For regular readers of Green Building Law Update, the concept of re-certification may sound familiar.  Here's what I had to say on the topic back in July:

 

I wish I had simply had the guts to say the USGBC will require LEED re-certification for future projects.  Because it is going to happen. 

Links

Some Buildings Not Living Up to Green Label (NYT)

Could LEED NC and LEED EBOM Join Forces? (GBLU)

Photo: suttonhoo

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

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

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

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

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

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

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

Photo:  Geoff Livingston

Links: 

Some Buildings Not Living Up to Green Label (NYT)

Malcolm Lewis (CTG)

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

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

Housing Tru-Twist heat exchanger technology allows the Enviro-Pak to proudly join ranks as one of Turbotec's high efficiency products.

• Provides free hot water
• Increases air conditioning & refrigeration efficiency
• Small footprint for applications up to 5 tons
• Controls and pump mounted and wired for simple installation
• Isolation valve kit available for water and refrigerant connections
• Stainless steel enclosure for long life and durability
• indicator lights for operation and safety diagnostics
• Whisper quiet operation
• Low pressure drop through water side of heat exchanger
• 5 year limited warranty on heat exchanger
• UL and CSA listed

Green Building Construction: Rewards, Rules and Risks

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

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

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

Sponsor: Crowell & Moring LLP

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

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

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

Photo: Merrick Brown

By Asha Echeverria

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

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

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

If the contracts place the risk to achieve LEED certification on the construction-design team, then which member(s) of the team—the LEED AP firm, the architect, the general contractor, the engineer, all of them?  Given that the achievement of certification takes a combined effort of all these parties, one would think that the contract should bind all parties to the same goal, but then if the building fails to achieve Platinum status with whom does liability lie?  With each member of the design team jointly and severally or with the party “responsible” for the failure to achieve the goal?   But given that LEED certification is determined from the cumulative points earned for specific efforts, multiple failures by different parties could lead to a project earning only 67 points, just one shy of the 68 points necessary to achieve Platinum status.  

Then one gets to damages and their calculation.  If an owner does not intend to profit directly from this project, as in the case of the Hannaford store, but instead expects indirect returns through increased good will, courts may be unwilling to recognize these losses because they are indirect and may be difficult to quantify with reasonable accuracy.  Speculative damages that cannot be proven with reasonable certainty won’t ever make it to a jury or fact finder.  

One possible method to counteract some of the issues related to liability and damages is for an owner to build a significant retainage into the contract until LEED certification of whatever level desired is achieved.  This method has several advantages in that it establishes some level of the owner’s damages related to the failure to achieve certification independent of “fault” of any particular party and also, it ensures that the construction-design team remains motivated to assist in the certification process, which can drag out 3-6 months after substantial completion.  A disadvantage of this method is that the construction-design team still needs to price or insure against the risk and that price will be passed on to the owner.  This will impact the cash flow of contractors, and downstream subcontractors and suppliers.  Given the usual time necessary to receive certification, some contractors may not be willing to wait or forgo placing liens on the project to stay within statutory deadlines.  But if an owner wants to bind the construction-design team to producing a LEED certified building, increased risks are pretty much unavoidable, the question is how are they allocated and priced, and maybe, in the future, insured.  (Note: Though it appears that AIG is dipping its toe into insuring contractors’ Green reputations and for defense costs in green litigation, so far I haven’t seen an insurance product that insurers a contractor against an owner’s consequential damages for failure to meet LEED certification – See Aug. 5, 2009 Post AIGRMGreen Reputation Coverage).

As you can see, many of the questions above generate more questions rather than answers.  Ultimately, the successful completion of projects promising LEED certification, and the litigation of the unsuccessful ones, will establish what contractual language “works” but until then, lawyers drafting such contracts will have to fill in the blanks.

Asha Echeverria is an associate at the law office of Bernstein Shur in Portland, Maine.  She practices in the firm’s Litigation and Energy and Environmental Practice Groups.  Asha is also a registered professional engineer in Maine and Pennsylvania, and recently passed the LEED® NC exam, making her a LEED® accredited professional. 

Photo Credit: Meadors, Inc.

The results for the samples are as you might expect; the copper has a high SRI when new but quickly loses reflectivity as it patinas with time. Strangely when it gets really old it starts to climb up in SRI value again, though not enough to put you in compliance with LEED's requirements. Here's a table of the results:

Description	Appearance	SRI	Solar Reflectance	Thermal Emittance
New	Bright Copper	69	0.758	0.045
2 Weeks Old	Bright Copper w/ Slight Smudges	62	0.729	0.028
Approx. 1 Year Old	Brown w/ Green Flecks	2	0.176	0.642
Approx. 5 Years Old	Brown	4	0.190	0.654
50-75 Years Old	Brown w/ Light Green Spots and Streaks	14	0.245	0.688

Use the above figures at your own risk (this is in no way an 'official' USGBC accepted set of SRI values), but reason would dictate that most copper roofs would have the same characteristics. The question still remains about which value to use, and that is open to some interpretation.

Credit interpretation rulings for SSc7.2 yielded no inquiries about materials that have a non-stable SRI value. Although this is simple conjecture, given the rapid deterioration in SRI for copper (non-compliant within a year, likely much sooner), I would suggest that this product is not in compliance with the intent of the credit which is to reduce heat islands. Clearly for the majority of the life of the copper roof will help foster heat island issues and not reduce them.

What if there are products that deteriorate more slowly, or even become more reflective over time? If I were to write my own credit interpretation request on the subject, I would propose developing a sort of weighted SRI over the course of the expected life of the product, likely a difficult task. What I mean in simple terms is that if we had a product expected to last ten years with an initial SRI of 100 and an SRI of 0 on year ten then the 'weighted' SRI would be 50 assuming a linear decline (90 after one year, 80 after two, etc.). A product such as copper that has some crazy parabolic arc would probably require an excel spreadsheet (or graphing calculator) to determine the lifetime average, but clearly the number for copper would be so low that it's probably not worth the effort. If you've already been through this situation and gotten an official ruling PLEASE share by leaving a comment!

This post wouldn't have been possible if it weren't for the nice folks at Meadors Inc. agreeing to share the results of these tests with all of you and the guys at LBL for doing the testing in the first place. The projects that spurred this post are two historic renovations in the epicenter of Charleston, SC's historic district, 93 Broad St. and 97 Broad St., hence their restriction to use appropriate copper roofing products. You can view galleries of the projects at the links above. Many thanks!

Learn more at RealLifeLEED.com!

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

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

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

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

http://www.amazon.com/Leed-Materials-Resource-Guide-Building/dp/1568988850/ref=sr_1_1?ie=UTF8&s=books&qid=1250868916&sr=1-1