“Sustainability,” “energy innovation,” “infrastructure upgrading.” These are the watchwords of today’s new future-oriented environment, from the worlds of politics and business schools, to industry, finance, venture capital and real estate investment. Like many “new” and “suddenly popular” trends, these have all been a long time in the making of their overnight prominence. My wife’s uncle, a professional forester, visited recently and after showing him our home heating wood pellet furnace, he reminded us that he had started a small company which pioneered the use of wood pellets thirty years ago, but failed in the attempt. Last month, I met a gentleman recently retired from the fuel cell division of United Technologies. While he is proud today to see his work adopted in city buses, truck fleets and soon in consumer autos, he spent almost his entire forty-five year career perfecting that technology.
Similarly, the U.S. Green Building Council, formed in 1993, quickly adopted their first version of the LEED (Leadership in Energy and Environmental Design) standards for environmentally sound sustainable building design and construction. In recent years, LEED design standards and their now familiar “LEED Certified” and “LEED Silver, Gold and Platinum” designations have crept into the general consciousness and vocabulary. But the actual adoption and promulgation of these standards for building construction and renovation in everyday commerce has taken almost the entire sixteen years to date. The occasional high profile story of a wealthy and/or socially conscious property owner has appeared from time to time. Harvard University, M.I.T., some large financial and insurance companies and some smaller, but well endowed private building owners have committed to the financial and administrative costs of such projects over recent years.
However, with today’s changed political priorities, increased global environmental awareness and the need for innovative and radical shifts in industrial and employment priorities in the U.S., interest in LEED has accelerated. By early 2009, Federal incentives included at least seventeen tax, loan and grant programs. Every U.S. state has adopted mandates, legislative requirements or preferential treatment for LEED or other environmental projects, including 298 tax incentive qualifications, 121 loan and bond programs and 290 rebate programs. Many municipal and corporate facilities departments and executive planners now specify space requirements that in return for their higher construction costs and lease payments, can improve the efficiency and cost savings of their occupancies, as well as the comfort, satisfaction and productive capacity of their employees.
The attainment of LEED certification requirements, now in its Version 3, involves extensive compliance with a virtually parallel building code in six areas: Sustainable Sites; Water Efficiency; Energy and Atmosphere; Materials and Resources; Indoor Environmental Quality; and a category allowing for new concepts and approaches to the Innovation and Design Process. A Project Administrator, working with design and construction professionals, files a design plan matrix with the USGBC. From improvements to Water Efficiencies such as water efficient landscaping and innovative wastewater technologies; changes to the Energy and Atmosphere of the building such as use of renewable energy and elimination of ozone depleting refrigerants; and standards for Indoor Environmental Quality including increased ventilation and improvements to thermal comfort and lighting, the design plan sets out which proposed credits specified in the USGBC guides the intended LEED certified building project expects to attain. The USGBC will notify the Project Administrator which credits will likely be awarded, if the filed plans are completed satisfactorily.
Following construction other credits may be awarded, among others, for use of recycled materials, effective construction waste management, attaining specified levels of building commissioning or use of low emitting paints and carpeting materials. Working with a LEED AP (Accredited Professional) can greatly expedite this process, as well as providing one optional Innovation and Design credit toward the minimum 26 credits to be certified, or to assist in obtaining the minimum of 33 credits for silver, 39 for gold or 52 credits for platinum levels. A LEED AP attorney can also assist owners, tenants, lenders, design and construction professionals and associated title, survey and environmental specialists in resolving LEED issues.
LEED certification is the mark of future oriented real estate, which can provide significant financial and tax benefits to your building plans, including eligibility for tax credits, loans, rebates and other incentives. Environmentally sound and cost effective building operations are more attractive to tenants, employees and owners, which can result in higher satisfaction, marketability and potential profits. If you have not investigated using its power to contribute to your next project, you are missing out on a significant opportunity for your real estate needs, your clients and the future of our built environment.
This article is for general interest and education only and does not constitute legal advice.
Robert A. Firger, LEED AP, is a member of the Real Estate Practice Group of MacDermid, Reynolds & Glissman, PC. He advises and assists in LEED project planning and certification and works with owners, tenants, design, construction and finance professionals to interpret and resolve issues in the LEED process as well as in commercial real estate transactions.