Green Construction Law

Chief District Judge Martha Vazquez of United States District Court for the District of New Mexico issued an order back on Friday granting a preliminary injunction in favor of the plaintiffs in AHRI et al. v. City of Albuquerque. The injunction bars the enforcement of the city’s Energy Conservation Code, which the plaintiffs claim is preempted by federal regulation, pending the outcome of the lawsuit. I thought a portion of Vazquez’ 24-page written opinion was particularly interesting in light of much of our commentary on state- and local-level green building legislation here at gbNYC. “The city’s goals [in enacting the disputed code] are laudable,” Vazaquez wrote, “[u]nfortunately, the drafters of the code were unaware of the long-standing federal statutes governing the energy efficiency of certain HVAC and water heating products.”

I did not attend West Coast Green last week, but was pleased to see that the conference included a panel discussion about the emerging legal risks associated with building green, titled “Packing a Parachute: Practices that Minimize Risk and Prompt Best Use of Green Features.” Some of the panelists’ remarks resonated particularly salient in light of recent posts here at gbNYC, particularly with respect to how green projects are marketed, as well as our presentation of the country’s first green building litigation. With respect to green building contracts, the panel suggested that there is no “magic green paragraph,” and stressed that documents need to be tailored for the particular circumstances of each individual green project. We noted the same in the context of the Shaw Development v. Southern Builders case, pointing out that “the critical lesson from the lawsuit is that there is no one-size-fits-all form agreement for a green construction project,” particularly in the current regulatory climate where mandates and incentives vary in every jurisdiction.

We noted recently that Community Housing Innovations (”CHI”) has broken ground on the $4.5 million, affordable, green Minerva Place Condominiums in White Plains, but wanted to formally present you with a few more details about the project. Minerva Place is one of the first low-rise new developments in Westchester County to satisfy the New York Energy $mart Multifamily Performance Program guidelines. The project includes a 350-foot-deep geothermal heating and cooling system, as well as efficient insulation and construction techniques that CHI anticipates will save residents up to 30 percent on energy costs. Minerva’s energy-efficient features are being subsidized by a $55,000 grant from NYSERDA. The project was designed by Warshauer Mellusi Warshauer Architects and includes 11 two-bedroom (priced at $265,000) and 3 one-bedroom units ($225,000), each with hardwood floors and granite kitchen countertops. To qualify, families must have incomes between $73,000 and $91,000.

We wrote earlier this summer about Brennan Beer Gorman Architects / Brennan Beer Gorman Monk Interiors’ (”BBG-BBGM”) new headquarters space on the 25th floor of the Empire State Building, which will seek the tower’s first LEED for Commercial Interiors rating. Recently, the 32,000-square-foot project’s general contractor Aragon Construction installed BBG-BBGM’s HVAC system on the building’s first setback on the southwest corner. The two 9500-pound chillers will run independently from the rest of the Empire State Building and were designed to save BBG-BBGM 15 percent on energy consumption over ASHRAE standards. The installation was actually the first in the history of the building and suggests some of the intricacies of both green construction contracts and leasing provisions, including whether the landlord or tenant should be responsible for the installation of such equipment and how any associated savings that are realized might be shared between the two sides.

A number of commercial insurers- including Zurich- expressed concerns in a recent issue of Property Week over the increased installation of green roofs across the United Kingdom, believing that some installations have the potential to dry out and become flammable. Stuart Blackie, a risk management consultant for Zurich, argues that green roofs could become hazardous during drought conditions, identifying schools as particularly at an increased risk. “If roof access is easy, it could be quite an easy way to set fire to a school,” he said. Mr. Blackie recommends that green roofs include means for irrigation and that insurers assist their policyholders during the green roof design phase. Blackie also cautioned that Zurich was not implying that buildings with green roofs would not be insured, only that insurers should be consulted prior to construction in order to ensure that a proper maintenance schedule is established and overall risk assessment program executed.

Designed by Costas Kondylis, Bruce Ratner’s 80 DeKalb Avenue will be the developer’s first residential tower to rise in Brooklyn. The controversial Mr. Ratner will seek LEED certification for the $200 million project, claiming that the 34-story tower will incorporate a variety of low-VOC materials and use low-flow plumbing fixtures. The project broke ground back in July; earlier this week, Mr. Ratner closed on hard-to-obtain $110 million in tax-exempt bond financing from the New York State Housing Finance Agency for the tower, which will feature 73 affordable and 292 market-rate units. Ratner plans on opening the project for leasing sometime next summer; the majority of the units will be studios and one-bedrooms.

Yesterday was not a good day to be a green building under construction in Midtown. First, Steve Cuozzo reported in the Post that Macklowe Properties’ 510 Madison Avenue, which is currently pursuing a LEED Gold rating from USGBC, has received a partial stop-work order from the Department of Buildings. Later in the morning, a 5 ‘ by 13′ panel of glass fell from the 51st floor of Cook + Fox’s LEED Platinum hopeful Bank of America Tower. The panel landed on sidewalk bridging across 42nd Street (where the former Verizon Building continues to undergo a number of green retrofits), shattering and sending one person to Bellevue. Tishman Construction is serving as the construction manager for both of the projects

Apparently, even if your floors are bamboo and your finishes low-VOC, that luxury condo may be giving you cancer anyway. The cause is that ubiquitous must-have mostly used for holding take-out containers: the granite countertop. “It’s not that all granite is dangerous,” a radon-detection technician was quoted in the New York Times. “But I’ve seen a few that might heat up your Cheerios a little.” Granite, particularly the varieties imported from Brazil and Namibia, can release both radon and radiation, according to reports and analysis by the Department of Health. The radiation/radon claim is fervently denied by the Marble Institute of America, which claims it’s “ludicrous” and perpetuated by competing materials manufacturers and makes of radon-detecting technologies. They have released their own study to refute marble’s danger.

An insightful letter to the editor that suggests many potential green construction law issues appears in the February 2008 issue of The Construction Specifier magazine. Written by Anne Whitacre of Gehry Partners’ Los Angeles office, A Different Perspective on Green draws attention to the LEED mandates that continue to be enacted in the author’s hometown of Seattle. In the letter, Whitacre raises her concerns about both local green building incentives and public mandates; her comments ring particularly salient in light of the recent Managing Risk in Sustainable Building conference at DePaul’s Real Estate Center in Chicago a couple of weeks ago, as well as freshly proposed Seattle-based legislation that would expand a green building mandate at the county level.

I had the opportunity last week to attend an excellent CLE that was offered by American Land. The program focused on the legal issues that attorneys must remain particularly mindful of when advising clients on green real estate projects. Accordingly, here are gbNYC’s top five legal issues that green construction projects may present to participants. [...]