First, here’s the language from Mr. Carson’s article which appears to have generated the controversy:

“As reported by the Villas County News-Review, a group of Wisconsin residents filed a 125-page complaint with the USGBC challenging the award of the LEED Gold certification to Northland Pines, which is generally credited as the first certified LEED Gold high school. The challenge was based on a little discussed provision in LEED 2009, which reserves the USGBC’s ability to revoke certification a project that fails to meet the program’s ‘Minimum Program Requirements,’ which include requirements for minimum occupancy rates, site boundaries, and information-sharing about the project’s energy and water usage for five years after certification. It was reported that the USGBC sent independent examiners to Wisconsin to conduct on-site tests at Northland Pines to determine the project’s qualifications for LEED, and that a final determination on the school’s eligibility for LEED would be decided in early 2010.”

Note the bold language (my emphasis) which is not correct; the challenge is not based on any provision in LEED 2009′s Minimum Program Requirements. Rather, the Northland Pines High School was certified under LEED Version 2.1; unlike LEED Version 2.0, the former version required projects for the first time to satisfy every prerequisite of each credit category in order to earn certification. (Previously, under Version 2.0, projects could still earn certification even if they did not satisfy the prerequisite for each individual credit category). The appellants’ specific allegations relate to the project design’s alleged failure to satisfy certain Energy & Atmosphere prerequisites, which, if accurate, would be grounds for USGBC/GBCI to revoke the school’s Gold certification. In early February, a USGBC spokesperson responded to Mr. Carson’s article with some very general clarifications in an insert in Engineering News-Record (which stated, among other items, that Mr. Carson’s piece contained “several inaccuracies, causing unnecessary anxiety in the marketplace”).

In the Multifamily Executive article, which dates from last month, USGBC’s Scot Horst further responded to Mr. Carson’s article as follows:

“‘The idea that there is this new thing call decertification is inaccurate,’ says Scot Horst, USGBC’s senior vice president for LEED. ‘The way LEED works is we have a rating system; you send us information about your project, and we certify to that. But let’s say that there was someone out there who lied about the prerequisite information or unintentionally provided inaccurate information. We have always had a policy to go back and say this wasn’t what it was represented to be. That is nothing new.’”  (emphasis added).

As far as decertification is concerned, USGBC and GBCI have clearly reserved the right to revoke certification from projects that fail to satisfy the Minimum Program Requirements. While that may not be any different from what the organization has been doing all along (hence the question mark in the title to this article), the introduction to the LEED 2009 MPR Supplemental Guidance document (Version 1.0, November 2009) clearly states on page 3 that “[i]f it becomes known that a LEED project is or was in violation of an MPR, certification may be revoked, or the certification process may be halted. These situations will be handled on a case by case basis according to GBCI’s challenge policy.”  However, it appears that the confusion over “decertification” stems from a conflation of a LEED project owner’s failure to report performance data with LEED buildings that actually perform poorly. Consider these remarks from Multifamily Executive:

“The fear of decertification likely stems from one of the Minimum Program Requirements (MPRs) of LEED 2009. The MPRs, which apply only to projects seeking certification under LEED 2009, list the basic characteristics that a project must possess to be eligible for certification under the LEED 2009 rating systems. Requirement No. 6 states that “all certified projects must commit to sharing with USGBC and/or GBCI [Green Building Certification Institute] all available actual whole-project energy and water usage data for a period of at least five years.”

But the information collected under MPR6 is for research purposes only and won’t be used to penalize project teams with buildings that do not perform as well as intended, according to the LEED 2009 Supplemental Guidance document published in November 2009.

‘MPR6 specifically is an exercise to improve the future iterations of LEED rather than to strip the certification from prior program participants and all information remains confidential,’ says USGBC communications manager Ashley Katz. ‘LEED certification is granted based on a building’s design and construction at the time certification is sought. LEED certification does not evaluate the ongoing operation or maintenance of a building—there are too many factors that have to do with how the building is operated.’”  (emphasis added).

I think it’s also worth repeating here that there is absolutely no connection between the Northland Pines proceeding and the Minimum Program Requirements that generated the initial buzz about decertification last summer. (However, it is important to note that the Northland Pines certification challenge appears to be taking place under the GBCI Certification Challenge Policy, which did not exist at the time the high school earned LEED Gold. The general lack of transparency about this process is troubling, but I am willing to give USGBC/GBCI the benefit of the doubt until we get a decision on the challenge before passing final judgment.  For example, will the organizations make certification challenge materials available to the public for third party review? If not, what about down the line in jurisdictions where public money is funding LEED projects whose certifications may be challenged? If for no other reason, the Northland Pines proceeding is critical for practitioners to keep an eye on from a procedural, legal perspective, as it appears USGBC and GBCI have not previously confronted such a serious challenge.)

Also, note that the LEED 2009 MPR Supplemental Guidance document states on page 27 with respect to MPR No. 6 that “this MPR does not intend to penalize project teams with buildings that do not perform as well as intended or create insurmountable technical or legal barriers to registering a LEED project.” (emphasis added).

With respect to this latter point, you will recall that MPR No. 6′s requirements to share whole-building performance data “must carry forward if the building or space changes ownership or lessee.” Page 27 of the Supplemental Guidance document (under “Specific Allowed Exceptions”) notes that

“[t]o own a LEED certified project is to participate in the ongoing evolution of the green building movement. In that spirit, and in keeping with the intent of this MPR, the owner’s commitment to provide whole-building energy and usage data is expected to carry forward to the next owner if all or part of a LEED certified project is sold, re-assigned, or otherwise transferred. However, it is recognized that this may not always be possible, and GBCI will respect the realities of situations in which reasonable efforts to maintain the commitment are not successful. In this situation, the initial building owner will no longer be required to provide the data or access to the data.”

So, although the concept of USGBC/GBCI policing their buildings for MPR enforcement will remain an issue, and practitioners will still need to understand and translate MPR requirements into contract documents and leases, some of the initial concerns about LEED 2009 decertification raised both here at GRELJ and elsewhere may turn out to be unwarranted.

Finally, here’s what Horst had to say in Multifamily Executive about Northland Pines:

So what’s the deal with the LEED Gold-certified Northland Pines High School in Wisconsin referenced in the Business Journal as potentially facing decertification? “We are reviewing the project to make sure that what was represented in the [LEED] documentation was accurate,” Horst says. “That is consistent with what a good certification program would do.” He declined to comment on who brought the project to the USGBC’s attention for review.

As far as the current status of the Northland Pines proceeding goes, I am told that the complaint (which was filed in late 2008, according to USGBC as quoted in ENR) is still being evaluated by USGBC, GBCI, and their technical consultants.

As always, we’ll continue to update you on this critical story.

21 of  the available LEED-CI 2009 points are available under the Sustainable Sites Credit Category (40-49 total points earn a project LEED Certified status, 50-59 Silver, 60-79 Gold, and 80-110 Platinum); points available on account of base building features are as follows:

• SS Credit 1: Site Selection. 1 to 5 points are available. In addition to earning 5 points for leasing space in a LEED-certified building, tenants can also earn up to 5 points for leasing space in non-LEED-certified buildings if they satisfy one or more of 12 compliance Paths, including brownfield redevelopment, stormwater runoff management, and light pollution reduction. Tenants will want to incorporate pointed questions within their RFP (i.e., is the building developed on a site documented as contaminated by an ASTM E1903-97 Phase II Environmental Site Assessment or a local voluntary cleanup program?) that tracks the specific language set forth in each of SS-1′s 12 Paths if the prospective building is not LEED-certified. Moreover, they will also want to perform sufficient due diligence to ensure that landlords are not giving them lip service with respect to their building’s LEED certification status; as we have noted frequently here at GRELJ, these types of misrepresentations (whether innocent or not) remain a persistent problem across the real estate industry.

• SS Credit 2: Development Density and Community Connectivity. 6 points are available under two different options. Option 1, Development Density, requires the tenant to select space in a building located in an area with a minimum density of 60,000 square feet per acre net. Option 2, Community Connectivity, requires that the building is (i) located within 1/2-mile of a residential area or neighborhood with an average density of 10 units per acre net; ii within 1/2 mile of at least 10 basic services (as described within SS-2); and (iii) offers pedestrian access between the building and the services.

• SS Credit 3.1: Alternative Transportation – Public Transportation Access. Again, 6 points are available under two different options. Option 1, Rail Station Proximity, requires the building to be within a 1/2 mile walking distance of an existing (or planned or funded) commuter rail, light rail, or subway station. Option 2, Bus Stop Proximity, requires the building to be within 1/4-mile walking distance of 1 more stops for 2 or more public campus or private bus lines that the tenant’s employees or occupants can utilize.

• SS Credit 3.2: Alternative Transportation – Bicycle Storage and Changing Rooms. 2 points are available. In order to earn these points, the base building must provide secure bicycle racks and/or storage within 200 yards of a main entrance for 5 percent or more of the tenant’s employees or occupants as measured at peak periods. In addition, the base building must also provide shower and changing facilities in the building or, again, within 200 yards of a main entrance, for 0.5 percent of occupants.

• SS Credit 3.3: Alternative Transportation – Parking Availability. 2 points are available. For projects with an area less than 75 percent of the total base building area, the parking spaces provided to the tenant must meet – but not exceed – the minimum number required by local legislation, and preferred parking must be provided for carpools or vanpools capable of serving 5 percent or more of tenant occupants. Alternatively, the base building must not provide or subsidize any parking for tenant occupants. (Note that the text of LEED-CI suggests tenants include “limited parking” provisions in their leases as a potential strategy for achieving SS-3.3). For projects with an area greater than 75 percent of the total building area, parking capacity must meet – but not exceed – the minimum required by local legislation and preferred parking must be provided for carpools or vanpools capable of serving 5 percent of the base building’s total occupants. Alternatively, no new parking can be added for rehabilitation projects and preferred parking must be provided for carpools or vanpools capable of serving 5 percent of the base building’s total occupants.

USGBC’s Green Office Guide suggests that these considerations, among others that relate more specifically to the prospective tenant space that the base building is offering, be built into a questionnaire which the tenant – or its broker – should forward to the building’s property manager or leasing agent in advance of – or as a part of – the RFP process. In addition, tenants should also request – to the extent the building will make the data available – information that will allow it to assess the base building’s ability to earn 5 points from the 12 Paths under SS-1 (i.e., does the building meet the 30 reduction in water use requirement for the entire building under Path 10 for 1 point, or does it employ on-site renewable energy systems under Path 11 for up to 2 points?)

The significant number of points available under the Sustainable Sites category that are purely a function of the base building make the RFP process – and working concurrently with knowledgeable brokers and counsel – an imperative for tenants who intend to seek Commercial Interiors certification under LEED 2009.

As we move into the first full week of 2010, the Northland Pines decertification proceeding is casting a long shadow over the short-term green building legal landscape- but more on that in a bit. Before we push forward here at GRELJ and continue dissecting them in much more detail this year, I think it makes sense to look back at what I think were the five most important green building-related legal issues which emerged during 2009:

• The stimulus package contained numerous green building-related provisions, including significant funds for state and local governments to implement energy efficiency codes. However, most of these funds have yet to be distributed, so it will be interesting to track legislative implementation during the course of 2010. Some municipalities are beginning to look more closely at the logistics of  implementing third-party-driven legislation, including in our own backyard here in New York. This will be a critical and ongoing issue to monitor.

• USGBC acknowledged the legal risks implicit with building green, but its white paper on the subject dubbed them “old wine in new bottles.” We reviewed the white paper here at GRELJ and concluded that it seemed “to be an effort to sweep many of the thornier legal issues that may indeed ferment into ‘new wine’ under the rug.” My reasons for disagreeing with the paper’s conclusions stemmed (and continue to stem) from the pace of regulatory activity, the lack of input from the insurance industry on green building risks, the uncertainty over the prevailing standard of care for design professionals practicing in the green building space, and the questionable body of green building performance data.

• Critiques of LEED building performance moved into the mainstream; USGBC mobilized in response. The ongoing debate about the energy performance was picked up on in media outlets that included the New York Times after Henry Gifford and USGBC’s Brendan Owens debated the merits of LEED at the NESEA forum last March. LEED Version 3.0 was released with the obligation for owners and landlords to report data on building performance to USGBC, though many of you wondered what USGBC would actually do with that data upon its compilation. USGBC’s Building Performance Initiative, which was launched in advance of Greenbuild in Phoenix, is ongoing; we’re likely to start seeing results and further studies and critiques of LEED building performance throughout 2010.

• The National Institute of Building Sciences convened a Task Group to review various third-party building performance rating systems, which identified associated risk and policy problems for the A/E/C community to contemplate. The Task Group’s recommendations to NIBS’ Board of Directors included the development of various white papers analyzing risk and policy issues in greater detail; we emphasized the import of this effort in the context of NIBS’ political backing and the scope of the report’s conclusions.

• The potential for decertification of LEED Version 3.0 projects that (1) fail to report building performance data or (2) provide a legal mechanism for the reporting requirement to carry forward after a sale or sublease caused a firestorm of blogosphere commentary. Interestingly, though, the first publicly reported decertification proceeding- the Northland Pines High School complaint, which USGBC is currently reviewing – received comparably little attention.

In my opinion, these last two items were clearly the most important green building legal stories of 2009. Although the Northland Pines proceeding is not the full-blown green building litigation that many have predicted, it implicates all of the legal issues associated with decertification that were discussed last year. It is also the type of scenario out of which green building litigation could arise in the event USGBC/GBCI revokes the school’s LEED Gold status. For all of these reasons, and regardless of the outcome, the Northland Pines proceeding will be the first major green building legal story of 2010, particularly because we are (publicly) witnessing USGBC/GBCI follow the procedures of its Certification Challenge Policy for the first time.

If there are any other noteworthy issues we missed, please feel free to note them in the comments below. Happy New Year, everyone!

For those of you reading this article in a reader or by email, we recently gave GRELJ a makeover and encourage you to visit the site in your browser. Hopefully the new design is easier to read and better organized. One new feature is threaded comments, which allow you to reply specifically to a given comment in each thread. I look forward to any feedback on our new look.

In terms of the procedures which both the residents and USGBC/GBCI are obligated to follow in addressing the complaint, the GBCI’s Certification Challenge Policy is important to review. It states, in pertinent part, that “GBCI may revoke previously granted LEED certification or take other action regarding LEED certification such as determine to reduce points or category of LEED certification previously granted, if GBCI determines that credits/prerequisites for LEED certification were granted based on erroneous documentation or falsely submitted documentation. Persons concerned with possible inaccurately granted LEED certification are encouraged to contact the GBCI, provided, however, that GBCI reserves the right to institute an investigation and review of such possible errors or inaccuracy or veracity of documentation without third party complaint.” In the full version of its article (which is not available online), the Vilas County News-Review reports a USGBC official as stating that USGBC “gets challenges from time to time on certification designation” but that the Northland Pines challenge is “off the wall.”

Independent from the technical merits of the complaint – which I am curious to review – the article raises many critical legal questions. First, if the allegations are indeed true, will GBCI exercise its ability to decertify the building? If it does, will the party or parties alleged to be responsible face legal action for those failures? Will the complaint – and any written record created pursuant to the requirements of the Certification Challenge Policy – result in precedent that GBCI will follow in any subsequent decertification proceedings? If so, could Northland Pines become the next Shaw Development, cited as the seminal case for LEED decertification and subsequent green building litigation? If other decertification proceedings take place in jurisdictions where legislation is tied to formal LEED certification, how will state and local governments penalize projects that are decertified (if at all)? Finally, to what extent – if any – will USGBC make decertification materials available to the public for peer review? The Northland Pines proceedings may not answer any of these questions, but because it is the first time a decertification proceeding has been reported publicly, we will be keeping a close eye on what transpires in connection with GBCI’s review of the complaint, a copy of which I am attempting to obtain.

• Citizens Challenge Green Certification of Pines School (VCNR)

Back in August, you may recall that Community Solutions executive director Pat Murphy authored the first piece of a three-part survey titled “LEEDing from Behind: The Rise and Fall of Green Building,” which we noted here at GRELJ. Our article pointing you to the piece generated quite a bit of commentary and, now that Mr. Murphy has completed Parts 2 and 3, we thought we’d point you to his new book compiling the survey which is titled “The Green Tragedy: LEED’s Lost Decade.” The book was released while I was away last month and builds on Part 1 by tracing the historical argument promoting minimal green building cost premiums, reviewing the ongoing marketing efforts behind LEED, and concluding that policy makers should demand energy efficiency standards more akin to the German Passive House rather than “cheap quick ‘green’ solutions.”

Interestingly, in the preface, Murphy observes that “[w]e are now faced with a movement to adopt LEED as part of our building codes. An over-marketed standard that is under serious attack for its poor energy performance is now being proposed and accepted by cities as a requirement for our buildings. The idea of accepting as law an inadequate standard that has been developed by the building industry – thereby allowing that industry to usurp the long-established methodology of setting building standards by government policy- is absurd and dangerous.”

In addition to their significant legal implications, these remarks resonate with the conclusions of the recent NIBS report and, in my opinion, portend the types of critiques I believe we will see more forcefully in 2010 if LEED buildings do not perform at a statistically higher level under Version 3.0. Mr. Murphy’s book is available here, and I look forward to continuing the robust discussion that emerged after we noted Part I here at GRELJ in the comments below.

• The Green Tragedy: LEED’s Lost Decade

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)