publicly available. 

In addition to the technology, there was plenty of substantive discussion about green building law.  Here are five things I learned at the symposium:

1.  Stephen Del Percio correctly pointed out that state legislation may run afoul of antitrust law if it only incorporates one green building rating system, like LEED.

2.  North Carolina's green building regulations focus on two specific green building strategies -- energy efficiency and water usage -- instead of requiring certification through a rating system.  This seems like a good idea to me. 

3.  If I am going to describe techniques to reduce water usage, I should be able to list more than just "low flow urinals."  Furthermore, I should not emphasize the awkwardness by repeating the word "urinal" and then pausing.  Thanks to everyone for pointing this out to me.

4.  Darren Prum described a ridiculous scenario in Nevada surrounding a property tax abatement that went awry.  Essentially, the property tax abatement that was provided to projects achieving LEED certification almost bankrupted the state. 

5.  There is a Property Tax Reduction regulation in Virginia for projects that achieve LEED certification or certification under another energy preferred standard.  You will definitely be hearing more about this at Green Building Law Update. 

Green Building Law Update will be looking at these issues in more depth in future posts.  Thanks to all of the symposium participants for their hard work and important ideas.

Related Links: 

• "It's Not Easy Building Green" homepage (W&M)
• "It's Not Easy Building Green" live blog (W&M)
• "It's Not Easy Building Green" twitter discussion (hashtags.org)

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[As part of the evolution of Green Building Law Update, I like to try out new post topics and formats.  Today I am beginning a new feature at Green Building Law Update:  “Sensible Interview.”  Please let me know what you think.]

Back in December, Kimberly Miller of Sensible City provided me with a press pass to EcoBuild, which is a fantastic event for those interested in discussing green building policy.  At EcoBuild, I was able to interview some brilliant people that have been involved with green building much longer than myself. One such individual was Marvin Malecha, the 2009 American Institute of Architects (AIA) President. I hope you enjoy the interview. 

Chris:  The topic of your keynote speech at Ecobuild was "Inheritance & Responsibility."  How does inheritance and responsibility tie into the current green building industry?

Marvin Malecha:  Perhaps our greatest inheritance is the environment. But it is important to understand that inheritance does not always imply that an abundance was given. In fact many times inheritance has also been defined as the debts of another generation to be paid by the next and the next. In the case of the environment we are in a position of both. We have inherited a world with areas still pure. Areas that contain within them the memory of a planet that was a pure habitat. A planet that nurtured life.

We have also inherited a planet with grave problems that have evolved over time causing toxic sites to be established and levels of carbon in the air that threaten life. Our recognition of both the unspoiled and the spoiled must lead us to a strategic action plan for the environment. Our responsibility is to protect that which is yet unspoiled and to save those species soon to be lost forever if we do not act. It is our responsibility to restore in as timely a fashion as possible those systems we have placed under duress. 

The current green industry provides the tools for both actions. We do have the technology to utilize building materials that are in harmony with the land. We do have the capability to purify water through natural systems that can be established in opposition to traditionally engineered water purification plants. We can plan settlements with a greater density to preserve open tracts of land and protect wildlife habitats. New building materials can utilized recycled materials. they can be produced utilizing manufacturing techniques that minimize carbon emissions in the manufacture and reduce waste. New systems can help to regulate building operations reducing the power necessary to operate a building and thereby reduce carbon emissions and more buildings can be constructed of local materials establishing the sense of region while minimizing the energy expended in delivery.

Chris:  Green Building Law Update tends to focus on the legal aspects of the green building industry.  As you know, the AIA recently incorporated new duties for architects related to green building.  Can you discuss these duties? 

Marvin Malecha:  The AIA has established a sustainability requirement for annual continuing education by members. Four hours out of a required eighteen hours are now necessary to maintain membership in the AIA. It is the intention of the Board to insure that every AIA member is knowledgeable about questions of sustainability and able to employ these ideas in architectural work. It is important to note that the AIA also considers sustainability course work as meeting the health, safety and welfare requirements of the institute.

Also, the Board of Directors has included a provision on sustainability in the institute Code of Ethics. The connection between environmental well-being and human health is essential and it recognizes the most fundamental responsibility of the architect. 

Chris: How do architects manage the risk associated with green building projects?

Marvin Malecha:  The management of risk in contemporary society is a reality of professional practice. Such risk is simply unavoidable and therefore several steps must be taken by the institute on behalf of its members and by members individually.  It is necessary for the institute to foster significant research on the subjects related to sustainability and environmental well-being so that members will be able to act from a basis of knowledge.  It will also be necessary to encourage research on the subject of building performance so that architects will be able to act from a body of knowledge rather than unconfirmed opinions.

Certainly, it is also necessary that to address the design of a truly environmentally responsible project a diverse team of professionals must be engaged. Diverse teams like a diverse natural environment are healthy, even vital in this age of heightened awareness. The Institute makes no assertion that it is the only source of knowledge on this subject. We are reaching out to a broad spectrum of partners from all of the associated professional disciplines and related professional associations. Our commitment is to a carbon neutral target not to any specific rating system. We encourage this same commitment to integrated teams by our members.
 

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Today, we bring you a first on Green Building Law Update:  my first radio interview. 

Vik Duggal, over at Konstructr, was kind enough to invite me to be a guest on his KCast interview series.  Konstructr is basically Facebook for the construction industry. 

Some of the topics we discuss include green building attorneys, President Obama's proposed economic recovery package, Twitter and Washington D.C.'s Green Building Act. 

There is one correction I need to make from the interview.  Despite what Vik says, I do not have a "LEED AP" tattoo (or any tattoo for that matter).  Enjoy and please send me your suggestions for future radio interviews! 
 

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Back in October of 2008, in the midst of the economic turmoil, Green Building Law Update wrote that governments should reconsider requiring green building certification for projects.  With the deepening economic recession, some governments are now supporting green building projects while specifically not requiring certification. 

A recent New York Times article highlighted green building developments in Westchester County.  Interestingly, one city is not requiring LEED certification due to the additional costs while another is pushing forward a code requiring LEED certification: 

Building green in the county does not always mean building to LEED certification standards. Some local governments, like New Rochelle’s and the county Department of Public Works, have committed to green building in principle but are not going for LEED sign-off because of extra costs of hiring consultants and paying certification fees.

“We are requiring all of our staff and consultants to provide us with a listing of options for the different levels of certification, and then we are analyzing the costs,” said Ralph L. Butler, commissioner of public works for the county . . . .

Reese Berman, the supervisor of the Town of North Castle . . . is working on green guidance for local governments.

“It’s hard when development is slow for towns to make this kind of legislation,” said Ms. Berman, whose town has had to shelve plans for a new highway garage with solar panels. “Unless there are really big incentives from the state or federal government, we are not going to see the kind of green initiatives we were hoping to see.”

The article also highlights Yonkers, New York, which has "drafted the most aggressive green building standards in Westchester."  In the coming months, the Yonkers City Council is expected to pass a green building code that will require most new construction comply with LEED standards.  

On January 30 and 31, I will be sitting on a green building law panel to discuss government green building regulations.  Which city do you think is crafting more appropriate green building regulation: New Rochelle, which is pushing green building projects without the certification or Yonkers, which is pushing a green building code requiring certification? 

Related Links:

• Green Building Trend Picks Up Pace in County (NY Times)
• A Week of Epiphanies: I Don't Mean to Diminish This But. . . (GBLU)

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Back in the summer of 2008, Green Building Law Update was nothing more than a pipe dream.  During that summer, Brian Maxted, a William and Mary Law student and summer intern at my firm, was relegated to hearing about my crazy green building law ideas. 

Brian just happened to be on the William and Mary Environmental Law & Policy Review Executive Board.  The Board was looking for a topic for their annual symposium.  And so we hatched the idea for "It's Not Easy Being Green: W&M Environmental Law & Policy Review Symposium."  The William and Mary students have since run with the idea - special thanks to Kim Piro and Sarah Simmons for their hard work. 

Here are details about the event: 

"It's Not Easy Being Green: W&M Environmental Law & Policy Review Symposium

Starts: January 30, 2009 at 12:00 PM
Ends: January 31, 2009 at 12:00 PM
Location: William and Mary Law School, Room 120
Contact: Kim Piro, kapiro@wm.edu

The Symposium will explore legal and political issues related to green building standards and sustainable development legislation.  See here for a list of speakers and more details.

On Friday, I will be speaking about "Green Building Regulatory Trends in Virginia."  On Saturday, I will be taking part in a green building regulation panel.  For you lawyers out there, the symposium may provide CLE credits.  If that is not enough, if you are around Friday after the symposium, I will buy you a beer at the Green Leafe!  Hope to see you there.

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"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." 

I don't mind making this prediction because it is not much of a stretch.  There are three factors that will contribute to the popularity of retrofitting existing buildings to improve energy efficiency. 

First, as we have been discussing all week, President-Elect Obama is pushing a large stimulus package aimed at, in part, improving the energy efficiency of existing buildings and homes.  Yesterday, President-Elect Obama again stated his plan "to modernize 75 percent of federal buildings and improve energy efficiency in 2 million homes to save consumers billions of dollars on energy bills."

The second factor that will contribute to increased popularity for retrofitting current building stock is a slowdown in new building project developments.  At this point, we have all heard the dire warnings of a construction slowdown.  This construction slowdown is due, in part, to tightened lending options.  We also know that tenants are now demanding green buildings.  The result will be that building owners will look to "retrofit" their existing buildings so as to offer more green building options. 

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. 

What do you think?  Are my predictions off?  What is your one prediction for the green building industry in 2009?   

Related Links:

• Obama's Green Energy Plans Build Hopes, Skepticism (Reuters UK)
• Construction Slowdown Hits Architects (BizJournal)
• Construction Slowdown Still to Come (Wall Street Journal)
• Congress to Delay Action on Cap-and-Trade (Wall Street Journal)
• A Very Detailed Green Stimulus Proposal (GBLU)

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Update:  For a rundown of green building provisions in the stimulus pacakge, see this post.

On Monday, we highlighted some green building strategies that might be incorporated in the Obama Administration's proposed stimulus program.  The Alliance to Save Energy, Edison Electric Institute, Energy Future Coalition and the Natural Resources Defense Council (NRDC) recently published a comprehensive Energy Efficiency Initiative to be included in the proposed stimulus plan.  You should read the letter yourself but here is a good summary from NRDC's Peter Lehner:

The proposal we put together would invest approximately $33 billion for greater energy efficiency. . . . One of our primary recommendations is to make grants available to states and local governments giving them a huge incentive to increase efficiency. Under this program, states would provide funding under the grants program to entities such as utilities, cooperatives, energy service companies and school districts.

The grants would fall into the following broad categories: home energy efficiency retrofits, retrofits of public buildings, commercial building efficiency retrofits and efficiency programs matching fund. 

The Initiative's plan to allocate the state grants is particularly intriguing.  The first half of the funding would be allocated without conditions.  The second half of the funding would be tied to, in part, a state adopting and implementing more stringent energy building codes: 2009 IECC (for residential buildings) and the ASHRAE Standard 90.1-2007 (for commercial buildings).

If the stimulus package includes any or all of these proposals, the impacts on the green building and construction industry would be enormous.  In a few short years, we would simultaneously see huge government investments in green building strategies to improve energy efficiency while states simultaneously adopt building codes that will force private projects to include new green building techniques and technologies. 

If you are in the construction or green building industry, you better pay attention to the details of the final stimulus package. 

Related Links: 

• The Stimulus:  "LEEDS"ing the Way (GBLU)
• The Stimulus:  Now for the Hard Part (GBLU)
• The Stimulus:  Green Building Provisions (GBLU)
• NRDC and Utilities Agree:  Efficiency Works (NRDC Switchboard)
• Big Business Support Green Stimulus Package (GBLU)

Photo:  Kimberlyfaye

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Update:  For a rundown of green building provisions in the stimulus pacakge, see this post.

Over the weekend, news broke that the massive economic stimulus package will not be ready for President-Elect Barack Obama to sign on day one. As you may recall, President-Elect Obama had previously indicated that the stimulus package would include support for green building strategies.

While it was not previously clear what green building strategies were to be included, a December 24, 2008 letter from the United States Climate Action Partnership (USCAP), a business-environmental coalition arguing for mandatory global warming legislation, detailed what it believed should be included as part of the package:

It is possible to move fast and make investments in energy efficiency that can immediately put people to work on transit projects and existing building retrofits. These include weatherization, insulation, HVAC upgrades, and use of waste heat in industrial processes and facilities.

Rural and urban homes and businesses alike can take advantage of renewable technologies such as solar photovoltaic systems, hot water heaters or small wind turbines, and communities can benefit from development of local renewable energy resources.

This letter was signed by CEOs of some of the biggest corporations in the energy industry:

Alcoa
The Dow Chemical Company
Duke Energy
DuPont
General Electric
NRG Energy, Inc.
PG&E Corporation
PNM Resources
Siemens Corporation

With much of the energy industry and the President-Elect supporting a stimulus package that invests in energy efficiency strategies, we are likely to see an influx of capital for green building projects.

How is your business preparing for these new construction opportunities? 

Related Links: 

• The Stimulus:  "LEEDS"ing the Way (GBLU)
• The Stimulus:  Now for the Hard Part (GBLU)
• The Stimulus:  Green Building Provisions (GBLU)
• Stimulus Bill Faces Delay to Win Support (USA Today)
• The Political Winds are Changing: Part II (GBLU)

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On Wednesday, we highlighted the Bush Administration's recent decision to order the Office of Management and Budget (OMB) to not adopt regulations that would have improved energy efficiency in all federal buildings.  This decision is in stark contrast to the political platform and green building policies being pushed by President-Elect Obama. 

If you may recall, back in 2008, Green Building Law Update highlighted the green building political platforms of both President-Elect Obama and Senator John McCain.  Among the green building proposals, both Obama and McCain supported "greening" the federal government by applying a higher efficiency standard to government buildings.  While we can not be certain what an Obama Administration would have done, the Bush Administration's decision to kill the federal building energy efficiency regulation contrasts sharply with Obama's platform. 

Even more telling, Obama has emphasized green building policies as part of a massive federal stimulus package that is likely to be voted on as soon as Congress returns in January: 

Roughly $350 billion would be invested to rebuild roads and bridges, modernize schools and help hospitals and doctors switch to computerized patient records. That category also would include projects aimed at improving energy efficiency, such as weatherizing buildings, as well as aid to the poor through expanded unemployment and food-stamp benefits.

As one of his first acts, President-Elect Obama plans to use $350 billion to, in part, improve energy efficiency in buildings and modernize schools.  Improved energy efficiency in buildings and modernizing schools will likely require green building strategies.  The political winds have most definitely shifted in favor of green building policies. 

If you are looking for green building projects, make sure you pay attention to the upcoming federal stimulus package.  We will continue to keep you appraised here at Green Building Law Update. 

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As we head towards the finish line of 2008, we turn our eyes towards 2009 and what lies ahead for green building.  The next two posts at Green Building Law Update will highlight the shift in political support for green building policies that will soon occur. 

In order to understand the shift, we must start with the current political support, or lack thereof, for green building policies.  Heading into the New Year, the Bush Administration has quietly been passing and killing regulations through the Office of Management and Budget (OMB).  One such regulation that the Bush Administration refused to adopt would have improved energy efficiency in federal buildings:

On Nov. 19, the OMB ordered the Energy Department to kill new regulations that would have forced the federal government to buy more-energy-efficient lights, appliances, and heating and cooling systems. Daniel J. Weiss, climate strategy director at the Center for American Progress Action Fund, called that retreat from a 2005 requirement "unbelievable."

Notably, 2005 energy efficiency requirements were passed by a Republican Congress.  According to Department spokeswoman Jennifer Scoggins, the energy efficiency regulations may be issued before or during the next administration.

As the economic downturn continues into 2009, construction players must seize all opportunities for new projects.  On Friday, we will discuss the shift in support for green building policies that will occur with the incoming Obama Administration and new business opportunities that result.

Related Links: 

• At the Last Minute, A Raft of Rules (Wash. Post)

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As we all settle in for the Holidays, I want to extend a thank you to all of my readers.  Green Building Law Update has far exceeded my expectations in just a few short months.  None of this could have happened without all of you reading my blog, subscribing to my blog and telling other people about my blog.  I cannot thank you enough.

In its most simple form, Green Building Law Update provides a forum for us to discuss interesting articles and green building legal developments.  In its most complicated form, Green Building Law Update is a snapshot of the development of an entirely new legal field and design and construction industry.  The latter is quite overwhelming and so I prefer to think of this blog in its simple form. 

What I am most amazed by is the interest that everyone has taken in the articles I select on a weekly basis.  I know there is a lot of information available and we only have a limited amount of time to consume this information.  Please do not ever hesitate to let me know what information you want to hear about or what information I should stop talking about.  Or just drop a quick email so we can chat or meet sometime (my email:  chris@greenbuildinglawupdate.com).  

Green Building Law Update will take a short break until next Monday.  Thank you and Happy Holidays! 

Chris
 

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Green Building Law Update’s review of reasons to build green has somehow become a top 5 list.  Here’s a recap of the first four reasons:

1.    Increased opportunity to obtain financing
2.    Build to the state of art
3.    Distinguish your project from traditional construction
4.    Your customer is demanding green

Rounding out the top five is a reason that you ignore at your own peril:  your government requires it. 

Previously, Green Building Law Update has highlighted states – Virginia, Indiana, Maryland – and cities – Washington, D.C., Alexandria, Portland, Los Angeles – that require or incentivize green building.  As we move into 2009, the political support for green building initiatives will increase.  As more cities and states require green building, parties will have to keep track of these green building regulations in order to ensure compliance.  Why not just build green and avoid the hassle?  

There you have it.  Five reasons to build green, including one reason why you will have to build green.  You’re convinced now, right?

Related Links: 

• Distinguish Your Existing Green Building (GBLU)
• Need Green? Build Green? (GBLU)
• The State of Green Building (GBLU)
• Your Customer Expects Green (GBLU)

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While I was at GreenBuild, I became motivated to think about reasons to build green despite the slumping economy. While Green Building Law Update has been critical of some green building trends and focused on the potential risks associated with this type of construction, there are many reasons to undertake green building projects now. 

Green Building Law Update decided to compile the top five reasons to build green despite the current recession. Lets look back at some of the reasons we have reviewed:

1. Improved financing opportunities
2. Build to the state of art
3. Distinguish your project from traditional construction

The next reason to build green is blunt – because your customers are demanding green projects! Don’t believe me? Do you believe 400 commercial real estate executives?

Commercial real estate executives are increasingly seeking greener office space -- and are less inclined to pay premiums for it, according to a recent survey by CoreNet Global and Jones Lang LaSalle.

 

"They are less willing to pay a premium for sustainable space because they understand that is doesn't cost the owner more to make that space efficient," said JLL Senior Vice President Michael Jordan.

The study found that 69 percent of real estate executives embrace sustainability, up from 47 percent in 2007. 

If Michael Jordan supports green building, shouldn’t you? 

Related Links: 

• Cost-Savvy Execs Expect Greener Buildings Without Big Price Tags (GreenerBuildings)
• Distinguish Your Existing Green Building (GBLU)
• Need Green? Build Green? (GBLU)
• The State of Green Building (GBLU)

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In two previous posts prior to Greenbuild, Green Building Law Update focused on reasons to build green in the slumping economy.  Continuing that theme, here’s another example of how green buildings help parties distinguish their projects as demand for new construction decreases:

 “LEED for Existing Building helps owners compete in tough market”

You may know that the USGBC has several different green building rating systems, one of which is LEED for Existing Buildings.  Instead of building a new shell or changing the exterior or interior structure, LEED for Existing Buildings deals primarily with changes to a building’s operations and management systems.
 
How can you use LEED for Existing Buildings to distinguish your green building project?

“LEED for Existing Buildings can help differentiate a building owner in an existing building market and allow them to stay competitive with new building stock,” says Barbara Ciesla, co-leader of the sustainable design group of HOK Canada’s Toronto office.

I hope you see the opportunities created through green building projects, despite the current recession.  You can increase your likelihood of obtaining scarce financing.  You can build for the future state of art.  Most importantly, you can distinguish your project from the surplus of available space.

Related Links: 

• LEED for Existing Buildings Helps Owners Compete in Tough Market (Daily Commercial News)
• LEED-EB Helps Owners Compete In Tough Market (HOK)
• Need Green, Build Green (GBLU)
• The State of Green (GBLU)

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For Thanksgiving, I returned to my original home, Kansas, fully expecting to take a break from green building.  Turns out, green building was waiting for me in Kansas as well. 

America can learn a lesson from the recovery of Greensburg, Kan., and two men from Lawrence plan a cross-country tour to spread the town’s “green” gospel.

“I look at Greensburg as a sort of experiment for the entire country,” Fraga said. “It can be a template for all of rural America, proof that these little towns don’t just have to fade away.”

• Staley High School: Certified for More Than Teaching (Matter Network)
• Pair to preach Greensburg’s revival on U.S. tour (KC Star)
• There's No Place Like a Green Home (GBLU)

Photo Credit: Hometown Invasion Tour

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Thanks to all of the Green Building Law Update readers that attended Rutherfoord’s symposium, “Green Building: Opportunity or Legal Quagmire.”  I went to bed last night without a voice, but thankfully, the laryngitis let up and we were able to discuss green building litigation issues. 

If you are interested in having me speak on green building legal issues with your company or organization, please email me at chris@greenbuildinglawupdate.com or call me at (703) 749-1056. 

So what did you think of the presentation?  Any outstanding issues that you didn't ask?  

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 Continuing our posts from GreenBuild, our next two posts will discuss two very different green building regulatory enforcement mechanisms from two very different cities.  The first city, Portland, has created a very innovative enforcement mechanism to enforce its stringent green building regulations. 

Portland is very similar to other cities in that they will require specific project to achieve varying LEED certification levels.  Portland's enforcement mechanism, however, is much different.  Called a "Feebate," Portland will require that some projects pay into a green building fund while other projects obtain rebates from the city.

Under the Feebate system, all new buildings built to code are assessed a fee.  If a project is built to LEED Silver, then the fee is waived and the owner obtains access to financing options.  Even better, if a project attains LEED Gold, the city writes the project owner a check! 

All money that is paid into the green building fund is used either for the incentives or to educate about green building.

Pretty neat, don't you think?  After the Holidays, Portland is coming out with its economic analysis of the plan, and I am looking forward to reviewing it with you. 

Photo Credit:  Scott_rtw

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One of the most significant announcements coming out of GreenBuild was the unveiling of the revamped LEED Accredited Professional (AP) program.  Or should I say, programs?

There will now be four levels of LEED accreditation:  

(1)    LEED Green Associate
(2)    LEED Accredited Professional
(3)    LEED AP Fellow; and
(4)    Legacy LEED AP

Additionally, a timeline for the new programs was graciously provided to me by Elaine Hsieh of KEMA Services, Inc., which is available here.  Elaine has indicated that you can contact her directly if you have questions about the program as she sits on the USGBC Steering Committee: elaine.hsieh@kema.com

While the Green Building Certification Institute (GBCI), which administers the LEED AP exam, does not reference a final date for the current LEED AP exam, I did see the following at Real Life LEED:

Aside from the times listed below, I have it on good (but not rock solid) authority that the last day to register for the current LEED-NCv2.2 and LEED-CIv2.0 exams is going to be March 31st, with GBCI to cutoff administering exams sometime around June. This should give you plenty of time to study, take, and pass the current exams should you so choose, but you don't have much time to wait!

Next week, I, along with some other bloggers, will elaborate on what the new LEED AP program means.  Thanks for reading Green Building Law Update, which will be on hiatus until Monday, and have a wonderful Thanksgiving!  

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While at GreenBuild, I had the pleasure of listening to Jeff Harris of the Alliance to Save Energy speak about the Presidential Climate Action Project.  Two of the points raised by Jeff really got me thinking and I want to share these ideas with you.

During his presentation, Jeff stated that the U.S. government is the largest user of energy in the world.  As a result, the U.S. government should lead the green building movement.  

Green Building Law Update agrees with Jeff.  While it may not be appropriate for cities and states to mandate LEED certification, governments that require green building strategies for public projects are creating two benefits.  First, the government is creating a market for green building products and players.  Additionally, the public projects that incorporate green building strategies will educate the public. 

Jeff also presented a model for the implementation of green building codes that seems very workable:

(1) Create incentives to incorporate green building strategies;

(2) Train individuals about green building; and

(3) Obtain market recognition of green building strategies. 

Green Building Law Update will be elaborating on these ideas in the future. Check back as we discuss other programs and ideas that were discussed at GreenBuild. 

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In previous posts, Green Building Law Update pointed to anecdotal evidence that financing difficulties were affecting the green building industry.  While there may be specific examples of green building difficulties, the bigger picture does not look as dire. 

According to a recent article, the green building industry is “staying afloat” despite the tight financing market.  More importantly, at least in New York City, incorporation of green building strategies may actually be a prerequisite for obtaining financing: 

Douglas Durst said that in this day and age, all the top tenants demand green projects, a fact the banks know, making financing such projects easier, not harder. With credit so difficult to come by, a few sustainable features or a LEED application may be the deciding factors on that eight-figure loan.

So the state of the art will likely require green building projects and obtaining financing requires green building strategies.  Why are you not in Boston learning about green building?  Want to learn more?  Contact me at chris@greenbuildinglawupdate.com. 

Related Links

• What Recession? (The Architect's Newspaper)
• The State of Green Building (GBLU)

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Come hear construction, design and surety experts speak about emerging green building litigation and risks:

Green Building:  Opportunity or Legal Quagmire?

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In anticipation of GreenBuild, Green Building Law Update is going to step back and ask: what is the state of green building? 

These are definitely interesting times for the green building industry.  On the one hand, as I have highlighted, green building projects may have to be shelved due to the tight lending market.  But making conclusions based on a snapshot of the current green building industry is short-sighted.  Prior to the economic crisis, we were in the middle of a “green revolution” and the revolution will continue when we emerge from the slumping economy. 

I am not the only one voicing these long-term positive expectations for green building: 

"The state of the art will be green," said Block, partner at Tannenbaum Helpern Syracuse & Hirschtritt LLP. "There’s no question about that." Block pointed out that as part of their more stringent standards, lenders will insist on the-state-of-the-art when it comes to financing new construction. Moreover, government is leading the way in mandating green standards, he added.

If the state of the art is going to be green, maybe it’s time you learn about green building.  Stick with Green Building Law Update and we will lead you through the “green revolution.” 

Related Links

• Panel: Green Revolution Is Already Here (GlobeSt.com)
• The Google Delays Green Building Project (GBLU)

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Come hear construction, design and surety experts speak about emerging green building litigation and risks:

Green Building:  Opportunity or Legal Quagmire? 

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As you may know, this week is the United States Green Building Council’s national event, GreenBuild, in Boston: 

USGBC's Greenbuild conference and expo is an unparalleled opportunity to connect with other green building peers, industry experts, and influential leaders as they share insights on the green building movement and its diverse specialties.

This year’s theme is "Revolutionary Green: Innovations for Global Sustainability” and Archbishop Desmond Tutu will be the keynote speaker.  I am very excited to attend, and, in particular, hear about green building regulatory schemes.  I wonder if others will argue that LEED certification should not be mandated through government regulations? 

If you are going to be at GreenBuild and you would like to meet up, please send me an email (chris@greenbuildinglawupdate.com) or leave a comment below.  It would be great to meet some of my readers!

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Come hear construction, design and surety experts speak about emerging green building litigation and risks:

Green Building:  Opportunity or Legal Quagmire? 
 

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Sorry, I won't be answering this rhetorical question today.  Instead, a group of construction, design and surety legal experts will attempt to address this difficult question at an upcoming symposium: 

What:  Trends in Green Building Seminar

Who:  Tom Mawson - The USGBC and Trends in Green Building; Chris Cheatham - The Emergence of Green Building Litigation; Bryan Phillips - Green Construction: A Legal Perspective, Dan Knise - Designing Green - With Reward Comes Risk, Geoff Delisio - A Surety Perspective on Green Building

When: Tuesday, December 2, 2008  9:00 - 12:00 AM

Where:  4301 Wilson Boulevard, Arlington, VA 22203

You can also download a complete invitation here. 

I will be speaking about the emergence of green building litigation with a focus on the Shaw Development v. Southern Builders case.  Other speakers will address green building issues from a construction, design and surety perspective.  Seating is limited so please RSVP by November 21 to Nancy Shipley at nancy.shipley@rutherfoord.com. 

Let me know if you have any questions regarding the event.  If you are going to attend let me know (chris@greenbuildinglawupdate.com) -- I would love to meet some of my readers!  
 

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During my speaking engagements regarding green building legal issues, I have noticed that the same questions keep coming up.  I thought I would begin to answer some of these questions for Green Building Law Update readers that have the similar questions.

Question:  When should I take the LEED Accredited Professional (AP) examination? 

This is a tricky question.  You may or may not know that the current version of the LEED rating system is Version 2.2.  In 2009, the USGBC is releasing a new version of the LEED rating system, version 3.0.  What does this have to do with the LEED AP exam?  The LEED AP exam primarily tests your knowledge of the LEED rating system.  When a new rating system is implemented, a new version of the LEED AP exam must be created. 

When the Green Building Certification Institute (the entity responsible for administering the LEED AP exam) creates the LEED AP exam for version 3.0, the exam will likely be more difficult.  According to Professional Publications Inc., "the LEED 2009 exams will be more difficult than the current versions with an expected pass rate of only 20%, compared to 34% for the current exams."  Furthermore, Professional Publications Inc. states that "the GBCI will stop administering the current LEED exams in late December, and availability of the LEED 2009 exams has not yet been announced." 

In short, you are best served to take the LEED AP exam before 2009.  

Have questions for Green Building Law Update?  Send your questions to chris@greenbuildinglawupdate.com or post them in the comments section below. 

UPDATE:  GreenBuild Recap Part II: New LEED AP Program Announced

Related Links

• What is a LEED AP?  (GBCI)
• LEED Version 3.0 Aims to Respond to Market’s Needs (FacilitiesNet)
• FAQs About the LEED Professional Accreditation Exams (PPI)

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Here at Green Building Law Update, we remain troubled by the disbanding of the proposed ASHRAE 189.1 green building code committee, but we have to point out one bright spot. 

As you may recall, last week we  discussed the merits of the “Proposed Standard 189: Standard for the Design of High-Performance Green Buildings Except Low-Rise Residential Buildings" and the disbanding of a committee that was to create the code, apparently due to pressures from industry groups.   After the committe was dissolved,  the USGBC voiced strong support for the green buiding code: 

Brendan Owens, vice president for LEED Technical Development at USGBC, told EBN that it was “very surprised at this action taken by ASHRAE,” adding that USGBC is trying to learn more about ASHRAE’s reasons.

 

“We want to make sure that this is the best path forward,” Owens said. Acknowledging the uncertainty about Standard 189, Owens noted that a minimum green building standard that can be incorporated into codes is “so fundamental to everything USGBC is about, we are very committed to making sure it happens.”

• Uncertain Future for ASHRAE Standard 189 (BuildingGreen)
• Industries Halt Proposed Green Code (GBLU)

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As the economy continues to stumble along, the effects on the green building industry are starting to emerge.  Green Building Law Update previously predicted that LEED certification would find itself on the chopping block and specific examples were discussed.  Now, via Jetson Green, an even more stark example has emerged: 

Google Puts Plans for Beyond LEED Platinum Offices On Hold

Dave Radcliffe, Google's vice president of real estate, said the project didn't make financial sense at the moment, even though the company reported unexpectedly high profits this quarter.

"We're focused on making the most efficient use of the space we have," he wrote, "and new construction at the site doesn't currently make the most economic sense."

"I don't think it's going to cost any more than it would to do a Class A style building for Google," Farrell said. "It's certainly going to cost less in the long run -- 10 to 20 years."

• Cutting Edge LEED on the Chopping Block? (GBLU)
• Projects Cut Out LEED Certification (GBLU)
• Google Puts Plans for Beyond LEED Platinum Offices on Hold (Jetson Green)
• Google's 'extraordinary' building (Mountain View Voice)
• Go Green or Die Not Trying (GBLU)

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Last week, Green Building Law Update questioned whether governments should be requiring LEED certification through regulations and mandates.  Assuming governments should get out of the green building certification business, what then should governments do to support green construction strategies?  There are generally two options, one of which we will discuss today:  green building codes. 

Green building codes essentially incorporate green building strategies into construction codes.  By incorporating green building strategies into code, governments can not only mandate the strategies they deem most important but also avoid the costly and time-consuming certification process. 

Apparently, not everyone agrees with me.  Shari Shapiro first brought my attention to the fact that the committee constituting the “Proposed Standard 189: Standard for the Design of High-Performance Green Buildings Except Low-Rise Residential Buildings” recently disbanded.  Proposed Standard 189-P was supposed to serve as a minimum green building code. 

A committee composed of members from ASHRAE, the USGBC and the Illuminating Engineering Society of North America (IES) had been put together in 2006 to work on the standard.  But on October 14, 2008, the committee was suddenly disbanded and the reasons remain unclear:   

Several committee members discussed the move with EBN, all of them speaking off the record, either because they were unauthorized to speak by the organizations they work for, or did not want to jeopardize their chances to rejoin the committee.

Discussing resistance from various industry groups, including steel, gas and utilities, wood, and building owner interests, one committee member said, “We must have been doing a good job.” While those trade associations had specific complaints in some cases, in others they were unsupportive of ASHRAE’s involvement, as a mechanical engineering association, in a broad green building standard.

There are many nuances to creating a green building code, which we will discuss in future posts.  Managing all of the associated parties' interests is one clear impediment to proposed green building codes. 

Related Links: 

• A Week of Epiphanies:  I Don't Mean to Diminish This But . . . (GBLU)
• The Death of ASHRAE 189? (Green Building Law)
• Uncertain Future for ASHRAE Standard 189 (BuildingGreen)

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On Tuesday, hopefully you are planning on exercising your civic duty to vote.  Here at Green Building Law Update, we try to remain non-partisan but we could not ignore this monumental election.  Thankfully, though, the candidates have made it easy for us.  Did you know that a vote for either Barack Obama or John McCain will be a vote for green building? 

It's true.  While the two candidates may hold substantially different opinions on other issues, both hold similar positions on green building energy efficiency standards:

"There really is a lot more alignment between the two platforms than folks may at first expect," says Jason Hartke, director of advocacy and public policy for the U.S. Green Building Council (USGBC). "They both do a very good job of emphasizing energy efficiency in their platforms."

• Obama and McCain both support increased energy efficiency standards. 

• Obama and McCain both want to "green" the federal government by applying a higher efficiency standard to government buildings. 

• Obama and McCain both believe that global warming is real and that a cap-and-trade program should be instituted. 

• Obama, McCain on Energy and the Environment (ecohome)
• Obama v. McCain -- No Real Contest on The Environment (Green Building Law)

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The final Green Building Law Update epiphany for the week will come in the form of a headline I came across this past weekend:  

In the LEED:  Green certification will be the norm in a few years

Last week, Green Building Law Update focused on how the economic downturn may result in a slowdown of green building developments.  On Wednesday, we discussed how government projects should consider foregoing the green building certification process due to certification costs.  But the exact opposite is true of private developments.  Private developments should continue to seek green building certification primarily because “green certification will be the norm in a few years.” 

Why does this matter?  Well, why would you build a project now that you know will be outdated in a few years?  Others are also recognizing this factor in their green building efforts:

“I think that over time, cities will start to adopt some of the LEED standards into building codes,” CEO Bill Cawley said. “It will cease to become something that sets companies apart and start to become standard – I would think in the next five, maybe seven years.” 

Mr. Cawley also brings up another great point that relates to Wednesday’s post:  government’s should adopt LEED standards into building codes.  But that is a topic for another post. 

Are there better reasons for continuing to pursue private project green building certification in a struggling economy? 

Related Links: 

• In the LEED: Green certification will be the norm in a few years (Fort Worth Business Press)
• Projects Cut Out LEED Certification (GBLU)
• Cutting Edge LEED on the Chopping Block? (GBLU)
• A Week of Epiphanies: I Don't Mean to Diminish This But . . . (GBLU)

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In continuing our week of epiphanies, here’s another one that struck us here at Green Building Law Update:  should governments consider getting out of the green building certification process? 

Yes, I realize this epiphany is out there and that practically every state has implemented some sort of green building regulation.  Over the past few months, we have profiled green building regulations in D.C., Virginia, Indiana and Maryland, to name a few.  But the more I think about these regulations, the more I become concerned that governments should not mandate certification, particularly of public projects.

Apparently, I am not the only one with these concerns.  For example, this article cites an Evanston, Illinois official that is concerned with certification cost:

At the meeting, Evanston residents spoke about the Green Building Ordinance, which was drafted by the Evanston Environment Board. . . .  Ald. Lionel Jean-Baptiste (2nd) cited the need to look closer at the cost of the ordinance.

"It's difficult in this current economic climate for anyone to build," he said. "We need to look more into the cost, and have greater discussion at the committee level." 

And here is another example, this time a LaCrosse, Wisconsin official voicing concern over the costs for green building certification:

“When I think about all this discussion about certification and not certification, I think we’re going to do all this good stuff so let’s just declare it a green building and go home,” Supervisor John Medinger said during the Law Enforcement Center Construction Committee meeting this week. “We say it’s a green building. Who says it isn’t? I don’t mean to diminish this, but I’m trying to see what we’re going to get with this $161,000.”

With the state facing a $3 billion shortfall, Medinger said the county will take a hit and can’t afford to spend money that brings no return.

These officials represent a minority view that government’s should not mandate green building certification due to the associated costs.  But Mr. Medinger drives home the point:  what are governments getting out of certification? 

Green building certification is primarily a marketing tool used to sell a building.  Green building strategies can most definitely be incorporated without obtaining certification and the results can still be confirmed through commissioning.  What benefits are cities and states getting when their public buildings are deemed certified?

Related links: 

• Cost concerns may clash with green ordinance draft (Daily Northwestern)
• Several commissioners object to price tag for LEED certification (LaCrosse Tribune)
  
• Can state budgets support green building? (GBLU)

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Over the weekend, we here at Green Building Law Update had some green building epiphanies.  So let’s start with epiphany number one.  As I was driving into my law firm’s office in Tyson’s Corner on Saturday, I looked out at the construction and thought to myself, why am I not writing about that? 

This isn’t any regular construction I am referring to either.  The construction I see everyday is the beginning stages of the Tyson’s Land Use Task Force Recommendations.  While I have been perusing the Internet for green building stories, there is a green building story happening in my backyard! 

The first time I read about the Tyson’s Corner redevelopment project was in this post  from Kaid Benfield’s NRDC blog.  Kaid describes the current design of Tyson’s Corner:

an absolute mess of a place that would be hard-pressed to function worse environmentally or even as a place to navigate in a car.  You'd have to be suicidal to try it on foot. 

Kaid is right – I have worked in Tyson’s for three years and walked to lunch once.  Thankfully, the Tyson’s Land Use Task Force Recommendations are aiming to fix these problems by focusing on “smart growth.”  Smart growth generally is an urban planning and transportation theory that concentrates growth in the center of a city to avoid urban sprawl.  

Maybe you are wondering, what does this have to do with green building?  Next time we discuss the Tyson’s Corner redevelopment, we will look at the Task Force Recommendations, which include green building regulations.  

Related Links

• Retrofitting suburbia for the 21st century (Kaid Benfield)
• Smart Growth (Wikipedia)

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Today we are going to take a hiatus from the discussions of green building in the current financial markets and, instead, wrap up what potentially could have been major green building litigation.  On October 17, 2008, the Lerner family and the D.C. Government resolved litigation stemming from the LEED-Silver certified Washington Nationals Stadium. 

In previous Green Building Law Update posts, we focused on the stadium's certification and discussed the “green” stadium scoreboard that incorporated “high-definition LED technology that the Lerner family paid to have upgraded beyond the basic specifications called for in the ballpark's design.”  During negotiations over the protracted stadium dispute, it came out that Lerner representatives were unhappy, in part, about the lighting on the scoreboard that they paid for through an apparent change order.

Based on the published Settlement Agreement, the dispute over the LED-lit scoreboard remained a sticking point throughout the negotiations.  On page 1 of the Settlement Agreement, the Lerner Family agreed to withdraw and irrevocably waive “its demands for credits . . . for disputed scoreboard change orders.”  What were the final results of the negotiations?  The City will pay the Nationals $4 million to resolve the disputes and, in return, “the team will pay $3.5 million in rent that was due to the city last spring.”

With this settlement, the green building industry dodges what would have been the most substantial green building litigation to date.  But the day is coming.  Are you convinced that you need to have a rock solid green building contract?

Related Links

• Washington Nationals to pay overdue rent (BizJournal)
• Giving you the Score, Plus a Whole Lot More (Wash. Post) 
• Litigation Involving "Green" Nationals Stadium (GBLU)
• Stadium LED Lights Strike Out? (GBLU)
• Giving You the Score and A Whole Lot More (Wash. Post)
• Nationals Park Revenue Falls Short of the Mark (Wash. Post)
• Some Council Members Criticize Nats Settlement (Wash. Post)

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As part of our review of the economic downturn's effect on green building, on Monday we looked at private projects that have cut LEED certification due to associated costs.  Today, we move from private projects to public projects.  Despite this shift, the theme is the same:  the economic downturn will result in less public projects pursuing LEED certification.  Want proof?  In the same Gazette.Net article cited to on Monday, one Maryland public project has already abandoned LEED certification:

A Frederick County Public School project, the Earth and Space Science Lab at Lincoln Elementary in Frederick, also had registered for LEED certification. Directors withdrew from the process in the spring, realizing it could not meet the standards without incurring additional costs.

Gov. Martin O'Malley directed state agencies yesterday to look for budget cuts of up to 5 percent that could include layoffs or unpaid furloughs for state employees, as he seeks savings in this year's budget and prepares a spending plan for next year.  An economic downturn has cut tax collections, so O'Malley must make cuts for the fiscal year that began in July to keep the $14 billion operating budget in balance, as required by law.

One area where state agencies may seek budget cuts is through green building programs.  For example, the Maryland Green Buildings Tax Credit (you may remember this from the Shaw Development case) has yet to be renewed in 2008 and it seems unlikely to be renewed in the face of the state's huge deficit.  Additionally, Governor Martin O'Malley signed Maryland's High Performance Buidings Act on April 24, 2008, which requires construction or major renovation of public projects to achieve green building certification through LEED, Green Globes or an equivalent green building system unless a waiver is obtained.  If agencies are asked to cut 5 percent from their budgets, it's not a stretch to imagine agencies using  waivers to eliminate green building certification and the associated costs. 

Obviously, Maryland is not the only state with a major deficit that has now been hit by the economic downturn.  It will be interesting to see Maryland and other states manage the green building certification process in face of state deficits. 

Related Links: 

• Developers Cede LEED Label for Savings (Gazette.Net)
  
• State Budget Troubles Worsen (Center on Budget)
• O'Malley Calls for 5% Cuts in State Agencies' Budgets (Baltimore Sun)
• Maryland Green Buildings Tax Credit (Maryland Govt.)
• Maryland's High Performance Buildings Act (Maryland Govt.)

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Previously, Green Building Law Update wrote that the struggling financial sector may impact the number of projects seeking LEED certification. This past weekend, an article highlighting this point came across my desk that I had to share. Gazette.Net profiled numerous green building projects in Maryland that, despite initially incorporating numerous green building strategies, will not seek LEED certification:

Despite its bevy of energy-saving features, local construction material and preferred parking for hybrid vehicles, the latest office building by Matan Cos. of Frederick isn't receiving the green imprimatur of the U.S. Green Building Council.
 

Matan's RiversideFive office building — a 126,151-square-foot, four-story structure near the Monocacy River — meets the council's criteria for its Leadership in Energy and Environmental Design, or LEED, certification. But Matan is waiting until a tenant requests a LEED-certified building to actually complete the certification process, which can cost up to $2,250.
 

Matan Cos. went on to claim that LEED certification was not pursued because of owners “conscientious of savings.”  The article also highlights another development project that initially sought LEED certification and then abandoned green building strategies:

BP Solar, which is expanding its Frederick headquarters, originally sought LEED certification with a planned green roof, solar panels and energy-efficient design. Plans for going green changed when BP announced it would not complete the $97 million project to expand its manufacturing capacity, but finish only the $30 million addition for office space.
 

Photo Credit:  Matan Cos.

Related links: 

Developers cede LEED label for savings (Gazette.Net)

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Green Building Law Update would be remiss if it did not comment on the recent financial struggles and the impact these events will have on the green building industry. Simply put, here at GBLU, we anticipate scaled back green building efforts as developers struggle to obtain financing.

A recent article in Globe and Mail (Canada’s National Newspaper!) does a great job highlighting the recent financing struggle for project development. The article focuses on a major condominium project in Canada and the developer’s struggle to obtain financing:

Just eight months after frenzied buyers lined up for days to buy units of the $450-million luxury skyscraper to be erected at the corner of Yonge and Bloor Streets, the global credit and U.S. subprime mortgage crises tightened their grip . . . .

Mr. Gold moved a few months ago to seek out new financing partners. Conditions are getting tougher, but the location and quality of the project helped him sign on two European pension funds, Mr. Gold said.

While this developer was able to find new sources of financing, the article points out that “it’s the marginal projects that could get hurt.” Additionally, as financing becomes harder to come by, developers may be forced to “scale back their projects.”  While Mr. Gold’s project apparently is not seeking LEED certification, if Mr. Gold had been forced to scale back the project due to a lack of financing, LEED certification may have been on the chopping block. Unfortunately, as developers fail to obtain financing, green building certification may be one of the first components of construction projects to be eliminated.

Do you agree or disagree?

Related links: 

• Kazakh company erecting 'bold' tower at Yonge-Bloor (cbcnews.ca)
• Developers struggle to secure financing (Globe and Mail)
• Architects Hit Hard by Financial Crisis (Architectural Record)
• ‘A good time to build unless you have to borrow’ (Char. Business Journal)

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A few weeks ago, I had the pleasure of serving as a Judge for the AGC of DC’s Washington Contractor Awards. One of the awards passed out was for the most Sustainable Company. Until I reviewed the applications, I had no idea the extent of sustainability programs being undertaken by green building contractors.

A recent news item further highlights sustainable efforts being undertaken by contractors. Last week, Turner Construction announced that it has made a commitment to reduce the company’s carbon emissions by five percent over the next five years. In order to reduce carbon emissions, Turner plans on reducing electricity consumption in offices and reducing fuel consumption in company-owned and leased vehicles. In addition, Turner has an extensive resume as a green building contractor and sustainable company:

• Completed 40 LEED certified projects and working on 65 LEED registered projects

• Doubled number of LEED Accredited Professionals to 260 Implemented policy to divert construction waste on all projects

So why do I keep going on and on about Turner’s sustainability efforts? If you are a contractor diving into the green building industry, it is important that your company incorporate sustainable business practices as well. Otherwise, you could be accused of “greenwashing” and receive bad press:

"Greenwash is when somebody says that, 'Oh, we have the greenest building in town,' and they do not have the metrics to show that they've done something," he said. "We've coined it from 'whitewash.' " 

Turner Construction is a great example of a green building contractor that has also “walked the walk” and incorporated sustainable business practices. What are you doing to include sustainable business practices into your company?

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To finish off the week at Green Building Law Update, we are going to attempt to answer another reader question with the help of all the readers out there. In a previous post, Anna MacLeod posted the following question: 

I need to find some DC-based architect, commercial building development companies, etc… Anyone who would be affected by the requirement described in the article below.

"Washington, D.C., was among the early cities to require privately owned buildings to meet LEED standards. Now, it is requiring the city government as well as private building owners to benchmark their buildings using the Energy Star Portfolio Manager tool and to submit performance data to the City, which will then publish it for the public.'

If anyone can help me by sending me any contacts or websites it would mean a lot to me.

I am glad Anna asked about this issue because I have been meaning to post on this topic. Back on July 15, 2008, the D.C. City Council unanimously passed The Clean and Affordable Energy Act of 2008.  Among the provisions in the Act is a requirement for Energy Star benchmarking:

Beginning in 2010, it would require commercial property owners to generate an Energy Star efficiency "score" for their buildings using free online tools provided by the Energy Star program. That score would be made available to the public by the District Department of the Environment (DDOE).

You may be asking yourself, what is the point of this benchmarking program? According to Cliff Majersik, the program director for the Institute for Market Transformation, the benchmarking program will create “a market-based demand for energy disclosure.” If the D.C. Government’s plan works, there will be increased demand for green buildings. In short, you might want to think twice about developing a non-green building in the District of Columbia. 

So can anyone out there help out Anna? If you are currently using the Energy Star benchmarking tool or The Clean and Affordable Energy Act of 2008 will affect you, please drop a note in the comment section below with more details and contact info for Anna. Thanks!  

Related Links:

• The Clean and Affordable Energy Act of 2008 (DC Council)
• In Washington, DC, Energy Star Benchmarking Law Arrives (CoStar Group)

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Way back on August 13, GBLU’s inaugural post focused on the impending green building litigation and factors that would cause the litigation.  One of the factors that was described focused on parties’ financial expectations:  “Parties undertaking green building projects for purely financial reasons will expect to make a profit.”  In order to make a profit from a green building, the project typically has to be certified.  Thus, it was anticipated that green building litigation would most likely occur when a project failed to achieve certification.  

Not surprisingly, we now have an example of green building litigation arising from this very scenario.  On February 16, 2007, Shaw Development, L.L.C. (Shaw Development) filed a counter-complaint against Southern Builders, Inc. (Southern Builders) in the Circuit Court of Somerset County, Maryland arising from, in part, the projects failure to achieve LEED Silver certification.  While the case never proceeded to trial, Shaw Development’s counter-complaint is instructive as to the future of green building litigation.  Our next three GBLU posts will look at the Shaw Development v. Southern Builders case in detail:  

•    Monday we will review the facts
•    Wednesday we will review the contract
•    Friday we will review the causes of action
•    Next Monday we will review the damages and provide some tips to avoid this type of litigation

The facts are similar to most construction projects.  Prior to the lawsuit, Shaw Development purchased property in Somerset County, Maryland and retained Southern Builders to construct a condominium project on the property.  In the counter-complaint, Shaw Development alleged, among other things, that Southern Builders failed to construct the condominium project in a good and workmanlike fashion and, as a result, the project did not achieve USGBC LEED Silver certification.

The contract between two parties is key to determining liability between two parties undertaking a green building project.  Check back Wednesday when we review the contract between Shaw Development and Southern Builders.  

Related LInks

• The Anatomy of America's First Green Building Litigation (gbNYC)
• The First LEED Lawsuit...Great.... (Real Life LEED)
• Open the Floodgates:  The Era of Green Building Litigation (Greener Buildings)

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On September 15, I had the opportunity to serve as a judge for the Associated General Contractors of DC’s Washington Contractor Awards for green buildings.  Tabbed the “2008 Anti-Boring Event of the Year,” contractors from across the D.C. metro area will gather on October 7 to honor this year’s award recipients.  I reviewed and voted for submissions from three green building categories:

•    Best Sustainable New Construction Project
•    Best Sustainable Design-Build Project
•    Best Company Sustainability Program

I was particularly impressed with the sustainable programs implemented by the nominated contractors. Hopefully we can discuss these programs with some of the nominees in a future GBLU post. 

Both the AGC and the AGC of DC are fantastic resources for contractors looking to learn more about green building construction practices.  For example, in the AGC of DC’s most recent newsletter, two green building training courses hosted by the AGC were highlighted: (1) LEED Estimating & Marketing; and (2) Building to LEED NC for Contractors.  I have attended similar courses hosted by the AGC and can attest to the thoroughness and quality of these programs.   

All of the sustainable submissions were very impressive but you are going to have to attend the AGC of DC’s event to learn the winners.  Tickets are still available!
 

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Over the Labor Day weekend, I had the pleasure of returning to my alma mater and attending the Orange Bowl Champion University of Kansas Jayhawks’ opening game of the college football season.  While I was in Kansas, I remembered one of the more memorable recent green building developments:  after being decimated by a powerful tornado, the small town of Greensburg, Kansas announced it would rebuild the entire town “green.”  

Being from Kansas, it was devastating but not all that surprising to hear a Kansas town had been demolished by a tornado.  More surprising was Greensburg’s ambitious announcement.   Apparently, I wasn’t the only one who was skeptical: 

"There was resistance to change," says Gene West, the county commissioner. "[Greensburg] is a rural area, and a conservative one."

Once the benefits of green building were explained to the Greensburg residents, opinions quickly changed:

"Our old church sometimes cost up to $1,000 a month to heat," says George, who plans to build back his church to the highest green standards. "Now, I'm not a tree-hugger by any means. But we have to be responsible for how we use natural resources, and be prepared for a future where energy costs are only going up."

Greensburg unveiled its first green building, the LEED Platinum 5.4.7 Arts Center (5.4.7 stands for the day the tornado struck), on May 4, 2008, the one year anniversary of the tornado.  Students in Studio 804, part of the University of Kansas School of Architecture and Urban Planning, designed and constructed the building.  Others have taken notice of Greensburg’s remarkable pledge, as Planet Green and Leonardo DiCaprio teamed up to chronicle the rebuilding of a green Greensburg.  

GBLU is currently arranging to speak with members of Studio 84 and hopes to bring you information about the difficulties that arose during the Greensburg project.  Additionally, we are going to look at the Greensburg ordinance that requires green building.  Until then, Rock Chalk Jayhawk! 

Photo credit:  David McKinney / KU University Relations

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In 2007, my firm, Watt Tieder Hoffar & Fitzgerald, was retained to work on what potentially could have been the largest construction case in history: litigation arising from Hurricane Katrina flooding and the New Orleans levee structure. While we never went to trial, as part of our preparations for the case, I found myself in New Orleans walking next to one of the infamous levees. With images of devastated homes in mind, I anxiously watched news of Hurricane Gustav over the Labor Day weekend. Thankfully, it appears New Orleans avoided the brunt of the hurricane. 

As rebuilding efforts have continued in New Orleans, one of the more interesting post-Katrina developments has been the incorporation of green building strategies in the construction of homes and businesses. For example, the Daily Green has reported “a wave of builders are repurposing salvageable materials from the destruction, which is a win-win in terms of reducing costs and cleaning up the enormous mess.” You may have also heard of Brad Pitt’s Make it Right project, which aims to build 150 affordable, environmentally sound houses over the next two years. Just two weeks ago, Pitt toured the first green home built through his project:

The Lower 9th Ward of New Orleans is a little greener, thanks to Brad Pitt. This week, he checked out the progress on the first building in what will be a sustainable, green -- and affordable -- housing complex.

Not only that, it's the first new housing to come to that particular neighborhood since Hurricane Katrina devastated the city in 2005, according to the Times-Picayune.

Now that it appears Hurricane Gustav has skirted New Orleans, rebuilding New Orleans can again be the focus. It will be interesting to see the innovative green building strategies that are incorporated into the city. 

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

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

DDOE District Department of the Environment

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

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

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

Applications are due September 9th.

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

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

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

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

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

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

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