Green Energy & Development Law Blog : Green Building & Development Lawyer & Attorney : Brad N. Mondschein : Pullman & Comley Law Firm

Starbucks announced that it intends to make all new company-owned stores LEED certified beginning in 2010.   Also, Starbucks plans to make all new company-owned stores get 50 percent of their energy from renewable sources, and 25 percent more energy efficient.  On a longer term basis, the company plans to replace all incandescent bulbs with LED bulbs and make 100 percents of its cup supply reusable or recyclable by 2015.

Beyond energy and energy efficiency, all new and renovated stores beginning in 2010 will use local craftsmen and use materials (which will also help with LEED points).  Starbucks sites to its recently built store in Seattle. The bar’s leather facade is made of scrap leather from local shoe and automobile factories, the cabinets from fallen trees in the Seattle area, and the community table from a nearby restaurant.
 

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The Connecticut State Legislature passed Public Act No. 09-192.  The new Act resolves an ongoing dispute between the legislature, Attorney General and the State Building Official.

By way of history, last year, the State Legislature passed an Act which required the State Building Inspector to amend the State Building Code to include that any new building over $5 million and any renovations over $2 million must meet or exceed LEED standards.  The State Building Inspector sought a constitutional opinion from the Attorney General.  The Attorney General told the State Building Inspector that the law was most likely unconstitutional because it took powers away from the State and local Building Inspectors and placed them in the hands of an unregulated third party.  In addition, LEED standards can and do change without regular hearings.  Since the Act did not specify which LEED standard must be met, any change in LEED standards would change the Building Code without due process.

The new Act rectifies many of these issues and also puts off to another day the requirements of LEED.  The new Act deletes the requirement that the State Building Code meet ASHRAE 90.1 and instead requires that the State Building Code incorporate the 2012 International Energy Conservation Code no later than 18 months after the new code is published.

Further, the new Act requires that on or after July 1, 2010, the State Building Code must include provisions requiring new and major renovations of "certain buildings of over a specified minimum size" to meet or exceed "optimum cost-effective building construction standards" for thermal envelope, mechanical systems, indoor air quality, water conservation, lighting and electrical systems.  While the provisions of the Building Code must "reference" nationally accepted green building rating systems such as LEED and Green Globes and requires third party verification "with the relevant portions of such rating systems", it is clear that the legislation stops short of requiring LEED certification or Green Globes certification. 

This story will continue as regulations are promulgated.

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Following the overwhelming trend in the United States, Richmond, Virginia is now requiring all city construction projects over 10,000 square feet to meet LEED Silver Standards.  The requirement will apply to all new construction started after July 1st.  The city council was told that the extra costs for meeting the Silver standard would be 3%.  However, opponents to the measure insisted that additional costs for LEED certification would exceed 5% and the Silver Standard could exceed 15% in additional costs.  Despite this evidence, the City Council approved the measure by a 7-1 vote.

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Rockland County, located just north of New York City, is the latest municipality to require all of its county owned and operated buildings that cost over $1 million to be LEED Silver certified on a going forward basis.

While these announcements appear to be commonplace these days, the broader question of LEED's place in the building codes, as a prerequisite to obtaining permits and as a floor requirement instead of a laudable accomplishment remain.  The USGBC in many public statements through representatives has stated that it wishes LEED to not become "standard" since that was not the original intent.  However, the USGBC's many activists and local councils continue to lobby and encourage LEED becoming a threshhold standard.

The problems with such a requirement are already being seen in many sectors.  For many building types, LEED standards either do not exist, or if they do exist, they are very difficult to meet.  This is especially true in the retail and industrial sectors where no two buildings are alike and very often are developed to specifications dictated by their expected use and tenancy.

While a reader may believe that I am "anti-LEED", they would be wrong.  LEED, like Energy Star, Green Globes, BRAEEM and other standards, have a great societal benefit and should be signify that something special has been accomplished.  LEED has not been developed to be a base standard and should not become a base standard.

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My good friend, Adam Ney, publisher of Auggie V's BuildingCT Green Blog has published an excellent article on the breaking news from yesterday relating to the potential building of a LEED Platinum commercial office building in Hartford, Connecticut. 

The building will be built on the current site of the former home of the Hartford CBS television affiliate, WFSB.  The existing building is planned for demolition.  The owner, Abdul Islam, is the founder of A1 Engineering which is currently located in Middletown, Connecticut.  The new building will consist of 200,000 square feet.  30,000 square feet will be occupied by his company and the remainder will be leased.  The expected price tag for the building is $40 million.  Islam has not yet secured financing for the project.

While I wish Mr. Islam good fortune in his endeavor, the building will be the first that I know of that is truly a "commercial" LEED Platinum building.  To date, every LEED Platinum building that I know of has either been affiliated with academia, government or an owner-occupier's desire for a signature building.  If Mr. Islam's dream of building a LEED Platinum building is realized, the next issue is whether tenants will pay higher rents to occupy such a building. 

The answer to this question could fundamentally change the commercial building market not only in Hartford but beyond.  If tenants show preference for a LEED Platinum building, existing commercial buildings could slowly become obsolete thereby lowering their rental value causing existing buildings to be renovated to keep up with the new standards.  Further, the new 2009 LEED standards relating to energy efficiency will encourage better HVAC systems, water systems and building design so that the demand for such technology can be met.

Therefore, Mr. Islam may be a visionary, an idealist and an environmentalist.  However, to many, his project will be a test of the marketability and demand for LEED in the real commercial market.

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In 2007, the Connecticut Legislature passed Public Act 07-242.  The Act requires that all buildings which cost over $5 million constructed after January 1, 2009 meet LEED Silver standards.  Further, all building renovations which cost over $2 million started after January 1, 2010 meet LEED Silver standards.  The mechanism for enforcing this requirement is that the State Building Inspector is required to amend the State Building Code.

The State Building Inspector has recently announced that the new Building Code requirements should be amended in the March 2009 time frame (absent a repeal by the State Legislature).  The Draft Building Code circulated by the State Building Inspector contains the following:

1.  Buildings without conditioned space, which are solely supplied by renewable sources or with energy usage below 3.4 BTUs per hour per square foot are exempt from the requirements.

2.  All projects with building permits applied for on or after January 1, 2009 (i.e., the code will be retroactive apparently) and projected to cost over $5 million must be built to meet LEED Silver requirements.

3.  All renovation projects with building permits applied for on or after January 1, 2010 that are projected to cost over $2 million must meet LEED Silver requirements.

4.  These requirements can be exempted for a given Project after review by the Institute for Sustainable Energy.

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The City Council of Long Beach, California voted unanimously last week to move forward with the drafting and implementation of final Green Building requirements.  Currently, Long Beach has interim Green Building regulations.  The interim ordinance requires that all residential development over 50 units and all commercial/industrial development over 50,000 square feet register their project with the US Green Building Council with intent to achieve LEED certification or provide third party verification that the development meets the equivalent of USGBC LEED certification prior to the issuance of Certificate of Occupancy.

The final ordinances may be stricter and have broader implications for the development industry.  According to an article in the local Long Beach newspaper, the Grunion Gazette, the new ordinance would require LEED certification or equivalent but be expanded to include all projects regardless of size.

The next step is for the ordinances to be drafted.  The City has constituted a Green Ribbon Committee which has been delegated this task.

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The San Jose City Council enacted new Green Building requirements for commercial and industrial building over 25,000 square feet as part of their Green Vision program.  These building must meet LEED Silver standards.  Any residential development of 10 or more units must meet basic LEED certification.  Also, any housing structure over 75 feet must meet LEED Silver standards.  These requirements become effective in 2012.

Interestingly, the structures and building do not need receive actual certification but must be "certifiable".

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The US Green Building Council has now issued its Five-Year Plan.  The Plan will send chills down the spine of many developers, especially those that have been shut out of the USGBC's standards process. 

The USGBC wants to expand beyond "green" building and move into the direction of "social justice", "economic justice", and "quality of life" issues.  How these will be measured, by whom will the standards be drafted and how they will be implemented remain open issues.  It appears that the USGBC is attempting to compete with groups advocating Responsible Property Investing.  While USGBC LEED principals often have mention, and even a role, in RPI, RPI is more inclusive and economic based.  The USGBC also is advocating the continued adoption of its standards as, in effect, building codes throughout the country (although contrary statements are made to the retail sector at meetings such as RetailGreen.)

The USGBC also wants to take on the issues of climate change, restoration of natural resources and other social objectives.

While these goals are laudable, the USGBC must be cautious to not alienate those industries that they would wish to adopt their standards.   The USGBC must work with developers to understand fundamental economic and design issues that prevent many retailers from adopting USGBC design issues.  As a recent industry insider said to me, their building may be 3 times more energy efficient than the USGBC requires, but still not qualify for certification.

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The International Council of Shopping Centers recently published a book authored by Rudolph Milian detailing the history and current efforts of the retail industry to "go green".  The book was publicized at the recent ICSC RetailGreen Conference in Addison, Texas. 

Although geared towards Retailers and Developers, the book provides an in-depth and accurate historical account of the birth of the American environmental movement.  From the 1969 Santa Barbara Oil Spill through the modern day efforts of Al Gore, Milian captures the sea change in American environmental policy. 

The book also provides great insight into the efforts by retailers and developers to "go green".  Milian explores the efforts of Body Shop, Bed, Bath & Beyond, Home Depot, Lowes, Wal-Mart, and Target.  In many of these case studies, Milian makes the insightful connection between corporate image, consumer demand and stockholder requirements for Green movement.

One shortcoming of the book, and of the retail green agenda generally, is the paltry evidence that Green Building boosts sales.  In addition, Milian does not spend a great deal of time explaining the various incentives that are available to developers in the areas of alternative energy and distributed generation.  Instead, the book is an attempt to focus on the good things retailers are currently doing and the challenges facing retailers in the future.

Overall, Milian's book will prove to be a useful resource and will find a place prominently on my bookshelf as a valuable reference guide.

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