Best Practices Construction Law : Construction Lawyer & Attorney : Matthew DeVries : Stites & Harbison Law Firm : Green Building & LEED Litigation

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In June of this year, one of my partners Greg Young and I will be speaking at the AGC Environmental Conference in Washington, DC.  Our panel discussion will focus on the dangerous intersections between construction law and environmental law.  One of those crossroads is the applicability of the Clean Water Act to construction projects.

Yesterday, the United States Supreme Court handed down a unanimous decision in the closely watched case of Sackett v. Environmental Protection Agency. Reversing the courts below, the Supreme Court held the Sacketts have the right to challenge an EPA decision that their property contained wetlands:

“[T]here is no reason to think that the Clean Water Act was uniquely designed to enable the strong-arming of regulated parties into ‘voluntary compliance’ without the opportunity for judicial review—even judicial review of the question whether the regulated party is within the EPA’s jurisdiction. Compliance orders will remain an effective means of securing prompt voluntary compliance in those many cases where there is no substantial basis to question their validity.”

The Clean Water Act does not preclude judicial review under the Administrative Procedures Act (APA) and, thus, the Court remanded the case to allow the Sacketts to bring a civil action under the APA to challenge the issuance of the EPA’s order.

For transportation and other development projects, which frequently have to deal with issues of wetlands jurisdiction, this decision will hopefully lead to a process where EPA jurisdiction can be challenged up front and early in the planning process rather than waiting for the EPA to assert a violation after the fact, as it did with the Sacketts. No doubt, the decision will also have a dramatic impact on EPA's actions to demand administrative compliance.

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According to the U.S. Environmental Protection Agency’s (EPA), healthcare facility owners and organizations spend nearly $8.8 billion on energy each year to meet patient needs.  To improve energy efficiency, thousands of hospitals rely on the EPA's Energy Star tools to help track consumption and prioritize facilities for energy upgrades.

Last week, EPA released an important update to Energy Star's national energy performance scale methodology for hospitals. The updated performance scale will help hospitals better assess their energy performance and make more informed financial and investment decisions in order to cut costs and improve their energy efficiency.

Energy Star's Portfolio Manager, an online energy measurement and tracking tool, will now include the updated hospital methodology. Over 85 percent of the acute care hospital market has already benchmarked their energy use with Portfolio Manager, making it the most widely used tool of its kind in the healthcare market. The update to Portfolio Manager reflects new survey data provided by the American Society for Healthcare Engineering and the significant changes in how hospitals use energy in recent years.

The updated Energy Star national energy performance scale methodology for hospitals now includes data inputs for the number of MRI machines and personnel and adjustments to weather normalization to reflect the amount of energy used to cool the building. Additionally, the methodology’s 5 million square foot size cap was removed, allowing larger hospitals to take advantage of the online tool.

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Earlier this week, I received an alert that "Five AIA Contract Documents are going green!" Developed using AIA’s flagship documents as a base, and incorporating concepts and model language from the AIA’s Guide for Sustainable Projects, the new documents address the unique roles, risks and opportunities encountered on sustainable design and construction projects.

 “The development of these new documents for sustainable projects is a natural next step following the release of the Guide for Sustainable Projects in the spring,” said Ken Cobleigh, Managing Director and Counsel for AIA Contract Documents Content. “We continue to see a demand for incorporating sustainable elements in projects. The AIA Contract Documents program continues to revise existing documents and develop new documents and guides, as necessary, to remain current with trends and changes in the industry and law.”

 The new AIA Contract Documents created for use on sustainable projects include:

1. A101™-2007 SP, Standard Form of Agreement between Owner and Contractor, for use on a Sustainable Project where the basis of payment is a Stipulated Sum
2. B101™-2007 SP, Standard Form of Agreement Between Owner and Architect, for use on a Sustainable Project
3. A201™-2007 SP, General Conditions of the Contract for Construction, for use on a Sustainable Project
4. C401™-2007 SP, Standard Form of Agreement Between Architect and Consultant, for use on a Sustainable Project
5. A401™-2007 SP, Standard Form of Agreement Between Contractor and Subcontractor, for use on a Sustainable Project

AIA Document D503™-2011, Guide for Sustainable Projects (free download), including Agreement Amendments and Supplementary Conditions, was released by the AIA in May 2011. In the short time since it was released, over 4,000 users have downloaded the Guide. In addition to providing model language that may be used to amend or supplement AIA Contract Documents for design-bid-build projects, the Guide discusses the applicability of key concepts to other delivery models such as design-build, construction management and integrated project delivery.

Question: Have you compared the AIA green docs with the ones from ConsensusDOCS?

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Timing is everything!  As I was preparing for a LEED for Healthcare presentation this week, one of my partners sent me a piece about the innovative use of "pods" to cut building costs. The article by Mike Boyer focused on a team of two plumbing and mechanical contracting firms who want to transform how the healthcare industry and other owners construct their facilities.

McGraw-Hill Construction estimates that the health care market will grow by more than 15% next year to almost $30 billion nationally.  According to the article, "...health care is the fasting growing market for prefabrication and modular construction, with 49 percent of all projects using it in some fashion."  

The prefabricated bathroom pods featured in the article are designed and built off-site and then they are transported and installed on-site.  Prefabrication offers many advantages, including:

• Promotes sustainability. While prefabrication is not new to the industry, it is gaining support because of its "environmentally friendly building techniques" such as less production of waste.  Modular assembly often involves pre-determined material quantities that generally lead to less scrap.
• Saves time.  During design, conflicts can be identified early in the process that may result in significant time-savings.  Additionally, since the assembly is performed offsite, there is the ability to perform multiple scopes of work simultaneously.  For example, a bathroom pod built by PIVOTek usually takes 120 hours in the plant versus 160 hours on the construction site. Time savings = cost savings = revenue generation.
• Improves safety conditions.  Since many of the prefabricated items are built in a plant, the working conditions can be safer: "Assembly is done at bench height inside a building, rather than requiring workers to climb ladders and scaffolding on site."

Of course, use of prefabricated items requires the right project. Can you identify any problems with prefabricated and/or modular assembly?

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My transition to a new law firm has come with a few new perks, such as working with a tight-knit group of construction and environmental lawyers who practice both nationally and internationally. 

One of our bright young stars, Lauran Sturm, recently compiled a comprehensive list of global codes and standards governing sustainable design and green construction. Here is the list so far:

Australia

• Green Star has rating tools for the following types of buildings: education, healthcare, industrial, multi-unit residential, office, office interiors, retail centre, office design, and office-as-built. Green Star has pilot rating tools for convention centre design, public buildings, and custom buildings (i.e., those that do not fall into any of the other categories).
• The National Australian Built Environment Rating System ("NABERS") is a system that "measures an existing building's environmental performance during operation" in categories including water, waste, energy, and indoor environment. NABERS provides ratings for office buildings, office tenancy, hotels, shopping centres, and homes.

Brazil

• LEED for Brazil has been in development since 2008, with the goal of completion of at least LEED for New Construction this year.

Canada

• Canada's Green Building Council implements the LEED program, which provides rating systems for new construction, core and shell, commercial interiors, existing buildings, homes, and neighborhoods.
• Green Globes is derived from the Building Research Establishment's Environmental Assessment Method ("BREEAM") and, in Canada, is operated by the Building Owners and Managers Association of Canada (in the US, The Green Building Initiative operates Green Globes).  Rating systems include new buildings & retrofits, office buildings, multi-residential, and light industrial.

China

• There is no official website for the Three Star System, but the ChinaGreenBuildings blog has a good overview of this voluntary rating system which applies to large commercial and residential buildings. Ratings are based on the following categories: land savings and outdoor environment, energy savings, water savings, material savings, indoor environmental quality, and operations management. One notable component: ratings are only awarded after one year of operation.

France

• Haute Qualitie Environnementale (HQE) [pdf attachment] is a voluntary certification system for the following buildings: commercial centers, hotels, schools, houses, residential, offices, in use, healthcare, sports, and occupational. 14 operational targets are arranged in 4 "families": eco-construction, eco-management, comfort, and health. Pursuant to a recent memorandum of understanding, HQE's certifying organization (Certivea) will also provide the BREEAM program (used in the UK) as an optional complement to the HQE system.

Germany

• The German Green Building Council provides a certification system for new office and administration buildings, new retail buildings, new industrial buildings, new educational buildings, modernized office and administration buildings, new residential buildings, new hotels, city districts, and existing office and administrative buildings. DGNB is also developing rating systems for several other types of buildings, including new hospitals, new laboratory buildings, and new parking structures. Rating system criteria are ecological quality, economic quality, sociocultural and functional quality, technical quality, process quality, and site quality.

Hong Kong

• Beam Plus is a voluntary rating system that applies to both new and existing buildings. The relevant credit categories are site aspects, material aspects, energy use, water use, indoor environmental quality, and innovation and additions.

India

• India Green Building Council (IGBC) provides several different rating systems. LEED India evaluates sustainable site development, water savings, energy efficiency, materials selection, and indoor environmental quality for both new construction and core and shell. IGBC also provides a Green Homes rating system for individual homes, high rise residential apartments, gated communities, row houses, and retrofit of existing residential buildings; a Green Townships rating system for large developments and townships; and a Green Factory Building rating system. Green Townships and Green Factory Buildings appear to still be in the pilot stage.

Japan

• CASBEE is a system that evaluates a project from pre-design through post-construction operation and life cycle. It consists of four general assessment tools: pre-design (which is still in development), new construction, existing building, and renovation. Separate tools evaluate Temporary Construction, such as expo pavilions, and Home (Detached Houses). Some Japanese cities, such as Nagoya and Osaka, have adopted their own CASBEE scoring guidelines.

Malaysia

• Green Building Index (GBI) applies to both nonresidential and residential buildings. The GBI rating evaluates energy efficiency, indoor environmental quality, sustainable site planning & management, material and resources, water efficiency, and innovation.

New Zealand

• Green Star has rating tools for the following types of buildings: office, industrial, education, and interiors. Assessment criteria are as follows: management, indoor environmental quality, energy, transport, water, materials, land use & ecology, emissions, and innovation.

Portugal

• LiderA - Version 2.0 of this system (announced in 2009) applies to buildings, outdoor areas, public spaces, blocks, and neighborhoods. Projects are evaluated on the following criteria: site and integration, resources, environmental loadings, environmental comfort, socioeconomic experience, and sustainable use. The six different ratings are called "classes" and are based on improvement on baseline performance (from 12.5% to 90% improvement).

South Africa

• Green Star was developed by the Green Building Council of South Africa.  This system has rating tools for the following types of buildings: office, multi-unit residential, and retail centre.

United Arab Emirates

• Estidama Pearl evaluates communities, buildings (specific requirements apply to offices, schools, retail, multi-residential and mixed use), and villas. An Executive Council order issued May 2010 requires all new development to meet at least level 1 of these standards (government-funded buildings must meet level 2). Evaluation categories include integrated development process, natural systems, livable communities/buildings/villas, precious water, resourceful energy, stewarding materials, and innovating practice.

United Kingdom

• Code for Sustainable Homes applies to new homes in England, Northern Ireland, and Wales, but it is a voluntary program. It measures energy/carbon dioxide, water, materials, surfacewater runoff, (flooding and flood prevention), waste, pollution, health & well-being, management, and ecology.
• BREEAM measures the following types of buildings in the UK: courts, new housing (in accordance with the Code for Sustainable Homes), refurbished housing, healthcare, industrial, multi-residential, prisons, offices, retail, education, committees, and other buildings not included in the referenced categories.
• BREEAM also has international schemes for Europe and the Middle East 

Have we missed any others? Send us a note if you have any additions.

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Initially filed as a class action suit in October 2010 against the USGBC, Henry Gifford's lawsuit took a turn this week when he filed an amended complaint.  The original lawsuit alleged violations of the Sherman and Lanham Acts for “deceiving users” of the LEED rating system.  The lawsuit questioned whether "LEED buildings use less energy than conventionally-built buildings.”

Gifford's amended complaint ([pdf) focuses on claims of false advertising under the Lanham Act and state law, as well as a claim for deceptive trade practices under state law.  Again, it is no longer a class action, but instead alleges certain damage to Gifford and a few others as professionals in the industry.  The amended complaint states:

USGBC's false advertisements divert customers from Plaintiffs to professionals accredited by USGBC and/or its affiliates who provide advice about how to obtain LEED certification. Plaintiffs are losing customers because USGBC's false advertisements mislead the consumer into believing that obtaining LEED certification incorporates construction techniques that achieve energy-efficiency.

Should Owners and Contractors Worry about Gifford's Suit Against USGBC? At this point, the answer is a simple ...  No ...  While it is interesting to follow the legal commentary about the lawsuit, the claims are in their infancy stage.  The USGBC will be afforded an opportunity to challenge Gifford and his co-plaintiffs' standing to bring the law suit.  "Standing" is one of those Law School 101 principles that says a party must demonstrate to the court sufficient connection to and harm from the action challenged.  In other words, they must have a dog in the fight.

Whether you are an owner-developer or contractor working with a green project, the real lesson from the Gifford show is to address LEED certification and energy performance in your contracts.  As an owner, you may want the LEED certification from the USGBC and you may want your building to achieve a certain energy performance.  As a contractor, you cannot guarantee certification, but you may be obligated to construct the building with certain performance guarantees. 

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In what has been unofficially called LEED 2012, the U.S. Green Building Council (USGBC) opened the first public comment period from November 8, 2010 to January 14, 2011 for the next version of the LEED rating system.  Yes, that means the first public comment period closes this Friday.

According to the USGBC's LEED Rating Development page, the "next version of LEED will be an update and expansion of the technical content from LEED 2009. Your comments help to ensure that LEED continues to be at the vanguard of innovative design construction and operation of buildings and communities. It is expected to be released in late 2012."  A second public comment period is scheduled for July 1 through August 15, 2011.

I have not digested all of the new draft, but there are some noteworthy changes.  First, the LEED 2009 has 9 prerequisites and 49 credits, while the new draft has 15 prerequisites and 49 credits.  Second, there are now 10 different categories in the new draft, as opposed to 7 categories in the prior versions.  The three new categories, as well as some changes and additions to the existing categories, are explained in more detail below:

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When asked about potential cost overruns on the Music City Center almost year ago, the Center's representative Larry Atema stated bluntly, "There aren't going to be any."  True to that commitment, Anne Paine of the Tennessean reported this past weekend that the Center's "green roof has grown less green."

According to the article, two pieces of the Center's green roof have been cut from the design to stay within the project's $585 million budget.  The roof is approximately 14.5 acres and, even with the reduction, the green portion will comprise 178,000 square feet or 28% of the entire roof. 

Green roof benefits. The Center is committed to (and as required by Metro Codes "required to") attain LEED Silver Certification.  For the Music City Center, the proposed green roof's benefits include: (1) stormwater capture and water retention for irrigation use and toilet flushing; (2) decreased energy costs from thermal insulation; and (3) improvement of the climate environment and clean air.

A path to LEED certification.  Ultimately, the proposed green roof at the Music City Center can help the property obtain over a dozen LEED credits, including credits for reduced site disturbance, landscape design that reduces urban heat islands, storm water management, water efficient landscaping, innovative wastewater technologies and innovation in design.

Green roof risks.  The Music City Center may prove to be a great case study for the benefits and risks of a green roof.   Some of the risks associated with a green roof may include: (1) failure to attain the energy efficiency levels claimed by the installation of a green roof; (2) failure to achieve the claimed number of LEED credits that are proposed for certification; (3) mold or other environmental hazards as a result of poor installation and maintenance of a green roof; or (4) a roof collapse resulting from a green roof that was not properly constructed, installed or maintained.

According to Holly McCall, an authority spokeswoman, no estimates are available on what the savings might be with the revised or the originally conceived green roof.

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Today's guest post is by fellow Stites attorney Bill Gorton, who acts as national counsel to numerous clients on natural resource, environmental regulatory and land and water resources matters. He has been counsel in the development of over 10 power plants. If you have questions, you can contact Bill by email or phone at 859-226-2241.

It has been more than ten years since the Federal Trade Commission (FTC) revised its guidance to American industry regarding what are appropriate claims of “eco-friendly” products.  Since then, substantial marketing efforts by manufacturers to tag their products as “green,” “recyclable,” “degradable,” “renewable,” “free of ______,” “eco-friendly,” “certified,” “carbon neutral,” and other environmentally friendly claims have proliferated. 

Whether or not such claims can be substantiated has drawn the attention of the FTC as it has recently published proposed revisions to its “Green Guides” to “deter” marketers from making misleading environmental claims.  In its press release on October 6, 2010, announcing the newly proposed Green Guides, FTC Chairman Jon Liebowitz noted that “businesses have increasingly used 'green' marketing to capture consumers attention, …but what companies think green claims mean and what consumers really understand are sometimes two different things.”

The FTC found, through its own intensive consumer perception studies, that its Guides were in need of updating and tightening if there is to be market place credibility regarding environmental representations to consumers.  It frowns on general “environmental friendly” claims, without more information to back up the advertising slogans.

Published on October 6, 2010, the revised and strengthened Guides admonish marketers about certain types of product representations including several new categories.  Several of those categories and their context include:

• Unqualified Certifications– The FTC found that “seals of approval” and similar general certifications often do not specify the basis for such certifications.  The FTC advises that general environmental benefit claims should be clear and specific.  General “eco-friendly” claims are prohibited since such claims are not specific and cannot be substantiated.
• Buzz Words– Environmental protection related terms require details.  Words such as “degradable,” “compostable” and “free of” must specify the basis and details related to the description.
• “Renewables” defined – The use of the term “renewable,” such as “renewable energy” or “renewable materials,” are often misleading, and marketers may not make unqualified claims if, for example, any part of the product was made using fossil fuel-derived energy.
• Carbon Offset Claims – Marketers must disclose if emission reductions that are being offset by a consumer’s purchase will not occur within two years.  Offset claims may not be made if the producer is already required to offset by law.

The FTC is seeking comments to the proposed Green Guides by December 10, 2010.  Comments can be submitted to https://ftcpublic.commentworks.com/ftc/revisedgreenguides/.

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What do you get when you cross UK with KY?  I am not talking about UKKY (...pronounced "yucky" ...), but that is something my kids would probably find funny.  I am talking about the BBC World Service, World Have Your Say Blog series that features the Green Building in Louisville, Kentucky on September 30 and October 1.

The Green Building opened in the Fall of 2008 in the East Market District.  Renovation of this 110 year old dry goods store began in the Sprin of 2007 when the owners decided to become the first LEED Platinum commercial building in Louisville.  According to the video, the owners are anxiously awaiting the certification results from the USGBC.

What makes an owner pursue sustainability at a premium cost during hard economic times?  In an interview with The Courier Journal, owner Gill Holland says it was a passion of he and his wife:

"And then my wife, Augusta, and I were still falling in love with this neighborhood, and a building a block away, next door to Toast, was for sale. When you come from New York City, everything seems so incredibly undervalued. We'd been living there. So we bought that building, and she's kind of the one who opened my eyes to the whole concept of sustainability. So we thought, "Let's make it the first, hard-core green, self-sustaining, run-the-electrical-meter-backwards building in Louisville."

In the interview, Holland described the details of green building process from demolition and recycling to material selection to construction.  He also explained why a green roof was important: 

It's important because it saves you energy. A black tar roof in the summertime goes up to like 170 degrees Fahrenheit. Obviously, you're air conditioning your building to 76 or whatever it is. You're spending a lot of electricity to get your building down there. A green roof: the dirt, the grass collects all that heat. It doesn't even make it to your interior.

Although it is a fairly long interview, Holland explains the features of The Green Building in simple terms.  He also has some great ideas about the future of green building in terms of public construction, infrastructure and private development.  And the interview was three years ago!

What has happened in the past few years? Sustainable or “green” construction practices have gone from fringe movement to mainstream.  A significant part of these practices, as reflected in the LEED rating system, concern energy conservation and efficiency.  There are literally hundreds of programs across the local, state, and federal level that provide some financial incentive for green energy projects.  The impact of these incentives on a project’s construction-cost bottom line can be significant and it pays (...literally...) for developers and contractors to thoroughly research programs that may apply to a particular project.

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 Today's guest post is by Angela Stephens, a fellow construction attorney in the Construction Service Group and Green Law Group at Stites & Harbison PLLC. She is a LEED Accredited Professional and is the first attorney in the Commonwealth of Kentucky to achieve Green Advantage® certification.

 Sustainable Design and Construction raises unique legal issues for all parties who touch the project. It affects sureties, insurance companies, banks, owners, design professionals, contractors, subcontractors, material suppliers, vendors, and their respective employees.

Design professionals should work with the owner and contractor to develop sustainable goals that are attainable. Owners and banks want to be sure that they have adequate remedies in case costs exceed what was promised, tax incentives which were being sought by having a sustainable and energy efficient building are lost, or if the design or construction of a project does not result in LEED Certification.

Contractors and subcontractors need to make sure that they understand the unique requirements for “green” projects such as: (1) following the Erosion and Sedimentation Control Plan adopted for the project, (2) avoiding disturbance of more areas than necessary or allowed by LEED on previously undeveloped land, (3) properly installing the right materials (i.e. materials with low VOC limits, high SRI values, which are recycled, reused, regional, or renewable) and equipment, (4) protecting materials and equipment during construction from moisture or construction debris, (5) collecting and submitting the required documentation for those materials, and (6) following the waste management plan for recycling construction waste materials. If a contractor fails to comply with one of these requirements which was tied to a sustainable goal or point needed for certification, then it may be liable for any resulting damages suffered by the owner.

Owners, design professionals, and contractors want to make sure that they have adequate insurance coverage in place to cover any potential risks. However, insurance companies are still evaluating whether special coverage is needed on sustainable design and construction projects; only a few companies are currently offering specialized coverage for “green” projects. In addition to obtaining insurance coverage to help minimize the risks to your company, here are some ways to minimize the potential legal risks of sustainable design and construction.

1. Don’t Promise More Than You Can Deliver.  In addition to environmental stewardship, there are many recognized benefits to sustainable design and construction such as energy and operational cost savings, healthier workspaces, increased worker productivity, increased tax incentives, and financing incentives. However, what happens when your marketing materials promise or guarantee these benefits and they are not realized or there is a dispute over whether these benefits are actually realized? The parties may end up in a dispute alleging breach of an express or implied warranty, fraud, false advertising, or other similar claims. The key is to monitor your marketing activities. Only promise what you can measurably deliver, and include clauses in your contracts which limit all warranties to those expressly provided in the contract.
2. Don’t Guarantee the Level of Certification. Likewise, if you are a contractor, subcontractor or design professional, do not guarantee the level of certification on any project unless required by law. In many cases, the determination of whether a project achieves a certain level of certification is regulated by a third party over which you have no control. For example, under the Leadership in Energy and Environmental Design (LEED) Green Building LEED Rating System, owners who want to design and construct a LEED certified building must first register the construction project with the Green Building Certification Institute (“GBCI”), a third party responsible for project registration and LEED certification. During the design and construction phase of the project, the project team submits documentation to the GBCI, through LEED Online, verifying that certain points have been achieved. Ultimately, the GBCI determines whether various points are achieved in order to reach the various levels of LEED certification. Therefore, instead of guaranteeing a certain level of certification, warrant that the work will be in accordance with the contract, the plans and specifications, and accepted industry standards.
3. Identify the Participants, Their Roles, and Their Responsibilities.  Many disciplines are involved in achieving a project’s sustainable goals (whether obtaining LEED Certification or following the guidelines of the Green Globes rating system). On most sustainable construction projects, no one party is in control of obtaining all of the points or goals. The parties must collaborate and work together in order to obtain the project’s goals. Most importantly, the parties must understand who is responsible for all of the aspects of meeting the project’s goals. For example, if the owner's goal is LEED Silver Certification, the parties should create a version of the LEED 2009 score card which clearly identifies which parties will be responsible (i.e. architect versus the general contractor and subcontractors) for achieving the various points sought within LEED 2009, and make this document an addendum to each of the contracts on the project. Additionally, owners and contractors should select an experienced green building team and consider inserting clauses in their contracts affirming that the contractor and/or subcontractor have read, understands, and will comply with the LEED or green requirements for the project.

To continue reading Angela's post and learn about the seven other tips, please click here.

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It really is impossible to put your arms around the number of green building and energy performance policies and codes that are sprouting up all across the nation.  When a project involves private commercial development or public investment, one of the most discussed issues is whether the cost of obtaining LEED certification from the U.S. Green Building Council is worth the investment.  And so the cost versus certification debate continues ... and one county in Montana has found the middle ground.

Yesterday, commissioners of Missoula County, Montana approved a policy that encourages and promotes green building practices, as long as they save money in the long run.  According to chair of the Commission, “This is the closest thing we'll come to having an energy policy. If the feds won’t do it and take the lead, I’m just honored to be a part of this.”

The policy directs county offices and departments to “incorporate” or “support the use of” LEED methods and techniques when designing, remodeling and operating public facilities. Unlike other counties in the United States that have recently required a specific level of LEED certification, the Missoula County policy will require “the highest level achievable under LEED that’s cost-effective based on the long-terms cost and the limits of available funding.”

As state and local leaders are racing to develop and implement new building practices—whether they incorporate USGBC’s LEED, Energy Star, Green Globes, or some other rating system—I think the compromise by Missoula County is a step in the right direction.  Such a policy would allow the public or private developer to incorporate cost-effective criteria in its development plans, while at the same time would require that owners and developers adhere to sustainable building practices.

There remains one problem: consider the owner who seeks the highest level of LEED certification that is cost effective based upon its long-term costs and limits of available funding and it is determined that LEED certification would not be possible. What then? Have they complied with the local building policy or code?

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About a year ago, I wrote a post on the trending topic of LEED revocation or de-certification.  That issue has not gone away ... it actually has been brought to the front page of the news.  The hot topic, recently reported by Stephen, Chris and Doug (...sounds like three men in a tub...), involves the LEED certification received by Northland Pines High School in Eagle River, Wisconsin. 

When the story first began buzzing around the internet last year, I called Larry Spievogel, an independent engineering consultant, who was giving a presentation on "the actions of the designers that led to the first ever decertification of and plaque removal from a LEED Certified project.”  What I learned a year ago was just confirmed by fellow bloggers, as well as another friendly email from Larry.  Here is what Larry sent me:

• The Executive Summary
• December 23, 2008 appeal to USGBC
• Correspondence with USGBC
• January 5, 2010 report of Horizon Engineering Associates
• April 26, 2010 report of Taylor Engineering
• April 27, 2010 letter from USGBC
• North Pines' response to Horizon report
• North Pines' response to Taylor report
• North Pines' statement

I am not going to retell the facts or the procedural background to this dispute (...you can check out the three men in a tub for that ...).  However, since it worked so well for the Spearin Doctrine, here is my Tweet about the LEED certification challenge in less than 140 characters:

Green school built. LEED color gold. Cheddar-heads revolt. GBC-Gods review. LEED challenge tossed. What now? Green atty!

According to representatives for the School, the fundamental allegations in the appeal for the revocation of the LEED certification are that the building did not comply with the mandatory ASHRAE prerequisite standards.  Since these standards are prerequisites to any level of LEED certification, the School argues that even a single instance of non-compliance with the ASHRAE standards provide a sufficient basis to deny certification.

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As a follow-up to my post yesterday about the costs of LEED certification, I was not surprised to read the following lead line in a local newspaper in Cary, North Carolina:

"Cary wants to be green. Just not certifiable."

According to the article, the local town council voted to skip the green building certification process because of the high costs.  "If the economy was in a better situation, I'd consider it," said Councilman Don Frantz, who made the motion to skip the certification. "But I just can't see the justification on moving forward and spending extra money."

The Cary fire station is the perfect example of the dilemma faced by commercial developers and public owners seeking to embrace green construction.  For instance, the fire station will spend more than $100,000 on energy-saving features in the new construction.  However, it would cost the town approximately $41,500 in registration, certification and other costs to have the fire station become LEED certified, according to a town report.

At the heart of this debate is the recognition that, to some, the goal is energy and other savings over the life of the building, while, to others, the goal is focused on sustainability.  In other words, to the Town of Cary, the estimated cost savings of employing green standards is approximately $580,000 over the next five years.  Since cost savings was a driving factor, the $41,000 associated with the LEED certification process was a significant amount. 

Nonetheless, the Town had a number of proponents supporting certification.  According to Town Council members who supported the effort, "seeking LEED certification would ensure that high environmental standards would be met."

Given this background, why would an owner-developer want to seek LEED certification? Here are some initial thoughts on the issue: 

1. It makes good business sense.  The LEED certification, which includes a rigorous third-party commissioning process, can offer compelling proof to you, your clients, and the community at large that you've achieved your environmental goals and your building is performing as designed.
2. It is a good investment.  Not only do LEED certified building embody good business practices, the USGBC's seal of approval can be a great investment and result in increased property values.  A LEED-certified building can garner a greater premium than a non-LEED certified building for the simple fact that it is ... well ... LEED-certified.  One provision here: the building standards should, in fact, result in operational cost-savings and energy cost-savings. 
3. It provides good incentives. There are numerous state and local incentive programs that offer tax breaks, faster or cheaper permitting, and other incentive programs for seeking the LEED certification.  Whether it makes sense that lawmakers are basing these programs on USGBC's LEED programs or incorporating LEED requirements into local building codes are not the issues.  Here, the issue is that you can in many locations receive great incentives for doing so.

Question: What additional benefits can you identify for the Town of Cary to go through the LEED certification process?

Image: www.architex.ca

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Most owner and developers would imagine that the most significant costs of LEED certification are the front-end registration and back-end submittal costs.  Are they correct?  Depends.

Environmental Building News prepared a primer on the costs of LEED certification for commercial construction.  As noted in the article, LEED certification includes various costs that must be considered separately in order to correctly analyze the total package.  According to EBN, here are the traditional costs explained in more detail:

1. The fees. Registration and certification fees are roughly 3¢–5¢ per square foot, depending on the size of the project and other factors.
2. Cost of documentation time and effort. This cost could be for an outside consultant hired just for that task, someone on the staff of the design firm, the contractor, or the owner. This is a big project for someone doing it for the first time and not such a big deal for someone who has done it enough to have figured out the process.
3. Cost of extra research, design, commissioning, and modeling for compliance. If your baseline is the cost to have a design team create a variant on their last few non-LEED projects, then designing to meet LEED standards will take some extra effort. But these added costs shouldn’t be attributed just to LEED—they are the costs of getting a better building. LEED introduces a few requirements that add costs if they are not already part of the scope of the project. At $0.50–$1 per square foot, commissioning, for example, may seem like a big investment, but it’s cheap compared to the cost of call-backs, fixes, and inefficiencies that are likely if you don’t do it.  If energy models aren’t code-required, then the LEED-specific model represents an added cost that starts at $5,000–$10,000 and goes up, depending on the complexity of the project.
4. Costs of construction. Including green measures can mean added construction costs such as the following: demand-controlled ventilation adds about $1/cfm to the cost of a standard ventilation system; bike racks will cost about $5 per full-time equivalent (FTE) occupant; occupancy sensors cost about $25 per fixture.

What does all this mean?  By looking at the diagram above, you can easily tell that construction costs account for the largest percentage of a green building project.  The real question remains whether the added costs of registration, adminstration, documentation and operation justify the savings (in terms of tax credits, cheaper operation, etc.) will justify those investments.  Check out what Minnesota has to say about the issue.  

So the real answer depends on a cost-benefit analysis.  The construction costs won't change with non-LEED certified green construction.  If the benefits and incentives are worthwhile (depending on your project type and location), then the LEED certification may be the route to go.

Image: www.buildinggreen.com

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Whenever a 100-page legislative or legal report is released by an agency, association or group of individuals, the best place to go in the document is the Summary or Findings sections.  So, yesterdary, when the USGBC, AIA, SMACNA and other groups issued its 93-pager entitled Using Executive Authority to Achieve Greener Buildings: A Guide for Policymakers to Enhance Sustainability and Efficiency in Multifamily Housing and Commercial Buildngs, I flipped straight to that place in the document.

The report presents a number of options that the Administration can do right now ... without seeking any new funds or authority from Congress ... to enhance energy efficiency and sustainability of buildings.  As noted in the Executive Summary, some of the most promising options with the largest reach include:

• Reforming appraisal and underwriting practices at Fannie Mae and Freddie Mac;
• “Greening” federal banking regulations;
• Promoting flexible FHA insurance products;
• Integrating energy efficiency and sustainability criteria into competitive grants and funding;
• Strengthening minimum property standards for federal housing and economic development programs to reflect energy efficiency and sustainability standards;
• Improving performance standards applicable to federal buildings and leases;
• Refining guidance applicable to the energy efficient commercial buildings tax deduction and the national historic preservation tax credit;
• Using SBA funding to support small business energy efficiency investments; and
• Streamlining Title 17 loan guarantees to make them suitable for buildings.

What do these options mean for private developers and contractors? As a preliminary matter, it is interesting to see the semi-diverse group of associations (including the USGBC, AIA, BOMA and SMANCA) who support stronger building codes, appliance standards, building labeling, and requirements and incentives for increased energy efficiency. 

I think the real significance of the report for the "green construction" industry is the identification of programs that can spur jobs, investment and development, while at the same time working toward energy efficiency:

All told, the programs identified in this report have the potential to directly provide or facilitate over $72 billion in funding or loan guarantees,2 and can leverage hundreds of billions of dollars in private investment through instruments such as mortgage insurance and regulation of the real estate lending market. 

According to the contributors of the report, even a fraction of this funding can have an impact on availability of green construction projects, which directly affects investment and jobs.

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I am in Austin, Texas this week attending the ABA Forum on the Construction Industry's annual meeting.  One of the ways that I got more involved in the Forum was participating in the activities of one of the twelve divisions.  I am a member of Division 10: Legislation and Environment, which helps assemble information regarding case law and legislation affecting the construction industry, including environmental trends. 

On Thursday morning, our division will host a breakfast with a presentation by LaVerne Williams, who designed Tonalacalli, Austin's very first LEED Platinum home in Austin. You can check out the project at: www.firstaustinleedhome.com.  Some of the features of the home include:

• Official First Certified LEED® Platinum Project in Austin; 
• Official First Certified LEED® Home in Austin; 
• Five-Star level rating (Austin Green Building Program's highest possible rating)
• Intentionally designed for Passive Sustainability... i.e., to have the ability to naturally maintain relatively comfortable livable conditions for the occupants during times when there may not be power or water or food available from off-site sources; 
• Green building features include rainwater harvesting; solar water-heating; high-efficiency HVAC system; sustainable site development; and environmentally preferred product use.

In addition, the project was awarded 3 additional Innovation Design credits beyond the maximum of 8 credits available in the program.  If you are in Austin this week, then stop by the Division 10 breakfast on Friday morning at 8:00-9:30 a.m.  Hope to see you there.

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A fellow Twitter friend, @danielschwartz, promoted a technology symposium on his Connecticut Employment Law Blog yesterday.  In order to spread the word about the symposium, he challenged his readers and fellow Twitter followers to tweet about their favorite Supreme Court case in less than 140 characters.  

As I thought about the construction industry, there was only one decision that kept coming to mind.  It involved a contractor who agreed to build a dry-dock in the Brooklyn Navy Yard.  In order to build the dry-dock in the site selected for it, the contractor was required to relocate a portion of a sewer that ran through the specified site. The owner (the United States) provided the plans and specifications for the sewer that was to be relocated.  The contractor completed the work according to the plans and specifications.  The owner approved and accepted the work.  But wait ... about a year after the relocation of the sewer, a dam in a connecting sewer caused flooding in the area excavated for the dry-dock. This dam was not shown on the owner's plans and specifications.  That's the background and here is my tweet: 

US v. Spearin: Owner designs. Contractor builds. Owner accepts. Work sucks. Owner sues. Contractor absolved. Owner loses.

If you live in the government contracting world, don't start sending me emails about how wrong I have described the Spearin Doctrine above.  Let me expand my statement beyond 140 characters and give you some more information about the 1918 decision in United States v. Spearin:

• The Rule. The Spearin Doctrine is legal principle that holds that when a contractor follows the plans and specifications furnished by the owner, and those plans and specifications turn out to be defective or insufficient, the contractor is not liable to the owner for any loss or damage resulting from the defective plans and specifications.
• Exceptions to the Rule.  In 2007, the Ohio Supreme Court rocked the construction law world by significantly limiting the application of the Spearin Doctrine.  In Dugan & Meyers Construction Co. v. Ohio Dept. of Administrative Services, the trial court applied the Spearin rule in favor of the contractor based upon alleged damages from the impact of an excessive amount of design changes.  On appeal, the Ohio Supreme Court reversed, holding that the Spearin Doctrine did not apply to cases involving delays due to design changes. Rather, the court focused its decision on the “no damages for delay” and “written requests for time extension” clauses in the contract.  Specifically, the court concluded: “We observed that the Spearin Doctrine does not invalidate an express contractual provision.” 
• Applicability to Green Construction.  Last year, fellow blogger Chris Cheatham suggested that there could be a green Spearin Doctrine.  I am confident that the Spearin Doctrine would be applied equally to non-green construction projects and LEED certified projects, As noted by Chris, a guarantee by the contractor could invalidate any Spearin Doctrine defense by the contractor.  Sounds like the Ohio Supreme Court, right?  The Spearin Doctrine cannot invalidate an express contractual provision.

Any Spearin tid-bits that you would like to share? 

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On Friday, I read a press release by the USGBC and blogged about the new International Green Construction Code (ICCG).  In my haste to avoid the traffic from the SEC Basketball Tourney in downtown Nashville, I quickly posted and jumped into my car to escape.  With all candor, my post was incomplete . . . I did not hit the bull's eye!

This morning, I received a kind tweet from @AIAStateAffairs, the arm of AIA that supports government and community relations.  According to the AIA, here is a link to the more complete story.  Some of the more important facts and dates include the following:

• The public version of the ICCG will be available today.
• The public and AIA Members will be able to submit comments on the document through May 14, 2010.
• In mid-August, comments will be considered in public hearings, with a view toward the issuance of an updated version of the code in early November.
• Another round of hearings will be held in May, 2011 with the final action hearing occurring in the fall of 2011.
• The final version of the code will be published in 2012.

According to the AiA article, architects must advocate for adoption of the IGCC as it is revised by building officials during the next stages of the code development process.  When the first public version of the IGCC is published in 2012, states and municipalities will be able to use the IGCC as a baseline for their own sustainable construction codes.  The IGCC is written in mandatory, legally enforceable language, which is unlike voluntary green building rating systems.  Finally, the IGCC includes post-occupancy building commissioning, as well as prescriptive versus performance-based metrics. 

@AIAStateAffairs, thanks for the sending me a note!

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I know its late on Friday afternoon.  The SEC men's basketball tourney is a few blocks away.  No one wants to talk about green building right now.  Most people around here only want to talk about BLUE!

But if I wait unil Monday, then I may forget to share this news and it might be too late! Four major organizations representing building safety professionals, energy and lighting engineers, green building practitioners, architects and technical standards developers have come together to establish the nation's first model green building code (pdf) designed to rapidly advance green building practices across the United States. The four groups are: the International Code Council (ICC), the American Society of Heating, Refrigerating and Air Conditioning Engineers (ASHRAE), the U.S. Green Building Council (USGBC), and the Illuminating Engineering Society of North America (IES).

According to the announcement made yesterday, the groups are launching the International Green Construction Code (IGCC), which seeks to provide "the building industry with language that both broadens and strengthens building codes in a way that will accelerate the construction of high performance green buildings across the U.S."

The official launch date of the IGCC is March 15, 2010, when the groups will release the model language.  Of particular importantance to the release is the inclusion of Standard 189.1, which is described as follows:

Standard 189.1 is a set of technically rigorous requirements, which like the IGCC, covers criteria including water use efficiency, indoor environmental quality, energy efficiency, materials and resource use, and the building’s impact on its site and its community. Standard 189.1 was written by experts representing all areas of the building industry, who contributed tens of thousands of man hours. Developed in a little over three years, the standard underwent four public reviews in which some 2,500 comments were received.

It is great to witness the collaboration of these huge players in the green building industry.  But only a focused review of the new IGCC provisions and time will tell whether the stated goals will be met. Have a great weekend!

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You don’t have to click too many times through your channels on your television set without finding a reality television show. There is one for finding the right man, losing weight to the extreme, rebuilding a destitute home in five days, and even eating spiders and beetles.

Earlier this week on the evening news I witnessed a reality show of sorts in the green building arena: an investigative report by a local news station about the construction of the new Music City Center in Nashville, Tennessee.

Location: A demolished building in downtown and a dumping site out of town.

Protagonist: Ben Hall, an investigative reporter from Channel 5.

Antagonist: A local demolition subcontractor involved in the project.

Plot: In a project committed to sustainable and green construction methods, will the subcontractor take the easy way out and simply dispose of the demolition waste rather than carefully pick through the recyclable materials?

Conclusion: See the video for yourself. [Cannot see the video, click here.]

This green building reality show illustrates one of the tensions between sustainable building practices and certified sustainable building practices.  Where a project is simply committed to sustainable building practices, conceivably there is no oversight.  The end product may contain energy-saving features or other green components, but the building methods may not change.

Where a project seeks LEED certification, as does the Music City Center, there should be requisite protections in place to monitor the reuse of recyclable material and the disposal of waste material.  "We're going to try to keep as much out of the landfills by recycling it," said Larry Atema, Senior Project Manager for the Center. ". . . [F]or example, the steel to a steel recycler, the brick to a brick recycler."

So, where did checks and balances fail at the Music City Center?  According to Atema, "It should not have happened. . . . I think what is important at least to us, when we first learned of it, we went out and less than 12 hours later we had the steel picked out of the debris." According to the article, Atema said crews will have to do a better job of sorting. He said that the crews are now looking more closely at what leaves the demolition site.

It will be interesting to follow this project through construction, as well as the LEED certification process, to see whether the Music City Center wins its green building reality show prize.

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For the next couple of weeks, the only thing you will see on our living room television is the Winter Olympics.  Luge...daring!.  Freestyle moguls...awesome!  Snowboard cross...cool!  Figure skating...good time to surf the Internet!

Last night, while watching figure skating surfing the Internet, I stumbled upon this article about the Olympic and Paralympic Village in Vancouver having received the highest certification for sustainable community development from the U.S. Green Building Council.  The LEED Platinum certification was announced Mayor Gregor Robertson on Tuesday morning.  According to the article, the Olympic village is the second development in the world to receive Platinum certification. 

Platinum certification was awarded to the $1-billion, 32 hectare South East False Creek neighbourhood development project based on a variety of factors including its proximity to the downtown core, affordable housing, green buildings and habitat restoration. . . .

“If we want to stand up and make Vancouver the greenest city in the world we are going to need some serious resources and aspirations,” said Roger Bayley, design manager for Merrick Architecture, the architects behind the project. “But I have no doubt that [the Village] is going to be profitable.”
 

The sustainability website inhabitat.com had a great overview of the sustainability features of the Olympic Village almost two years ago.  These included:  solar panels, green roofs, rain water harvesting systems, in-slab hydronic system for heating and cooling of the buildings, and all underground parking.

It is good to see that the Olympic Village attained its goal for LEED certification . . . a Platinum medal in the Olympics of green building.  Local community leaders want to use the Olympic Village as model for sustainable development to help Vancouver become the "greenest city in world."  

The problem? It came at a significant cost.  A $700-million bailout was required from the City in order to finish the construction of the Olympic Village, generating concern for the profitability of future LEED development projects.

The answer? As with many other green building issues, only time will tell.  First, we will have to wait until the end of the Olympics to see how Vancouver transitions Olympic Park into affordable housing for downtown residents.  Next, we will have to watch the performance of the sustainable buildings.  If private development can do it cheaper and faster with the same or comparable performance data, then there may not be the green community development anticipated by local leaders. 

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Stressed out trying to keep up with all the local building codes?  What about green building incentives in your neighborhood?  Have you figured out the changes in LEED 2009?  (...scream...).

"Calgon CalGreen, take me away!" 

Reminiscent of the 1970s commercial involving a certain screaming mom, a few screaming kids, and a bubble bath, you may be overwhelmed trying to figure out the status of green building initiatives in your jurisdiction.  Here's another one to add to the mix:

Yesterday, the California Building Standards Commission voted unanimously to approve "the most stringent, environmentally friendly building code standards of any state in the nation," as dubbed by the San Francisco Gate.  The new building code, which has been called CalGreen, takes effect January 2011.  According to the new code, builders must do the following for new construction: 

• Install plumbing to cut water usage
• Divert 50% of construction waste from landfills to recycling
• Use low-pollutant paints, carpets and floorings
• Install separate water meters for different uses (non-residential only)

In addition, CalGreen mandates the inspection of energy systems by local officials to ensure that HVAC systems are performing the energy-saving jobs correctly.  CalGreen, a statewide code, allows local jurisdictions to implement or retain even stricter standards.

CalGreen incorporates sustainable practices into the state building code, as opposed to adopting a third-party rating system such as USGBC's LEED.  That is precisely what Nashville Councilmember Mike Jameson suggested last week at  a sustainability breakfast in Nashville should be done: "... I would like to see the city code mirror the [third-party version] ... to be a stand alone code."

The passage of the code was significant, particularly where six major environmental groups, including the Sierra Club, the Natural Resources Defense Council and the United States Green Building Council, opposed the measures because "some of the rules ... aren't tough enough."

You can beat that the rest of the nation, including localities such as Nashville, are keeping a close eye on state and local codes like CalGreen.

(Hat Tip to @elaineishere for the Tweet!)

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A week does not go by without a friend, colleague, or new acquaintance asking me, "How do you do it all?"  The short answer: "It's tough ... very tough ... but I have some help.  For home and family issues, I have my lovely wife.  For unloading the dishwasher, I have my son.  For getting out letters, I have my legal assistant.  For researching legal issues, I have a number of associate attorneys who can help.  And for blogging and staying current with the construction industry, I have Google Reader." (...Okay, so my answer was not that short...)

I use Google Reader to track and scan over 100 blogs, news sources and Twitter feeds relating to the construction industry, leadership, marketing and social media.  Rather than try to explain how it works, check out the following short video:

Now, let's see how Google Reader has helped my blogging efficiency for an actual blog post.  A few months ago, I read an article in my Google Reader about two tunneling machines being used on a project in Puget Sound. Since the article highlighted what I thought was an instance of a "construction project gone wild," I blogged about the incident, as well as some construction management tips. 

How can Google Reader help you? The tool can be used:

• To track your "go to" websites that you regularly check
• To track certain terms in the mainstream media (i.e. "construction bids Tennessee" or "green incentives for developers")
• To follow certain Twitter feeds for people or terms

Since words have different meanings to people, there may be problems with some of the initial feeds you set in Google Reader.  It may take time to determine whether the inquiries you set are returning useful information.  Overall, this is a "must use" for anyone in the construction and green building industry.

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When Nashville Mayor Karl Dean created the Green Ribbon Committee on Environmental Sustainability, he had lofty goals of making Nashville the greenest city in the Southeast.  Indeed, Tennessee's Lt. Governor Ron Ramsey shared a similar commitment to be a green "LEEDer" in the South. 

Fast forward to January 2010 ... Where are we on the green front?  What have we learned over the past year?  Where are we going in the future? Have we met any goals outlined in the Green Ribbon Committee report?  How have the current real estate market conditions impacted the short-term future of green building in Nashville?  Is it time to require some sort of mandate for green buildings or are incentives enough? 

Yesterday morning a group of community leaders, developers, bankers, attorneys, engineers, contractors and other green players met for breakfast at Waller Lansden's sustainability breakfast series to tackle these questions. The panel included the following: 

• Jimmy Granbery,CEO, H. G. Hill Realty Company, LLC
• Mike Jameson, Councilmember, Metro Nashville Council District 6
• Bert Mathews, President, The Mathews Company
• Joni Priest, Metro Nashville Planning Department
• Sharon Smith, Metro Nashville Mayor's Office, Director of Office of Sustainability 

The one-hour discussion was very thought-provoking and the panelist had some practical comments on the future of green building in Nashville.  Here are a few:

On the progress of green building:

Jimmy Granbery applauded the development of technology and better understanding of green solutions.  "For example, we can now build a green roof with only four inches of dirt rather than two feet of dirt," said Granbery.  This has certainly resulted in significant cost savings in the underlying materials, as well as the building costs such as the steel needed to support a heavier roof.

On city or state-wide green building code:

Councilmember Mike Jameson discussed the problem that localities face by adopting a third-party building code such as USGBC's LEED certification, suggesting that the building code will have to change as the third-party standard changes.  "Instead, I would like to see the city code mirror the [third-party version] ... to be a stand alone code," said Jameson.

On local incentives for green building:

Joni Priest highlighted some potential incentives, including bonus square footage for LEED certified buildings and building height variances.  Priest said  that there was significant opposition to any mandate for LEED certification on construction, joking that her phone rang off the hook when the mandate issue came up for discussion.

On general trends for green building and sustainable design:

Bert Mathews said that it really depends on the client, as some tenants of his developments have absolutely no interest in green building, while for others, "it is a standard that many have come to expect."

Question:  How would you rate Nashville's commitment to green building?

I look forward to the sustainability breakfast series over the next few months.  Thanks to @tenngreenlawyer for the tweet about the breakfast.

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This guest post was written by Kevin Kaiser of SuretyBonds.com, specializing in teaching consumers about surety bonds through the Surety Bond Education Center.  I do not represent Kevin or his company, nor do I sponsor any of their products.  Kevin has some great things to say about the surety's perspective in green construction, which is particularly timely given the announcement of a recent challenge to a LEED certification in Wisconsin. 

The Green Performance Bond

Green building continues to gain momentum across the country, as project developers and consumers look for ways to incorporate environmental consciousness into everyday life.

Last year, Energy Star homes accounted for almost 20 percent of all new single family construction, up from 12 percent the year before. There’s also greater interest this year in LEED-certified homes and other more involved green-certified standards from the U.S. Green Building Council.

But it isn’t all smooth sailing. In fact, green construction is proving extremely problematic for the surety industry, which ensures that construction projects are completed and in accordance with contracts by issuing bonds.

And until that’s rectified, a nationwide wave of green construction might be on hold.

The Friction

In short, the issue is a performance bond. These are a key part of the normal construction bonding process that guarantee a contractor completes all work up to contract and code.

Surety companies typically scrutinize a contractor’s financial health, expertise, work history and likely ability to perform the job before underwriting a bond. They also look at a given project’s specific contract. Performance bonds are tied to specific, quantifiable goals grounded in industry standards and accepted practices.

That’s why green building performance standards are becoming a significant and mounting problem for surety companies.

To obtain certain green building designations, third parties like the U.S. Green Building Council look for specific levels of energy efficiency and other quantifiable improvements. But most sureties will steer clear of bonding a company with a contract that calls for third-party certification or requires specific energy reductions.

The reasons revolve around risk mitigation and responsibility: Who’s on the hook financially if the building falls to meet those third-party requirements?

“It’s not always the party that has to post the bond that’s responsible for that element of LEED certification,” Bob Duke, director of underwriting and assistant counsel for the District-based Surety and Fidelity Association, told the Washington Business Journal. “Maybe the party posting the bond doesn’t have control of the total obligation.”

Because of those lingering questions, most surety companies will not issue a bond for a contract that calls for any type of green or energy efficiency benchmarks, which are not performance standards but prescriptive requirements.

“In the event that a building fails to perform to a specified level of resource efficiency, should the surety be required to compensate the owner to rebuild the structure?” Mark Rabkin, a risk manager for Althans Insurance Agency, noted in a recent blog post. “That is not what they are in business to do and will not bond contracts guaranteeing efficiency and performance specifications.”

The D.C. Green Building Dilemma

The green performance bond issue has garnered headlines in the last year because of new regulations in Washington, D.C.

The District in 2006 created a green building requirement for certain private and public projects. The regulation basically requires the use of a bond that doesn’t really exist yet — a green performance bond.

Surety companies and associations have lobbied against the new regulations, which take full effect in 2012.

Projects that fail to meet the new green standard would pay claims of up to 4 percent of building costs to a city green building fund. Compounding the situation is a clear conflict of interest: The District agency that maintains the green building fund is the same that can determine whether a project is in compliance with the new regulations.

Last fall, surety claims attorney Bryan M. Seifert addressed the D.C. green building regulation in a piece on Entrepreneur.com:

This type of legislation involves a fundamental misunderstanding of the marketplace, the type of products available in the insurance and surety industry and how those products respond to today's construction needs. Performance bonds typically guarantee the performance of a quantifiable objective. Rather than legislate a performance bond to guarantee a quantifiable goal based on an objective standard for which the bond is written, the District has chosen to legislate a particular prescriptive rating system with attendant unknown risks. The surety product will more likely end up contributing to the District's green building fund and not the sustainable performance objectives of the District's projects.

Owners, stakeholders, contractors, risk managers, insurers and sureties must be keenly aware of the flurry of legislative activity and its implications for their interests. Much of the recent green building legislation is a result of advocacy for intangible outcomes with little analysis given to the overall performance of the public asset and little consideration for the industries that support and sustain the construction process such as insurers and sureties. The D.C. Act is just one of many examples of legislative activity that may have profound and unknown affects on these industries.

Sureties continue to balk at the vague and risky language of this and other proposed green building bonding measures. If that persists, the burden will fall to contractors and developers to assume greater risk when taking on some green public and private projects.

Current Environment

After consistent outcry from the surety industry, officials in Washington, D.C., are trying to rework the language regarding performance bonds.

Industry officials and observers alike are unsure when or how the issue will likely get resolved. D.C. environmental officials have staked a claim that green performance bonds are feasible.

Now they have to find a practical way to prove it to the nation’s surety industry.

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The U.S. Environmental Protection Agency yesterday issued a final rule in an effort to reduce water pollution on construction sites. The rule, which is set to take effect in February 2010 over a four-year period, is targeted to improve the quality of water nationwide.  According to a press release by the EPA, the impact is significant: 

Construction activities like clearing, excavating and grading significantly disturb soil and sediment. If that soil is not managed properly it can easily be washed off of the construction site during storms and pollute nearby water bodies.

The final rule requires construction site owners and operators that disturb one or more acres to use best management practices to ensure that soil disturbed during construction activity does not pollute nearby water bodies.

In addition, owners and operators of sites that impact 10 or more acres of land at one time will be required to monitor discharges and ensure they comply with specific limits on discharges to minimize the impact on nearby water bodies. This is the first time that EPA has imposed national monitoring requirements and enforceable numeric limitations on construction site stormwater discharges.

Soil and sediment runoff is one of the leading causes of water quality problems nationwide. Soil runoff from construction has also reduced the depth of small streams, lakes and reservoirs, leading to the need for dredging.

The pre-publication rules (pdf), as well as the EPA's Fact Sheet on the final rule (pdf) are available online.  While it is too early to comment on the draft rule (...primarily because I have not had a chance to digest it all...), it is interesting to note that adoption of the rule came in response to a court order in a lawsuit alleging that the EPA failed to issue certain regulations under the Clean Water Act.  According to the Wall Street Journal, the court requried the EPA to issue the rule no later than December 1, 2009.

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As much as possible, I like to highlight various forms of construction contract documents.  In most of my green building presentations over the past few months, I have talked about the "soon to be released" Green Building Addendum from ConsensusDOCS.  Well, that day has finally come!

Based upon my preliminary review of the 310 Green Building Addendum, I am confident to say that the blogosphere of architects, engineers, owners, contractors, LEED AP-ers, and attorneys is going to be jumping.  There are a lot of new terms, such as Elected Physical Green Measures and Elected Green Status; there is a new contractual party, called the Green Building Facilitator (or "GBF"); and there is a meaty "Risk Allocation" section in the document. 

The first seven sections of the 310 Green Building Addendum include the following:

1. General Principles, including an acknowledgment that Green Measures are being incorporated into the project that affect the roles and responsibilities of the parties.
2. Definitions, which introduce and define all the new players, roles and responsibilities.
3. Green Requirements and Procedures, which are elected by the owner.
4. Green Building Facilitator, which addresses who this person will be and what his role will be.
5. Green Status, which sets the targeted status (i.e., LEED Certified Silver).
6. Green Measures, which outlines the steps to achieve the Green Status.
7. Plans and Specifications, which helps incorporate the green measures into the underlying contract documents.

Section 8 addresses risk allocation, which is where I will probably spend a couple of days digesting.  In this section, you will find issues such as:

• The role of the contractor during the process, as well as a provision that limits the contractor's responsibility for performing certain services. 
• A waiver of consequential damages, which is the provision that every green attorney will want to take a look at first.
• A general limitation of liability provision that addresses the failure to attain the targeted status, as well as, the failure to receive any intended benefits to the environment.

One cursory review ... and I did not find anything absolutely surprising.  I was interested to see that the contract document was not LEED-driven, meaning that the drafters wrote the green measure provisions and the green status provisions broad enough to include all existing and any future green building programs.

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I am certainly not the first ... and certainly won't be the last ... person to write about Robert Watson's webinar presentation yesterday afternoon entitled, Building a Sustainable Future: Progress & Trends Toward Improving the Environmental Footprint of Commercial Buildings.

Watson, Executive Editor for GreenerBuildings.com, is most commonly referred to as the father of LEED because of his pioneer role as founder of the USGBC rating system. Watson spoke from his home in Shanghai at 1:30 a.m. Watson began his presentation with the following bold statement:

Green buildings [are the] only bright spot in the construction market.

Even then, Watson suggested that there will be some lag in the green building market due to the introduction of the more stringent LEED 2009 requirements, as well as the economic downturn in the market generally.

One of the primary purposes of the webinar was to highlight the release of the second edition of the Green Building Market and Impact Report 2009, which was authored by Watson. The Report sets out to document how and how much green building is making a difference in the world today. Some of the key finding include:

• The estimate of reduced vehicle miles traveled has grown to 780 million to date versus 400 million in 2008, which means there are significant annual gasoline savings.
• Total water savings from LEED through 2009 is estimated at 15 billion gallons, comprising 0.5 percent of annual non-residential water use.
• Annual carbon dioxide savings from LEED buildings is approximately 2.9 million tons from energy efficiency and renewables.
• Based on average materials costs, green building materials represented approximately $7 billion in cumulative spending through 2009.
• Moreover, the embodied energy in buildings that are renovated instead of demolished is expected to save significant sums of energy.
• Finally, an average of over 60 percent of construction and demolition waste was diverted from LEED projects, totaling 25 million tons to date.

According to the report, employees are currently enjoying improved indoor environments in LEED buildings at present and the productivity benefits from LEED buildings to date range from $230 to $450 million.

What do all these number mean to the traditional commercial developer, the hard hat contractor or the construction litigator? Here are some thoughts:

1. The Report recognizes that new construction of green buildings is growing, while actual LEED certification is lagging. In my simple mind (...and I admit this may be an oversimplified conclusion...), the industry wants to be green but does not want to pay for the green plaque.
2. The growth of the green building industry has created a "several billion dollar market" for LEED qualified and sustainable materials. From a practical point of view, subcontractors and suppliers of old will need to transform some of their product lines so as not to be edged out by the new material suppliers.
3. The energy performance issues raised by green building critics will have a significant impact on the future of building standards. Shari Shapiro has addressed this issue on a number of occasions.

Watson concluded his presentation with the following statement: "In spite of the economic downturn, or perhaps because of it, LEED has reached target market saturation."

Question: Do you agree with this assessment?

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I love seeing a case zig zag through the appellate process ... and I especially enjoy reading one where intermediate appellate court reverses the trial court and the highest court then reverses that intermediate appellate court.  I know, I'm sick.

In a decision released yesterday, Goff v. Elmo Greer & Sons Construction Company, the Supreme Court of Tennessee reversed the Court of Appeals and reinstated the trial court's decision approving an award of punitive damages in a construction case.  The owners of the property filed suit against the general contractor on a highway widening project.  The owners contracted with the general contractor to use their adjacent land as a lay down area in exchange for compensation.  When the contractor failed to pay the full contracted amount, the owners sued.

Following a trial, the jury found in favor of the land owner and awarded: (a) about $5,300 for the unpaid contract balance; (b) about $9,500 for damages resulting from blasting activities; and (c) about $3,300 for burying debris on the property.  The jury also returned a verdict of $2 million in punitive damages, which the trial court reduced to $1 million.

The Court of Appeals affirmed the trial court's judgment as to liability, but reversed the award of punitive damages based upon a finding that the trial court improperly considered Tennessee's environmental laws in approving the award.  The Supreme Court of Tennessee reversed, holding that the trial court properly considered Tennessee's environmental statutes in approving the award.

The Goff decision has a number of construction nuggets to analyze.  One of the more significant aspects of the opinion is the jury's award of punitive damages based upon various environmental laws without any finding of a violation of those laws.   The intermediate appellate court determined that because the jury found that the contractor had not committed an environmental tort, the trial court should not have relied on the environmental statutes and policies in affirming the award of punitive damages.  The Supreme Court disagreed:

The evidence supporting the nuisance claim was the proof regarding buried whole waste tires.  In order to determine the reprehensibility of burying whole waste tires, the trial court considered the State's policy regarding such action. To this end, the trial court correctly noted that the State has enacted legislation against burying whole waste tires, recited the public policy behind that legislation, acknowledged that [the contractor] was aware of the State’s policy against burying waste tires, and
observed that high civil penalties are permissible for burying waste tires. In our  view, the fact that the legislature has determined it necessary to prevent the improper burial of tires “to protect the public health, safety and welfare” is important in the discussion of the reprehensibility of [the contractor's] actions.

Interestingly, the Supreme Court did not decide whether a private right of action existed for a claimed violation of the state's environmental statutes because the jury did not find the existence of any "environmental tort" and neither of the parties raised the issue on appeal.

For the contractors out there, Goff is a good reminder of the total exposure (including significant punitive damages) for violation of state waste disposal and environmental laws.  For the legal practitioner, Goff instructs that a statute may be used to define the public policy for proving punitive damages even when there is no violation of the actual statute.

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Not many things in life are free.  So you can imagine my excitement over the weekend when I received an email to attend a free sneak preview webinar featuring Robert Watson, the "Father of LEED."  Better yet ... you are invited, too!

Join this fast paced live 60 minute free webinar to hear a first-hand presentation and analysis of the second edition of the Green Building Market & Impact Report by the report’s author Robert Watson, GreenerBuildings.com Editor, industry leader and LEED “founding father.” 

In the Green Building Market & Impact Report 2009, the authors attempt to answer whether commercial green buildings live up to their name—that is, that they are engendering demonstrable environmental improvement. The findings are described by the authors as "both encouraging and cautionary."

 Overall, we believe that LEED buildings are making a major impact in reducing the overall environmental footprint of individual structures. However, significant additional progress is possible and indeed necessary on both the individual building level and in terms of market penetration if LEED is to contribute in a meaningful way to reducing the environmental footprint of buildings in the U.S. and worldwide.

Findings from this landmark survey include:

• LEED 2009 & Global Green Building Market Trends
• Worldwide impacts of LEED on LEED Market Trends
• Land Use Impacts
• Water Efficiency Impacts
• Energy Impacts
• Materials Impacts
• Indoor Environmental Quality
• And more…

All registrants get access to a downloadable version of the Green Building Report.

 

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I have my Google reader set to search various blogs, news sites, and Twitter feeds to help me keep current with the latest trends in the construction industry.  There remains one major problem: the words we use have different meanings for everyone.  

Take, for example, my search of Twitter feeds (above) for Building Information Modeling (BIM).  If you were to do the same search during a weekday morning, the majority of results would return various individuals involved in some aspect of the construction industry either praising or criticizing BIM. Now, if you were to do the same search on any given Friday or Saturday night, you might be surprised to get a varied assortment of results (and photographs) of individuals out for a night of partying.  You see, BIM is also slang for "bimbo" or ... how do I say this ... a "lady with questionable morals"? 

What's the lesson here?  Did you click on this article because you thought it related to LEED or Green Buildings?  It kinda does.  It kinda doesn't.  The lesson is that we live and work in a world where information spreads quickly.  In addition, we have become informal in our communications through the use of email, texting and Twitter.  (And in our personal lives, there may not be anything wrong with informality in our communications.)

However, the construction project is built on expectations and performance.  Where those expectations are accurately and correctly reduced to a writing, the parties have a written contract.  Where the parties use words that have different meanings (and both interpretations are reasonable), we now have an ambiguity.  A judge or arbitrator will then be asked to interpret that ambiguity based upon any number of legal tools (i.e., parties' words and conduct, other writings outside the four cornings of the contract, industry norms, etc.).  As the construction industry begins to employ new technologies, such as BIM, or new performance based goals, such as energy performance from a LEED certified building, then it becomes even more important that we use words that do not lead to miscommunication.

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Living in the SEC at this time of the year is exciting!  The competition is fierce and everyone has their favorite.  And I am not talking about football . . .

Last week, I highlighted that Tennessee Lt. Governor Ron Ramsey was speaking to a group of contractors in Nashville at the annual convention for the Associated General Contractors of Tennessee.  At the same time Ramsey was commenting that Tennessee should be the "green leader in the South," a four-member panel in Birmingham, Alabama urged business leaders to take advantage of its central location and become "the epicenter of green for the South."

Going Green: Sustainability in Tough Economic Times, which was sponsored by the Birmingham Business Journal, featured a number of green business executives who touted the region's ripeness for growth: "The Southeast is the fastest-growing area for green construction . . . . That is mostly because it is so far behind. However, Birmingham could tap into that growth."  Although many of the "going green" recommendations were about creating energy-efficient environments, one panelist believed that better siting should dictate the activities of business owners.  Chris Miller, co-founder of Piedmont Green Building Solutions, LLC, wondered why business wanted to build beyond the reach of downtown:

Birmingham-area business owners should focus on improving the city’s inner core instead of building in outlying areas, Miller said. It’s puzzling as to why a number of businesses build new facilities outside Birmingham on undeveloped land when there are plenty of opportunities to establish facilities in developed areas inside the city, he said.  “I wonder why people build outside of downtown when you already have this infrastructure in place,” he said. “It’s all about mindset and a culture change.”

The smack-down doesn't end in Birmingham.  Beginning with a reception later this evening ... and continuing all day tomorrow ... the first-ever Tennessee Green Building Summit will focus on green building initiatives in a tight economy.  The following organizations have committed to participation:

• Office of Energy Efficiency & Renewable Energy U.S. Department of Energy (DOE)
• Tennessee Valley Authority (TVA)
• State of Tennessee—Tennessee Department of Economic and Community Development
• Nashville Electric Service (NES)
• Association of Tennessee Valley Governments (ATVG)
• Southeast Energy Efficient Alliance (SEEA)
• National Association of State Energy Offices (NASEO)
• National Energy Services Coalition (ESC)
• National Energy Services Companies (NAESCO)

While I am sure that both Tennessee and Alabama have something to offer to this "greenest leader in the South" competition, it is important to remember the distinction between goal and outcome.  With respect to green buildings, one of the litmus tests is the number of LEED certified buildings.  According to last week's green building study by the Chicago Tribune, the only southern jurisdiction that made the "Top Ten U.S. Cities" was Atlanta. (Go Bulldogs!)  If you are talking about alternative and renewable energy legislation, then perhaps you will find most of the leaders outside the SEC.

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You've read the play on words: LEEDing the way ... In the LEED ... LEEDership ... and even LEEDigation.  In an address to a room full of contractors, suppliers, and (a few) attorneys on Thursday afternoon, Lt. Governor Ron Ramsey (R-Blountville) said that the state is committed to being a leader of sustainability in the South: "Honestly, I think we need to lead the wave of green."

Ramsey was the keynote speaker at the annual convention for the Associated General Contractors of Tennessee. His animated address focused on the pro-business initiatives throughout the state.  Ramsey said that Tennessee has traditionally been rated within the top three states in the country, alongside Texas and North Carolina, for its pro-business environment.  Ramsey also took the opportunity to publicly announce key appointments to various committees in the Senate.

During the Q&A session, I asked the Lt. Governor about the future of green building/alternative energy in Tennessee and where these issues fell with respect to his pro-business focus.

Ramsey smiled, commenting that as a "conservative Republican" most people would not imagine him "pushing green [programs]."  Ramsey then highlighted two major businesses that manufacture and build alternative energy solar products (Hemlock Semiconductor Group and Wacker Chemical) that have recently committed to investment in Tennessee.  The Lt. Governor also suggested that certain initiatives through the State Building Commission could help Tennessee lead the "wave of green" in the future.  In the end, Ramsey maintained his conservatism: "I'm not for more government regulation."  Instead, he suggested that results could be achieved through incentives and other programs.

While the Lt. Governor of Tennessee sees the state as being a "green leader" in the South, I am not sure it will be the "green LEEDer" until there exists a state-wide green building code.  And right now California stands alone on this issue.

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There has been a lot of talk recently about measuring a green building's performance after construction has been completed.  Last week, I highlighted what the United States Green Building Council (USGBC) had to say about the issue.  On Monday, Mireya Navarro of the New York Times wrote a lengthy article about green buildings not living up to their performance expectations.

Almost immediately, green voices across the internet have shared their critiques and criticisms of Navarro's article.  For example, Preston Koener at Jetson Green comments: "Navarro's not breaking any new ground here, especially for those ensconced in the green building world; however, like the ingredients of a hot dog, the general population needs to understand what LEED is made of."  Koener continues his assessment by describing the LEED process and the distinctions between design, construction and operation.  An excellent read!

On the more critical side, Lloyd Alter at Tree Hugger cuts to the chase ... suggesting that the New York Times is "behind the times" and "distorts" the LEED energy performance issues.  According to Alter, the NYT article "stretches the point" by highlighting an older building designed and constructed under outdated LEED standards.

What do I think?  I think we need to look at another player in this scenario ... the Green Building Certification Institute (GBCI) ... which is the entity responsible for project certification and professional credentials.  On its website, GBCI summarizes the LEED 2009 Minimum Program Requirements (MPRs).  I previously reviewed the "revocation" language in the MPRs and the commentary from many of the industry players. But you should look at the actual language of MPR #6, which states that the building owner must commit to sharing whole-building energy and water usage data:

All certified projects must commit to sharing with USGBC and/or GBCI all available actual whole-project energy and water usage data for a period of at least 5 years. 

This period starts on the date that the LEED project begins typical physical    occupancy if certifying under New Construction, Core & Shell, Schools, or Commercial Interiors, or the date that the building is awarded certification if certifying under Existing Buildings: Operations & Maintenance. Sharing this data includes supplying information on a regular basis in a free, accessible, and secure online tool or, if necessary, taking any action to authorize the collection of information directly from service or utility providers. This commitment must carry forward if the building or space changes ownership or lessee.

GBCI still reports that the LEED 2009 Supplemental Guide is expected to published in summer 2009, which by my calendar has already passed. Has anyone seen a copy of this guide yet?

Now you may understand why there are so many divergent green voices out there: from Navarro to Koener to Alter.  First, there was a desire to design and construct a green building that achieved certain energy efficiency standards.  Then, there was trophy (i.e., certification) awarded to the building owner for excellence in the design and construction of such a sustainable project.  Now, there is a warning from the trophy giver that the "certification may be revoked" for "non-compliance" with any applicable standard.  However, that applicable standard (as it reads now) is merely a "commitment" from the owner to provide certain energy performance information.  That standard is not an actual achievement energy savings.  Let's hope the trophy giver can clarify the issue through its new Building Performance Initiative.

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When discussing the short and long term building performance of a green project, the issue generally comes down to the following question: Is there any identifiable or measurable gap between the predicted building performance (in the design and construction phases) and the actual bulding performance (during occupancy, operation and maintenance)?  This issue has been addressed in part by a number of my colleagues, including Stephen Del Percio ("Energy Performance in LEED Buildings: A History") and Chris Cheatham ("Real Life Example of the Energy Performance Gap").

Yesterday, I saw the following following press release: USGBC Tackles Building Performance Head On.  The USGBC announced the Building Performance Initiative, which is intended to assist LEED building owners and project teams to close the gap between predicted performance and actual performance.  The new initiative seeks to tackle building performance by the following:

1. Employ a comprehensive data collection effort from all buildings that have acheived LEED certification;
2. Implement an appropriate method to analyze the data collected; and
3. Provide feedback to building owners.

There will be four summits held across the country in September and October to preview the proposed data collection and data analysis methods.  "The local summits are a way to gather people's input for our vision and also for them to share their performance stories, successes and challenges," said USGBC LEED Senior Vice President, Scot Horst.

Although USGBC says that it is ready to rumble by tackling building performance head on, it will be interesting to see some of the ideas previewed in these summits.  Already, we have heard from numerous industry players about the proposed enforcement tactic of revocation.  One of the more significant unknowns is determining whether LEED certification (based upon design and construction) should be separate from building performance (based upon actual assessment). In other words, will USGBC have a multi-tier certification for design/construction and performance? Will USGBC have a conditional certification based upon predicted performance? Will USGBC extend the certification process to include building performance? The USGBC better be ready to rumble!

Photo: Wade

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A few weeks ago I tweeted about the local building code in Nashville "under review."  Actually, those words were a little weak.  What about these words: "Contractor Leads Attack Against Nashville's LEED Legislation" ... the exact words used by my colleague Stephen Del Percio, attorney and author of Green Real Estate Law Journal.  A good analysis by Steve!  

The original article by Michael Cass in The Tennessean highlights a local contractor's frustration with the LEED requirements on a school project.  However, Councilman Duane Dominy, sponsor of the bill, said he didn't write the legislation specifically to help the contractor and isn't trying to "do away with LEED." 

According to the title of the legislation at issue (BL2009-503), the bill seeks "to allow an alternative to LEED certification based upon lowered measured energy use."  The legislation was introduced on July 21, 2009 and passed its first reading. The bill was then referred to the Codes Committee. It was scheduled for three votes on August 6, 2009, but was "deferred" for a later time.

Importantly, the preamble contains a statement that any alternative should be allowed "provided the alternative system will result in actual lower measured energy use."  There are many signficant highlights of the proposal, including the following:

• it allows for a city-wide approval of an alternative to LEED certification;
• it requires "actual lower measured energy use" for an alternative system
• it requires the governing authority (Metro Goverment) to approve a certified or duly recognized "business energy professional" to monitor the energy use 12-18 months after substantial completion

Finally, here are the two kickers:

D. If the energy use objectives are not met, the pre-determined entity responsible for the warranty shall reimburse the Metropolitan Government for excess energy use costs for any year of the warranty period based on the energy rate costs prevailing during the first year of the warranty period. The entity responsible for the warranty shall provide the Metropolitan Government an irrevocable warranty surety.

E. No warranty penalty or reimbursement shall be applicable if the Metropolitan Government significantly changes the function of the facility beyond what was originally authorized by the final use and occupancy permit.

A couple of thoughts on this new legislation: First, it will be interesting to see whether a surety will step up to the plate with an irrevocable warranty.  I cannot imagine the difference in energy costs savings and losses would be so significant so as to place the risk beyond insurability. 

Second, there remains a carve-out in the event that the owner changes the function of the building beyond what was anticipated.  In other words, there appears to be a less stringent standard ... or no penalty ... for major rennovations that perhaps change the function of the building.

Finally, the legislation demonstrates that there is, and will continue to be, tension between the LEED rating system and alternative rating systems, particularly as local and state jurisdictions become more green-saavy in their understanding of sustainable design, energy performance, and longterm investment strategies.

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Which is worse: (a) one lawyer in a room of one hundred architects; or (b) one architect in a room of one hundred lawyers? 

Two weeks ago I found myself in the first category (... although I'm sure that I was not the only shark in the room ...) at a local United States Green Building Council (USGBC) meeting that featured the "2009 Top Ten Green Projects" awarded by the American Institute of Architect (AIA) Committee on the Environment (COTE). In case you don't know, every year COTE highlights the top green projects based upon the measures of sustainable design.  According to COTE, "Sustainability envisions the enduring prosperity of all living things ... [and] ... [s]ustainable design seeks to create communities, buildings, and products that contribute to this vision."  The measures of sustainable design include, among others, design and innovation, land use & site ecology, materials & construction, and energy flows & energy future.

The "Top Ten" from 2009 may be old news to many of you.  However, it is worth mentioning here because of the AIA / USGBC comparison that was highlighted in the 2009 presentation:

As you can see, the COTE Top Ten Measures go a few steps beyond the LEED rating system.  According to the speakers a few weeks ago, Henry Siegel and Kim Shinn (both were judges on the 2009 Top Ten panel), the COTE measures include both quantitative and qualitative measures (or "intangibles").  In the presentation above, the measures highlighted in yellow on the left are those areas not fully addressed by USGBC's LEED rating system. 

(... DON'T JUMP THE GUN, USGBC!... I am not done yet...)  This presentation was based upon the LEED v 2.2 criteria ... and not LEED 2009, which now addresses some of those areas included in COTE's Top Ten Measures (i.e., regional credits, future energy performance).  For the green-building newbie, the Top Ten Green Projects is a good starting point for seeing various sustainable measures carried out in actual building projects ... with cool pictures, too!

[NOTE: The full presentation can be found on AIA-COTE's website ... about halfway down on the left.]

UPDATE (8-1-09): Thanks to Michael at www.buildinggreen.com, who pointed out that Henry Siegel is past chair of AIA COTE and is currently a committee member. He was not a judge on the panel this year.

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Today’s post was written by François Lévy, an architect, author and professor. Lévy maintains a blog, Sustainable Architecture, which he describes as a collection of short and thought-provoking essays on sustainability and architecture. Lévy resides in Austin, Texas with his wife and three children.

As an architect and a concerned citizen, I am frequently required to evaluate the cost of a particular technology or artifact, and then voice my opinion or advise a client as to its value. Cost accounting is typically framed within the context of manufacturing or production. In this model, all contributing costs are determined (by one of several competing methods) only up to the moment a manufactured item is produced. Thus contributing expenditures are the sole determinant of value; cost accounting is hence inherently historical. Furthermore, it is inherently consumerist: in its particular analysis of the cost of production it implicitly treats the artifact as relevant only through the production process; afterwards consideration for the artifact is discarded in effect by neglect. At no time are the costs of the consequences of the artifact considered. In order to shed some light on some of the implicit difficulties in measuring cost, let’s look at a couple of seemingly innocuous commonplace technologies.

When we think about the environmental impact of an automobile, we tend to think of the car alone, as an object. But there are in fact two technologies at play: the technology of the artifact itself (the car qua particular machine), and the technology of the “ecosystem of carhood.” By the latter inelegant term I mean its embodied energy (the extraction, processing, and manufacturing of natural resources) and the consequences of its utility (in the form of hydrocarbon consumption, roads and the complex economic infrastructure, including sprawl, which support this particular form of mechanized personal transportation). The individual may enter a power relationship with the particular artifact, but is de facto helpless against this “ecosystem of carhood,” as that system controls, or at the very least heavily influences, her regardless of whether or not she individually owns a car.

As another common example of the limitations of cost accounting, consider weighing the merits of maintaining existing overhead power lines as opposed to running them underground (the grammatically unpalatable “undergrounding”). Such an analysis would inevitably point to some of the difficulties with calculating true costs, such as accounting for an artifact’s embodied energy and consequences. One can compare overhead and underground electrical distribution system’s relative reliability, but it becomes difficult to calculate relative lost productivity attributed to outages, not to mention lost billing opportunities to the utility company, and emergency repair costs. But where cost accounting fails utterly is in valuating qualitative factors like aesthetics, because these dimensions are social. In some cases individual utility consumers are unwilling to pay reasonable but significant sums for underground service, but in others communities regularly pay on the order of $1M per mile for conversion to such service. Collectively consumers seem willing to pay what individually they reject, even if the cost per distance is the same or similar.

In the end, cost accounting is only about, well, cost, and is not concerned with an artifact’s value. Any method for evaluating cost that relies solely on historical production data, rather than a community consensus of an artifact’s phenomenological context, will tell an incomplete story. An analysis of cost treats artifacts as objects (as in, “objectification”), pigeon-holing them as phenomena disassociated from their use, whereas considerations of value postulate that artifacts are meaningful as experiences in their broader social and environmental context. Cost is therefore not sustainable because it alienates artifacts from the environment; value is sustainable because it contextualizes artifacts as having agency within the larger environment.

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Mom always said I was a late bloomer (... Wonder what she meant? ...)  Well, you can call me late to this game, but hopefully not too late. 

Perhaps the best summary of the new LEED 2009 Minimum Program Requirements (MPR) can be found on Stephen Del Percio's Green Real Estate Law Journal.  Last week, Chris Cheatham's Green Building Law Update caught on fire with comments about his post on LEED Decertification.  The match that lit the fire turned out to be the following language found on USGBC's website about the MPRs:

NOTE: CERTIFICATION MAY BE REVOKED FROM ANY LEED PROJECT UPON GAINING KNOWLEDGE OF NON-COMPLIANCE WITH ANY APPLICABLE MPR.  IF SUCH A CIRCUMSTANCE OCCURS, REGISTRATION AND/OR CERTIFICATION FEES WILL NOT BE REFUNDED. 

A couple of observations from my neck of the woods.  First, I am not sure that the fact USGBC has wielded this revocation stick is as noteworthy as its ramifications. Indeed, verification requirements and revocation/de-certification processes appear in various substantive areas of law (i.e., union and labor, banking, minority business, etc.). What is noteworthy, again, is the fact that the revocation stick will have undetermined consequences. 

In other words, the authority to revoke LEED certification from a project raises legal concerns beyond the scope of LEED’s stated intent—that is, to provide “building owners and operators a concise framework for identifying and implementing practical and measurable green building design, construction, operations and maintenance solutions.” Now we are talking about issues like: third party standing to initiate decertification proceedings, time elapsed certification, regulation enforcement and insurance coverage questions.

Next, would you be surprised to learn that the concept of "permit revocation" has been adopted by a local municipality for green projects that fail to provide proof of LEED certification? That’s right, last fall the City of Gaithersberg, Maryland adopted the “Green Building Requirements” to amend its building code, which included the following revocation provision:

3110.2.4 Verification. Within eighteen (18) months after the receipt of a Certificate of Use and Occupancy, the applicant shall provide proof to that the required LEED-level rating was obtained. Failure to submit the required proof shall be grounds for revocation of the Certificate of Use and Occupancy.

This code was passed almost one year ago. I’m looking into whether any revocations have occurred yet under this new Gaithersberg ordinance.

 Finally ... and here's the kicker … apparently, a LEED revocation is underway or has already occurred somewhere out there. According to the literature for the Green Buildings Seminars in September 2009, there is one reported instance of decertification proceedings. Lawrence Spielvogel, an independent consulting engineer, is scheduled to “discuss why this non-compliance typically occurs, and will describe the actions of the designers that led to the first ever decertification of and plaque removal from a LEED Certified project.” 

 Did I read that correctly?  Let's ask Larry ...  ring ... ring ... [conversation] ... hang up phone ... Yes, I read that correctly! Looks like we have to wait for the presentation in September 2009 to report on the whole scoop.  Perhaps Shari will go for me?

 And now ... what I promised in the title of this post ... here is what some the industry experts have said about the revocation issue:

  If I missed you, send me an email and I will update the list.

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I realize that the title to this post may scrunch some “What you talkin’ about, Willis?” eyebrows to the many LEED AP-construction-green-building-attorneys out there. However, the title really conveys the first words that ran through my mind as I read Gary Cole’s post on The Real Green Goblin – Emerging Legal Liability for Green Design Professionals and Contractors on his blog LAW/ARK.

I must admit that I jumped to various conclusions prior to reading Cole’s entire post. Instead, I focused on the following statements:

The bad news is that attorneys, especially those already practicing in construction law, will soon realize that aside from green design and construction’s sometimes specialized and occasionally ill-defined vernacular, there’s no real novelty in the types of claims that might arise.

No new frontiers of jurisprudence need be explored–a leaky green roof is still a leaky roof–whether it also requires regular mowing and landscape maintenance changes little from a legal perspective.

As I continued reading the post, however, I realized that Cole was marching in the right direction, particularly with the following statement: “In non-legal terms, most legal liability associated with green design and construction will arise from one issue–though it’s an issue with many faces–unfulfilled expectations.” Cole even makes a call out to the “fellow attorneys” reading the post with a disclaimer that this is an oversimplified analysis of the legal claims available.

When discussing green building claims, perhaps the best point made by Cole is understanding the balance between a project’s “green marketing claims” (or its “form”) and its “real performance (or its “substance”). I view that so-called "balance" at the heart of the issue. While it can be said that green building disputes will arise primarily from parties’ unfulfilled expectations–as do most commercial contract disputes–the form and substance will be an inherent part of any claim, whether pursued in contract, tort or otherwise.

Cole may be right that there is no novelty to the traditional types of claims (contract, tort, statutory, etc.) that may arise in green construction disputes. However, the novelty in the green building industry is the new set of standards that will inevitably become part of the legal dispute. In other words, while “a leaky green roof is still a leaky roof” … there will be new risks to be allocated, different types of damages lost, additional players involved, varied proof required and, yes, perhaps a novel cause of action alleged because that leaky green roof system failed.  Given the relatively uncharted territory, I cannot say that "green building for attorneys is merely hoopla" ( ... my words ... not Cole's ...)

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I know that I am a few hours early, but Governor Phil Bredesen is scheduled to sign the Tennessee Clean Energy Future Act of 2009 today at 1:30pm.  He will be joined by key legislators, as well as members of his Energy Task Force.

Among other provisions, the new law will provide for: (1)  a limited statewide residential building code to promote energy efficiency, (2) new energy usage guidelines for state buildings and vehicles, and (3) an extension of Tennessee’s emerging industry tax credit to the clean-energy technology sector. You can find the bill summary on the General Assembly's website, along with the full text of the new law.

Under the new law, the State Building Commission has the authority to implement various cost-saving measures. 

The measures may include, but shall not be limited to, maintenance, repair or replacement of lighting and mechanical equipment and related controls. Energy cost saving measures may be implemented through contracts with energy professionals including, but not limited to, energy service companies, commissioning and retro commissioning firms and agencies and energy auditing consultants.

There are no new state-wide LEED certification requirements, though.  In due time ... in due time.

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Just when you thought it was safe to put up your study books, your on-line prep exams, and your stacks of flash cards ... there is a new professional certification available for all you sustainable design players.  Green Roofs for Healthy Cities announced last month its Green Roof Professional (GRP) Accreditation Program at the 7th Greening Rooftops for Sustainable Communities Conference, Awards and Trade Show in Atlanta. The GRP accreditation exam focuses on five key areas, including predesign, design, contract management, quality assurance and support, and maintenance.

While it is informative to learn about a new accredited professional in the green building world, a key issue is understanding the role of "professional accreditation" (whether LEED AP or GRP or other designation) in the green construction process.  According to Green Roofs' website, becoming a GRP can provide a number of important benefits that are key to the long-term health and growth of the green roof industry, including the following:

• Enabling professionals to differentiate themselves in the marketplace.
• Establishing a high-level of professionalism and improved multi-disciplinary collaboration.
• Increasing customer confidence in green roof technology.
• Resulting in better green roof design and installation practices.
• Protecting the industry from the inevitable failures that result from inappropriate design, installation and maintenance practices.

According to the Green Building Certification Institute, the LEED credential "provides employers, policymakers, and other stakeholders with assurances of an individual’s current level of competence and is the mark of the most qualified, educated, and influential green building professionals in the marketplace."

Is that what these AP-ers provide? Customer confidence or assurance? Better green designs and installation practices? Understanding that there will be different levels of consultation—from technical advice on a rainwater pit to legal advice on risk allocation—perhaps GBCI got it right by creating the new multi-faceted credentialing system that seeks to differentiate between accomplishment, knowledge, expertise and longterm success in the industry (Green Associate, LEED AP BD+C, LEED Fellow, etc.). 

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What does it take to become a Rockstar of Sustainability in today's environment?  As reported by Wendy Koch of USA Today, it takes the following:

• Being an architect in San Francisco with a desire to build your own eco-friendly home

• Taking 14 months to actually build it

• Designing a more, affordable alternative

• Stalking manufacturers to build the prefab home

• And ... winning an innovation award from the National Association of Home Builders for all the work you did!

This Rockstar of Sustainability is ... Michelle Kauffman ... and she has tapped into a growing market.  The modular homes range in cost from $100,000 to $1 million.  The USA Today article has an interactive home plan that demonstrates the green features.  As far as savings, Kauffman's own home has a zero-energy bill since the home produces about two times the energy (through solar panels) than the home uses.

Another Rockstar of Sustainability is ... Warren Buffet ... who is being reported as having introduced a line of green prefab homes through a Berkshire Hathaway subsidiary called Clayton Homes.  The green features include: well insulated exterior walls, floor and roof; low-e windows; metal roof designed for rainwater collection; No-VOC paint; high efficiency heat pump; and dual-flush toilets.  Other feature options include: 2-4 kilowatts of solar PV panels; bamboo flooring; tankless hot water heaters; Energy Star appliances.

Riddle me this, Batman Green Lantern, AP?  Which LEED credits should the project seek?

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Look around the internet and you are sure to find one of these:

The design team of a 28,000 sq. ft. public school hope to achieve SS Credit 6.2, Stormwater Design: Quality Control, in the LEED-NC Rating System. Incorporating which of the following green building elements into the design would aid the team in achieving this credit? (Choose three)

A. constructed wetland

B. solar hot water system

C. vegetated roof

D. infiltration basin

E. high-albedo concrete

The correct answers are A, C, and D. (Thanks www.intheleeed.com for the sample.)  Well, if you look around Nashville, you are sure to find a real life LEED AP exam question brewing on some property known as Bells Bend.  It's called the May Town Center ... and the development has both supporters and critics.  If you think I'm kidding about the exam question, watch this clip and listen for words like "sustainable site" "light reduction" and "green-washing":

Following hours of heated open hearings, the Planning Commission voted last week against the proposed land use plan for the development. According to the Nashville Business Journal,

The Metro Nashville City Council has final say on zoning changes and will take up the issue in a public hearing on July 7. However, with a negative recommendation from the planning commission, the zoning measure will need 27 votes from the council, rather than the 21 usually required. . . .The planning staff had recommended approval of a zoning request to allow the development, but that was contingent on the land use plan amendment. The commission then voted down the proposed zoning changes.

There are many of us in Nashville closely watching the May Town Center development and I look forward to reviewing some of the LEED-related issues on the project, as well as reporting back after the July hearings.

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I know it's a gamble to think that my wife or kids would be reading Best Practices ... but in case you do ... my birthday is right around the corner ... and I want one of these:

Gadgets like the Canadian-based ecobee Smart Thermostat are coming to America!  ecobee has partnered with Brady & Associates, as well as opened a new office in Florida, to roll out this digital, energy-saving thermostat.  The ecobee has an integrated programmable smart thermostat with a WiFi-enabled touchscreen that automatically sets your household to conserve energy with a touch of a button. 

The ecobee can now also be purchased online ... but that's not the only thing happening via the Internet.  You can actually monitor and control your home temperate remotely from a personalized web portal.  That means I won't have to get out of bed at night to turn on the air conditioner ... I can use my Blackberry (... or iPhone ... another birthday wish ...)

This post, however, is not entirely about my wants and desires.  Let's talk about this little gadget's effect on the green building industry.  For example, the ecobee Smart Thermostat was installed in the Minto's Inspiration line of echo-homes, which has been touted as "one of Canada's greenest homes."  It has been reported that the ecobee company built its product platform around the LEED rating system.  The company's Smart Thermostat was even selected for use in the "Smart Home: Green + Wired 2009" exhibit in March of this year, presented by Wired Magazine in partnership with Chicago's Museum of Science and Industry.  The promotional material indicates that the device can recoup its $385 price tag within the first 12-18 months of use.

Has anyone out there installed and used an ecobee?  Let me know before July 12 ... that special date right around the corner!

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Within the past couple of months, BNA started a new report called Infrastructure Investment & Policy Report.  Earlier this week, I was contacted by BNA reporter Kate Naseef to share some thoughts about HR 2454, the climate change legislation that was recently approved by the House Energy and Commerce Committee and its affect on the construction industry. 

According to AGC and ABC representatives, Naseef writes, the climate change bill is a "mixed bag" because it offers both opportunities for new construction and building modifications, but it could also lead to increased costs and delays given the regulatory hurdles. The article also highlighted comments from Cathy Altman, a good friend and construction attorney in Dallas:

Fewer, Bigger, Green Projects

 

As building shifts to more carbon-friendly facilities, there will be fewer, but bigger projects “because of the higher capital costs of green construction,” Cathy Lilford Altman, an attorney with Carrington, Coleman, Sloman & Blumenthal, L.L.P in Dallas, said.

 

A cap-and-trade program and renewable energy standards are going to further experimentation and use of new technologies and new construction means and methods, “which could open up opportunities, but also create risks,” Altman said. “There's a certain amount of trial-and-error that is going to be inevitable,” she said. Owners are going to want guarantees that designers and contractors might not be able to give until the new technologies and processes are tested.

 

Designers, engineers, and contractors are going to have to get accustomed to working with new materials and new technologies that add cost on the front-end of a project, Matthew DeVries, an attorney with Smith Cashion & Orr, PLC in Nashville and author of www.bestpracticesconstructionlaw.com, a construction law blog, said. Whether or not this results in savings down the road remains to be seen, he said. 

Although there are reports that HR 2454 will be brought to the House floor next week, it will be interesting to see any mark-ups from the Transportation and Infrastructure Committee chaired by Rep. James L. Oberstar.  For those of us outside the Beltway, keep us informed BNA!

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According to its website, BNA "publishes—in print and electronic formats—more than 350 daily, weekly, monthly, and up-to-the-minute news services covering the full range of legal, legislative, regulatory, and economic developments that impact the business environment around the nation and the world."  If you are not a subscriber of BNA, you can take a test run of all of its services. 

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You may not know this, but I grew up in New Mexico . . . the Land of Enchantment . . . until I moved to Washington, D.C. to pursue a career in politics and law. In fact, I just had my 20-year high school reunion back in Albuquerque this past week. Do you know how hard it is to get seven of your favorite restaurants into only two days worth of mealtimes? I managed.

Coincidentally, right before my trip, I received an email from an acquaintance who I met during one of my seminars at the Falmouth Institutes’ Construction in Indian Country conferences a few years ago. Donavan Natachu, Project Manager for Zuni Housing Authority, wrote:

As far as our construction we are turning towards green building. So far we have built 4 units. We use ICF’s, low–e rated windows, energy star appliances, light fixtures, and bulbs. The ICF’s that we are using are Quad-Lock and they are very simple to set up. . . . There is so much and different new materials coming out for green building that it’s hard to make any decisions on whether to use them or not.

Donavan also said that the Zuni Housing Authority is currently seeking additional HUD funds in the stimulus package that will include green construction. I was glad to hear back from Donovan and the Zuni’s commitment to best practices in construction.

I wonder what resources are available to Indian Country for green construction projects? Here are a few of the more interesting tidbits: 

• Building and Buying Green in Indian Country: A Practical Guide for California Tribes
• A great article by Dean Suagee on tribal sovereignty and the green energy revolution 
• A residential project in Window Rock, Arizona that was designed by Keya Earth with the "hopes of becoming a trend across Indian Country."
• A short 2006 case study by Shelley McGinnis on sustainable design and green building in Indian Country.
• Indian Gaming magazine's article on Architectural Design in Indian Country

The California Guide is the most informative resource for providing an overview of “green” building practices to help tribes evaluate and choose sustainable options as they develop projects with architects, contractors, suppliers, or other building professionals.  The Indian Gaming article really highlights the desire to maintain a tribe's cultural heritage with sustainable design and building practices.

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My kids yelled at me last night: "Dad! The plastic container goes in the plastic container box! NOT THE TRASH!"  Nice. Environmental-friendly-kids.  

Even in my day-to-day law practice, I am finding that I am taking small steps to lessen my impact on the environment.  (... Did I just say that?  Out loud? ... )  I am reading correspondence, project documents, and pleadings electronically.  I am selectively sending out correspondence "Via Email Only" to my clients and opposing counsel.  And I just started an monthly e-newsletter.  If you would like to join, please sign up. 

My first newsletter just went out this week and I have received numerous positive responses (... Hi Lauren! Hi Jeff! Hi Kelly! ...)  My e-newsletter host, MyEmma, and their partner, Plant-It 2020, planted 5 trees on behalf of Best Practices Construction Law and 1,645 trees on behalf of other customers who signed up in May. 

Whether law firm, non-profit organization, architect, engineer, owner-developer, contractor or supplier ... what are you doing to lessen your impact on the environment?

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And I only have 18 days until my test ... because I am taking the test on the "second to last" day.  If you are wondering why I am calling it the "last" LEED AP 2.2 test, GreenSource explains the basic requirements of the new LEED categories, including an easy-to-read chart of credentials.  If you have not already registered for the version 2.2 test, then it's too late.  If you have registered, then you should already have a scheduled test date ... and June 30, 2009 is the last possible date to take the LEED AP 2.2 test.  If you already passed, BuildingGreen.com explains what it means for you.

I know there are endless resources (...free and not-so-free.,.) out there that can help you prep for the exam.  Well, thanks to my partner Vic McConnell (...Mom always liked you best...) who passed the exam last week, I have a plan of action.  With the obligatory disclaimer (...there are no guarantees that you will pass if you follow this method...), here are some of the materials that I am using for my preparation: 

• USGBC Reference Guide (LEED Reference Documents)
• USGBC Colorado Chapter Study Guide (Test)
• intheleed.com (LEED AP Walkthrough; audio files)
• Greenexamprep.com (5 sample tests; flashcards)
• GBCI Candidate Handbook
• University of Florida "Learning to Leed" website
• Leedexamstudy.com (online courses)
• Summary Chart ... homemade
• Memory Chart ... homemade

Here is a list of substantive issues that I am focusing on for the test:

• Certification ratings and points
• Six credit categories (WIMSIE)
• Code/Standards referenced (especially ASHRAE)
• Exemplary Performance Credits/ID Credits
• Project registration
• Project certification process
• CIR process (Credit Interpretation Rating)
• Appropriate rating system (LEED-NC)
• Certification application & fees
• Prerequisites
• Introductory sections to each credit
• Submittals for each credit
• Submittal phases
• Commissioning (EAP1 & EAc3)
• Synergies between credits
• Relations between SS 6.1 & 6.2; SS 5.1 & 5.2; and SS 7.1 & 7.2
• Energy Performance credits EAP2 & 1
• EQ Credits (3.1 – 3.2)
• EQ Credits (4.1 – 4.4)
• Water efficiency  – plumbing fixtures involved
• Project administrator duties

 All you LEED-ers, did I miss anything? 

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That's not exactly how the headline reads ... but close enough.  The actual title is BIM Promotes Sustainability: Practitioners are Finding Paths to Green through Interoperable Software.  As reported by McGraw Hill Construction, this article demonstrates the practical utility of Building Information Modeling (BIM) on a construction project ... a green one!  MH reports about the restoration of the historic Grant School in Washington, D.C.: "The contractor had nearly finished the time-consuming coordination of mechanical, electrical, and plumbing trades. Then work ground to a halt. Local legislation had just passed requiring all public buildings to achieve LEED certification."

Although the project was exempt from the change in the law, the School wanted to demonstrate their commitment to green by seeking LEED certification.  Using BIM, modifications to the design (including the mechanical systems and the acoustics) were relatively straightforward.   Without BIM, the work would would have been prohibitive given the increased costs and delays associated with the re-design.

Two cool things ...

First, the Grant School project featured by MH typifies the benefits of technology in the industry.  According to Dwayne Sellars, BIM manager for Turner Construction, his company is using BIM even in situations where the architect does not because the model reveals conflicts between systems that are often discovered only in the field. 

Second, not only does the Grant School project illustrate the effective use of BIM technology, the format of article itself is exciting.  The article is presented in a case-study format as part of McGraw Hill's Continuing Education Center.  You can review the information and take a test for 1.00 credit for HSW/SD.  According to CEC, after reading the full article you will be able to: 

• Describe building-information modeling (BIM).
• Explain strategies for applying BIM to promote sustainability.
• Discuss uses of BIM at different phases of a building's life cycle.
• Understand how BIM relates to green "best practices" within your own discipline.

The real import of the article--and particularly the convergence of BIM and LEED--is realized upon reading the concluding paragraph:

Architects are receiving better, earlier energy-related analysis; engineers are providing more focused expertise during design; builders are reducing waste in construction; and facility managers are increasing the efficiency of their operations. And many of those experiencing the benefits of technology and teamwork have visions of still more capabilities and benefits in the future.

No time for the test, McGraw Hill ... but thanks for the good information.

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In this day and age of Biggest Loser, South Beach Diet, and the latest fitness craze highlighted by Oprah, I find myself more and more conscious about my eating habits. In fact, if you promise not to tell anyone, we have a little fitness competition within our own law firm starring four fatties. Although I have not been faithful to my own fitness regime (…again, please keep that a secret…), I have found myself diving into a new set of suits in my wardrobe. Herein lies today’s topic…the matter of perspective.

You see, according the average observer, my somewhat strained belt buckle and 1-inch-shy-of-buttoning jacket are signs of an outgrown suit. But little does that average observer know is two months ago I would not have been able to attempt the acrobats of wearing this suit to work. This is one of many suits from 10 years ago! Give me two more months and the pants will be sliding on with room to grow.  You see, that average observer has a different perspective than my family who has never seen me in these suits.

I view a lot of the challenges in the green building industry as emanating from a matter of perspective. There are countless resources available on the web about the legal risks associated with green building—just look at some of the green sites on the sidebar ( -----> ). However, as you scroll through some of those posts on green building, the tone of each writing evidences the perspective of each author. In the same fashion, a green building seminar given to construction attorneys is entirely different than a green building seminar given to owners, design professionals and engineers.

Stated differently, the parties’ expectations about the benefits of a green design will result in disputes. As noted by Frank Musica at the 2007 AIA Convention, these are often “unrealistic expectations” of the owner-developer that place significant risks on the architect. But Frank was presenting to a bunch of architects. What if the talk was given by Professor Thomas E. Glavinich at an annual AGC convention, who defines "the green contractor"?  (... If you look closely, Frank was there, too. Frank is everywhere ...)

Do you understand the potential disputes caused by the parties’ perspective? So long as each party maintains a different perspective on the particular issue, then disagreement will run the project performance. But if the parties are able to clearly and accurately reduce their reasonable expectations to a writing … a contract … then perhaps the perspective they will share is one of success.

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Best Practices. Lessons Learned. Reliable Methodologies. Successful Techniques. Scour the Internet and you will find any number of good definitions for "best practices", including:

• "A commitment to using the best practices in any field is a commitment to using all the knowledge and technology at one's disposal to ensure success." (What Is)
• "A technique or methodology that, through experience and research, has proven to reliably lead to a desired result." (Wikipedia)

"Best Practice ... implies accumulating and applying knowledge about what is working and not working in different situations and contexts, including lessons learned and the continuing process of learning, feedback, reflection and analysis (what works, how and why)." (VisitAsk)

I have fond memories as a newly minted lawyer in the Washington, D.C. area ... working for a nationally recognized construction boutique law firm ... writing various for senior partners on "lessons learned" and "best practices."  Through the years of research, writing and litigating, I learned that many disputes could have been avoided by employing best practices during all phases of the project ... contract drafting ... team building ... document management ... efficient technology ... and the list goes on forever.

To us, Best Practices Construction Law is "... using experience, knowledge and technology to ensure success in the construction industry ..."  And that is what we are going to explore.   In the process, we are going to have some fun.  I will open the door to my family ... you can do the same ... and let's make a difference in the construction world.

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As I was driving to work, a super-hero-like voice interrupted my morning news program on the radio: "Green Power Switch is coming to a neighborhood near you!  Green Power Switch will allow you, the consumer, to choose to purchase “green” energy from the companies that sell the power that TVA generates."

That’s right! The Tennessee Valley Authority and local power companies are banding together to offer their customers various alternatives of renewable energy (i.e., solar, bio fuels and wind).

Self, I ask, what’s the big deal with that? The big deal is that the speeches and PowerPoint presentations we’ve heard on renewable energy legislation and its effects on the construction industry are becoming a reality.  

Just a few weeks ago, the Green Ribbon Committee on Environmental Sustainability issued its recommendations to Nashville Mayor Karl Dean, including the following: 

• "Implement program at NES to switch from petroleum oil to a soybean-based oil for transformers used city wide."
• "Develop a Metro Green Fleet program to expand the use of electric vehicles, hybrids and bio-diesel to help diversify energy supplies, decrease emissions and support regional economic activity."
• Adopt an Advanced Metering Infrastructure (AMI) system for NES residential customers that would enable them to manage their energy consumption and conservation efforts.

From government initiative ... to legislative enactment  ... to industry standard ... to consumer incentive ... renewable energy will have a dramatic effect on the construction industry as a whole. Already, we are seeing green-related ordinances that affect the day-to-day business operations of your hard-hat construction contractors, laborers and suppliers.  Take, for example, the green cement ordinance in Dallas, Texas that requires use of cement from "dry kilns" versus "wet kilns."  That's good news if you operate a dry kiln ... not so good news if you operate a wet kiln.  In other instances, the issue is finding its way into the court system like City of Albuquerque v. AHRI, which blocked enforcement of various state energy conservation codes in New Mexico on preemption grounds. The plaintiffs were a group of HVAC and water heating equipment trade organizations, contractors and distributors.  (Steve Del Percio discusses the City of Albuquerque v. AHRI case on www.greenbuildingsNYC.com.)  

These are just a few examples of the 411 (... information ...) that you can find here at Best Practices Construction Law.  Check back soon for an overview of other green-related legislation affecting the construction industry.

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