Green Building Law Update

The Intersection of Real Estate, Science, and Law

GSA Building Underperforms

Something very important popped out at me when I re-read the New York Times article about the green buildings not performing as anticipated. The green building highlighted for poor energy performance is a General Services Administration building:

"The building’s cooling system, a major gas guzzler, was one culprit. Another was its design: to get its LEED label, it racked up points for things like native landscaping rather than structural energy-saving features, according to a study by the General Services Administration, which owns the building."

Why would I bring up the New York Times article yet again to point out the GSA’s ownership of the building? The GSA received $4.5 billion from the American Recovery and Reinvestment Act for construction and renovation of federal buildings. The GSA also requires that all new projects be LEED Silver certified, with a preference for LEED Gold certification. That means $4.5 billion is being spent on new GSA projects that could fail in the same manner as the building in the New York Times article. Next week we will look at why design professionals and contractors want to avoid ARRA green building project failures. My colleagues at Crowell & Moring have done a tremendous job analyzing the ARRA, including funding for the investigation of fraud, waste and abuse. Related Links: Some Buildings Not Living Up to Green Label (NYT) GSA’s Green Stimulus Projects (GBLU) GSA: Sustainable Design Program (GBLU)

Photo: wilkins lee

Happy Labor Day

By Chris Cheatham on September 7, 2009 Posted in Events

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 in the USGBC’s suggestion that re-certification will be required in the future.

What do you think?

The Future of LEED: Re-certification

By Chris Cheatham on September 4, 2009 Posted in LEED, Trends

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:

Mr. Horst, the LEED executive, said that LEED may eventually move toward the E.P.A.’s Energy Star model, which attests to energy efficiency only for the year the label was given, similar to restaurant ratings.

“Ultimately, where we want to be is, once you’re performing at a certain level, you continue to be recertified,” Mr. Horst said.

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 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.

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

New York Times, USGBC Address LEED Performance Gap

By Chris Cheatham on September 2, 2009 Posted in LEED, Legal Developments

You may have recently read the New York Times article about the gap between LEED building designs and actual energy performance. If not, I would recommend reading the article. You may have also noticed a reference to "construction lawyers":

"Already, some construction lawyers have said that owners might face additional risk of lawsuits if buildings are found to under-perform."

In May 2009, I spoke with Ms. Navarro about legal issues that could arise from under-performing green buildings. I told her that under-performing green buildings might result in unhappy owners when energy performance promises were not met. Even worse, owners might interpret a green building energy performance design as a promise and be disappointed when actual performance does not match. Finally, I pointed Ms. Navarro to Malcolm Lewis of CTG Energetics, who actually corrects energy performance gaps that occur in new buildings.

A lot has happened since my conversation with Ms. Navarro. The USGBC has taken big steps to address the energy performance gap, which the article covers. Remember when we discussed the USGBC’s new requirement for reporting of energy data from LEED buildings? Remember how the USGBC threatened to de-certify buildings that do not report energy savings? These actions mean the USGBC is addressing the energy performance gap head on.

Want more proof of how seriously the USGBC is taking this issue? This is from a June 2009 press release from the USGBC:

The U.S. Green Building Council announced this week that Christopher Pyke, Ph. D. has been appointed Research Director. Dr. Pyke joins USGBC from CTG Energetics in Irvine, Calif., where he was National Director of Climate Change Services. He brings a strong background of leadership in green building research to USGBC, underscoring its commitment to raising the bar on research related to green building science and technology, including the performance of LEED-certified buildings. This research will be vital to the ongoing development of the LEED green building certification program.

CTG Energetics is one of the leading building energy performance companies. In hiring Dr. Pyke, the USGBC is investing significant resources into researching energy performance.

Of course, this is all old news. Friday we will discuss new information revealed by the USGBC’s Scot Horst that has enormous ramifications for LEED.

Photo: Geoff Livingston

Links:

Some Buildings Not Living Up to Green Label (NYT)

Malcolm Lewis (CTG)

How I Learned to Stop Worrying and Love LEED De-Certificaiton (GBLU)

This Post is Really Important and Is Not For the Faint of Heart (GBLU)

Green Building Law Update Gets a New Home

By Chris Cheatham on August 31, 2009 Posted in Green Building Introduction, Legal Developments

Today, I am starting work at a new law firm: Crowell & Moring. I am excited and I think you will see why with a single story.

My last day at my previous law firm was August 19. What did I do on my first day off? Sadly, I wrote blog posts. I have to keep all of you happy! As I was reviewing clipped articles for story ideas, I came across the following:

Green Building Construction: Rewards, Rules and Risks

Increasing public awareness and government attention has jumpstarted market demand for environmentally-friendly or “green” building designs, construction practices and final products. Green building construction is the wave of the future and is inevitable for any company constructing in America. However, the possibility for liability is huge, which makes it vitally important to think-out projects from contracting, through construction, until the desired certification level has been achieved. This session will inform contractors and owners of the best way to situate themselves now to mitigate the inevitable litigation fall-out.

Moderator:
Randy Erickson, Administrative Partner and Construction Practice Group Co-Chair, Crowell & Moring LLP

Panelists:
Deborah Arbabi, Counsel, Crowell & Moring LLP
Rosemary Carson, Associate, Crowell & Moring LLP
Bernadette Stafford, Associate, Crowell & Moring LLP

Sponsor: Crowell & Moring LLP

Incredible! My first day off, and I am already reading about my new firm’s involvement with green building law. Fantastic.

If you are going to be at the Construction Superconference in December, I would highly recommend dropping in on this session. Say hello to my firm’s attorneys. We would love to hear from you. I would love to hear from you. In fact, here is my new contact information:

Chris Cheatham
Crowell & Moring
1001 Pennsylvania Avenue
Washington, D.C. 20004
P – 202.624.2717
ccheatham@crowell.com

Photo: Merrick Brown

You Made Me . . . Promises Promises

By Chris Cheatham on August 28, 2009 Posted in Legal Developments

[I am on vacation this week in Phoenix and then Kansas City so I bring you guest posts and interviews! I met each of the guest authors or interviewees somewhere along the way and asked them to contribute.

When I was in New Orleans for the ABA Forum on Construction event, I met up with former collegue Asha Echeverria, a fellow construction attorney. Asha told me all about green building events in Maine and I asked her to write a guest post. I hope you enjoy!]

By Asha Echeverria

Greetings from the Vacationland State of Maine! With the recent certification of the “first Platinum-certified LEED supermarket in the world” built in Augusta, Maine by Hannaford Supermarkets and the first LEED accredited newly constructed ice arena constructed at Bowdoin College in Brunswick, Maine, I have begun to wonder what would have happened if these celebrated and long awaited projects had failed to achieve LEED certification. These ambitious projects were billed as “seeking LEED certification” long before they achieved LEED certification and though as a lawyer I know the word “seeking” makes all the difference in that claim, such advertisement raises some interesting issues, both legal and otherwise.

First, what, if any, are the legal consequences to an owner if a building fails to receive the desired level of certification from the USGBC? For many owners, there may be little, if any, legal repercussions, but the failure to “live up to the hype” could result in financial losses, loss of good will, and other intangible losses. Failure to achieve certification may result in lost advertising costs, a damaged public image, and a lost opportunity to capitalize on public interest in all things Green. Though Hannaford seems to have accepted that the individual store in Augusta will not be profitable due to high investment costs, the supermarket chain does expect some return through increased good will at that store and at other Hannafords around the Northeast.

Second, what are the consequences to the construction-design team? The answer to this question, as to many questions in the construction industry, is “What do the contracts say?” Unfortunately, we usually never know what construction contracts say unless litigation ensues, but we can discuss some of the issues surrounding the theoretical negotiation, content, and ultimate effects of these contracts. First, do the contracts allocate the risk of achieving certification to the construction-design team or do the contracts simply indicate that the building was “designed” to achieve LEED status? The former protects the owner’s interests discussed above but places the construction-design team in a difficult position to price or insure against a risk that requires the coordinated effort of the entire construction-design team and, even scarier, is predominantly controlled by a third-party, the USGBC. The latter option, just indicating the project is “designed” for certification, places the project on the wrong side of the lessons learned from the Captain’s Galley litigation (See Jan. 14, 2009 Post Shaw Development v. Southern Builders case).

Electrical Contractor Recognizes Green Building Impact

By Chris Cheatham on August 26, 2009 Posted in Construction, Legal Developments

Ben Shultz works at Shultz Brothers Electric Company, an electrical contractor in Kansas City. I also went to high school with Ben and I beat him every year in fantasy football. So when he expressed interest in taking the LEED AP exam, I was intrigued. The following is an interview I did in June with Ben regarding green building. Hope you enjoy.]

1. Your company is an electrical subcontractor and you just became a LEED AP. How do you see green building and LEED certification impacting your business?

There are significant benefits in having a LEED AP electrical contractor involved in all phases of a construction project, but the greatest contributions would be on a design/build project and in the design and budgeting phases of a plan/spec project. In those specific situations our expertise, understanding and application of the LEED rating system into a construction project would be of significant value to all parties involved in a green building project. A few of our customers have already noticed this and have been reaching out to us for thoughts and ideas on upcoming green projects. We anticipate this trend to grow as we are confident that owners and general contractors will see the value in having a LEED AP electrical contractor on their project.

2. What’s the Kansas City construction market like these days? Are you seeing more green building projects?

Right now it’s a tough market; bid lists are long and projects are going for less than we’ve seen in the past. There is still plenty of good work, and we’re encouraged about what we see ahead, but there’s no question it has tightened up.
We have been seeing more green projects, which is encouraging to us because of the long term benefits of having a LEED AP as a resource. Since there is a small premium to pay for a green building, as the economy turns around we expect to see more in the future.

3. As a subcontractor, how would you manage guarantees of LEED certification made to the owner?

That would most likely be determined on a project by project basis. It would depend on our level of involvement and at what stages of the project, what is being asked and expected of us, and what we have committed. Since each trade contributes to certain LEED points, you could only be held accountable for those that you have an influence over and are identified as anticipated points. As there are multiple players involved at multiple stages of a project, this is a gray area that could be a potential issue if not identified and addressed early on.

Demystifying Green Roofs

By Chris Cheatham on August 24, 2009 Posted in Green Building Introduction

[I am on vacation this week in Phoenix and then Kansas City so I bring you GUEST POSTS! I met each of the guest authors somewhere along the way and asked them to contribute. Hope you enjoy.]

By Linda McIntyre

Does the notion of plants on a roof seem bizarre, even dangerous, to you? If so, that’s understandable–there aren’t a lot of green roofs in the US yet. But their numbers are growing, because green roofs–relatively simple installations usually featuring low-growing herbaceous plants, not park-like roof gardens with furniture and trees–can be useful functional tools when properly designed, installed and maintained.

A green roof has a waterproofing membrane like any relatively flat roof. Above the membrane, plants grow in a layer, usually four to six inches deep, of mostly mineral-based medium that looks like gravel, not soil. A drainage layer comprising coarse aggregate or synthetic sheets ensures the system will drain properly after it reaches field capacity, and fabrics are available to protect the membrane from roots if the material isn’t naturally repellent. These layers make up the green roof assembly. Think of a ballasted roof with plants growing among the stones.

Why put a green roof on a building? It can help control stormwater runoff (a big and growing problem in cities), reduce energy costs (especially for air conditioning), and provide amenity space for employees or residents (if a building’s loading capacity allows for such access, a green roof assembly can provide a cost-effective garden). The green roof assembly, when properly designed and installed, protects the membrane, extending the lifespan of the roof. It can earn LEED points and make a building more marketable. If built on a mass scale, green roofs can mitigate the urban heat island effect that makes densely-built cities so uncomfortable in hot weather. A green roof aggregates benefits in a way that other approaches, such as reflective white roofs, which also save energy, can’t. And it will almost certainly look better than a black tar roof.

Maybe you’ve seen a couple of green roofs and been unimpressed. Not every green roof is flamboyantly beautiful, and not every project is successful. There’s no “Consumer Reports” for green roof components, and trial and error is unavoidable with any new technology. Green roofs are common in Europe, but still relatively new here, and we have a more variable climate and a different building culture. Research, project data, and the accumulation of experience are helping to fill knowledge gaps and making it easier to design and install successful green roofs.

A green roof isn’t the right choice for every building. It’s always going to cost more, and installation will always be more complicated. Especially for the first year or two of its life, it will require more maintenance than a conventional roof. But, more and more, it’s a choice worth considering.

Linda McIntyre is a writer specializing in environmental and urban issues. She is working with nurseryman and consultant Ed Snodgrass on a book about designing, installing, and maintaining green roofs, to be published by Timber Press in 2010.

For any help with roofing visit https://www.tatescoating.com.au/products/domestic-solutions/ceiling-and-under-roof-insulation/.

Why Energy Ace’s LEED Guarantee is Brilliant

By Chris Cheatham on August 21, 2009 Posted in Construction, Design, LEED, Legal Developments

When I first read about Energy Ace’s LEED certification guarantee, I thought it was nuts.

Then I read a Co-Star article and realized Energy Ace’s guarantee was brilliant.

When I read a green building regulation, I always look at the enforcement mechanism. And when I look at a green building contract, I always focus on the potential damages. Energy Ace’s LEED certification guarantee is brilliant because it limits potential damages if certification is not achieved:

"If a project misses its LEED target level (like Silver or Gold) or fails to earn certification altogether, Energy Ace would refund its LEED administration fee, which is between 30 percent and 45 percent of its total fees, Robertson said.

Simply brilliant. Energy Ace provides a LEED certification guarantee that reassures owners while simultaneously limiting Energy Ace’s potential damages.

The potential damages stemming from a project’s LEED certification failure are much greater than the limit described by Energy Ace. For example, in Shaw Development v. Southern Builders, the owner sued for $635,000 when the project failed to achieve certification by a certain time. I have never heard of a triple digit LEED administration fee.

Brilliant, right?

By the way, I can help you write a similar contract…

Guaranteeing LEED Certification (CoStar)
Southern Builders v. Shaw Development: Green Building Damages (GBLU)

Photo: ejpphoto

How to Make a Green Building Attorney Queasy

By Chris Cheatham on August 19, 2009 Posted in Construction, Design, Legal Developments

Reminder: Don’t forget to register for Green Building Law Update’s Birthday Happy Hour this Thursday!

Energy Ace Inc., an Atlanta-based sustainability consulting firm, has publicly announced it will guarantee LEED certification for its projects. Of course, there are limitations to the guarantee:

“Energy Ace is guaranteeing LEED™ certification on projects where the firm is able to oversee LEED™ administration, Fundamental Commissioning and Energy Modeling, and where the project team is committed to LEED success.”

Let’s go through those conditions one at a time:

1. “The firm is able to ovesee LEED administration”

Since Energy Ace is a LEED consulting firm, I assume “LEED administration” means overseeing LEED certification paperwork. Energy Ace doesn’t appear to serve any design or construction role. Remember, important decisions are made at both the design and construction stages that impact achieving LEED certification. How can Energy Ace be comfortable that LEED administration is enough?

2. “The firm is able to … oversee Fundamental Commissioning and Energy Modeling.”

This one makes sense. Commissioning and modeling are key components of buildings that eventually achieve LEED certification.

3. “The project team is committed to LEED success.”
As a construction attorney, this sentence makes my stomach roll. Please, seriously, someone explain this to me. How do you define “committed to LEED success”?

Despite all of this, Energy Ace knows what they are doing. Check back on Friday and I will explain why.

Links:

Energy Ace Inc. to Offer the Industry’s First Guarantee for LEED

Photo: misterbisson