Presentation - Green Construction (00034799-2)

8/23/2019 Presentation - Green Construction (00034799-2)

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GREEN BUILDING DESIGN& CONSTRUCTION

A LEGAL PERSPECTIVE

Presented to:

September 16, 2008

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: GC’s 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



What is a Green Building?



• High-performance building that reduces its environmentalfootprint through sustainable site selection and conservationof energy and resources, while improving the health and

productivity of its occupants.

• 3rd Party Certification (USGBC-LEED; Energy Star; GreenGlobes)

• LEED is currently the preeminent 3rd party certification program. – Leadership in Energy and Environmental Design (LEED)

– 5 Major Categories:

1. Sustainable Site Development

2. Water Savings

3. Energy Efficiency

4. Materials Selection

5. Indoor Air Quality



LEED - Today



• Current Rating Systems:

1. New Construction (NC)

2. Commercial Interiors (CI)

3. Existing Buildings (EB)

4. Core & Shell (CS)

5. Homes (H)

6. Neighborhood Development (ND)

7. Numerous pilot programs (e.g. Retail)

• Certification Levels:

1. Certified: 26-32 points

2. Silver: 33-38 points3. Gold: 39-51 points

4. Platinum: 52-69 points



LEED - Future



• LEED 2009 Changes (Version 3)

– New 110 point scale

– Certain credits with more environmental impact now worth multiple

points, with intention to reward owners for employing these strategies

– Water Efficiency Prerequisite – 20% overall water use reduction(excluding irrigation)

– 4 additional points available through development density and

community connectivity (intent to drive development toward infill

sites)

– 4 regional points into NC



Why Build “Green”?



• Advantages of Buildings vs. Conventional Buildings

– Cost Savings (First-Cost Savings; Ongoing Operating Expense

Reductions)

– Minimize Impact on Environment

– Enhanced Health & Productivity of Occupants

– Increased Value & Lease-Up Rates

– Community & Social Benefits

– Other Owner Benefits (Lender Incentives; Tax Abatements; Etc.)



• Green Will Become Standard

– Required by Government

Code in Europe

Washington, DC and Pasadena, CA: Require certain private development

projects to meet LEED requirements.

Boston, MA: All new and rehabilitation construction projects > 50,000 s.f.

must earn at least 26 LEED points.

Dallas, TX: Government buildings > 10,000 s.f. must achieve LEED silver

Rating. New ordinance recently adopted; applicable to private development

Chamblee, GA: All new construction > 20,000 s.f. must achieve LEED

certification as a condition of C.O.

Los Angeles, CA: Commercial projects > 50,000 s.f. must be LEED

certified.

San Francisco, CA: Most stringent green building ordinance to date (enactedAugust, 2008). Newly constructed commercial buildings > 5,000 s.f.,

residential buildings > 75 ft. in height, and renovations of buildings > 25,000

s.f., must meet LEED or other 3rd party green standards.



– 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



• Any Trends Away from Green Building?

– Short-term: Pending suit regarding constitutionality of green building

laws.

Albuquerque, NM suit by HVAC contractors, et al. Misguided perception

that green building standards will negatively impact contractors’ business

and right to earn a living.

– Long-term: Green building will become the norm in U.S.

Legislation – will become Code

Lender expectations

Tenant expectations

Reputation in community



Design & Construction of a

Green Building



• Green Building vs. Conventional Building – Newer Materials & Technologies with Less of a Track Record

– Enhanced Operations Procedures During Construction

Activity Pollution Control (ESC Plan)

Construction Waste Management Plan

- Diversion of Waste from Landfill

- Recycling and/or Salvaging On-Site

Re-Use of Materials

Indoor Air Quality Management Plan

– Stringent Requirements Associated with 3

rd

Party Certification (LEED)



Implementing LEED: GC’s

Role



• Prerequisite 1 Construction Activity Pollution Prevention

– Create and implement an Erosion and Sedimentation Control (ESC)

plan for all construction activities associated with the project.• Credit 5.1 Protect or Restore Habitat

– On greenfield sites, limit all site disturbance to 40 feet beyond the

building perimeter; 10 feet beyond surface walkways, patios, surface

parking and utilities less that 12 inches in diameter; 15 feet beyond

primary roadway curbs and main utility branch trenches; and 25 feet beyond constructed areas with permeable surfaces (such as pervious

paving areas, stormwater detention facilities and playing fields) that

require additional staging areas in order to limit compaction in the

constructed area.

– On previously developed or graded sites, restore or protect a minimumof 50% of the site area (excluding the building footprint) with native or

adapted vegetation.



• Credit 2.1 Construction Waste Management: Divert 50% fromdisposal – Recycle and/or salvage at least 50% of non-hazardous construction and

demolition.

– Develop and implement a construction waste management plan that, ata minimum, identifies the materials to be diverted from disposal andwhether the materials will be sorted on site or commingled.

• Credit 2.2 Construction Waste Management: Divert 75% fromdisposal

• 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 valueof materials on the project.

• Credit 3.2 Materials Reuse: 10%



• Credit 4.1 Recycled Content: 10% (post-consumer + ½ pre-

consumer)

– Use materials with recycled content such that the sum of post-consumer

recycled content plus one-half of the pre-consumer content constitutes

at least 10% (based on cost) of the total value of the materials in the

project.

• Credit 4.2 Recycled Content: 20% (post-consumer +1/2 pre-

consumer)• 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



• Credit 6 Rapidly Renewable

Materials

– Use rapidly renewable buildingmaterials and products (made from

plants that are typically harvested

within a ten-year cycle or shorter) for

2.5% of the total value of all building

materials and products used in the

project, based on cost.

• Credit 7 Certified Wood

– Use a minimum of 50% of wood-based

materials and products, which are

certified in accordance with the ForestStewardship Council’s (FSC)

Principles and Criteria, for wood

building components.



• Credit 3.1 Construction IAQ Management Plan – During

Construction

– Develop and implement and Indoor Air Quality (IAQ) /management

Pan for the construction and pre-occupancy phases of the building.

During construction meet or exceed the recommended Control Measures of

the SMACNA IAQ Guidelines for Occupied Buildings under Construction,

1995, Chapter 3.

Protect stored on-site or installed absorptive materials from moisture

damage. If permanently installed air handlers are used during construction, filtration

media with a MERV of 8 shall be used at each return grille. Replace all

filtration media immediately prior to occupancy.



• Credit 3.2 Construction IAQ Management Plan – BeforeOccupancy

– Option 1 – Flush Out

After construction ends, prior to occupancy with all interior finishesinstalled, supply a total air volume of 14,000 cu.ft. of outside air per sq.ft.of floor area while maintaining and internal temperature of at least 60°Fand relative humidity no higher than 60%

If occupancy is necessary prior to completion of the flush out, the spacemay be occupied following delivery of 3,500 cu.ft. of outdoor are per sq.ft.

Once occupied, space must be ventilated at a minimum of 0.30 cfm/sq.ft. – Option 2 – Air Quality Testing

Conduct baseline IAQ testing using testing protocols consistent with theUnited States Environmental Protection Agency Compendium of Methodsfor the Determination of Air Pollutants in Indoor Air.

• Traditionally, developer and architect drive the ship, butLEED requires integrated planning between design andconstruction. General contractor will need to play a larger rolein the transition from DD’s to CD’s.



• Ask for a LEED checklist and modify existing practices basedon 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 employedon 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



Enhanced Risks When

Building Green



• Design & Construction Issues

– Failure of innovative materials to meet performance requirements

– Improper installation due to inexperience of contractors

– Unanticipated performance failures due to design or construction flaws.

– Construction Delays

– Failure to maintain adequate records

• Failure to Achieve 3rd Party Certification

• Owner Impacts

– Loss of Financing

– Loss of Permitting or Incentives

– Loss of Tenants



• Contractual Issues

– Ambiguity in contracts as to expectations, responsibilities andliabilities of parties

– Enhanced obligations and liabilities of architects and contractors

– Greater exposure to litigation and consequential damages

• Failure of Building to Meet Ongoing Performance

Requirements – Failure to properly train operations personnel

– Lack of continual measurement & verification

– Lack of performance of materials or technologies

– Unanticipated side-effects

– Failure to properly regulate tenant behavior under leases (needexperienced green leasing counsel)



Effectively Managing,

Mitigating & Allocating Green-

Related Risks



• 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



• Exposure For Contractors

– Standard of Care & Liability

Enhanced standard of care of architect and contractor in green building

context

- Failure of materials or technologies to perform

- Compliance with new rapidly evolving green legislation

Usually required when construction permit application submitted

Can conceivably cause project to be re-designed and/or

reconstructed

Should take adequate measures to limit liability:

- Limit obligations to compliance with legislation in effect at time of

contract execution

- Owner indemnity for any issues arising from newly-enacted

legislation



– 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; beconsistently sensitive to LEED requirements



• Keep Detailed & Accurate Records (LEED; Demonstrate

Performance)

• Assure Adequate Measures in Place DURING AND AFTER

Design & Construction Process to Ensure Design,

Construction and Performance of Building Meets 3rd Party

Certification Requirements and Expectations of Parties

– Proper training of operating personnel

– Operation manuals

– Periodic testing procedures

– Ongoing measurement & verification

• Ensure a LEED AP Consultant is Engaged by Owner; Proper

Allocation of Responsibilities for LEED Issues



• Education About LEED

• Insurance & Performance Bonds – Insurance

Design Team – Errors and Omissions Insurance (E&O)

- Protects against claims that insured did not perform up torequired standard of care (level of care and skill of similar

professionals in same locality)

- Insures against design defects, not construction defects

Contractors – Commercial General Liability Insurance (CGL)

- Typically covers construction defects caused by negligence of contractor or subcontractors (insures negligence, not

perfection) Owner – Property Insurance in a Builder’s Risk Policy

- Traditionally, excludes losses resulting from design defect or faulty workmanship



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:

- Fireman’s Fund – Amended in 2006 to include green building specificcoverage

- Aon Corporation – Green Building Property Program assuresreimbursement for repair or replacement of green buildingcomponents, enabling owners to upgrade to environmentally efficientcomponents (covers certified and non-certified buildings). Tied tolocal government mandates, as well as LEED and other recognizedstandards

- XL Insurance – Sustainable Property Endorsement allows insured to

collect an amount greater than value of damaged property if replacedwith environmentally acceptable substitute (tied to LEED)

- Travelers – Just recently joined USGBC. Likely to lead to additionalgreen 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 enhancedcontractual obligations of contractor in green building context



Case Study

Abercorn Common

Savannah, Georgia



Abercorn Plaza in the 80’s



Abercorn Common Today



First LEED Certified Retail Shopping Center in U.S.

(Awarded LEED Silver – C&S) 2007



First LEED Certified McDonald’s In U.S.

(Awarded LEED Gold – C&S)

GOLD



Sustainable Features



Abercorn Common Shopping Center, Savannah GA. –

A Case Study

Vegetated Roof & White Roof Membrane to

Reflect/Absorb Heat and Keep Center Building Cooler

Pervious pavement diverts storm water

Concrete paving reflectsheat, keeping the center

and parking lot cooler

White roof membrane reflects heat, keeping the center 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)

• Decreases the need for

municipal stormwater treatment

• Helps remove sediment and pollutants

• Decreases site runoff by 25%



The Cistern harvests rainwater from rooftops,

5 million gallons annually



• Low-flow toilets & Faucets and

waterless urinals – reduce water use

• Tighter envelope, better glazing &high efficiency HVAC & lighting

to reduce energy consumption

• Located ¼ mile from 3 bus stops, preferred parking for hybridvehicles; bike racks & changingfacilities – encourages use of carpooling & alternatetransportation



• Low-emitting paints, sealants and adhesives used

– Zero or low volatile organic compounds (VOCs)

• No smoking (including restaurants) – before GA became

non-smoking

• Increased ventilation – 30% over ASHRAE 62

Indoor Environmental Quality

W R d i



Abercorn Common Shopping Center, Savannah GA. – A Case Study

Waste Reduction

• Stringent construction waste management practices

– prevented 85% of construction waste from

landfills

• Over 6,000 tons were recycled or reused



Abercorn Common Shopping Center, Savannah GA. – A Case Study

• Over 70% of materials manufactured within a 500mile radius

• Over 20% recycled materials by cost

• FSC Forest Stewardship Council Certified Woodused at McDonald’s

500 mile

radius of

Savannah, GA

Materials and Resources

S



Abercorn Common is:

• 30% more energy efficient than code (ASHRAE 90.1)

• 55% more water efficient (than 1992 Energy Policy Act )

• Healthier indoor air – less toxins and more fresh air

• Has 30% Less stormwater runoff

• Uses no potable water for irrigation

Summary



Summary & Recommendations

• Green Building is here to stay

• LEED rating system is likely standard

• Contractor directly affects several prerequisites and point

• Enhanced risk issues for contractors• Knowledge and careful allocation of contractual liabilities and

obligations is critical

• Rapidly evolving marketplace



Robert E. Stanley, Esq. 1170 Peachtree Street, Suite 750

Atlanta, GA 30309(404) 835 - 6201

[email protected]

www.seblaw.com

mailto:[email protected]

http://www.seblaw.com/

http://www.seblaw.com/

mailto:[email protected]

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