Green Building Law Update

The Intersection of Real Estate, Science, and Law

Can You Guarantee LEED Certification?

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

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

This week, we are going to be looking at an issue near and dear to me: guarantees of LEED certification.  Two publications from last week made clear to me the wide variety of views on the issue:

(1) Washington Business Journal’s On Site, "Hot Potato" by Vandana Sinha (print only):

For the most part, these players have come together time and again to score a LEED designation and plaque.  But what happens when one of the parties comes up short, and the project misses its LEED goal?  Who’s at fault?
…

Green building mandates make the question even more important. . . . "As more LEED mandates come out that require certification, this becomes a bigger deal," says Cheatham, a LEED-accredited D.C. construction attorney with Watt, Tieder, Hoffar & Fitzgerald LLP, where his primary job is to worry about risks associated with green building and things like the D.C. performance bond.  "That’s actual cost.  That’s money.  The owner will recognize that risk and more likely want to hold somebody accountable at the end."

(2)  CoStar, "Guaranteeing LEED Certification" by Andrew C. Burr:  

Energy Ace Inc., an Atlanta-based energy services and LEED consulting firm headed by Wayne Robertson, is offering what it calls the industry’s first LEED certification guarantee.

At a time when many cities and states have begun mandating LEED-certified buildings, “We can offer clients a certainty that their project is going to be certified and remove that anxiety,” Robertson said.

…

“One of the senior architects was saying that these mandates are putting us in a position to offer a guarantee, and we can’t do that,” Robertson said. “And I’m thinking, yes we can.”

Who is right?  Is my concern about LEED guarantees warranted?  Or are companies like Energy Ace Inc. able to avoid issues surrounding LEED guarantees?  Are we both right?  

Photo: Wade Roush

District of Weatherization

By Chris Cheatham on Posted in City, Codes and Regulations

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

Sometimes, my fair city of Washington, D.C. can drive me crazy. There is no doubt we have our issues.

But one thing Washington, D.C. has going for it is its push to become more green. D.C. is at the forefront of the green building movement and it is taking full advantage of American Recovery and Reinvestment Act funding:

The District of Columbia will receive $8.1 million in federal funds to support its weatherization programs for low-income residents. The funding is part of a United States Department of Energy grant to the District under the American Reinvestment and Recovery Act. It will allow the District to weatherize an additional 785 homes over the usual workload of about 400 in the same period.

I have received a number of inquiries about the requirements for eligibility under the weatherization program. Here are the income requirements in D.C.:

If you have questions about eligibility for the weatherization program in your region, I would recommend reviewing the website dsireusa.org.

Finally, here is a great video put together by the White House about the D.C. weatherization program. This has me feeling (gulp) hopeful. Watch this and tell me Van Jones is not the coolest environmentalist on the planet.

 

https://youtube.com/watch?v=JMERwl7FuyQ%26hl%3Den%26fs%3D1%26

Links:

District To Weatherize Hundreds of Additional Homes (DDOE)

Database of State Incentives for Renewables & Efficiency (DSIRE)

Green Jobs for a Green Future: Weatherization (YouTube)

GSA Awards Over $1 Billion in Green Stimulus Projects

By Chris Cheatham on Posted in Codes and Regulations, Federal

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

If you are looking for green building projects resulting directly from the American Recovery and Reinvestment Act, then the General Services Administration is the agency for you. The GSA received $5.5 billion to support its High Performance and Sustainable Buildings program. Previously, I had reported that the GSA was requiring LEED certification and preferred LEED silver certification. Turns out, those requirements have changed:

As a means of evaluating and measuring our green building achievements, all GSA new construction projects and substantial renovations must achieve Silver certification through the Leadership in Energy and Environmental Design (LEED®) Green Building Rating System of the U.S. Green Building Council. Projects are encouraged to exceed LEED® Silver and achieve LEED® Gold.

Back in April, we reported on an initial list of ARRA projects published by the GSA. Since then, very little information was available regarding these projects. Bisnow recently reported on the first GSA ARRA project award that I have seen:

[C]ongrats again to sponsor Grunley Construction for landing a renovation contract for the Mary E. Switzer Building at 330 C St., SW. Having completed Phase I in 2008, GSA put Grunley back to work using Recovery Act funding. The project includes: interior construction removal (including Hazmat); a "green roof system"; renovated elevators; and, three 2-story atriums, like the one above. Work is underway, due in July 2011. Designed by HNTB, it’s aiming LEED Silver.

The Grunley-GSA contract is just the tip of the iceberg. ENR recently reviewed tremendous progress made by the GSA in awarding ARRA projects:

After taking about six weeks just to produce its list of stimulus projects, GSA has shifted into overdrive. It has awarded contracts totaling nearly $1.1 billion for projects involving about 120 buildings. Twenty of those projects account for more than $940 million of that total.

Most of those funding commitments came in a burst of awards announced since early July, according to Anthony Costa, acting commissioner of GSA’s Public Buildings Service. “At least 20 of the 120 projects are already under construction,” he told the House Transportation and Infrastructure Committee at a July 31 hearing. “The rest will begin soon.”

Even more GSA recovery-act work is on the way. Costa says the agency plans to award another $1 billion in ARRA contracts by Dec. 31, with the goal of having 91% of the $5.5 billion under contract by Sept. 30, 2010.

Of course, it’s nearly impossible to report on stimulus projects without highlighting the fact that bids are much lower than anticipated. In the case of GSA ARRA projects, bids are coming in 10 to 15 percent below government estimates. I have serious concerns about bids coming in below government estimates, which I will discuss in more detail next week.

Links:

GSA Sustainable Design Program (GSA)

Grunley! (Bisnow)

New GSA Contracts Starting to Surge (ENR)

DOE Stimulus Project Opportunities Are Available

By Chris Cheatham on Posted in Federal

Note:  Don’t forget to register for Green Building Law Update’s Birthday Happy Hour

This week we will be taking a look at green building and renewable energy funding available through the American Recovery and Reinvestment Act. While the opening of the stimulus spigots has been slow, there has been a noticeable uptick in news the last few weeks.

Today we will look at the Department of Energy; Wednesday we will check in on the General Services Administration; and Friday, we are going local to see how Washington D.C. is using weatherization funding.

If you are in the renewable energy sector, you may want to take advantage of a recently announced loan guarantee program made available by the Department of Energy:

The Energy Department is making available $36 billion in loan guarantees for renewable energy projects and for modernizing the electricity grid.The department said Wednesday it will accept applications for the financing support over the next 45 days.

The government-supported loans are expected to help companies involved in solar, wind, biofuels and other renewable energy projects get private financing. It also aims to spur investments in power grid improvements. 

To learn more about the Department of Energy’s loan guarantee program, check out their loan guarantee website.

In addition, other opportunities remain available at the Department of Energy.

DOE’s Energy Efficiency and Renewable Energy Program Office is reporting that of the $16,796,000,000 it was allocated, only $3,534,031,000 has been obligated and $63,362,000 has been spent. Many of the deadlines have already passed for the DOE projects so check in now to see where you can benefit.

Anyone had any luck with DOE stimulus projects?

Links:

Department of Energy Loan Guarantee Program

DOE Makes Available Energy Loan Subsidies

Recovery and Reinvestment at the Department of Energy: Welcome

Recovery and Reinvestment at the Department of Energy: Funding Opportunities

Green Building Law Update: Stimulus

Photo:  rebuildingdemocracy

Shh, Don’t Tell the Blog But Here are the Birthday Party Details

By Chris Cheatham on Posted in Events

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. 

A Green Building Holy Grail: LEED Certification Insurance

By Chris Cheatham on Posted in Insurance, Legal Developments

Over the past week, we have been discussing AIG’s .  I had speculated that this insurance might cover bad press resulting from allegations of greenwashing. 

Turns out, AIG’s insurance product covers more than just bad press. 

Mark Rabkin, my green building insurance guru, located a copy (PDF) of the AIGRMGreen Reputation Coverage.  From my reading of the policy, it would actually cover a green building project that failed to achieve LEED certification.  Come along with me as we read an insurance policy.  Don’t worry, I have only picked out a couple of sections:

So what is considered an "adverse green claim"? 

I have been clamoring for this type of insurance policy for awhile.  I thought it would take much longer to create.  This is an important first step to properly insuring owners, contractors and architects involved with projects seeking LEED certification. 

We will definitely be discussing this policy in more detail.  Take a look at the policy (PDF) if you get a moment.  What do you think? 

Birthday Party for Green Building Law Update

By Chris Cheatham on Posted in Events, Trends

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. 

The Value of Greenwashing Insurance

By Chris Cheatham on Posted in Insurance, LEED

When I read about the AIGRMGreen Reputation Coverage, which covers bad press for green building projects, I immediately thought of allegations of greenwashing. From wikipedia:

Greenwash (a portmanteau of green and whitewash) is a term used to describe the practice of companies disingenuously spinning their products and policies as environmentally friendly, such as by presenting cost cuts as reductions in use of resources. It is a deceptive use of green PR or green marketing.

One particular type of greenwashing involves projects seeking or building to LEED standards. A recent Grist article detailed one instance of alleged greenwashing through the use of LEED:

Take, for instance, the highly controversial parking garage plopped in the middle of Atlanta’s Piedmont Park. Conceived and championed by the Piedmont Park Conservancy and the Atlanta Botanical Garden as a way to raise funds and provide parking space for folks attending the park’s special events (like the upcoming “Green Concert” starring Sir Paul McCartney), this “built to LEED standards” structure has been largely derided by neighborhood groups, including Friends of Piedmont Park (FOPP), as being a decidedly improper use of park space.

“We’re upset about the conversion of more public green space to cement and concrete,” says Jack White, a FOPP board member.

Grist is a very popular environmental website. After this story ran, other websites then picked up the story, resulting in substantial negative publicity for this construction project.

Is this the type of scenario that would be covered by the AIGRM Reputation Coverage? If the Piedmont Park had this coverage, would the Grist article represent a reasonable claim under the policy? And again, how would you measure the associated damages?

What’s A Green Building Reputation Worth?

By Chris Cheatham on Posted in Insurance

How did we all miss this?  While AIG may have had its problems recently, it certainly has created an innovative green building insurance product: 

The company says the casualty coverage for property owners and managers of green buildings consists of two coverages, AIGRMGreen Reputation Coverage and AIGRMGreen Indoor Environment Coverage.

The reputation coverage provides up to $50,000 in coverage, per occurrence, when a green building experiences adverse publicity. It also provides funds to employ crisis management specialists to manage adverse publicity; guide and counsel key company personnel; and provide other services to assist in restoring a company’s reputation.

Did you know you can get insurance to cover you if your green building project goes awry?  Obviously, I would have to read the exclusions (I haven’t), but theoretically I could envision that the AIGRMGreen Reputation Coverage would cover your project if it failed to achieve LEED certification. 

In order to offer particular coverage, an insurance company has to be able to measure the risks and potential damages.  How do you measure the damages from bad publicity resulting from a green building project?

Any AIG readers out there?  I would love to talk to you about this coverage! 

Photo:  happymichaelchung

Reporting Green Jobs is Tricky

By Chris Cheatham on Posted in City, Codes and Regulations, Federal, State

If you are a contractor lucky enough to have won a stimulus project, one of the pesky requirements attached to the project is reporting the number of new jobs created by the project.  Many builders and contractors have been wondering how exactly to do that.  Finally, at long last, the White House has provided clarity: 

”Just count the people being paid out of Recovery Act dollars,” said Rob Nabors, deputy director at the White House budget office.

 

Wait, that didn’t answer all the questions out there.  If someone was already working for you, do they count?  What about subcontractors?  If you receive multiple stimulus contracts and employ the same person for both jobs, is that one job or two?  Maybe there is further clarification:  

”This whole thing is tricky. I’m not going to pretend it’s not,” Nabors said. ”This whole effort is virtually unprecedented.”

Oh, now I get it!

The reporting of ARRA jobs is going to be an extremely confusing and important issue for all parties. Back on June 22, I wrote:  "As we draw closer to the 2010 election cycle, you can bet that politicians who supported the ARRA will be looking to tout green jobs that were created." 

Turns out, the federal government isn’t the only one hoping to tout good job creation numbers:

If the numbers are to be reliable, however, states, cities and contractors must report honestly. White House officials know there are political and financial incentive to cheat: Contractors can use job-creation data as a public relations ploy. Local politicians can turn job numbers into campaign literature. And states that use the money well could be in line to get more of it.   In the absence of these rules, some states have announced jobs based on out-of-date formulas, leading to implausible estimates. Ohio officials, for instance, have estimated that a $20 million bridge construction project will create or save 10,500 jobs.

As funds for green building projects start flowing from the General Services Administration and the Department of Energy, everyone will be paying attention to the number of green jobs created by these agency projects.  If you have to report green jobs, be extra careful that you follow the reporting requirements, whatever those requirements may be.

Photo:  talkradionews

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