I am happy to share with you that I will be a contributing editor to ENR’s Viewpoint section offering commentary about legal and risk issues facing the design and construction industries.

My first contribution is titled, “An Uphill Battle Against LEED-Based Codes” where I review my predictions regarding the reception of the International Green Construction Code (IgCC) in the year ahead and the impact that the soon-to-be released version of LEED will have on the relevance of the IgCC. Click here to read the ENR.com article.

I invite you to follow along at ENR.com for future updates. We will also be posting links to those updates here and on our LinkedIn company page.

Thank you for your continued support.

Advertisements

Yesterday the construction practice group of Chamberlain Hrdlicka together with McDonough Bolyard Peck, Inc. and Sterling Risk Advisors hosted a seminar for real estate, design, engineering, and construction professionals called “Managing for the Rebound.”   The program included a public sector panel, private sector panel and the keynote speaker from Jacoby Development, Inc.  Click here for more detailed information about the panelists.

Here are some of the highlights addressed by the panelists:

Public Sector Panel

  • Fort Benning is rapidly expanding and building due to the movement of troops and operations from Fort Knox in Tennessee
  • Five years ago, annual construction at Fort Benning was consistently around $50 million per year
  • In 2009-2011, spending for construction projects at the base will exceed $350 million per year
  • As a result of the increased training mission at Fort Benning, it will have a higher priority for future congressional funding
  • After the major expansion is complete, annual construction budgets for the base are expected to increase for operations and maintenance contracts
  • The expansion of Fort Benning and the movement of troops to that area will bring additional construction projects in the form of county infrastructure improvements and schools and private development in residential, commercial and retail
  • GSFIC currently has 10 major projects open for solicitation that listed on the Georgia Procurement Registry and total more than $110 million
  • GSFIC recently had a bond sale in October which will fund just under $100 million in new construction projects
  • GSFIC also has 40 “smaller” projects totaling more than $35 million in energy-related upgrades that range from $50,000 to $2.2 million per project
  • Most new GSFIC projects will have some LEED requirements
  • GSFIC is embracing BIM (Building Information Modeling) and will include BIM expectations in future solicitations
  • General Services Administration (GSA) has active opportunities for the construction of courthouses in Mobile, AL; Savannah, GA; and Nashville, TN
  • Funds have been designated by Congress for the design of courthouses in Charlotte, NC; Greenville, SC; and Anniston, AL

Private Sector Panel

  • Experts believe that the Atlanta residential real estate market has bottomed out, but will not recover quickly
  • Apartments and multi-family housing will likely be the first sector of real estate to see capital investments and the first sector of construction to see increased activity
  • Panelists did not believe that the Atlanta commercial real estate market bottomed out
  • Technology has permanently changed the need for office space
  • Banks have liquidity and capital but are not lending due to the uncertainty of regulations and policies from the federal government
  • Once there is certainty in banking regulations, banks will begin funding new projects again but credit will be harder to obtain
  • Even during the recession, data shows that new companies are coming to Georgia and that existing companies are expanding
  • Atlanta metropolitan area has experienced a net increase in population even during the recession
  • Georgia is attracting companies in the biomedical, renewable energy, film producing and imaging industries
  • Future growth for the Atlanta area will have to be focused on more density rather than growing “outward”

Key Note Speaker

  • Jacoby Development purchased the former Ford Hapeville assembly plant to re-develop into a mixed-use development called “Aerotropolis” and has already completed demolition and cleaning of brownfields at the site
  • The timeline for development of Aerotropolis has shortened as a result of interest from potential tenants and end-users
  • The roof of the parking deck at Aerotropolis will be covered with solar panels capable of generating 10 MW of electricity that will be sold back to the grid (10 MW is roughly 1/3 of the electricity needs of Atlanta Hartsfield-Jackson Airport)
  • Jacoby is working on solutions to connect Aerotropolis to the airport and Atlanta through fixed-rail systems or other transit systems

We want to thank our co-hosts, panelists, key note speaker, and attendees for making this such a successful event!   Please tell us what you think.

For all those that have been waiting to see whether the LEED rating system would spark litigation, the wait is over.  On October 8, 2010, a class action lawsuit was filed against the USGBC and its founders.  The suit was filed by Henry Gifford and his company Gifford Fuel Saving, Inc. on behalf of “consumers, taxpayers, and building design and construction professionals.” 

Gifford has apparently been an outspoken opponent of the LEED rating system for a while, and in his lawsuit he alleges that the USGBC falsely claims that the LEED rating system creates energy savings when it does not and by doing so deceives building owners, designers, and other building professionals into believing that LEED buildings are more energy efficient than non-LEED buildings.  Of course, I’m paraphrasing the allegations—you can download the actual complaint here to read all of the claims.

Shari Shapiro has written a great commentary on www.greenbuildinglawblog.com about whether the designated categories of plaintiffs are similarly situated enough in order to survive the fairly rigorous legal standards for certifying a “class action.”  I agree with her assessment that the types of plaintiffs and the ways in which they have allegedly been damaged by the LEED rating system do vary widely.   For this reason, I believe the attorney for the plaintiffs has an uphill battle to fight on the class certification. 

But aside from the class action aspect of the lawsuit, Gifford’s main arguments are that the USGBC is perpetrating a huge fraud against the world by claiming that LEED certified buildings are energy efficient.  He claims that LEED does not require verification or actual energy use data to measure performance of energy savings strategies for which LEED points are awarded.  (Under the latest version of LEED—LEED 3.0—measurement and verification of energy performance is required following construction)   He also claims that the USGBC has manipulated data from a study performed by the New Buildings Institute (NBI) in March 2008 to falsely promote that LEED buildings are more energy efficient than non-LEED buildings.

Now, I obviously don’t know enough about the facts to make a judgment as to whether they are true.  But, I also feel like Gifford is not giving enough credit to his purported class of plaintiffs.  To believe Gifford’s allegations, you have to believe that sophisticated building owners and operators, as well as licensed design and construction professionals have all been misled by the USGBC to believe that LEED certification equals energy efficiency—end of story.  That ignores the fact that the LEED rating system has 5 other core areas of sustainable strategies that are part of the certification point system.  Energy efficiency is just one aspect of LEED, not the whole enchilada. 

 Is Gifford suggesting that building owners do not have any idea what they are bargaining for when they contract for a LEED-certified building?  Or does he simply believe that the value the owners place upon the LEED certification is solely based upon the energy efficiency strategies that are implemented rather than the cumulative impact of all of the sustainability measures that are part of a LEED building?

This case has just started and many bloggers and other green building professionals (including me) will be analyzing it and writing about as it progresses.   So, there will be more to come on this case.

What do you think about this lawsuit?  Do you think it has merit?

Engineering News-Record (ENR) recently reported in its July 5, 2010 issue that revenue from projects registered with and actively pursuing green building certification by a third-party sustainable-design standard organization–like LEED and Energy Star–rose 16.8% in 2009 for ENR’s Top 100 Green Design Firms.  According to ENR, the total revenue from these projects rose to $3.3 billion, up from $2.85 billion in 2008, and includes both private and public projects, though revenue was largely generated from private sector markets such as retail, hospitality, multi-unit residential and health care.  This is pretty remarkable given that funding for private construction projects has all but disappeared since the banking industry bailout and since the recession hit the development and construction industries like a “ton of bricks.” (pun intended)    

 It would be reasonable to expect that the demand for green building and third-party certifications would decrease during these tough economic times because of the additional cost associated with green building and sustainable certifications.  So, why is green building bucking the recession trend?  Here are my thoughts:

  • Owners are taking advantage of tax credits and other government economic incentives designed to promote reduced energy use and encourage alternative energy production
  • Owners are recognizing that green building is not simply a status symbol or marketing tool to lure tenants—they are understanding that the implementation of many of these green building initiatives will reduce energy and operating costs
  • The cost to build green has come down—the old notion that green building was significantly more expensive than traditional design and construction techniques is no longer true
  • More state and local governments are including green building rating systems in their building codes for both public and private construction

There are probably many more factors that have contributed to the rise in green building revenue despite the recession, which I haven’t mentioned.  What all of this tells me is that we are thinking green now.  Green building initiatives are becoming the baseline for design and construction rather than extraordinary and unique features. 

 Do you believe that green building and sustainability is the new way of doing business for the design and construction industries?

I had planned for my first blog post to be an introduction to LEED—an overview of the U.S. Green Building Council’s comprehensive and widely-used rating system and its significance to the green building movement.  However, there is a recent significant issue relating to an appeal of a LEED certification rating that is at the forefront of green building news currently.  You will see it referred to as the Northland Pines High School Appeal.

You can find a detailed recitation of the facts surrounding the Appeal as well as the key Appeal documents at www.greenbiz.com

Here is just a brief summary of the Appeal, as set out in the original documents:

  • Northland Pines High School in Eagle, Wisconsin was the first public high school to be awarded Gold LEED certification in May 2007 under the New Construction (NC) 2.1 standards.
  • In December 2008, members of the Northland Pines High School Building Committee and concerned tax payers, along with two engineers, filed an appeal of the Gold certification given to Northland Pines.
  • The Appeal challenged the award of Gold certification on the basis that the design and construction of the school did not meet LEED prerequisites EA1 (Fundamental Building Systems Commissioning), EA2 (Minimum Energy Performance) and EQ1 (Minimum Indoor Air Quality Performance).
  • More specifically, the challengers claim that certain mandatory standards were not complied with ANSI/ASHRAE Standard 62.1-1999 (Ventilation for Acceptable Indoor Air Quality) and ANSI/ASHRAE/IESNA Standard 90.1-1999 (Energy Standard for Buildings Except Low Rise Residential Buildings), together with numerous violations of the Wisconsin Code.
  • The challengers also claim that the violations of the ANSI/ASHRAE/IESNA Standards could not have been cured without a complete redesign of the HVAC system, which was never done.
  • In April 2010, the U.S. Green Building Council (USGBC) issued a formal written response to the Appeal affirming the Gold certification to Northland Pines High School, stating that “after extensive review, USGBC and its consultants have no reason to believe that the project failed to meet all of the LEED prerequisites and credits that it has attempted.  Thus, USGBC will not act to revoke certification or disallow any prerequisites or credits.”
  • On June 5, 2010, the challengers issued an Appellant’s Executive Summary Response in which they criticized USGBC for, among other things, relying on documentation and information that was obtained from the designers only after the Gold certification was awarded and for using post-submission design and/or construction changes as a basis for compliance—suggesting that the original submission for certification was inadequate to prove compliance with the prerequisites.

This Appeal raises numerous issues about the LEED certification process that green lawyers have predicted for some time.  At a minimum, this Appeal shows that the LEED certification requirements and process are open to subjective interpretation and potentially arbitrary enforcement.  In this case, engineers on both sides make technical arguments to support their conclusions that the prerequisite standards have either been violated or complied with.

Does the USGBC’s affirmation of the Gold certification in this case set a “dangerous precedent” as the challengers suggest in their Executive Summary Response?  Does the USGBC have an incentive to affirm certifications rather than to revoke them, or does the real threat of revocation for noncompliance add credibility to the LEED rating system?  These are just a few of the issues raised by this appeal that will be analyzed and discussed in the green news and this blog in the coming months.

We’ll continue to look at issues that can emerge from the Northland Pines High School LEED Appeal in future posts, and we’ll get back to the basics of LEED and other rating systems as well.