Better Building: The Responsible Developer's Blog : Northwest Construction Lawyers & Attorneys : Foster Pepper Law Firm : Sustainable Building & LEED Projects in Seattle & Spokane, WA

Kelly Angell, an associate in Foster Pepper’s Real Estate practice group, has earned the LEED Green Associate credential from the Green Building Certification Institute (GBCI). The LEED Green Associate credential is for professionals who support green building design, construction, and operations, and have demonstrated knowledge of green building principles and practices and LEED.

GBCI provides independent oversight of professional credentialing and project certification programs related to green building. GBCI is committed to ensuring precision in the design, development, and implementation of measurement processes for green building performance (through project certification) and green building practice (through professional credentials and certificates).

Established in 2008 to administer certifications and professional designations within the framework of the U.S. Green Building Council’s LEED® Green Building Rating Systems™, GBCI continues to develop new programs and offer the marketplace validation that building certifications and professional designations have met specific, rigorous criteria.

At Foster Pepper Kelly's practice is concentrated in real estate law with experience representing clients in acquisitions, dispositions, development, leasing, and financing of commercial, mixed use, retail, and multifamily projects. She is a regular contributor to Foster Pepper’s Better Building: The Responsible Developer’s blog at http://www.responsibledeveloper.com.

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 Efforts to reclaim formerly contaminated and publicly inaccessible sites for new sustainable developments are popping up along the shores of the Puget Sound, from Tacoma and Bremerton in the south to Bellingham and Port Townsend in the north. These new projects aim to achieve LEED gold and LEED platinum, with visions to restore marine habitat and provide public access and economic vitality to the urban waterfronts.

A recent article in the Daily Journal of Commerce described the projects occurring along the Puget Sound Shores:

Tacoma

The city of Tacoma successfully reclaimed Fort Wells, a former Superfund site. The waterfront development underwent an extensive cleaning and remediation effort. The area now supports water-dependent and water-oriented uses including maritime business, education and recreation facilities, residential buildings, museums, and retail and commercial buildings. The increased use of the area both ensures that members of the public can enjoy the waterfront, and helps offset the high costs of cleanup and restoration.

The Center for Urban Waters is on target to become Tacoma’s first LEED platinum building. The 50,000 square foot, $23 million environmental lab and research facility opened last spring and is the first new project on the east side of the Foss Waterway.

The building acts as a hub for research on urban waterfronts, houses offices and labs for the city’s Environmental Services science and engineering group, and houses both the University of Washington’s Environmental Studies group and the Puget Sound Partnership. The Puget Sound Partnership is the state-sponsored group charged with developing a long term plan to clean up the Puget Sound.

The building has numerous sustainable features and a goal of achieving “net zero” energy use. The building minimizes runoff and filters water with rain gardens, a green roof and ground level cisterns. These on-site water treatment systems provide up to 50 percent of the building’s water for toilets, and 100 percent of the building’s water for irrigation. The porous pavement on the public walkway allows water to filter into the earth. Several intact dead trees were placed to attract migratory birds to the area. There were also trees placed in the water to provide habitat for marine mammals and fish.

Port Townsend

The Northwest Maritime Center recently made its debut in Port Townsend. The building, which was 15 years in the making, serves as the new home for the Wooden Boat Foundation and as the center for maritime education and the craft of wooden boats. The two-building, 27,000 square foot, $12 million project is the first LEED gold building on the Olympic Peninsula.

The site had a long history of industrial use. It was originally the home of a sawmill, and was later used as an oil terminal and tank farm for decades. Cleanup of the site included removal of over 2,400 tons of contaminated soil.

Over 60 percent of the site is open to the building, in an effort to provide the public with the opportunity to enjoy the shoreline. The new dock also provides moorage for large visiting vessels. The unique heating system uses the temperature differential between nearby seawater and ambient air instead of a traditional gas heat pump. Water source heat exchanger plates were installed under the new pier to use the temperature of the Puget Sound to efficiently heat and cool the two buildings.

The buildings include sustainably harvested woods throughout the structure. The new dock includes stainless-steel panels that reflect sunlight back into the water, which helps migrating and juvenile fish. Over 3,000 square feet of eelgrass was planted to provide nursery grounds and protection for fish, shellfish and marine mammals.

Point Wells 

Just north of Richmond Beach, the 61-acre, $1 billion Point Wells project is the most ambitious waterfront development in the making. Once completed, the project could add up to 4,500 new residents over a 20-year period. This would more than double the population of Richmond Beach.

The project site, which is currently inaccessible to the public, served as an oil tank farm for decades. The site, however, has great potential with a shoreline that stretches three quarters of a mile. Environmental cleanup and shoreline and habitat restoration is estimated to cost $20 to $30 million.

Construction of the project, which could begin as early as 2016, is expected to occur over a 15 to 20 year period. It may add up to 3 million square feet of mixed use buildings. The developer has planned several amenities for residents and guests, including a community center, a boardwalk and bike trail, a public transportation hub (including a Sounder station), a large beach plaza, amphitheater, p-patch opportunities and abundant open space and wetlands.

The sustainable features will include on-site sewage treatment and construction of a biomass plant fueled by agricultural waste brought in via train. The wastewater management system will also include a water system to collect rainwater to use for toilets and irrigations. The site aims for a 96 percent carbon emission reduction, from 1,100 tons per year to 25 tons per year.

These three projects are examples of the transformation of the Puget Sound shoreline that will continue for years into the future to help reclaim urban shorelines and provide a healthy, sustainable urban environment.

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In the Better Building Initiative, President Obama proposes new measures to improve energy efficiency in commercial buildings around the United States. The initiative aims to make commercial buildings 20 percent more energy efficient over the next decade by encouraging private sector investment with incentives to upgrade offices, stores, schools, municipal buildings, universities, hospitals, and other commercial buildings.

The goal is to increase cost effective upgrades that will reduce energy bills and save business owners money. The hope is that this cost savings will be used to hire more workers, invent new products, and create shareholder value.

The initiative calls for a reform of existing tax and other incentives for commercial building retrofits, and proposes a new competitive grant program. President Obama is also asking corporate leaders to commit to making progress towards these energy goals. The President’s budget proposal will include efforts to make American businesses more energy efficient through several new initiatives:

• President Obama is asking Congress to redesign the current tax deduction for commercial building upgrades to make the current deduction a tax credit that is more generous and will encourage building owners and real estate investment trusts to retrofit their properties.
   
• President Obama is also making an effort to address the financing access problems for building retrofits. The Small Business Administration is working to encourage lenders to take advantage of increased loan size limits to promote new energy efficiency retrofit loans for small businesses. Further, the President’s budget will also propose a new Department of Energy program that will guarantee loans for energy efficiency upgrades at hospitals, schools and other commercial buildings.
   
• The President’s budget will also propose new competitive grants to states and local governments that streamline commercial energy efficiency standards to encourage upgrades.
   
• President Obama is challenging CEOs and University Presidents to have their organizations set an example in saving energy. Committing to a series of actions to make their facilities more efficient will make the organizations eligible for many benefits including public recognition, technical assistance, and best practices sharing with their peers.
   
• The Obama Administration is also working to implement reforms that will improve transparency around energy efficiency performance and provide more training in energy auditing and building operations.

The end goal of the Better Building Initiative is to increase energy efficiency in commercial buildings by 20 percent and create a potential cost savings of $40 billion per year.

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This year, the Bullitt Foundation planned to construct the Cascadia Center for Sustainable Design in Seattle's Central District, designed to be the world’s most efficient office building built to date, and the nation’s first mid-rise commercial building to achieve “Living Building” certification. "Living Building" certification requires the Cascadia Center to achieve 20 benchmarks, including the on-site production of 100% of the building's energy and water needs (100% is not a typo). The center would also be evaluated after one year of the building's operation (a response to the criticism that LEED-certified buildings fail to perform to green design standards over time). Ultimately, the Bullitt Foundation envisioned developing the Cascadia Center to be a local and national model for innovative sustainable development. However, the Cascadia Center is quickly becoming a model that demonstrates the barriers to innovative sustainable development in Washington State.

Recently, a nearby building owner filed an administrative appeal challenging the Cascadia Center because the project’s developer did not prepare an Environment Impact Statement ("EIS") under the State Environmental Policy Act (Chapter 43.21C RCW, "SEPA"). The building owner (whose building's views would be blocked) argues that an EIS is required because of the purported environmental impacts by the departures to the land use code provided in the City’s design review process and provided in the City’s Living Building Pilot Ordinance (now codified at SMC 23.40.060). The departures were needed to design the building to meet Living Building certification standards. Because of the building owner's collateral attack, the project is now stalled in litigation for the foreseeable future.

Ironically, one of the largest barriers to innovative sustainable development is the State Environmental Policy Act, a law originally intended to be a protective shield for the environment.

Generally, development projects that do not meet a City's SEPA threshold exemptions are subject to the SEPA review process, which may or may not include the preparation of an EIS (which, is costly to prepare and takes many months or even years to complete). As demonstrated by the Cascadia Center, the SEPA review process is vulnerable to legal appeals, providing a tremendous amount of uncertainty for urban development, especially innovative sustainable development that may require departures from established code requirements. Regardless of SEPA's initial environmental intentions, in reality, the SEPA process increases the uncertainty and cost of urban development, providing a disincentive for innovative sustainable development.

To encourage urban development, the Washington Legislature has amended SEPA to dispense qualifying projects from SEPA review at the project level if a non-project EIS has been previously completed at the planning level. This is what many call "upfront SEPA," and several cities in Washington State have effectively used upfront SEPA to encourage urban development. Washington State has authorized several forms of upfront SEPA, including planned actions, optional local infill exemptions (RCW 43.21C.229; WAC 197-11-800(1)), utilization of regulatory requirements in lieu of SEPA review, and RCW 43.21C.420. The City of Seattle did not complete a non-project EIS for the Cascadia Center project area, and, as a result, the Cascadia Center remained vulnerable to SEPA-based appeals.

The Cascadia Center's legal woes demonstrate that sustainable development remains vulnerable to SEPA-based legal challenges. It is likely that sustainable development will remain vulnerable to “environmentally-based” challenges unless cities complete upfront SEPA or SEPA itself is dramatically amended. Until then, sustainable developers should consult with a SEPA attorney to develop a strategic plan to minimize the cost and delay of defending their project should a SEPA-based challenge arise.

Cascadia Center Details:

Project owner: Bullitt Foundation
Project developer: Point32
Architect: Miller Hull
 

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On February 7, 2011, Judge Bryan dismissed the Building Industry Association of Washington’s (“BIAW”) claims that certain newly enacted provisions of the Washington State Energy Code are preempted by federal law. The Washington State Building Code Council (the “Council”) promulgated the revisions, contained in WAC 51-11-0900 (“Chapter 9”), in order to comply with its statutory requirement to achieve a 15 percent reduction in annual net energy consumption in new construction, and originally set the effective date as July 1, 2010.   As we previously reported, BIAW filed suit in federal court in the western district of Washington on May 25, 2010, seeking an injunction and a declaratory judgment that Chapter 9 violated the Energy Policy and Conservation Act of 1975 (“EPCA”).

The main basis of BIAW’s claims was that Chapter 9 was preempted by EPCA, and therefore invalid. EPCA, as amended, set federal energy efficiency standards for certain "covered products, including heating, ventilating, and air conditioning equipment (“HVAC”) and water heaters, as part of its energy conservation program.  (EPCA is responsible for the familiar bright yellow energy conservation guides you see on new major appliances for sale in retail stores.)

As reported in one of our prior blogs, in a June 8, 2010 letter to the Council, Governor Chris Gregoire asked the Council to delay implementation of the revisions until April 1, 2011, for fear of further delaying the construction industry’s recovery from the recession. The Council did in fact delay the effective date to January 1, 2011.

BIAW had joined with various industry groups to bring their claims, and the NW Energy Coalition, Sierra Club, and others were allowed to intervene for the Council. Both sides brought summary judgment motions. EPCA expressly states that it preempts any state regulations concerning the energy efficiency of “covered products”, but did provide for exceptions, if a state code complied with seven specific requirements. The Council argued Chapter 9 fell within the exceptions, BIAW argued it did not.

In his 23 page opinion, Judge Bryan carefully analyzed each of the contested exceptions and, referring to a combination of legislative history, expert testimony, and computer simulations, found that Chapter 9 passed muster. Judge Bryan granted the Council’s summary judgment motion, denied BIAW’s motion, and dismissed the complaint.

As Washington and other state and local governments amend their energy codes to improve energy efficiency, there will likely be more challenges similar to BIAW’s.  Judge Bryan distinguished one challenge already decided in New Mexico, where a federal court granted an injunction against the City of Albuquerque’s high performance building ordinance because it was preempted by EPCA.

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