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.