Greener Pastures:Managing Risks WhileNavigating Federal and StateGreen Building Opportunities

Chris Cheatham, Esq., LEED APSteve McBrady, Esq.

Agenda

– Green Building Basics

– Green Government

– LEEDigation

– Contractual Provisions

What isGreen

Building?

How do you measure “green”?

The USGBC has fourlevels of LEED:

Steps to LEED certification:

Register YourProject

Track Progress &Document

Achievement

Apply ForCertification

ConstructionCompleted

Green Government

GovernmentIncentives,Mandates

andRegulations

Federal Investments:America Recovery and

Reinvestment Act

$3.6 billionfor energyefficiency andmodernization

$4.5 billion forhigh-performancegreen buildings

$6.3 billion forthe State EnergyProgramand EECBG

$5 billion forweatherizationof homes

Most ARRA FundsNot Spent …

Green Mandate

“As a means of evaluating and measuring our greenbuilding achievements, all GSA new constructionprojects and substantial renovations must becertified through the Leadership in Energy andEnvironmental Design (LEED®) Green BuildingRating System of the U.S. Green Building Council.”

GSA, http://www.gsa.gov/Portal/gsa/ep/contentView.do?contentType=GSA_OVERVIEW&contentId=8154

Top 10 Green BuildingBills in the Senate

The Clean Energy and American Jobs ActKerry (D-MA) and Boxer (D-CA)

The American Clean Energy and Leadership ActBingaman (D-NM) and Murkowski (R-AK)

Energy Efficiency in Housing Act (EEHA) of 2009Whitehouse (D-RI)

Livable Communities Act of 2009Dodd (D-CT)

The Expanding Building Efficiency Incentives Act of 2009Snowe (R-ME)

The School Building Fairness ActHarkin (D-IA)

Clean Energy for Homes and Buildings Act of 2009Merkley (D-OR) and Lugar (R-IN)

The Energy Efficiency Modernization Act of 2009Bennet (D-CO)

The Water Accountability Tax Efficiency Reinvestment (WATER)Act of 2009M. Udall (D-CO)

The Federal Agency Energy Efficiency Improvement Act of 2009Collins (R-ME)

ARRA: Construction SpendingIncreases Are Finally Occurring

• “Increases in public-sector construction spending, drivenby stimulus funds, helped boost total construction activityby almost $2 billion between February and March,according to a new analysis of federal spending figuresreleased today by the Associated General Contractors ofAmerica.”

- Associated General Contractors, May 3, 2010

State and LocalGovernments

Green Building regulationsare prevalent:

• 45 states

• 132 cities

• 35 counties

• 28 towns

• 34 state governments

• 13 federal agencies

State and LocalGovernments

Washington, DCDC Green Building Act

State and LocalGovernments

CaliforniaGreen Building Standards Code

What is LEEDigation?

Four types (so far):

1. Failure to Obtain Certification

2. LEED Certification Challenge

3. Energy Performance

4. LEED Costs

LEEDigation:

Shaw Development v. Southern Builders

LEEDigation:Shaw Development v. Southern Builders

Shaw Development v. Southern Builders

LEEDigation:

Shaw Development v. Southern Builders

LEEDigation:

Shaw Development v. Southern Builders

LEEDigation:

LEEDigation:Shaw Development v. Southern Builders

LEEDigation:The Wisconsin LEED Challenge

LEEDigation:The Wisconsin LEED Challenge

“Persons concerned with possible inaccurately granted LEED certificationare encouraged to contact the GBCI . . . .”

"GBCI may revoke previously granted LEED certification or take otheraction regarding LEED certification such as determine to reduce points orcategory of LEED certification previously granted, if GBCI determines thatcredits/prerequisites for LEED certification were granted based onerroneous determinations or inaccurately or falsely submitteddocumentation.”

LEEDigation:The Wisconsin LEED Challenge

Challenge Liability:AnyoneAnytimeAnything

LEEDigation:Energy Performance

LEEDigation:Energy Performance

Some Buildings Not Living Up to Green Label

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

According to an environmental assessment last year, itdid not score high enough to qualify for the energy starlabel. . . . The building’s cooling system, a major gasguzzler, was one culprit. Another was its design . . . .”

LEEDigation:Steven Gidumal et al. v. Site 16/17 Dev. LLC, et al.

LEEDigation:Steven Gidumal et al. v. Site 16/17 Dev. LLC, et al.

LEEDigation:LEED Costs

BuildingGreen.com, May 1, 2010

LEEDigation:LEED Costs

Kyle Busch dispute centers on green construction

"Nearly a dozen companies involved in building a newrace shop for Kyle Busch say they have filed liens orintend to file liens because they are collectively owedabout $1 million for work done. . . .

Busch was supposed to buy the building but has delayedthe purchase because the final price tag was more thanexpected. The subcontractors say that's because theyoung multimillionaire NASCAR driver wanted a top-of-the-line, LEED-certified building and orderedupgrades during construction."

-CharlotteObserver.com, June 1, 2010

Contracts:Design-Build Contracts

• One party responsibility for LEEDcertification

• Pass-through clauses important

• Define subcontractor LEED responsibility

Design-Bid-Build Contracts:• LEED guarantees dangerous

• Instead, carve out LEED responsibilities

• Contractor

• Build according to plans & specs

• Material sourcing

• Construction waste management

• Indoor air quality

Contracts:

Avoid guarantees of energyperformance if you do not controloperations and maintenance.

Contracts:

Greener Pastures

Three Keys:

Green building is not a fad

Understand Emerging Federal and StateGreen Building Regulations

Clarify Responsibilities Before“Guaranteeing” Compliance

Questions?

Contact Information:

Steve McBrady, smcbrady@crowell.com

Chris Cheatham, ccheatham@crowell.com

Reminder. The slides and a link to a recording of thewebinar will be distributed to attendees after the event.