A malfunctioning geothermal heating and cooling system at the Sussex County Emergency Operations Center in Georgetown, Delaware has officials scrambling for a temporary solution before the summer heat begins in earnest.

The $13 million, 18,000-square-foot facility opened in 2008 and was heralded as energy-efficient green building that could respond to large emergency events even during dangerous weather. The structure was designed to withstand wind loads of up to 120 miles per hour. But the facility is now in danger of its air conditioning shutting down and the oppressive Delaware summer damaging its millions of dollars of state-of-the-art electronics equipment.

To function properly, that equipment needs constant air conditioning which is provided by the geothermal system. The closed-loop system uses groundwater as its starting point, the temperature of which should range from 60 to 70 degrees Fahrenheit. But in recent weeks the water in the system’s 24, 600-foot-deep wells has ranged from 80 to 85 degrees. On more than one occasion it has even even topped 95. If the temperature reaches 100 to 105, the building’s air conditioning system will shut down. $2 million in county equipment and $2 million in state equipment could be in jeopardy.

Earlier this month, Sussex County approved a temporary generator to operate the building’s cooling systems while the problem is investigated (at a cost of $14,000 through Labor Day). Digging more wells or installing a permanent cooling tower would cost approximately $200,000. The county is also seeking advice from geothermal experts. More ominously, the county “will try to determine whether an engineering or design flaw contributed to the problem and, if any are found, will try to recover any costs.” Already the county engineer has publicly speculated whether the project’s designers factored in that the building would always need to be cooled “because of the amount of heat generated by equipment in the EOC. Possible litigation could center on that.”

Hopefully the issue can be resolved without any significant damage to the EOC or litigation. But as more green buildings that opened during the mid- to late-00s continue to operate, the odds that similar problems with other advanced building technologies could manifest themselves will increase.

We’ll keep an eye on the Suffolk County Emergency Operations Center as the summer proceeds and experts weigh in on possible solutions to the geothermal system’s woes.

A recent article in the Sydney Morning Herald suggests that Henry Gifford’s class action suit against USGBC has resonated not only domestically, but across global real estate markets as well.

Consider the following: while visiting Melbourne to observe green Australian commercial office buildings, Roderic Bunn, the principal consultant at Britain’s Building Services Research and Information Association said that “[w]e are piling often unmanageable complexity into these buildings, so the consequence is unmanageable complexity. It’s the enemy of good performance.” Although Bunn stated that he was “not saying it [a lawsuit] will happen [in Australia] or in the UK,” he did affirm his belief that “Australian commercial and public sector buildings are suffering the same problems as those in Britain.”

Pointing specifically to Henry Gifford’s lawsuit against the USGBC currently pending in the Southern District of New York, Bunn went on to say that “[p]roperty organizations have accused the [USGBC] of selling green certification. Some people are waking up to the fact they believe they have been mis-sold a rating system that guarantees performance, and the construction industry hasn’t been quick to disabuse them of that notion.”

In addition to its referencing the Gifford litigation, I think the article is important to note because it highlights many of the same building performance issues that have plagued green buildings here in the U.S., as well as the operational issues that green lease provisions are designed to address. For example, Bunn observes that:

• “We have been seduced by the often false promises of new technologies. A building can be mounted with wind turbines and photovoltaics, but they don’t contribute nearly as much as designers think they do because they haven’t driven down the energy requirement to begin with. We tend to glue these things on to the outside of buildings before we actually have reduced the loads of the building as far as we can go. The mantra should be ‘half the loads, double the efficiencies. Halve the carbon in the fuel supply before we go anywhere near on-site renewables. They are often expensive, small, very complex, and maintenance hungry, and the maintainability of these things is rarely taken into account.”

• “The construction industry is very good at designing dreams but crafting nightmares – and it’s the managers who inherit the nightmares. We can’t afford to have a sustainable building not delivering what they are supposed to deliver.”

Bunn served for 16 years as editor of the Building Sciences Journal, which is the official journal of the Chartered Institute of Building Services Engineers, and has received numerous government grants to study building performance in the United Kingdom. Uniformly, according to Bunn, those studies found that “energy consumption was far too high, systems were not finished off properly, no one knew how to use them, and they were misfiring on a whole range of criteria.”

Some of the solutions which Bunn suggested to the Sydney Morning Herald include requiring the project team to remain engaged with the building for a period of time after construction is complete to get it “as close to the design targets as they can get. Finish it off properly, follow through. Builders should be appointed on the basis they will stay engaged for a significant period after occupation to fine tune and perform, monitor the energy use to optimum satisfaction.” Of course, in the U.S. construction industry, this rarely happens; the project team wants to get off the job as quickly as possible, and for the owner to keep it engaged for any additional period of time costs money.

Although addressing the gaps between green design, construction, and operations will continue to be a major challenge in 2011, I think it’s clear that the Gifford litigation is playing a major role in raising awareness about those gaps and increasing the level of conversation about the types of measures that can improve it. Indeed, Bunn also identified the new building performance reporting requirements in Australia for office buildings as potentially closing the gap between design and operations and allowing future green building projects to more meaningfully address it; as you may recall, as of November 1, Australia requires landlords to disclose the energy efficiency of their office buildings when they either sell or lease space that is larger than 21,530 square feet (2,000 square meters). (Ratings are based on the National Australian Built Environment Rating System (“NABERS”), which is on a scale of 1 to 5 stars, and Australia’s current median market performance stands at 2.5 stars). I think this is also important to note because, in the aftermath of the 2010 USGBC Legal Forum at Greenbuild, we pointed to building performance reporting requirements as a trend that will likely increase in 2011.

Finally, I thought Bunn’s remarks were also timely given the recent release of the International Green Construction Code for a second round of public comments in light of the types of green building practices that could soon become mandatory as part of building codes throughout the U.S. We’ll have more thoughts on the IGCC and what it means for the future of local-level green building programs in an upcoming article here at GRELJ.

On Thursday, November 18, I will sit on a panel at USGBC’s 2010 Legal Forum at Greenbuild. “The Legal Challenges Posed by Green Building” will feature three, one-hour panels, two of which are titled “Current Green Building Statutory & Policy Issues” and “Practical Practice Pointers.” I will sit on the third panel, “What’s the Next Big Challenge in Green Building Law?” with Chris Cheatham and moderator Shari Shapiro. I anticipate a robust discussion of Henry Gifford’s class action lawsuit (which, in some ways, I think has more merit than does Ms. Shapiro) as well as the future of “LEEDigation” (which I believe is manifesting itself in a very different context than does Mr. Cheatham). I mention this not to take any sort of peremptory shots at my colleagues, but rather to suggest that the panel should be a spirited one, so I hope you will consider attending if you will be at Greenbuild, even if you do not need the CLE credit.

I also think it is worth pointing out that – two years ago, in my description of what I thought was “good,” “bad,” and “ugly,” about Greenbuild 2008 over at gbNYC, I noted that there was very little discussion at the conference about legal issues arising out of sustainable design and green building. I wrote:

The Ugly: No Discussion of Liability and Risk Management Issues

Unless I missed something, not one panel discussion or education session featured any presentations regarding the risk management aspects of building green. This was an enormous Greenbuild shortcoming, in my opinion. As you may know, I practice construction and real estate law and the number of lawsuits that our group has seen in the last few months since the Wall Street meltdown has increased significantly. Litigation that might not have been necessary as recently as the summer may now mean the difference between turning a profit on a job or a development and walking away in the red. A stakeholder that, in years past, would not have asserted a claim arising out of a green project because of the fear of being branded the bad guy might not care anymore if the dollars aren’t adding up. For these reasons, I believe that failing to educate our industry about emerging green building risks is a huge mistake, particularly as we head into what will likely continue to be a particularly brutal economy through 2009.

Also in looking back at what I wrote two years ago, it struck me that Henry Gifford was, even back then, casting a shadow over USGBC and LEED:

The Bad: Not Enough Emphasis on LEED Building Performance Failures

On Friday, Alex Beam of the Boston Globe wrote a column about a recent article by building science expert Joseph Lstiburek in the journal of the American Society of Heating, Refrigerating and Air-Conditioning Engineers. The article reviewed a report that was written back in March by New York City-based Henry Gifford which dissected the USGBC-commissioned New Buildings Institute study. The NBI study was unveiled at last year’s Greenbuild and claimed that LEED buildings were performing 25 percent better than comparable buildings with respect to energy efficiency.

As Mr. Gifford sets forth in his report (available via the link below), the NBI study suffered from a few big problems, including that it only obtained data from 22 percent of the LEED-certified buildings in the country, and then compared it to a national database (CBECS) that includes buildings dating from the early part of the 20th century. However, notwithstanding the fact that the data pools were flawed from the beginning, the study’s most egregious failure was that it compared the median energy consumption for LEED buildings to the average of the pool of comparable buildings. In other words, it compared an apple to an orange and drastically shifted the results of the study to make a much more compelling case for LEED. In the piece in the Globe, Lstiburek said that he’s “gotten hundreds of e-mails about his article, mostly saying, ‘I can’t believe they let you publish this’” and called Greenbuild “six thousand looney-tunes wandering around Boston.”

It’s clear that, because points with respect to energy consumption are being awarded based on a predictive model and not actual, performance-driven data, LEED buildings are not performing as well as they should in terms of energy savings, and the building science experts who have spent decades analyzing building performance are being vilified for pointing out the shortcomings of the LEED system. Moreover, from a legal perspective, if you’re building an energy model for a LEED project and don’t have a green building lawyer looking at your contract documents, you absolutely need to hire one.

I don’t think there’s anything wrong with questioning the merits of LEED- it seems like the type of thing we should be doing in order to continue refining the system. Mr. Lstiburek and Mr. Gifford are the types of people who should be speaking at Greenbuild, either keynoting or providing stakeholder education about best design practices or commissioning procedures once a building is operational. Mobilizing the industry is important, and creating green good will is great too, but I think the USGBC is missing a big opportunity here by not embracing these types of leaders who can help improve the energy performance of our buildings- we can’t lose sight of that ultimate goal.

Although I think it’s safe to assume that Mr. Gifford will not be speaking at this year’s Greenbuild in Chicago, I also think it’s interesting that the tenor of the building performance discussion does not seem to have changed all that much in the past two years; as Larry Spielvogel noted in a recent comment here at GRELJ, “[t]hat no one has produced and published comprehensive metered energy data to contradict Henry Gifford’s conclusions in more than two years speaks volumes.”

In any event, this post is not only a plug for our panel, but also an opportunity to pause and take stock of what has been a very busy few months in the green real estate legal space. From Mr. Gifford’s complaint, to the ongoing vote over the new forest certification benchmark within LEED, building code preemption litigation out West, and the condominium lawsuit in Battery Park City’s Riverhouse, there been no shortage of fascinating legal topics that will continue to merit discussion both here at GRELJ for the rest of 2010, as well as on our panel in Chicago.

If there are any other topics that you believe merit particular discussion during our panel, I would welcome your input in the comments below. I hope to meet many of you after the panel concludes!

Factors that the study identified as responsible for the increase included:

• The building averages 450,000 visitors per year, not the 300,000 anticipated by the model;

• Its two theaters operate for 7 hours daily, not the 2 hours anticipated by the model; and

• Office space is used 7 days a week, not 5.

According to a spokesperson quoted in the Observer article, the library did not track its energy consumption “due to the cost.” Rather, it was “a reflection of [the library's] faith in the LEED certification process that [it] did not go back and second-guess the efficiency of the equipment.” As the Observer notes, the building’s increased energy requirements are, in some sense, due to its own success. However, as ASHRAE Fellow and Distinguished Lecturer Larry Spielvogel, P.E. pointed out in a letter to the New York Times which we reproduced here at GRELJ last summer, “[b]uildings alone do not use energy. The occupants, operators, and systems do.” The factors driving ImaginOn’s performance gap are another example of why the type of predictive energy modeling on which LEED relies is so imprecise and why project teams need to remain careful about the types of representations they make to their clients about the performance-related results of potential LEED certification.

I also think it is also useful here to emphasize again that, under LEED 2009, this type of performance gap would not be the basis for a LEED 2009 decertification proceeding. Rather, the decertification discussion which was so heated last summer related to LEED 2009 projects which fail to commit to sharing performance data or to satisfy any of the other new Minimum Program Requirements- not if projects simply use more energy than anticipated.

• ImaginOn’s Energy Use Grows With Popularity (Charlotte Observer)

Although the study concluded that these 19 green buildings were consuming (on average) 40 percent more energy than predicted, all of the buildings were consuming less than a building designed to Massachusetts baseline building codes. The disparity in predicted versus actual energy consumption is probably not surprising, but the study did identify a number of issues common across the buildings which resonate with many of the technical and operational provisions of documents like the Model Green Lease. I think it is therefore worthwhile to review the study both from a green leasing perspective, but also in terms of LEED, particularly because the Lowell study has not been referenced in many of the recent articles discussing the ongoing LEED performance gap.

Among other factors, the study identified the following as accounting for the disparity in predicted versus actual performance:

• The predictive energy models used during the design phase were created based on the incremental amounts of projected energy savings from each of the proposed systems and efficiency measures which, according to the energy modelers interviewed for the study, did not account for the building’s performance in its entirety once those systems were installed and operational;

• By nature, predictive energy modeling does not account for the behavior of building operators and occupants with respect to their use of plug loads, occupancy levels, and operating hours (but note the importance of green leasing practices in this context);

• Design and materials changes during the construction phase on account of budget constraints (which emphasizes the need for ongoing construction counsel); and

• Some of the buildings suffered from increased energy consumption during the initial months of occupancy due to incompletely installed or commissioned systems, which the study concluded stemmed from contractors who incorrectly set the systems initially, as well as occupants who did not understand how to use the systems.

In addition to suggesting that these specific design and construction factors may impact green building performance, I think it is also important to note that the authors identified a “frustration” in stakeholders over the observed energy performance gulf. The study suggests that the gap be bridged through “communicating uncertainties in design predictions” and “better training in the use of the technologies in the buildings;” the former is a marketing and construction contracts issue which we’ve frequently discussed in the context of LEED, while the latter can be addressed through the use of various types of green lease provisions.

Although the study itself is somewhat dated, I do think that it emphasizes two important points. First, LEED building performance has been a question mark for quite some time, and will likely remain a critical issue for the foreseeable future, particularly while industry stakeholders continue to grapple with addressing the foregoing building performance factors through risk management strategies, construction contracts, and green lease provisions. Second, it confirms the unpredictable nature of energy modeling and importance for project teams to manage their clients’ expectations when discussing the opportunities presented by green building and other sustainable construction practices.

• Barrientos, J., U. Bhattacharjee, T. Martinez, and J. Duffy, 2007, “Green Buildings in Massachusetts: Comparison between Actual and Predicted Energy Performance,” Proceedings Annual Meeting American Solar Energy Society

The USGBC August 25, 2009 press release about their Building Performance Initiative implies that a large-scale collection of energy data from LEED® buildings will improve energy performance. This suggests a response to escalating criticism about the actual energy use of LEED® certified buildings compared with all others. Why do few published stories about these buildings include metered energy and water use data? If these buildings can waste energy efficiently, perhaps one answer is not to include those measures that allow that to happen.

The reality is that neither predicted nor actual measured energy use determines whether a building is energy efficient. Nor does energy use alone determine whether a building meets or exceeds all required or desired criteria, or provide the accountability necessary to achieve those results.

I have been collecting and evaluating detailed metered and measured building energy performance data for 40 years. Collecting the data is one thing, even if done completely and correctly. However, evaluating the data and then making comparisons among buildings is something else. Buildings alone do not use energy. The occupants, operators, and systems do.

In an extreme case, look at apartment buildings where each apartment is identical, and the metered energy use per apartment can easily vary by 2 or 3 to one, or more. Individually metered floors in office buildings occupied by the same company or tenant also can vary by 2 or 3 to one.

The functions in a building can also have a major influence on building energy use. The presence of a laundry in a hotel or hospital can make a 25 to 50% difference in total building energy use per bed, room, or square foot compared with an identical building on the same street.

Buildings with intermittent occupancy present similar dilemmas. How does one estimate, predict, or compare the energy data for two identical churches on the same block built at the same time, when one is only occupied for a few hours each Sunday and on some holidays, and the other is occupied most days of the week?

Comparing metered energy use to modeled energy data is not a valid measurement of anything. If the modeling and estimating methods were sufficiently accurate, utility companies would not require the use of meters.

Some articles I wrote 25 years ago show apartment by apartment or office floor by office floor metered energy use data in the same building. For another good example, look at the range of energy data for any given building type shown in the statistically significant quadrennial CBECS reports, collected at a cost in eight figures.

That reminds me of an energy research project 35 years ago during the 1970’s energy crisis. The US Postal Service spent hundreds of thousand of dollars instrumenting and recording the detailed energy use in a large postal facility. The conclusion was that they could collect lots of data.

The answer in evaluating and comparing energy data is using professional judgment and experience. That involves knowing and understanding not only the energy use and particulars of the subject building, but also the energy use and particulars of comparable buildings in the area. Comparing the energy use of a suburban office building in Boston with suburban office buildings in Providence without knowing the particulars is not likely to be meaningful or conclusive. This is much like the commercial real estate appraisal profession.

I think that there are a few important things to consider here. First, in USGBC’s Building Performance Initiative press release, LEED Senior Vice President Scot Horst notes that “[p]lenty of people are content to simply point to these longstanding issues [relating to LEED building performance] without offering a constructive way to address them. We’re going to take them on and engage practitioners and thought leaders alike in establishing a national roadmap to optimize building performance.”

After last fall’s Greenbuild, I suggested over at gbNYC that, if USGBC was serious about improving the energy performance of LEED buildings, it needed to engage building scientists such as Henry Gifford, Joseph Lstiburek, and Mr. Spielvogel in a meaningful way- certainly through more of an effort than simply collecting more data. As Mr. Spielvogel notes in his letter above, “[b]uildings alone do not use energy. The occupants, operators, and systems do.” This, of course, is what makes the type of predictive energy modeling on which LEED relies so imprecise and why project teams need to remain careful about the types of representations they make to their clients about the performance-related results of potential LEED certification. As Pat Murphy noted in a recent comment here at GRELJ, “[t]here is a crying need for accurate, verifiable and reliable energy rating systems. If LEED doesn’t fill the bill, other options will come forward.” I agree with Mr. Murphy and, in conclusion, would suggest that this is precisely what should give policymakers pause as they consider incorporating LEED- as currently constituted- into state- or local-level green building legislation.

• The Ugly, the Bad, & the Good: Thoughts on Greenbuild 2008 (gbNYC)
• Some Buildings Not Living Up to Green Label (NYT)
• Building Performance Initiative (USGBC Press Release)

In this first piece, Mr. Murphy concludes that “[t]here has been concern with the LEED rating system relative to energy and CO2 since its inception. . . . LEED has failed to lead in the important areas that are measurable. Initially, [USGBC] adopted a weak status relative to energy consumption. [It] did not recognize and incorporate accountability and verification, unfortunately wasting years that could have providing important feedback relative to energy use. [It] has also not clearly and honestly communicated that LEED is not an exemplary indication of energy performance.” This final thought, of course, is of particular note in the context of many green building legal issues and why Mr. Murphy’s piece will likely serve as a critical backdrop to associated risk management strategies for stakeholders moving forward.

I encourage you to print off this first article, review it, and share your thoughts below in the comments; we’ll be adding the entire series to our Resources section here at GRELJ once it’s available.

• LEEDing From Behind (Community Solutions)

The much more practical research that I turned up was the following except from an article by Kelly Luckett, the self-proclaimed “Green Roof Guy” who writes a column for greenroofs.com. In a column from the very end of 2008, Mr. Luckett describes how uneducated project teams may unwittingly expose themselves to unanticipated risks stemming from the maintenance requirements of green roof installations. His remarks also reflect a number of key points we’ve made consistently both here at GRELJ and over at gbNYC with respect to the additional risk management strategies demanded by new green building technologies and third-party certification programs.

It is also interesting to note that, for the particular project that he describes below, LEED certification requirements resulted in the green roof’s irrigation system being disconnected after the initial green roof establishment period, which resulted in a roof that did not appear as anticipated by the owner. One last important thought- Mr. Luckett hints that this project was located in Toronto, which, as you’ll recall, recently passed a green roof mandate. I think this is a great example of how legislation is fueling the types of liabilities that we grapple with here at GRELJ, and why, as always, contract language will remain paramount for green building project teams.

I would like to turn the focus now to an issue that continues to plague the green roof industry: the maintenance-free green roof myth.  Some in the media continue to espouse this nonexistent characteristic of green roofs resulting in many of our customers being painfully uneducated about realities of critical green roof maintenance!

Pretty strong language, I know, but the problem doesn’t seem to be getting better.  Let me tell you a story about my company’s largest project.  It’s a government owned project in the city that has become the nation’s green roof capitol; you know the place.  I sat in on a meeting where the general contractor, the architect, and the roofing contractor removed all mention of maintenance guidelines and the Plant Health Alert System from my submittal package!

For those of you outside the construction industry, a submittal package is a gathering of documents and drawings the subcontractor submits to the architect and owner to demonstrate compliance with the specifications for products or portions of the construction project.  When I questioned why they were removing critical pages of information from my submittals, I was told that they eliminated the irrigation system for this 96,000 square foot green roof based on a tour a green roof provider took the owner on during the preceding spring.  I asked if they had told them about the drought that killed green roof plants all over the region the summer before, to which I only received blank stares.  I practically had to threaten to hold my breath until I turned blue, or at least threaten to walk away from the project to get them to issue a change order to put the irrigation system back in.

The green roof was planted in June and July, 2007, and required routine irrigation throughout the establishment period, a task that could not be accomplished over 96,000 square feet using a garden hose.  After alleviating concerns over the irrigation system conflicting with LEED certification requirements by agreeing to disconnect the system after the establishment period, the change order was issued.  However, I insisted that the irrigation system remain in place as insurance should drought conditions require its activation to keep the $250,000 worth of plants alive.

Now fast forward two years. The phone rings; it’s the roofing contractor.  The ownership is requesting a walkthrough to discuss the condition of the green roof.  I asked our horticulturist to accompany me to the autumn meeting on the rooftop. We were greeted by the general contractor, the architect, the roofing contractor, and a clearly unhappy owner’s representative.  The condition of the green roof?  Starving sedums due to absence of the fertilizer that was supposed to have been applied the previous spring, per the maintenance guidelines that the ownership never got to see.

Also, since the plants did not receive the food required to grow and cover the surface of the growth media, the weeds moved in.  The good news –  the weeds will die over the winter and an application of fertilizer next spring will allow the plants to thrive.  The bad news – the project lost the opportunity for the plants to grow in one of the wettest growing seasons on record.  As you can imagine, there was a round of discussion about who was supposed to have provided the maintenance, a discussion that may wind up being continued in a court room.

However, the owner’s representative asked why the irrigation system was still there.  When the general contractor started to speak he was stopped by the owner’s representative who said the question was directed to me.  Before I could answer, another question was posed, “Do you tell your customers that they need to provide irrigation for their green roof?”  To which I replied, “Absolutely yes, every single one of them.”

The owner’s representative, clearly not expecting this answer, became even more agitated.  That’s when I began to appreciate how serious this problem has gotten for the green roof industry.  The owner’s representative placed in charge of one the city’s largest green roofs, in arguably the most green roof educated city in the nation, was utterly surprised by the fact that plants need food and water.  The building code issue evoked an urgent call to arms that brought about action by many and opened lines of communication among perceived adversaries, while lack of proper green roof maintenance poses far more serious threat to the green roof concept yet the green roof industry remains largely quiet.

Admittedly, nobody uses discussing maintenance during the green roof sale as their go-to closing strategy, but it’s a lot healthier for a green roof business in the long run to address this issue upfront rather than standing in the middle of a problem on a green roof facing an unhappy and uneducated customer the following season.  I’ll keep working on the code issues on behalf of the industry, but it’s time the industry start working on this much larger problem.

• The Green Roof Guy (greenroofs.com)
• Green Roof Archive (GRELJ)

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)

Specifically, while the new Stadium was projected to more or less play the same as the old one across the street, a number of factors that the Yankees and their design team may not have considered, underestimated, or were outside of their control all along have resulted in a drastically different performance than the club anticipated. For example, the new Stadium stands sixty feet taller and concourses on each level of seating are exposed to the building’s exterior, which may be creating a wind tunnel effect that is blowing baseballs out towards the fences. Interestingly, the Yankees and their engineers are not entirely certain about what will happen to these wind patterns once the old Stadium is razed as demolition has yet to start in earnest.

The analogy here, of course, is where policymakers, owners, or other stakeholders make legislative or project-related choices that are based on projections which do not accurately reflect actual performance once a structure is brought online; these dangers are even more acute where contract documents obligate a project team to achieve a certain level of performance or fixed reduction in operating expenses that are based on a predictive model. The reasons why a building’s performance could diverge may be complex and entirely unanticipated by stakeholders; building science is complicated and buildings themselves are complex systems for which modeling does not always reflect reality. The experience at New Yankee Stadium to date may be a rather simplistic example, but I do think it helps make the point that predicting performance and evaluating performance based on actual data are two very different ballgames.

As you will recall, NAIOP analyzed and then assembled a package of energy efficiency features that it identified based on a targeted 10-year payback period and then modeled the building in three separate climate zones to come up with its projected energy reductions over ASHRAE 90.1-2004. The study concluded by stating that the projected energy efficiency savings were “done primarily by upgrading the building envelope insulation and increasing efficiency of energy using sub-systems. Representing the practical limit of current construction, together, these upgrades will save enough energy in approximately 10 years to offset their marginal increase in cost. Solar can be used to make up the difference to 30 percent, but with a payback timeframe exceeding 50 years.”

NAIOP concluded that to reach the target reductions, an 11,000-square-foot rooftop photovoltaic system would be required at an installed cost of approximately $1.1 million; such a payback period would be in the range of 55 to 100 years. Interestingly, the report itself notes that “[a]fter upgrading building energy features, solar generation is the current solution for additional energy savings over the 90.1-2004 Standard. However, installed solar cost would need to come down by a factor of five for it to meet the ten-year payback criteria. This presents a significant economic barrier. Federal, state, and local incentives can further reduce this barrier.”

For policymakers, I believe that the study- and NAIOP’s response, particularly with respect to this latter point- is critical to consider, particularly in the context of crafting green building legislation in the form of a mandate rather than incentive. I think that it is critical for policymakers to understand that the the purpose of the study was to determine whether some of the 30 to 50 percent reductions in efficiency that are being discussed in many legislatures is practicable given current technologies and standard development practices. Absent significant financial incentives for developers that will bring expected payback periods in line with their business models, the types of efficiencies that we are hearing about are not economically feasible given current technologies. NAIOP’s FAQ actually notes that “a 10-year payback period is an extreme case for a developer to use as a business model” and many of NAIOP’s members have actually told it “that they cannot include anything beyond a 5-year payback in their business model.”

NAIOP President Thomas Bisacquino responded to critics in an interview he gave last month to GlobeSt.com with a number of interesting quotations that I have pulled and set forth below for your reference:

• “The reaction to the study has been really blown out of proportion. It’s clearly a case of shooting the messenger for the message. I’m not saying the study is perfect. I’m sure there are technical flaws. But it generally gives you a sense that to mandate these targets right now, of 30 percent efficiency by 2010, is unrealistic for a lot of properties.”
• “If these efficiency goals were set 3, 4, 5 years out, it would be a different story. A lot of these goals are here and now, the next 10 to 12 months. That’s where we see an issue.”
• “We think it’s very positive that if you use standard design, you can reach upwards of 23 percent without building a green building.”
• “I’ve read that you can use a lot of these technologies like solar to get a much quicker payback than our study indicates. They’re right, but where they’re suggesting that is where there are incentives at the city level, the county level, the state level. That’s what we’re advocating. We think incentives are good things. We don’t want mandates. We want incentives.”
• “The bottom line is that we’re an industry that does make a profit, with investors who have to be satisfied. They have to look at the operations of the building. Profit is not a bad thing. That’s how these companies work.”
• “We felt there were feel-good numbers being picked out of the air, [with some] saying ‘we need to mandate or legislate these targets through building code.’ They weren’t goals, or even nice targets to hit. They were going to become law. We asked, ‘is there data out there that supports these goals as something we can achieve and keep the building profitable. That’s the key.’”

Perhaps most interestingly, Mr. Bisacquino closed his interview with GlobeSt.com by noting that NAIOP is considering a variety of other building types for its next study, including a high-rise commercial office building or industrial property.

Just as a final note, while NAIOP acknowledges that much higher efficiencies are possible for trophy buildings or other types of development, I think that that the study helps buttress the argument that one-size-fits-all mandates will not make sense until a sufficient body of performance data emerges from an adequate cross-section of building stock.

• NAIOP Study – Facts
• NAIOP Study – FAQ
• Thomas Bisacquino Interview (GlobeSt.com)

The station first interviewed a number of Washington’s larger school districts, who reported their experience to be a green building premium between 3 and 7 percent, not the 2 percent claimed by the state. In the video, a Spokane School District spokesman states that one particular elementary school in Lincoln Heights would save $40,000.00 annually in operating costs. KING 5 followed up by interviewing this same spokesman, who said that this amount was an “incorrect projection” and the school is actually saving around $15,000.00. Finally, the video contends that “[o]ne California district has seen scores increase close to 30 percent in buildings with abundant daylight. While other districts may see increases of lesser magnitude, the conclusion is still the same: better light equals better scores.” KING 5 reports that this claim is “based on just one study done by a California architecture consulting firm ten years ago. WASL scores [that the station] looked at from three local schools did not show any noticeable improvement once the students moved into a new building.” This last point is particularly interesting to note given the weight that many green building advocates accord to the alleged soft benefits of sustainable design (i.e., increased worker productivity, reduced absenteeism, etc.). According to the station, representatives from the state refused to appear on camera with KING 5 to discuss the results of its report.

I think KING 5′s investigation suggests a number of important points that have been discussed previously here at GRELJ, both in prior articles and in the comments. First, as we move forward through this horrible economy, claims about projected green building performance and the benefits associated therewith that are used to buttress support for state- and local-level policymaking will be viewed with heightened scrutiny, particularly where taxpayer dollars may be used to fund such programs. Second, questionable performance issues with respect to green buildings will continue to demand strong contract language for all construction stakeholders, as well as carefully crafted marketing or other materials representing a property’s green design features and projected operating expenses. Finally, if other major media outlets follow KING 5′s lead in terms of investigating green building claims made by public entities in support of legislation, it could go a long way towards disseminating better performance data and, in turn, drive projects to achieve the higher efficiences and lower operating expenses that every industry stakeholder is pushing for.

• Investigators: Green School Claims Oversold (KING 5)

In his opening remarks, Mr. Gifford discussed both his problems with the LEED system generally, as well the basis of the critiques in his paper. “The first study we heard was in ‘07, and even before that, it was becoming law. The study came out and said that LEED-rated buildings save 25-30 percent compared to a national database. Well, I did a radical thing. I read the study, and I think there’s nothing in the study that supports, related to, or even references the conclusion. I think the conclusion was invented and stuck on. They found a 24 percent difference between two numbers, mean energy used by the national database and the median of the LEED buildings. Mean to mean would have shown that LEED did 29 percent higher.”

Mr. Owens responded by agreeing with Mr. Gifford that “before this research was done, there was a leap of faith involved, but the characterization of this as a scandal and a con is really unfortunate. I’ve never found anyone other than Henry saying that these buildings are using more energy. LEED is an assessment of potential for a building to perform. That’s all it is. We could do better to educate the public that the model isn’t good enough, yet. We haven’t really gone through and said ‘this is the first step in a 6 or 7 or 8 step process.’”

Fred Unger, a former board member of NESEA, challenged Mr. Owens and USGBC from the floor “to commit to not putting LEED or USGBC on any legislation” and called it a “scandal” that “LEED is being put into building codes when it still has these bugs to work out.” Mr. Owens responded by saying that although “the USGBC has never advocated putting this into law, it’s not the best use of this rating system.” According to Mr. Prager, Mr. Owens said USGBC would not make that commitment to keep LEED out of any legislation. He did, however, state that perhaps USGBC should have been more of an advocate in terms of articulating that LEED was not meant to be used as a legislative tool. Just as a side note, as recently as approximately one year ago, USGBC did have a statement on its home page that LEED was not intended for adoption into legislation or local building codes, but I am not certain whether it’s still there in any capacity or not.

I think it’s important for USGBC to engage building scientists like Henry Gifford at events such as these and, for that, I give it and Brendan Owens credit for attending the NESEA forum; indeed, one of the major disappointments of this past year’s Greenbuild event was USGBC’s failure to acknowledge LEED performance failures and other risk implications of building green. In a post at gbNYC that discussed the event, I wrote, with respect to building performance, that “[m]obilizing the industry is important, and creating green good will is great too, but I think the USGBC is missing a big opportunity here by not embracing these types of leaders who can help improve the energy performance of our buildings- we can’t lose sight of that ultimate goal.” Hopefully that’s what’s beginning to place here.

I also think it’s encouraging that green building performance issues are beginning to receive more media attention, particularly in the context of LEED. If anything, the NAIOP study and Henry Gifford’s ongoing efforts have stakeholders on both sides of the aisle considering the merits of predictive energy modeling more vigorously; hopefully that debate will continue as USGBC prepares to release its LEED 2009 system. In the interim, the construction and real estate attorney’s role in the context of building performance will continue to be- as Mr. Owens hinted at during the NESEA panel- educating clients that the LEED model “isn’t good enough, yet” and may present liability implications that they have not previously had to consider.

I am certain there will be much more to say about both this forum and the NAIOP study in the coming weeks and I look forward to hearing your thoughts and reactions in the comments below. I also encourage you to check out the comments to BuildingGreen.com’s article discussing Mr. Gifford’s “Lies Damn Lies” paper, where folks like Fred Unger, Rob Watson, and Mr. Gifford himself have left a tremendously interesting series of responses which I think that you’ll find to be quite insightful.

• Lies Damn Lies (BuildingGreen.com)
• LEED Controversy (Michael Prager)