A LEGAL PERSPECTIVE
Presented to: AGC of TN Middle TN Branch
Overview
What is a Green Building? LEED Today LEED Future Why Build Green? Design & Construction of a Green Building Implementing LEED: GCs Role Enhanced Risks When Building Green Effectively Managing, Mitigating & Allocating Green-Related Risks Issues Related to Design & Construction of a Green Building Exposure for Contractors Abercorn Case Study Summary & Recommendations
High-performance building that reduces its environmental footprint through sustainable site selection and conservation of energy and resources, while improving the health and productivity of its occupants.
3rd Party Certification (USGBC-LEED; Energy Star; Green Globes) LEED is currently the preeminent 3rd party certification program.
Leadership in Energy and Environmental Design (LEED) 5 Major Categories:
1. 2. 3. 4. 5. Sustainable Site Development Water Savings Energy Efficiency Materials Selection Indoor Air Quality
LEED - Today
Certification Levels:
1. 2. 3. 4. Certified: 26-32 points Silver: 33-38 points Gold: 39-51 points Platinum: 52-69 points
LEED - Future
Required by Owners
Lender Requirements & Expectations - Overhaul of CMBS Standards on Wall Street - Green Programs - Incentive Programs Tenant & Occupant Expectations - Corporate green policies - Reputation/marketing - Health & productivity of occupants Permitting & Incentives - Expedited permitting process - Variances - Tax credits & abatements Growing Private Equity Demand/Requirement
Credit 2.2 Construction Waste Management: Divert 75% from disposal Credit 3.1 Materials Reuse: 5%
Use salvaged, refurbished or reused materials such that the sum of these materials constitutes at least 5%, based on cost, of the total value of materials on the project.
Credit 4.2 Recycled Content: 20% (post-consumer +1/2 preconsumer) Credit 5.1 Regional Materials: 10% Extracted, Processed, and Manufactured Locally
Use building materials or products that have been extracted, harvested or recovered, as well as manufactured, within 500 miles of the project site for a minimum of 10% (based on cost) of the total materials value.
Credit 5.2 Regional Materials: 20% Extracted, Processed, and Manufactured Locally
Traditionally, developer and architect drive the ship, but LEED requires integrated planning between design and construction. General contractor will need to play a larger role in the transition from DDs to CDs.
Ask for a LEED checklist and modify existing practices based on which points are targeted. For some points, it is best practice to implement overall program changes.
Construction waste management IEQ management plan can be a set of standard best practices employed on all job sites. Construction activity pollution prevention Develop policy for sourcing material that maintains integrity of targeted points.
MR credit 4.1 and 4.2: Recycled Content; 5.1 and 5.2: Regional Materials EQ credit 4.1-4.4: low-emitting materials (adhesives, sealants, paints, coatings, carpet systems, and composite wood and agrifiber)
General Conditions/Pricing should reflect additional time and effort for targeted points.
Materials and Resources 4.1: Recycled Content Sustainable Sites 5.1: Protect or Restore Habitat
Contractual Issues
Ambiguity in contracts as to expectations, responsibilities and liabilities of parties Enhanced obligations and liabilities of architects and contractors Greater exposure to litigation and consequential damages
Clearly Define Roles & Responsibilities of Various Parties (architects, engineers contractors, commissioning agent, etc.) Through Design Charrettes Contracting Process
Clearly define roles and responsibilities of parties in contracts
Contracts for project team, when aggregated, should include everything required to complete project with no overlap
Specify expectations regarding construction waste management (salvaging; recycling; diversion from landfill measurement) Clearly specify the types of materials to be used No change or substitution of materials unless approved by owner, contractor and LEED consultant Responsibility for training operating personnel Record keeping On-going measurement & verification responsibilities
Damages
Great exposure to consequential damages in green building context (loss of 3rd party certification, governmental incentives (tax credits/abatements), financing and/or tenants; reputation) Consider liquidated damages provision if damages not quantifiable (Caps on damages negotiable)
Warranties
Define with specificity the breadth of the coverage In green building context, may cover unanticipated green-related obligations, such as innovative materials and technologies required under LEED
Indemnity
In green context, may expose architect and contractor to greater liability:
Liability with respect to non-performance of innovative materials and technologies Exposure to broader consequential damages (loss of financing, tenants, etc.)
Must confirm if covers green aspects of project Thoroughly investigate materials and technologies being used; be consistently sensitive to LEED requirements
Ensure a LEED AP Consultant is Engaged by Owner; Proper Allocation of Responsibilities for LEED Issues
Green-Related Issues Regarding Exclusions from E&O and CGL Policies - Typically, the standard of care (i.e., negligence) is not sufficient to cover the enhanced green-related obligations, so must confirm extent of coverage, and must thoroughly investigate the materials and technologies being used, and consistently be sensitive LEED requirements - No coverage for the following: Warranties or guaranties or claims arising therefrom Contractual obligation to achieve a certain LEED Rating (i.e., LEED Silver or Gold) Contractual obligation to cause certain energy reductions or similar outcomes Certifications, declarations or warranties in connection with LEED template - For the foregoing reasons, contractors and design professionals must be very prudent as to the contractual obligations they subject themselves to, as the same may not be covered by insurance.
New products out on the market: - Firemans Fund Amended in 2006 to include green building specific coverage - Aon Corporation Green Building Property Program assures reimbursement for repair or replacement of green building components, enabling owners to upgrade to environmentally efficient components (covers certified and non-certified buildings). Tied to local government mandates, as well as LEED and other recognized standards - XL Insurance Sustainable Property Endorsement allows insured to collect an amount greater than value of damaged property if replaced with environmentally acceptable substitute (tied to LEED) - Travelers Just recently joined USGBC. Likely to lead to additional green building insurance products in the market
Performance Bonds
Guaranty, not insurance Guarantees owner that a contractor will perform as required by its contract, and will pay for required materials and labor Insurance companies may be reluctant to guarantee the enhanced contractual obligations of contractor in green building context
First LEED Certified Retail Shopping Center in U.S. (Awarded LEED Silver C&S) 2007
GOLD
Sustainable Features
Vegetated Roof & White Roof Membrane to Reflect/Absorb Heat and Keep Center Building Cooler
White roof membrane reflects heat, keeping the center cooler
Concrete paving reflects heat, keeping the center and parking lot cooler
Pervious Pavement
Almost 1 acre of pervious pavement, which allows water to infiltrate the ground (runoff coefficient of .3 vs .95 for traditional concrete) municipal stormwater treatment
Low-flow toilets & Faucets and waterless urinals reduce water use Tighter envelope, better glazing & high efficiency HVAC & lighting to reduce energy consumption Located mile from 3 bus stops, preferred parking for hybrid vehicles; bike racks & changing facilities encourages use of carpooling & alternate transportation
Waste Reduction
Stringent construction waste management practices
prevented 85% of construction waste from landfills
Over 20% recycled materials by cost FSC Forest Stewardship Council Certified Wood
used at McDonalds
500 mile radius of Savannah, GA
Summary
Abercorn Common is:
30% more energy efficient than code (ASHRAE 90.1) 55% more water efficient (than 1992 Energy Policy Act)
Robert E. Stanley, Esq. 1170 Peachtree Street, Suite 750 Atlanta, GA 30309 (404) 835 - 6201 rstanley@seblaw.com
www.seblaw.com