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New Data on the Cost of LEED, Credit-by-Credit

Jeff — Fri, 16 Apr 2010 21:37:10 +0000

New Data on the Cost of LEED, Credit-by-Credit
by Nadav Malin, BuildingGreen.com
April 16, 2010

We’ve just released a neat new report on what it costs to achieve specific LEED credits. Based on the current LEED-NC 2009 rating system, “The Cost of LEED” draws on the experience of veteran cost estimators to provide prices for specific measures a project team would consider. The report helps a team understand the implications of LEED on the cost of its own particular project, with lists of “standard” approaches compared to “high performance” options, along with cost premiums for those options.

Over the years we’ve reported in Environmental Building News and on BuildingGreen.com about various attempts to measure what it costs to get a building LEED certified. Notable among these were:

The seminal 2003 report by Greg Kats and his team, based on a set of California projects (updated in 2007 with a set of Massachusetts schools, and in 2010 for the book Greening Our Built World);
The 2004 report “Costing Green” from Davis Langdon, updated in 2007 as “The Cost of Green Revisited” with guidelines and tips on individual credits based on LEED-NC 2.2; and
A detailed 2004 study by John Amatruda for the U.S. General Services Administration analyzing the cost required to take two prototypical GSA buildings to a LEED-Silver level.

Our new report adds to this pantheon. I hope you’ll find it worthy of its predecessors, while adding a new level of utility. Here are a few bits from our press release on the report:

While previously published studies have taken an aggregated approach, trying to predict overall cost impact of LEED from looking at previous projects, this report draws from the resources and experience of veteran cost estimators to present the cost of specific measures a team is likely to consider.

“The goal of this report was to get a handle on the ways in which LEED credits can be achieved, and to understand the cost implications of those actions within a building project” says Stephen Oppenheimer, AIA, of Tsoi/Kobus & Associates, coauthor of the report. “We were not interested in generalizations of what a LEED Silver project might cost. We wanted much more detail than that.”

“The Cost of LEED” doesn’t provide hard numbers for every credit–there are some that are just too project-specific for that to be useful. What’s the cost of locating a project near mass transit, for example? But it does offer real numbers for measures that a cost estimator can work with, be they low-flow fixtures, CO2 sensors, or moving contaminated soil from a brownfield. This information should help teams get a handle on the ways in which LEED credits can be achieved, and to understand the cost implications of those actions within a building project.

This new report looks exclusively at construction costs–any additional design work, credit documentation, and special analyses are left to the designers to work out based on their own fees and expectations. Compiled by a team of seasoned practitioners who have collaborated on LEED-certified buildings, this report benefits from real-world experience in identifying the construction cost areas that matter.

In addition to BuildingGreen, the authors come from of Tsoi/Kobus & Associates, AHA Engineers, and Vermeulens Cost Estimators. A hard copy of the report is available from BuildingGreen.com for $49. Or, you can buy a PDF for the same price on LEEDuser.com.

Source: http://www.buildinggreen.com/live/index.cfm/2010/4/16/New-Data-on-the-Cost-of-LEED-CreditbyCredit

News: $1B Green Project Planned for Istanbul

Jeff — Wed, 12 Aug 2009 22:31:25 +0000

$1B Green Project Planned for Istanbul
by Preston Koerner, JetsonGreen.com
August 12, 2009

Just yesterday, architecture firm RMJM announced plans for a $1 billion, landmark green project for the Atasehir district of Istanbul, Turkey. The Varyap Meridian development is slated for a new residential and business district — and just might transform into a new financial district for Turkey. Of course, the buildings will each seek LEED certification, and if obtained, it could be the first green development of its kind in the country.

Th 372,000 square meter development will sit on a site of 107,000 square meters and includes a 60-story tower, 1,500 residential units, a five-star hotel, offices, conference facilities, parking facilities, and landscaped public areas.

As massive as the project is, it’s planned to be completed in 2011.

The buildings will have unprecedented, panoramic views while minimizing the solar heat gain. And according to Building Design + Construction, some of the following green technology will be used: “rainwater collection sites and facilities to optimize water usage and reduce energy consumption, wind turbine technology, cooling water pools that enhance the external landscape, and a co-generation plant that will produce electricity for the development.”

Image Rendering credits: RMJM.

Source: http://www.jetsongreen.com/2009/08/rmjm-green-project-planned-atasehir-istanbul.html

Report: Grab the ‘green’ real-estate boom

admin — Wed, 15 Jul 2009 16:11:48 +0000

Grab the ‘green’ real-estate boom
Real-estate moguls know there’s good money in environment-friendly buildings. Here’s how the little guy can play, too.
By Walecia Konrad, Fast Company

If the workplace is any indication, you could almost believe corporate America really cares about the environment.

Goldman Sachs (GS, news, msgs), Hearst, IBM Corp. (IBM, news, msgs), JPMorgan Chase (JPM, news, msgs) and Toyota Motor (TM, news, msgs) all have made the move into “green” buildings.

Bank of America (BAC, news, msgs) plans to build a 52-story eco-skyscraper near New York’s Times Square, and Accenture (ACN, news, msgs) has leased green office space throughout the country.

Sustainable construction is one of the fastest-growing segments of the already-red-hot commercial-building industry. An estimated 5% of all new U.S. commercial construction received the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) certification last year. And by 2010, 10% of all new commercial construction will be sustainable, according to McGraw-Hill’s (MHP, news, msgs) 2006 Smart Market report. (The green trend in home construction is still in its infancy, although that’s bound to change.)

Existing construction is getting an eco-lift too. Developers such as Hines and the Durst Organization, and some real-estate investment trusts (REITs), are snapping up half-empty office buildings and renovating them according to green standards. That can often bring 3% higher rents and a 7.5% increase in a building’s value, according to the McGraw-Hill report.

On average, green buildings save 10% of utility costs each year — and sometimes much more. Genzyme’s (GENZ, news, msgs) corporate headquarters in Cambridge, Mass., spends 42% less on energy and uses 34% less water than a similar traditional building would. Even more important, as sustainable materials and technology improve, green construction will become more cost-effective, says Charles Lockwood, an environmental and real-estate consultant in Southern California and New York.

So how do individual investors get in on this latest real-estate boom? The easiest opportunities may lie in REITs that have made a substantial commitment to new or renovated green buildings. In a sign of just how hot this phenomenon is, however, two of the biggest, greenest REITs, Arden Realty and Equity Office Properties Trust, have been swallowed up by GE Real Estate and Blackstone Group, respectively.

But there are still promising names out there. Liberty Property Trust (LRY, news, msgs) has 21 green buildings in its portfolio of about 700 properties and says that number will rise quickly as the trust renovates more of its existing properties and takes on more new green projects. Liberty has enjoyed the nice run-up that all REITs had in the past year thanks to the strong commercial-building market. But Fauzia Rashid, a co-manager of Fred Alger Management’s Spectra Green Fund (SPEGX), expects Liberty’s green investment will help it continue to perform well even if commercial building starts to slow down.

For investors who get a bit woozy at the thought of betting solely on the vagaries of the commercial-real-estate market, a mutual fund with green-building holdings might be the safer way to go. The Spectra Green Fund, unlike many of its socially conscious counterparts, has consistently outperformed the Russell 3000 for the past three years.

The fund, which among other things invests in clean-energy stocks, is putting a small percentage of its assets in green REITs. Rashid also likes to invest in the building segment through the back door, focusing on the supply and equipment manufacturers that green builders rely on, such as Johnson Controls (JCI, news, msgs), the maker of devices that measure and monitor energy output. At about $96 a share, Johnson Controls has jumped in the neighborhood of 40% in the past year. And that’s a nice neighborhood to be in.

Source: http://articles.moneycentral.msn.com/Investing/RealEstate/GrabTheGreenRealEstateBoom.aspx?page=all

Analysis: The Concept of LEED De-certification

Jeff — Mon, 13 Jul 2009 16:49:09 +0000

The Concept of LEED De-certification
Written by Preston Koerner, Jetson Green
July 13, 2009

LEED Version 3 has some new aspects, and the green building community is trying to understand the ins and outs. One aspect has been talked about strenuously in the past week, and I thought we should ground ourselves a little bit. Let’s take a step back and look at Minimum Program Requirements (“MPRs”), the concept of de-certification, or certification revocation, and whether this all means that projects can lose certification if they do not perform as designed.

The 411 on MPRs:

LEED V3, as of today, has seven MPRs. These are “minimum characteristics that a project must possess in order to be eligible for certification under LEED 2009.” See LEED 2009 NC Rating System [pdf], pgs. xiv-xv. The MPRs apply only to projects registered under LEED 2009. Let me say this again: MPRs do not apply to non-LEED 2009 projects! Thus, in order to be eligible for LEED 2009 certification, a project:

(1) Must comply with environmental laws;
(2) Must be a complete, permanent building or space;
(3) Must use a reasonable site boundary;
(4) Must comply with minimum floor area requirements;
(5) Must comply with minimum occupancy rates;
(6) Must commit to sharing whole-building energy and water usage data; and
(7) Must comply with a minimum building area to site area ratio.

You can find further explanation of MPRs on the USGBC’s website. There’s also supposed to be a LEED 2009 MPR Supplemental Guidance document published in June 2009, but I can’t find it anywhere. We’ll keep you posted as to this … In any event, keep in mind that MPRs will evolve over time, so don’t get too attached.

What If You Don’t Comply:

If a LEED 2009 project does not comply or cannot comply with the MPRS, here’s the certification revocation language: “CERTIFICATION MAY BE REVOKED FROM ANY LEED PROJECT UPON GAINING KNOWLEDGE OF NON-COMPLIANCE WITH ANY APPLICABLE MPR. IF SUCH A CIRCUMSTANCE OCCURS, REGISTRATION AND/OR CERTIFICATION FEES WILL NOT BE REFUNDED.”

The lawyers in the house will note the permissive language “may be revoked.” I read this to mean that someone has the option to revoke certification. Who can do this? Stephen Del Percio mentioned the interesting issue of third-party standing to revoke certification, but I believe the party that issues certification will be the party that has the option to revoke. That’s just my opinion, though.

Bottom line, if a project doesn’t comply with the MPRs, its certification may be revoked. If it hasn’t obtained certification, it won’t be eligible for certification.

So Why Do We Need MPRs?

There are three main goals with the MPRs. First, MPRs are designed to give clear guidance to customers. Second, MPRs help protect the integrity of the LEED program. And third, MPRs reduce challenges that occur during the LEED certification process.

You can imagine the kinds of situations these MPRs have been designed to prevent. Chris Cheatham opened a thread on the subject, to which, Michael Kawecki, Axiom Sustainable Consulting, commented: “The MPRs are intended to stop some of the abuse that is going on … You should talk with USGBC and hear some of the projects that have come through – tollbooths, boats, the list goes on.” I haven’t verified Mr. Kawecki’s remarks with the USGBC, but what he says seems consistent with the espoused goals of the MPRs as set forth in the LEED 2009 NC Rating System documentation.

Energy and Water Data Reporting:

Now here’s where this all gets pretty juicy. We all know the USGBC is trying to close the performance gap — to get certification to the point where designed performance approaches actual performance and where certification actually means that a building outperforms a non-certified building. In this regard, on June 25, 2009, the USGBC issued a press release talking about the energy and water data sharing MPR. In the press release [pdf], Scot Horst, Senior VP of LEED, USGBC, said:

We’re convinced that ongoing monitoring and reporting of data is the single best way to drive higher building performance because it will bring to light external issues such as occupant behavior or unanticipated building usage patterns, all key factors that influence performance.

The press release explains that the “USGBC will be able to use the performance information collected to inform future versions of LEED.” But the press release doesn’t say that the USGBC or the GBCI, or whomever, will monitor this pipeline of energy and water data to yank points away from projects and then de-certify them. Maybe they will, but I haven’t seen where that idea comes from.

What about Performance Monitoring?

Lawyer Shari Shapiro discussed the concept of de-certification for the veritable GreenerBuildings. She questioned, “What happens to a 10-year property tax abatement if the project loses its LEED certification after two years due to failed energy savings?” Wait, “failed energy savings?” — I guess this may be where the idea is coming from. The use of the phrase “failed energy savings” while discussing decertification seems to imply that someone will: (1) monitor the data pipeline, (2) discover that the actual performance of a certified building does not meet the design performance of the same, and (3) yank EA/WE points to take certification from the project?

But wasn’t this information going to be used to inform future LEED iterations, or to improve the system or help projects? So I emailed Ashley Katz, Communications Manager for the USGBC, for clarification. Ms. Katz responded:

USGBC is monitoring the data to inform the future development of the rating system, as well as inform owners on how their building is performing. We’re planning to develop a yearly scorecard that grades each building as a way to inform owners of their performance and where they stand in relation to their predictions and to other buildings out there. There’s no certification revocation involved based on performance –we’re merely asking projects that can provide data to do so (there are 3 ways that projects can fulfill this specific MPR …). If the project refuses, then we won’t certify them (or take their certification away if necessary).

The concept of a yearly scorecard is interesting — we’ll see how this develops. But, in summary, as a precondition to certification, you must commit to share energy and water data. That’s it. You just need to share it, and there are three ways you can comply with this data sharing MPR. If you can’t comply, too bad: Your project cannot be certified.

This is Good News:

If you’re going to share the information, you might as well do it right. And I believe project teams now have an extra incentive to use smart technology to make data sharing easy. In doing so, they’ll have access to information to improve the actual performance of a project. Project teams won’t have to act on the information, but they can if they want to.

Which brings us to the conclusion of one of the longest articles you’ll ever read on this site. There’s one main point: with the MPRs and de-certification, there’s a difference between sharing and performing. LEED V3 projects that don’t share may be de-certified. LEED V3 projects that don’t actually perform as designed still maintain certification. And this is why we haven’t heard the last of the so called performance gap with certified buildings.

Source: http://www.jetsongreen.com/2009/07/the-concept-of-leed-decertification.html

Analysis: Do Third Parties Have Standing to Initiate LEED 2009 Decertification Proceedings?

Jeff — Thu, 09 Jul 2009 18:36:09 +0000

Do Third Parties Have Standing to Initiate LEED 2009 Decertification Proceedings?
By Stephen Del Percio, Green Real Estate Law
July 9, 2009

The possibility that a LEED-certified project could be “decertified” by USGBC or GBCI in the event that any of the new LEED 2009 Minimum Program Requirements (”MPRs”) are not satisfied presents a variety of novel legal issues which we presented earlier this year here at GRELJ when the first iteration of MPRs was announced by USGBC. Today, Engineering-News Record (”ENR”) published an article that highlights a number of those issues, but also raises the question of who, exactly, would have standing to bring a decertification proceeding. If strictly limited to USGBC or GBCI, a recent comment here at GRELJ from Brian Anderson (”lawsuits are bad for marketing”) suggests that decertification would be a remote possibility. However, in the ENR piece, which is titled Building Rating System Requirement Raises Concern and authored by Nadine Post, my colleague Ujjval Vyas notes that “[a]ny third party has the right to initiate a non-compliance action by USGBC. This creates a huge risk and provides standing to any entity whatsoever to injure a building owner or tenant.” If third parties can compel decertification proceedings, the risks associated with failing to comply with the MPRs are far more serious than if that discretion rests exclusively with USGBC or GBCI.

However, I think it’s important to look at the specific language that provides for decertification in LEED 2009, which reads (in part) as follows: “certification may be revoked from any LEED project upon gaining knowledge of non-compliance with any applicable MPR.” (emphasis added). The way I read this language, USGBC/GBCI is not obligated to revoke certification upon learning of non-compliance, but it is not restricted from receiving information regarding non-compliance from any third party. The question then becomes what, if any, obligations USGBC/GBCI may have to use that information and pursue a decertification proceeding, either conferred elsewhere in the LEED rating system itself or otherwise imposed by law. I don’t know the answer to that question, but perhaps Ujjval or others could chime in below in the comments. I think this is an absolutely critical point to dissect.

Also of import in the ENR article with respect to the MPR requiring access to building performance data (which has been the MPR driving much of the risk discussion here at GRELJ and elswhere), Duane Morris construction attorney Ed Gentilcore emphasizes that “[w]hat was once an initial project-performance milestone now has ongoing tail responsibilities that could create extended obligations for the owner itself and possibly, in turn, design and construction teams.” In addition, Scot Horst told ENR in the same article that the organization is “still developing the best and easiest ways to help owners do this. This is a new requirement and there is a lot to work out over time.” He declined to tell ENR when any addenda to the MPRs might be released.

I think it’s clear that the contract challenges and corresponding risks associated with the new LEED 2009 MPRs are just begin to emerge, particularly if USGBC and GBCI release a second addenda to a document that was just released a few months ago.

Building Rating System Requirement Raises Concerns (ENR)

Source: http://www.greenrealestatelaw.com/2009/07/do-third-parties-have-standing-to-initiate-leed-2009-decertification-proceedings/

Analysis: “Whither the Lawsuits?” A Mid-2009 Assessment of the State of Green Building Litigation

Jeff — Tue, 09 Jun 2009 17:27:51 +0000

“Whither the Lawsuits?” A Mid-2009 Assessment of the State of Green Building Litigation
By Stephen Del Percio, Green Real Estate Law Journal
June 9, 2009

In a piece that appeared both on her blog and at Greener Buildings, my colleague Shari Shapiro opines on why, as we rapidly approach the midpoint of 2009, there remains a dearth of reported lawsuits arising out of green building projects, despite much commentary suggesting the contrary to be imminent. Ms. Shapiro suggests four reasons: (1) a relative lack of green building practices generally as compared to overall construction; (2) owners who are “too afraid” to measure building performance and are thus unable (or unwilling) to assert a claim arising out of violated green building expectations; (3) a general reluctance to engage in costly litigation given the economic downturn; and (4) the green building movement’s relative infancy. However, over the course of 2009, and notwithstanding the lack of lawsuits filed to date, there has been an explosion in commentary on green building litigation across the legal community. Accordingly, I thought Ms. Shapiro’s piece was particularly timely and worthy of some additional discussion here at GRELJ.

First, I think that Ms. Shapiro’s last point is probably the biggest reason why we have yet to see a flurry of lawsuits. In my experience, plaintiffs will typically wait until they are up against the controlling statute of limitations before commencing a lawsuit. Here in New York, the applicable statutes of limitation for many of the causes of action under which green building liability may arise (such as negligence and breach of contract) range from three to six years. When you consider that LEED Version 2.2 only went live on January 1, 2006, many of the LEED-related green building claims that have been suggested to date remain well within the statute. This could be a significant reason why both LEED- and green building-related litigation will remain on the horizon for the near future. It is also important to consider that almost every construction agreement contains a confidentiality provision, which prevents the project team from disclosing any information about the project to certain third-parties. If aspects of an ongoing green building project’s design or construction are problematic, we will likely not hear about those failures until (a) the owner chooses to divulge that information; or (b) a lawsuit is commenced (subject to the foregoing SOL considerations).

Next, consider the following text describing the posture of the Shaw Development litigation from footnote 24 of the highly touted Harvard Law School green building liability study that was released last week: “[h]owever, a certificate of occupancy, which was necessary to obtain LEED certification, was not achieved within the requisite amount of time, and the developer failed to earn the tax credits.” (emphasis added). Moreover, in an article in the New York Times‘ Green, Inc. blog discussing the study, Robert Fox, a partner in the Philadelphia-based law firm that sponsored the study was quoted as stating that “the first lawsuit related to LEED, a green-building certification standard, occurred in Maryland, where a new condominium failed to get LEED certification and a certificate of occupancy in time to get substantial tax credits associated with green building.” These descriptions are simply not accurate. As discussed extensively here at GRELJ and over at gbNYC, LEED certification itself was not the source of liability in the Shaw Development litigation. Notwithstanding its pedigree and publicity, the Harvard study is an excellent example of attorneys misconstruing facts and, perhaps, creating heightened expectations that we will imminently see a crush of LEED-related litigation. There is no question that LEED and other third-party green building rating systems create an additional layer of risk that every project team must assess and mitigate through carefully drafted construction agreements, and I do believe that there is significant potential for LEED-related litigation. However, I think that the more imminent threat comes from regulatory structures that are, though perhaps well-intentioned, drafted poorly, enacted quickly, and confusing to project teams and their attorneys as was the case in Shaw Development.

Finally, I suspect that much of the activity that might fall within the purview of “green building litigation” will not jump off the page at us. Consider a recent news article in the Bakersfield Californian where a rooftop photovoltaic installation at a local Target caught fire and required officials to evacuate the store. Preliminary conclusions from the fire department indicated that the panels were not installed properly. These types of issues that arise in connection with green building projects- whether they lead to litigation or are otherwise managed through the insurance claims process- are likely to be far more pervasive than the higher profile LEED certification failures that have been discussed extensively to date. Of course, as LEED-driven mandates continue to proliferate, the potential for LEED-related litigation will continue to increase. But, I do think the relatively unspectacular failures similar to the Bakersfield Target fire are where we will find much of the activity in the short term.

Source: http://www.greenrealestatelaw.com/2009/06/assessing-green-building-litigation/

LEED Version 3 is Launching

admin — Wed, 22 Apr 2009 20:38:02 +0000

LEED version 3 is launching

LEED v3 Webcast Video

On April 27, 2009, the LEED green building certification program is launching Version 3. This version will taking advantage of new technologies and advancements in building science while prioritizing energy efficiency and CO2 emissions reductions.

Version 3 Roll-out Timeline:
* March 27: Reference guide e-copies available for order; hard copies available for pre-order.
* April 27: LEED v3 launches.
* June 27: New projects will be required to register for LEED 2009.
* Dec. 31: Last day of free migration period, during which currently registered projects can transition to LEED 2009 and LEED Online v3 without paying a new registration fee.

LEED V3 Time line (PDF)

Find out more about the changes in LEED version 3 here.