green building in the 21st century

Green Building in the 21st Century: The American

Recovery and Reinvestment Act of 2009 and Beyond

The Top 100 (green contractors) generated $38.69 billion in revenue in 2008 from projects registered with or certified by third-party rating groups. . . .

This marks a startling 70% [increase from] $22.76 billion [in revenue generated] for the group in 2007.

Copyright © 2009, Chris Cheatham. All Rights Reserved. Copyright © 2009, Chris Cheatham. All Rights Reserved.

Green Building in the 21st Century

Copyright © 2009, Chris Cheatham. All Rights Reserved.

The American Recovery and Reinvestment Act allocated $25 billion to green building related projects.




Green Building regulations are prevalent :

•45 states •132 cities •35 counties •28 towns •34 state governments •13 federal agencies




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• What Will You Learn?

• Significant federal investment

• Regulations require green building

• Think twice before making guarantees

• Guarantees of certification bring risks

• Building performance hard to control




• Agenda

• Green building basics

• Green Government

• Green risks

• What’s on the horizon?


What is green building?


How do you measure “green”?


• IN ORLANDO


Why build green?


Green Building Basics


Why build green?

• Profit

• Reduce Operating Costs

• Increase demand

• Goodwill

• Regulations




Why build green?

• Profit

• Goodwill

• Public

• Employees

• Regulations




Why Build Green?

• Profit

• Goodwill

• Regulations

• Mandates/ Incentives

• ARRA

Green Government


• The American Recovery and Reinvestment Act of 2009: Construction and Infrastructure

• “We will … make the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s.”

• - President Barack Obama

Green Government


Green Government

• The American Recovery and Reinvestment Act of 2009: Construction and Infrastructure

• On February 17, 2009, the President signed the $787 billion American Recovery and Reinvestment Act of 2009.

• The Act contains approximately $575 billion federal spending, including:

• $120 billion designated for construction and infrastructure projects.

• $25 billion specifically for Green building.


Green Government

• The ARRA directs substantial funding to several agencies, including the General Services Administration, the Department of Defense, and the Department of Energy for Green construction, renovation and rehabilitation projects.


• On March 31, 2009, the United States General Services Administration (GSA) submitted to Congress a list of proposed construction and renovation projects it plans to undertake pursuant to ARRA. Of the $5.55 billion in projects proposed by the GSA, $4.5 billion in funding is dedicated to the conversion of federal buildings to high-performance Green buildings.

• The GSA states that its proposal involves building projects in all 50 states, and it anticipates awarding all contracts within the next two years.

• - General Services Administration,

www.gsa.gov/sustainabledesign

Green Government


• Some federal buildings will undergo full or partial modernization, with the emphasis on energy conservation and renewable energy generation, while other buildings are slated for “limited scope” projects, including replacing deteriorating roofs with materials that will improve the building’s energy efficiency, such as photovoltaic membranes and green roofs.

• “As a means of evaluating and measuring our green building achievements, all GSA new construction projects and substantial renovations must be certified through the Leadership in Energy and Environmental Design (LEED®) Green Building Rating System of the U.S. Green Building Council.”

• - General Services Administration,

www.gsa.gov/sustainabledesign

Green Government


Green Government

• ARRA includes substantial funding for energy efficiency initiatives within the Department of Defense (DOD) within the approximately $4.2 billion investment in renovation of DOD facilities.


Green Government

• The Department of Energy (DOE) also received significant Green construction funding which will be disbursed largely through grants, rather than contracts, with the grant recipients, in turn, awarding contracts to contractors.

• The DOE’s plan for this funding includes $16.8 billion to its Energy Efficiency and Renewable Energy (EERE) program, to be divided among a number of sub-programs for Green grants.


• For example, one EERE sub-program, the Weatherization Assistance Program, has received $5 billion to assist in reducing energy costs for low-income families through Green renovations. This funding will be applied to activities including renovation and replacement of insulation, air filtration systems, and heating and cooling units.

• ARRA also includes $3.1 billion for EERE’s State Energy Program (SEP). Under the SEP, the DOE awards funds to states to promote innovative energy efficiency programs, including renovation programs for existing buildings and industrial facilities, with a minimum goal of reducing the states’ 1990 per capita energy use by 25 percent by the year 2012.


Green Government

• Municipal Green Building Regulations

• Washington, DC

• Vancouver, British Columbia


Green Government



Green Government


• DC Green Building Act of 2006 • January 1, 2012• Private construction > 50K SF • LEED certified


How do you enforce that?

“(b) On or before January 1, 2012, all applicants for construction governed by section 4 shall provide a performance bond”

“(g) All or part of the performance bond shall be forfeited to the District and deposited in the Green Building Fund if the building fails to meet the verification requirements described in sections 3 and 4.”


Green Government


• DC Green Building Act of 2006

• D.C. Green Building Act of 2006


Green Government


• Surety and Fidelity Association of America and Surety Bond Producers:

• “The new law incorrectly uses the term ‘performance bond.’ In short, the performance bond assures that the construction contract, and therefore, the project will be completed.”

• D.C. Green Building Act of 2006


Regulatory Compliance



Green Government



What are the risks?


1. Non-compliance2. LEEDigation3. Green Defects


LEED + litigation = LEEDigation


Green Building Risks


• LEEDigation: Shaw Development v. Southern Builders• Shaw retained

Southern Builders to construct $7 million condo project

• Shaw sought LEED Silver certification




• LEEDigation: Shaw Development v. Southern Builders• The Contract

• LEEDigation: Shaw Development v. Southern Builders




• Allegation: Breach of Contract

• LEEDigation: Shaw Development v. Southern Builders




• Allegation: Negligence




• LEEDigation: Shaw Development v. Southern Builders• The Damages

Project is designed to comply with a Silver Certification Level according to the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) Rating System, as specified in Division I Section “LEED Requirements.”




Hypothetical




Project will be constructed to comply with a Silver Certification Level according to the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) Rating System, as specified in Division I Section “LEED Requirements.”

Hypothetical




Project will comply with a Silver Certification Level according to the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) Rating System, as specified in Division I Section “LEED Requirements.”

Hypothetical




• Green Defects: Energy Efficiency Some Buildings Not Living Up to Green Label

“The Federal Building in downtown Youngstown, Ohio . . . has LEED certification, the country’s most recognized seal of approval for green buildings. But the building is hardly a model of energy efficiency.

According to an environmental assessment last year, it did not score high enough to qualify for the energy star label. . . . The building’s colling system, a major gas guzzler, was one culprit. Another was its design . . . .”

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“NOTE: CERTIFICATION MAY BE REVOKED FROM ANY LEED PROJECT UPON GAINING KNOWLEDGE OF NON-COMPLIANCE WITH ANY APPLICABLE MPR.”

• Green Defects: Energy Efficiency




• What Did You Learn?

• Significant federal investment

• Regulations require green building

• Think twice before making guarantees

• Guarantees of certification bring risks

• Building performance hard to control

Want to learn more?

www.greenbuildinglawupdate.com




http://www.greenbuildinglawupdate.com/

green building in the 21st century

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