News: Design Errors Add Delay and Cost To SR 520 Project

Does the Responsible Public Developer disclose design or construction defects to stakeholders?


Timely and full disclosure engenders trust, and the sooner the issues are disclosed the sooner they can be remedied.

At Foster we work with our clients in the construction arena every day.  We know that no project is immune from defects in potential design or workmanship.  History is full of examples of problematic construction projects, going back to Hammurabi, who enacted the first building code in 1780 BC (with some rather strict penalties).  3,793 years later human error still impacts construction projects.

It’s no surprise, then, that costly design defects have been discovered on the pontoons that are a critical part of the $4.65 billion SR 520 project.  The Washington State Department of Transportation (“WSDOT”) has taken responsibility for most of the problem, stating that significant responsibility for cracks in those pontoons lies with its own engineers and that the pontoons will require expensive corrective work.

WSDOT designed the pontoons for the 520 bridge on a fast track, using its in-house engineers rather than having its contractor (Kiewit) responsible for the design. Designing the pontoons was part of  WSDOT's strategy to attract lower bids and to complete the floating section of the bridge by 2014. The winning bid to build the pontoons was $180 million less than WSDOT’s own estimate.

Inspections after post-tensioning the concrete pontoons revealed spalling and cracking.  The cracks in the pontoons and water leakage reportedly resulted from time-saving actions  taken by WSDOT engineers, who apparently did not carry out as many modeling tests as they might have, before the pontoons were built.  Existing cracks on the pontoons havewidened because there is insufficient steel rebar used to keep tendons in place.  In a WSDOT press release, outgoing Secretary of Transportation Paula Hammond stated: “The results of our internal review show that we did not follow standards of good practice to validate the pontoon design elements, and as an engineer, that is particularly frustrating.”

Here’s a link to WSDOT’s statement about the pontoon problem.

WSDOT has announced that its repair plan is to de-tension the steel tendons, remove the concrete, and add steel rebar reinforcement. Then new concrete will be poured and allowed to cure. The estimated cost to repair the pontoons is $100 million.

The good news for us is that in almost all significant public construction projects (like the SR 99 Bored Tunnel contract), the SR 520 contract included a $200 million contingency fund for impacts like design and construction defects.  The bad news is that half of the contingency fund will be devoted to solving a single problem, while the project remains delayed.

WSDOT’s incoming director, the Governor, and other state leaders, are working together to address these issues.  The parties will likely draw lessons from this latest setback and work collectively to maintain public confidence.  Just like Hammurabi.

Concrete Evidence the Housing Market is Improving

Oh ye faithful, your long wait for hard data showing the housing market has improved may be over.

Today the Seattle Times reported U.S. stocks opened higher based in large part on good news from the housing front.  The Dow Jones industrial average was up 101 points at 12,844 in the first hour of trading today.

American builders broke new ground on more single-family homes in May and requested more permits to build homes and apartments than they have in the past three and a half years.  The Commerce Department also said April was much better for housing starts than first thought. The government revised up the figures to 744,000, the fastest building pace since October 2008.

Simultaneously the National Association of Home Builders Builder reported an increase in confidence in the market for newly built, single-family homes gained one point in June from a slightly revised level in May to rest at 29 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today.  This is the highest level the index has attained since May of 2007.

“This month’s uptick in builder confidence comes on the heels of a four-point gain in May and is reflective of the continued, gradual improvement we are seeing in many individual housing markets as more buyers decide to take advantage of today’s low prices and interest rates,” said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla.

“While the June HMI is in keeping with our forecast for gradually improving single-family home sales this year, recent economic reports that have shown some weakening in the pace of recovery likely factored into the marginal gain,” said NAHB Chief Economist David Crowe. “In addition, builders across the country continue to report that overly tight lending conditions and inaccurate appraisals are major obstacles to completing sales at this time.”

Derived from a monthly survey that NAHB has been conducting for 25 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

Regionally, the HMI results were mixed in June, with two areas of the country posting significant gains.  The Midwest registered a five-point gain to 31 while the West registered a four-point gain to 33.

This good news was expected by several savvy local, regional and national home builders, some of which had just recently moved into Washington State.  This author congratulates these new and existing home builders, better times appear to be on the horizon.        


What Makes It GREEN? 2012 Winners Announced

Six Projects Receive AIA Seattle What Makes It GREEN? Award

On April 18, 2012, AIA Seattle announced the recipients of the 2012 What Makes it GREEN? Awards. The winning projects include:

  • Bertschi School Living Science Building, designed by KMD Architects;
  • Bremerton office and studio, designed by Rice Fergus Miller;
  • LOTT Clean Water Alliance – Regional Services Center, designed by The Miller Hull Partnership;
  • Machais Elementary School, designed by NAC|Architecture;
  • Bullitt Center for Sustainable Design and Construction (unbuilt), designed by the Miller Hull Partnership; and
  • Greenfire Campus (unbuilt), designed by Johnston Architects.

Honorable mentions went to:

  • The Bill & Melinda Gates Foundation Campus, designed by NBBJ;
  • Biodiversity Green Wall (unbuilt), designed by the University of Washington Green Futures Lab;
  • SIERR Building at McKinstry Station, designed by McKinstry and CTA Design Builders;
  • Swift Building Lofts, designed by High Plains Architects;
  • Walking Mountains Science Center, designed by Mithun; and
  • U.S. General Services Administration Federal Center South Redevelopment (unbuilt), designed by ZGF Architects LLP.

AIA Seattle’s Committee on the Environment established the What Makes it GREEN? program over a decade ago to promote the importance of sustainable building practices, as well as to recognize and learn from the best in sustainable design.

The 2012 What Makes It GREEN? jury was moderated by Brian Geller, Founder & Executive Director of Seattle 2030 District. The four member jury included:

  • Ash Awad P.E., Vice President – Energy & Facility Service, McKinstry;
  • Amanda Sturgeon AIA, Certification Director, International Living Future Institute;
  • Jason Twill, Senior Project Manager, Sustainability, Vulcan, Inc.; and
  • Daniel Williams FAIA, Founder, DWA Design.

For photos and a list of award winning and honorable mention projects, click here. For a list of all projects entered, click here.

Rebuilding can be more important than building.

Does the Responsible Developer volunteer to help rebuild communities? 

Absolutely, and you can get involved too.  It really makes a huge positive impact on the homeowners that get this kind of help.  RTS (Rebuilding Together Seattle) has now made it easy to get involved with one of these amazing feel good volunteer projects.

Recently, well known South Lake Union Developer Vulcan Real Estate, teamed up with Foster Pepper and RTS, to spend some quality time making a difference in someone's life.  The homeowners, Buford and Evelyn Neal, were a gracious older couple and Buford is a veteran of both WWII and the Korean War (where he lost his legs to frostbite while serving his country).  Why not work hard for people like that!

So RTS set us up and gave us the ground rules.  We had numerous precon meetings to define the scope of work, the materials and tools needed, what actual "contractor volunteers" would be involved and how many laborer volunteers would be needed.  The hard working foursome of Margie Thirlby and Sarah Ihrie of RTS, Vulcan Project Manager extraordinaire Kyle Weeks, and Foster's own angel of organization, Joanna Plichta-Boisen, kept us all together and well prepared.   

Prior to full mobilization, some of the actual contractors started on tasks like interior demo of walls and floors.  Then on the day of, 30-40 Vulcan and Foster volunteers descended on the site.  The weather gods were smiling as the volunteers were treated to the then warmest, sunniest day of year.

At end of long day the volunteers has transformed the home inside and out, new floors and coverings, appliances, enlarged door ways to better accommodate wheelchairs, and repairs to outbuildings, gutters, patios, walkways, landscaping and removal of lots of accumulated "stuff."

This RTS event transcended rank and title, where Vulcan Senior Directors were working side by side with Foster lawyers, staff, and their family and friends.  It was a wonderful day for a wonderful cause.  During the day several times curious passersby stopped wanted to know what was going on and when they found out, wanted to know how to get involved.

To cap a truly meaningful event, KOMO news reporter Theron Zahn appeared with a camera crew to interview the Neals (watch the interview) and capture the images of the many people who took time from their lives to be part of Rebuilding Together Seattle.

Get involved with RTS, you'll be glad you did.  It is the responsible thing to do.  See you next year.

Hope Springs Eternal

 Developer Claudio Guincher, at his Lake Boren Townhomes in Newcastle

Can responsible real estate developers and agents create market recovery by simply building new projects and reporting on improved market conditions?

Recent local sources say yes, by building, marketing and selling in the right areas.

For example here's part of a great article from the Puget Sound Business Journal:

After years of work in western Canada, developer Claudio Guincher (of Continental Properties)  has returned to the Seattle area with new optimism, believing the residential real estate market has turned upward.

With land values now down 50 percent from their peak, he's shopping for parcels to buy. Guincher is back in the Puget Sound area market with a new residential project on Lake Boren in Newcastle, now selling 56 townhomes at prices between $300,000 and $400,000.

With the housing market still soft, the decision to develop dozens of new residential townhomes to sell on property that previously was a mobile home park might seem surprising. The lure: 80 feet of waterfront and a dock.

“I am venturing into 'for sale' product again, which is unusual, but the fact is, these townhomes are listed at a very attractive price point," Guincher said. "It's a great location in Newcastle with waterfront, it's just so unique," Guincher said. The property includes a dock for kayaking on the lake and a barbecue area with picnic tables.

Guincher has also started construction of the 58-unit Cameo Apartments at 15th Avenue and Pine Street on Capitol Hill and has another apartment project in the works on Capitol Hill, as well as an 80-unit project on lower Queen Anne. He's expecting rents to increase over the next five years. And despite the many apartment projects that have been proposed, he believes the market won't get overbuilt. 

"I do not think all the projects that are being talked about will get out of the ground," Guincher said, especially with lenders wanting developers to kick In 35 percent of their own equity. "It takes a lot of cash," he said.

Here's part of an equally great interview on improving local market conditions from KUOWs Deborah Wang (who says in many places, home sellers are now in the driver's seat and the market seems to be roaring back):


Wang: "If you're looking for evidence of a real estate comeback, just check out any Sunday open house in Ballard, a popular Seattle neighborhood. This particular house just went on the market last week. It's a small, two-bedroom, 1927-era home. It's on a quiet street with neat houses and well-kept lawns. It's close to parks and a popular elementary school. Jed Kliman is the listing agent. He works for Windermere. He says the home has been completely renovated, and all of the fixtures and appliances are brand new."

Kliman: "Aside from all the cosmetics you see, this house has all new systems, so its 100 percent new wiring, 100 percent new plumbing. There's a new furnace." And Kliman says it's priced right: $389,000. And he expects it to go fast. He says there are a lot of people looking to buy homes in Ballard, and very few houses for sale.

Kliman: "Somebody flipped a switch about 2 1/2 months ago, and Ballard inventory is down about 40 percent from a year ago. So the market is on fire right now. Everything, if it's well priced and it's a good home, it's going to sell quickly," And it's not just the case in Ballard. The number of new homes for sale is down dramatically throughout the area. King County now has 30 percent fewer new homes on the market compared to a year ago.

Tim Ellis: "Inventory is just dropping like a rock. I think that's really the big story." Ellis is a real estate agent with the property company Redfin, which is based In Seattle.

So, with so few properties on the market, the competition to buy a home is now fierce. Remember that house in Ballard? Well, agent Jed Kliman set a deadline. Offers had to be in the day after the open house.  The next day, here we are in a conference room, with Kliman and the home's owner, Joe Therrien. Kliman has a big binder of papers in front of him.

Kliman: "So, we have six offers, and there is a seventh being emailed over in the next 10 minutes or so." Kliman didn't want to disclose too many details, but he was willing to tell us that all six buyers were offering the full price of $389,000, or higher. Two people offered cash, two had already done inspections. Kliman and Therrien spent a couple of hours behind closed doors making phone calls to agents. Then, the deal was done.

And Joe Therrien's experience is becoming more commonplace. Real estate agents say they are seeing a steady rise in competitive bidding, especially in the popular Seattle neighborhoods, like Ballard, Ravenna and Greenlake. Redfin says more than half of its transactions now involve multiple offers. Tim Ellis says in that way, it feels like the housing boom, when the market was at its height.

So let's hope this spring will be the first to restore optimism in sellers and buyers. It is about time.

The Big Green Pay Off

Is investment in green sustainable buildings still paying off?

Absolutely, according to a study of properties managed by CBRE Group Inc. ("CBRE").

Sustainable buildings generate stronger investment returns than traditional managed properties, according to the ongoing study of a national office portfolio managed by CBRE.  The study found that there is a higher value and an increased demand for green, and in particular for LEED® certified buildings, which is demonstrated by increased occupancy and rental rates in comparison with the general market.

The study, which surveys approximately 150 CBRE-managed office buildings and more than 2,500 building occupants, shows how green building performance continues to trend higher than the general market, establishing a clear economic case for the value of green in existing buildings, with mid-sized markets leading the trend.  In particular, aggregated data on LEED certified buildings over three years shows an average 3.1% improvement in both rental rates and building occupancy in comparison to the general market. The 2011 phase reinforces earlier findings that demonstrate sub metering of utilities for tenant space reduces energy costs by 21% on average.

This report should not surprise anyone.  It is the building equivalent of purchasing an electric or hybrid automobile for all the same reasons, it saves energy, costs less to operate and is better for the environment.  Why not build, buy, or invest in one. 

The CBRE report also noted that economic uncertainty can cause downward pressure on an any organization's continuing commitment to sustainability.  Still, survey respondents consider green features important when selecting office space, with a healthy indoor environment as the leading factor. This finding supports other results of the study in which 19% of tenant respondents reported increased productivity and 94% of tenant managers registered higher employee satisfaction in green office space.  The study also shows a growing general awareness of green.

CBRE was ranked #30 among Newsweek's greenest companies in America in 2010, and #1 among the financial services sector.

Recall also that earlier in 2011 the Green Building Opportunity Index came out with the first office market assessment tool to provide weighted comparisons of top U.S. office markets on the basis of both real estate fundamentals and green development considerations.  The Index focuses on the primary factors that influence successful development, retrofitting, leasing and sales of investment grade green office buildings in the largest U.S. Central Business Districts.  It compares a market's relative position to its peers in six categories: Office Market Conditions, Investment Outlook, Green Adoption & Implementation, Local Mandates & Incentives, State Energy Initiatives and Green Culture.  For 2011, the Index has been enhanced by adding five new markets and refining the methodology and data inputs - yielding a more comprehensive view into market influences that determine where sustainable development brings competitive advantages.

As a tool to examine the overall climate for green building, the Index assists a broad spectrum of professionals to determine where the favorable conditions exist.  Investment/pension fund managers and developers can use this data to consider where to put their money and why.  City policy makers, utility staff and planners can examine the data to understand what new policies and incentives might be useful to accelerate green building activity.  Building owners, architects and green building consultants can determine where green development brings competitive advantages, or where it is simply an emerging standard.

According to Cushman & Wakefield the 2011 Green Building Opportunity Index's top 10 markets overall shows that five cities on the West Coast are on that prestigious list:  (1. San Francisco; 5. Los Angeles; 8. Portland; 9. Seattle; and 10. Oakland).  One very recent entry into the green sustainable office market in Portland is making news.   

Portland’s city council approved plans for the Oregon Sustainability Center last week (see image above). The city and its project partners hope the Center will be the world’s first and tallest mixed-use office building to achieve Living Building status.  The decision to support the Center represents the city’s commitment to build (and pay for) a sustainable building.  With a construction budget of $62 million, the 150,000 square foot tower will cost 15 to 20 percent more than comparable buildings in Portland’s downtown area.  The city’s fiscal pledge to green building recognizes a return on investment bigger than rental income.

The project is jointly supported by the Oregon University system, the Portland Development Commission, the City of Portland Bureau of Planning and Sustainability, and an assortment of for-profit and non-profit groups with interests in sustainability and social equity.  In June of 2011, the Oregon state legislature held their approval for funds on the conditions that private sector tenants were found and signed to leases, and that the city of Portland foot the costs of architecture and engineering services.  Ultimately the Center will be owned by the city and the Oregon University system.

Sustainable buildings at the commercial and institutional scale are relatively expensive to build. Innovations, especially in the early stages, often come at a premium.  Some of the Center’s premium technologies include triple-glazed glass, solar panels, a high capacity underground water tank, and a geothermal well system that will provide heating and cooling.  The energy saving and energy generating materials make up a heavy, but worthwhile expense. 

Targeted for a 2012 groundbreaking, the Oregon Sustainability Center is an example of the importance of total buy-in for sustainable building.  Mayor Sam Adams understands the value of the experience: “We’re never going to be the biggest city, but I want us to be the scrappiest, most successful international city.  To do that you’ve got to invest in innovation.”

So not only is the market for green sustainable buildings currently viable, the City of Portland is betting $62 million that the trend will continue into 2013.  


Seattle Bites the Green Bullitt


At the end of last month, the City of Seattle broke ground on The Bullitt Center, located at 1501 East Madison Street, which is touted to be the greenest commercial the world. 

Seattle Mayor Mike McGinn claimed the $30 million Bullitt Center project will create green jobs on every level, the 94 jobs for the construction workers who will receive green building training on-site, the future 141 permanent jobs for employees in the building and the people in the green building industry who will teach classes and receive green building certificates at the project’s Center for Energy and Urban Ecology.

So Seattle voters, in recession, new jobs are good but is this project just another green monument that may prove to be a drain on taxpayers?  

No, says the Mayor and the Bullitt Foundation.  The new Bullitt Center will be taking net zero building trends to new heights.  This six story tall, 52,000 square-foot office building is designed to be both a net-zero energy building and a net-zero water building while managing all of its own waste needs.  It will produce as much energy as it consumes, provide all of its own water, and process all of its own sewage.  It will also use only 1/3 as much energy as an average, similar-sized building – or half as much as a certified LEED platinum building!
Achieving these goals may not be an easy feat but if successful, will make the building much more affordable to operate.  Some of the green technologies used in the building include: 
  • A triple-glazed curtain wall system
  • Windows that open and close automatically depending on outside conditions
  • A closed-loop geothermal system
  • Radiant floor heating and cooling
  • Extensive daylighting thanks, in part, to taller than average ceilings and windows
  • Rooftop solar system designed to generate 100 percent of the building’s energy needs
The green tax dollar savings allegedly won't stop after construction is complete.  Tenants in the building will be required to use electronics that are extremely energy efficient and are designed to automatically shut down at night.  Although this sounds like a Machiavellian requirement for tenants to meet, four of the six floors have already been rented out.
If the project delivers the expected performance ratings, then kudos will be in the offing to the design and construction team behind this premier green building project, the Miller Hull Partnership, Point32, Schuchart Construction and PAE Consulting Engineers.
The project's success would probably be good for the Mayor's performance rating too! 

How Green Is My City?

Does the Responsible Municipal Developer and its citizens aspire to be the "Greenest?" 

Absolutely and the competition is fierce, as it should be, after all it's a matter of civic pride!


Our blog has showcased the many laudable efforts of local and state governments, citizens and private developers to implement green and sustainable development practices (the preservation of open spaces; control and capture of storm and rain water; energy savings; green electric highways; reclamation of brown fields and the construction of passive homes).


So how does our Emerald City compare to other great cities?  Well that depends on the source. 

We looked for objectivity and think we found it in Siemens Global's US and Canada Green City Index  (which was also cited by  Siemens' rating was based on some fairly broad comprehensive objectives and methodology.


The objective criteria was to measure and compare the performance of 27 major US and Canadian cities, based on their commitment to reduce their future environmental impacts.  The goal of the index was to allow a comparison of cities against their peers and to study innovative projects which other cities may want to follow.


The methodology was based on the work of other Green City index sites (global) and included 31 quantitative and qualitative indicators in nine categories: CO2; energy; land use; buildings; transport; water; waste; air and environmental governance.


Based on the criteria and the fact the study included Canada, we should be proud that Seattle was #4 with a score of 79.10.  Our score was heavily based on the fact Seattle had set, and met, many environmental goals over the last 10 years and Seattle ranked #1 in the buildings category because it was among the first cities to mandate LEED-certification for municipal building projects.


The City of Seattle has done a fantastic job of setting goals and obtaining the necessary commitments from its citizens to create green and sustainable projects and communities.  Seattle's ranking was no accident but was a result of a great vision and a lot of hard work and expense.


Seattle is a great place to live and work and we can all be proud of this ranking.  


Wind Wars Episode I-PNW Energy Companies v. BPA

Does the Responsible Developer avoid conflicts in Renewable Energy Production that could lead to litigation?  Apparently not all of the time.

At the end of last month we reported the Bonneville Power Administration's ("BPA") decisions to allow more water to be spilled over dams and to shut down many wind turbines.  We speculated that the decision would create conflicts that could lead to litigation.  And so it has, the Wind Wars have begun.

A coalition of five PNW energy companies (Iberdrola Renewables, PacifiCorp, NextEra Energy Resources, Horizon Wind Energy and Invenergy have filed a one hundred and thirteen page complaint with the Federal Energy Regulatory Commission ("FERC").  The coalition claims to have invested $6 billion in renewable energy generation in the region.  The coalition is howling mad and alleges that BPA violated the Federal Power Act by using its control of the region's power grid to breach its contracts and seize transmission rights. 

The American Wind Energy Association ("AWEA") also filed a motion to intervene with comments in support of the coalition, decrying BPA's alleged acts as discriminatory in favor of its own interests, and further voicing its support for the energy companies' allegations.  

"BPA is using its control of the region's transmission system and exploiting unusually high water levels to break contracts," said Rob Gramlich, senior vice president for public policy at the AWEA and former FERC policy advisor. "Contracts cannot be broken for wind or anything else.  BPA, a government-owned monopoly, cannot play by different rules and shred contracts with private companies. FERC can rise above the politics and adjudicate based on facts and the law".

According to BPA's newsroom it was aghast that the complaint had been filed.  BPA spokesman Mike Hansen stated "We are disappointed that this filing has proceeded as we are participating in mediation sponsored by FERC that we believe is worthy of effort". 

BPA also argues the complaint is overblown because the BPA already has authority to limit wind generation, particularly during periods of overgeneration. “We have the legal authority to implement the Environmental Redispatch policy and, in addition to that, we believe our transmission contracts also give us the legal authority to limit generation,” stated Hansen.

BPA's position is unlikely to keep it out of the courts or away from an expensive and protracted  battle at FERC.  Other Northwest energy companies are expected to blast these and other BPA policies in the Ninth District Circuit Court of Appeals by alleging BPA actions are in violation of the Northwest Power Act.  Individual companies and utilities may also file actions to recover losses from BPA for its actions this spring in the U.S. Court of Federal Claims.


Stay tuned, this is a major, reoccurring conflict with very high stakes.  Anticipate it may take a long time for the wind wars to blow over. 


When Green Conflicts: Wind vs. Water


Do Responsible Developers anticipate that Green Energy will create conflicts?

Yes, but unfortunately those conflicts may not be easily resolved.  Here's a timely example.

If you have recently driven over I-90 into Kittitas County and crossed over the Columbia River down past Wanapum Dam, you probably noted two interesting things.  First, many of the wind turbines have been shut down and two, enormous amounts of water are being released from Wanapum and other dams.

As a resident of the Pacific NW you probably also know that spring is when dams and wind turbines generate the most power, providing a huge increase in available power to businesses and consumers, a great economic benefit. 

In a year like 2011 where the PNW has very high precipitation (snowpack) it can be anticipated that the increased runoff may result in two decisions by public utility operators like the Bonnevillle Power Administration that may result in decreased economic benefits to some.  The first decision is to prevent flooding by allowing more water to be spilled over the dams. The second decision is that due to abundant electrical power, wind turbines may be temporarily shut down.

Either decision may also have at least two unfortunate economic costs.  One, huge spills of water over dams can increase dissolved oxygen levels in the surface water below dams, killing young salmon and pen raised fish that cannot escape by moving into deeper water with more oxygen.  Second, the available surplus of hydroelectric power may trigger a decision to shut down wind turbines which in turn, shuts off the flow of revenue and tax incentives.

The first decision to release water earlier this month has reportedly resulted in massive fish kills on the Columbia.  Killing fish always incurs the wrath of sportfishing consumers and commercial fish farm operators.  According to a Seattle Times report the loss in revenue to fish farms alone in 2011 may run into the tens of millions.  

The second decision has incurred the wrath of the American Wind Energy Association.  Rob Gramlich, the Senior Vice President for Public Policy, recently stated that "No one is above the law and no one can break contracts as Bonneville has.  Commerce can't exist without contract sanctity. This will have a chilling effect on investment.  There's a better way.  I think there's a preference for keeping certain types of generation running and to benefit certain customers and not others.  If you do the math, you can see we’re into the millions already in damages and we’ll be moving into the tens of millions of dollars.  I believe we will see legal action very soon."

So to avoid these seasonal and therefore reasonably foreseeable Green Energy conflicts, is there a middle ground to avoid  "power struggles" costing millions in damages and millions more in the form of protracted court battles?  Hopefully, yes.  The parties may use information in the 2007 Northwest Wind Integration Action Plan and seek guidance from the BPA, the Department of Energy, the Obama administration and other public and private actors that can work toward reconciliation of these and other energy conflicts.   

It is the responsible thing to do.


Green Building Means Green Infrastructure

Do Responsible Public and Private Owners incorporate Green, Sustainable components into infrastructure to better manage stormwater?  Absolutely, and locally we have some excellent examples.

First here's the concern, as eloquently expressed by a member of the American Association of American Geographers ("AAG") as part of an annual meeting being held in Seattle this week:  

"America's water infrastructure is in crisis.  Nationwide, conventional urban and exurban storm water management systems increasingly require extensive replacement and repair, leaving residents susceptible to flooding, infrastructure breakdowns, and contamination risk.  However, estimated stormwater systems rehabilitation costs run in the billions, an expense that many municipalities are unable to meet. To address this problem, officials in several U.S. and international cites are increasingly turning to an urban design based alternative, termed green infrastructure to to supplement conventional surface and subsurface drainage systems."

 King County has made just such a proposal for the Barton Basin area.  KC plans to design and build "green stormwater infrastructure" ("GSI") to control combined sewer overflows.  The GSI project will consist of planted areas call "rain gardens" between sidewalks, curbs and others areas in several locations in West Seattle.  This is the first "green" project KC Wastewater will implement.  The goal is to have these rain gardens trap millions of gallons of water a day that would otherwise enter the combined sewer system.  

Seattle Public Utilities is also heavily promoting the use of what it call Natural Drainage Systems projects ("NDS").  These systems also rely on open spaces of trees, smaller plantings, swales, soils and small wetlands to absorb water and filter out contaminants like oil, paint, fertilizers and heavy metals-before those contaminants reach our lakes, streams and Puget Sound. 

For you bloggers who may be homeowners and green do-it-yourselfers, SPU also has another link for called "Residential Rainwise Program" that encourages the use of landscape designs that incorporate the use of cisterns, rock filled trenches, grass strips, rain gardens and use of porous pavers (instead concrete or asphalt).  The Department of Ecology has a great guide for protecting waterways entitled "Protecting Aquatic Ecosystems."

In case promotion of green infrastructure in recession may not sell with some voters, perhaps some negative reinforcement may help.  For a really disastrous local example of what can happen when too much contaminated stormwater and wastewater enter our waterways, take them on a drive to lower Hood Canal on a gorgeous late summer day.  Go for a walk on the beach.  If the timing is right, they may see the red algae bloom in the otherwise blue water and the dead sea life littering the shoreline.

A sad but poignant reminder why all public and private owners need to work together to fund the protection of our priceless waterways. It is the responsible thing to do.     


The Right Time To Develop Green Highways?


Despite national, state and local budget woes, should the Responsible Developer pour more money into green sustainable transportation?

The US Departments of Commerce and Energy, along with the Washington Departments of Commerce and Transportation, say YES!

Given the civil unrest in North Africa and the Middle East and concern for disruption in the flow of oil, record high retail gas prices are predicted for this summer.  There may not be a better time to own a Chevy Volt, Ford Focus, Nissan Leaf (or if you are rich, see above) a Tesla Model S, or other all electric car.  The problem is, on a long drive, where do you stop to "fill" up? 

As you may recall in 2010 the DOC awarded the State of Washington $1.3 million for a series of electric car charging stations on I-5, in part to implement the nation's first "electric highway", a 1350 mile strip starting in Mexico and ending in Canada.  This is known as the "West Coast Green Highway."  

WSDOT also expects to create another section of green highway by the end of this summer, the Stevens Pass Electric Vehicle Highway.  WSDOT is holding two meetings to provide more information and to help local partners prepare for alternative fuels.  The meeting will be held on March 8th in Leavenworth and March 9th in Sultan

General Electric is also sponsoring a local event to promote "EVs" (electric vehicles).  The GE EV Experience Tour will be held on March 15th in Seattle, at the Experience Music Project.  The workshop will include technical and business tracks for developing EC Ecosystems, strategies and facilities.  Also, you Responsible Developers, heads up, GE is also looking to partner with public and private owners, property managers, electrical contractors and commercial and residential builders. 

While you are there you can even test drive some of GE's EV fleet vehicles (sorry no Teslas).

Still, imagine the day when you are cruising along I-5, for work or pleasure, where there is less engine noise, less exhaust fumes and when you stop to "fill up" your EV, your hands do not smell like gasoline and the only money you spend is in the EV convenience store....on health food.  Kidding, it's likely junk food will still be sold too, because no matter how driven we are, we're still Americans. 


Cleaning Up (and Greening Up) the Mercer Mess

If you live or work in Seattle, you probably know that after more than forty years of debate, construction is now underway to fix the notorious Mercer Mess. What may surprise you, though, is that the Mercer Corridor improvement project is considered to be a model of responsible development.

If you are unfamiliar with the Mercer Mess, it is a circuitous one-way route running east/west through the South Lake Union neighborhood, connecting Interstate 5 to Elliott Avenue West, and it carries over 80,000 people per day. Built in the 1950s as a temporary route, the corridor divides neighborhoods, hinders development and creates traffic congestion that not only clogs city streets but impacts the entire regional highway system. Fixing the Mercer Mess has been one of the City’s most significant transportation challenges for decades; but after breaking ground in September 2010, Phase I of construction to widen and improve the corridor is well underway.

Major transportation projects present a unique opportunity for cities to implement environmentally-friendly solutions on a large scale, and Seattle has risen to the challenge. In a recent Seattle Daily Journal of Commerce article, “Mercer Street: From a Mess to a Model of Sustainability,” Roger Mason and Angela Brady report that in addition to reducing congestion and increasing mobility, the Mercer Corridor project incorporates many notable sustainable elements such as:

  • A reduction in impervious area by 0.5 acres;
  • Natural drainage provided by a “wet median” and rain gardens;
  • Undergrounding utility lines;
  • The deconstruction, salvage and eventual re-use of a historic building;
  • A tree canopy along the corridor, including more than 260 trees, 10,000 shrubs and other landscaping;
  • Enhanced safety and accessibility for pedestrians and bicyclists; and
  • Public art installations.

Want to learn more? The Seattle Department of Transportation’s website has information on the planning process, project funding, construction updates and an overview of the entire project here.


New "Upfront SEPA" Law Provides A Voluntary Tool To Encourage Infill Development

The 2010 Washington State Legislature amended the State Environmental Policy Act (“SEPA”) to provide cities with a new voluntary tool to encourage urban infill development. This tool, or as many call it, “upfront SEPA,” encourages urban infill by providing greater regulatory certainty for infill development. The 2010 amendment bars administrative and judicial appeals of SEPA compliance for infill development when a city prepares a nonproject Environmental Impact Statement (“EIS”) that analyzes the environmental impacts of future infill development at the planning stage. This is the Legislature’s latest attempt to accommodate projected population growth in urban areas in order to avoid rural sprawl and the conversion of forest and agricultural resource lands.

Although SEPA already contained several provisions designed to facilitate infill development, the 2010 SEPA amendment, RCW 43.21C.420, improves upon the previous measures. Specifically, the amendment:

  • Eliminates all SEPA-based appeals for infill development projects if: (1) the city completes a nonproject EIS for comprehensive or subarea plan policies and the development regulations designed to accommodate such infill development; (2) the infill development is consistent with these comprehensive or subarea plan policies and development regulations; and (3) an application sufficient to vest the project is submitted within a period specified by the city, not to exceed ten years.
  • Explicitly authorizes cities to charge a late-comers fee to recoup the costs associated with preparing the nonproject EIS.
  • Requires increased public notice to encourage early public participation in the planning and nonproject SEPA review processes.

Only cities meeting statutorily defined eligibility requirements may exercise the authority granted by the 2010 SEPA amendment. Eligibility extends to any city with a population over 5,000, located in counties governed by the Growth Management Act, that has a designated mixed-use or urban center subarea, or meets specified urban transit criteria. In Eastern Washington, different transit-oriented eligibility criteria apply to cities located outside of Spokane County.

If a city elects to invoke the 2010 amendment, the city is subject to several requirements:

  • The city must establish comprehensive or subarea plan policies and development regulations that allow and encourage high density infill.
  • The city must complete a nonproject EIS for the plan policies and development regulations that analyzes the environmental impacts of development consistent with the policies and regulations.
  • The city must consider establishing a program for the transfer of development rights from county-designated agricultural and forest resource land to the area targeted for infill.
  • The city must hold a public meeting before a scoping notice is issued for the nonproject EIS. Notice of the meeting and notice of the scoping must be mailed to all property owners within the subarea and other interested parties outside of the subarea.

The amendment is lengthy, containing numerous detailed provisions governing eligible cities, authority to recoup the nonproject EIS preparation costs, and immunity from SEPA-based appeals. Some of these provisions vary for local governments depending on population and region of the State. Nonetheless, the 2010 SEPA amendment provides cities with an effective voluntary tool to encourage urban infill development.

For additional information on the amendment, please contact Jeremy Eckert (; 206.447.6284) or Dick Settle (; 206.447.8980).*

* Foster Pepper land use attorneys, Pat Schneider, Tayloe Washburn, Dick Settle, and Jeremy Eckert, were deeply involved in drafting the 2010 SEPA amendment (ESHB 2538, 2010; RCW 43.21C.420). The legislation was endorsed by the Climate Action Team, received unanimous approval from the State Senate, and nearly received unanimous approval in the State House.


How Responsible Developers Manage Risks

Does the responsible developer need to manage risks by limiting liabilities? Of course, no developer can hope to survive (especially in this real estate market) without being a good risk manager. 

So what is that state of the law regarding limitations of liability (“LOL”s)? Well it depends on whether the LOL is used to manage a business-to-business risk or a seller-to-consumer risk. Why? Because the law affords a greater level of protection for consumers. This dynamic is best explained by some recent Washington court cases.

In a Washington appellate decision last month, Mattingly v. Palmer Ridge Homes, (a seller-to-consumer claim) the court examined the developer-general contractor's contract and warranty LOL disclaimers. The test the court based its ruling on was whether or not the developer’s disclaimers were enforceable due to being clearly worded, or unconscionable and unenforceable due to the developer’s greater sophistication, bargaining power and poorly drafted contracts. The court found that due to providing incomplete information, and the use of confusing contract language, that some of developer’s disclaimers were ineffective. However, the disclaimers that were clearly worded “as is” (as in the stereotypical used car context) and were specifically related to certain claims were found to be effective.

Compare this result to a Washington Supreme Court case from last year in the same context, a residential real estate contract, which at first blush appears to be another seller-to-consumer case. The case was Torgerson v. One Lincoln Tower. Here the court examined the same type of LOL disclaimers to determine whether they were enforceable. The court found that the developer’s disclaimers were effective and enforceable for at least two big reasons: the disclaimers were clearly labeled in bold as such; and the court took notice that these purchasers were far more than average consumers, they were licensed real estate agents and thus appeared to be held to a higher (business-to-business) standard.

The take away here is that the responsible real estate developer should endeavor to ensure (especially when dealing with consumers) that his or her contracts, warranties and purchase sale agreements pass the test for enforceability. After all, responsible risk management is good business. 

New Public Works Reporting Requirements

EHB 2805, which was recently signed into law by Governor Gregoire, requires contractors on various Washington public works projects estimated to be over $1 million (certain project are exempt) to report information regarding certain off-site, prefabricated, non standard items produced outside of the state of Washington. The information must be provided as part of the contractor’s affidavit of wages paid form. The requisite information includes: (1) the estimated cost of the public works project; (2) the name of the awarding agency and the title of the project; (3) the value of the off-site, pre-fabricated, non-standard project specific items produced outside the state of Washington; and (4) the name, address, and federal employer identification number of the manufacturer of the off-site, pre-fabricated, non-standard project specific items. To review the bill, click here.

The teeth behind the new law is that a contractor’s repeated failure (more than once) to provide this information means the contractor is not “responsible”, which would preclude the contractor from bidding on other projects.

Public Owner Requirements
Public agencies must put the reporting requirements in their bid documents. Requisite form language is found at the General Administration Office website, by clicking here.

Various questions are addressed on Labor and Industries’ website including, What projects are exempt? When does the law go in effect? What happens to contractors and subcontractors who do not comply with the new law? Click here.

Stormwater Runoff from Logging Roads Requires Discharge Permit

In a precedent-setting opinion,1 the Ninth Circuit Court of Appeals has ruled that stormwater runoff from logging roads that is collected in ditches, culverts and channels and discharged to surface water requires a water quality discharge permit.2 While this case involves stormwater discharges from logging roads, the Court’s decision could affect other activities that rely on regulatory exemptions from the discharge permit requirements.

The timber industry and the EPA argued that (1) the Silvicultural Rule3 exempts logging road discharges from discharge permit requirements and (2) discharges were exempt under the 1987 amendments to the federal Clean Water Act. The Court rejected both arguments, relying on the broad definition of the term “point source” in the federal Clean Water Act, which regulates discharges from discrete or channeled conveyances. The Court also found that the lack of a specific statutory exemption for logging road stormwater runoff within the point source definition precluded exempting road runoff from permit requirements. Because the Court ruled that logging road runoff was an industrial activity regulated under the 1987 Clean Water Act Amendments, it declined to delay issuing its ruling.

The Court’s decision effectively eliminates the Silvicultural Rule for most logging road runoff, except for unchanneled “natural runoff,” which is not a “point source” discharge. This is the latest case to invalidate EPA rules exempting certain activities from permit requirements. In 2009, the D.C. Circuit invalidated the EPA rule exempting pesticide residue from permit requirements.4  In 2008. the Ninth Circuit invalidated the EPA rule exempting sewage discharges from vessels.5

The breadth of this decision is likely to affect other activities that either rely on EPA regulatory exemptions or involve activities that typically have not required discharge permits. The case is virtually certain to lead to additional litigation in this area.

If you have any questions, please contact Lori Terry Gregory (206.447.8902) or any lawyer in Foster Pepper’s Environmental Group.

1  Northwest Environmental Defense Center v. Brown, __ F.3d __, 2010 WL 3222105 (9th Cir. August 17, 2010), available at
2  The water quality permit at issue in this case was a National Pollution Discharge Elimination System (NPDES) Permit, which is required for discharges of pollutants from a point source into surface waters.
3  40 C.F.R. § 122.27.
4  National Cotton Council of America v. EPA, 553 F.3d 927, 940 (6th Cir. 2009)
5  Northwest Environmental Advocates v. EPA, 537 F.3d 1006 (9th Cir. 2008).

Is Wind Power Affordable?


Traveling north on old logging roads below Blewett Pass, as you start to emerge from the forest above Ellensburg, with the sun setting in the west, look to the east.  You’ll see a far away ridge covered with shining, white towers.  Camelot? Minas Tirith?  No, it’s Kittitas County's Wild Horse Wind Facility, now owned by Puget Sound Energy .  Wild Horse’s 149 wind turbines have blades whose diameters are larger than a commercial jet’s wingspan, and they send clean renewable energy to more than 69,000 homes.  Energy not dependent on dams, gas or coal mining, nuclear reactors or offshore oil rigs. 

So are wind farms "the" answer for renewable and economically feasible electricity?

Maybe an answer, but not "the" answer.  According to the DOE, in 2009 all of the US renewable power sources (wind, solar, etc.) generated only 3-4% of all electrical power, while coal generated 48%.  Many advocate that future development should continue to provide incentives to generate more renewable power that is both affordable and responsible (does not cause costly long term damage to our lands and waterways, like Chernoble or the recent Gulf of Mexico disaster, etc.).

Like the Federal government and other states, Washington State and its voters have provided great incentives for the responsible development of wind power, like in 2006 with I-937.  Although I-937 was under siege even before the recession, thanks to some far sighted citizens it has been protected and remains largely intact.  Accordingly, by 2020 most WA utilities companies will have to produce 15% of all the electricity they generate from renewable sources.  Our state also provides other incentives such as sales tax exemptions and grants, loans and rebates, for the production of wind power.

How does Washington wind power generation compare to other states?  Actually we should be proud, because even though Washington’s geography is not ideal for wind power, and there are far bigger states like Texas and California that also have vastly greater wind potential, we still rank number 5!

So what do the economics of green energy look like since I-937 in 2006?  As construction costs rose in 2006-2008 it dramatically increased the cost of wind power.  Wind power requires negligible fuel costs but very high capital costs.  As construction labor and material cost (like steel) spiked, the cost rose so high some work slowed or was shelved.  However, as construction costs fell in the recession, wind projects became much more viable.  In May of this year, PSE ordered another 149 wind turbines for its Lower Snake River Wind Project, with an option for 110 more.

According to GE Energy’s recent Western Wind and Solar Integration Study (“WSIS”) the cost to consumers for wind generated electricity is becoming more affordable as an increasing number of wind power plants come on line.  Improvements in technology are lowering costs too.  Note that the WSIS cost analysis does not factor in the external costs that clean wind power reduces or prevents in the form of environmental contamination related clean up, associated health care claims, destruction of habitat and wildlife, the cost of military action to protect energy supplies, not to mention the potentially huge costs of global warming due to emissions from structures powered by fossil fuels.

While wind power is not yet less expensive than other energy sources, when you factor in the savings due to the external costs that wind power largely prevents, it seems that greater production of wind farms is a must for responsible development.

How Green Is My Project?

Go on line to compare and find out!

The American Institute of Architects is keeping score, globally now, and updates a Letterman-like TOP 10 Greenest Buildings list.  So far for 2010 the top entries include projects from several US states and other countries.  Alas there are no entries this year (yet!) from Washington state but our neighbors in Oregon are in contention with the Twelve/West tower project that is expected to be LEED Platinum and should provide its owners energy savings of 45% over a comparable building.

Ironic to some, the AIA's Top 10 list also includes a gorgeous entry from Saudi Arabia, the King Abdullah University of Science and Technology .  It is the Saudis first LEED project and the planet's biggest LEED Platinum building. 

To students of history this should come as no surprise because if you have ever read about or seen the Alhambra or the Mezquita in Spain, you know that for centuries middle eastern developers have greatly prized architectural designs that incorporated greenery and water features for the reasons many do now...because the shade and water cool the air making buildings more livable, not to mention more desirable and valuable.    

Many  lawyers cannot help but dwell on the liability of developer, designer and builder clients that fail to achieve LEED certification or comply with energy standards or codes.  To place this modern liability in a less onerous context, ponder the fate incurred by Moorish designers and builders who failed to meet the Caliph's or Sultan's personal green standards. 

More on modern green liability next time (without the curved swords). 


Responsible Developer's Blog Launches on Earth Day

In celebration of Earth Day 2010, Foster Pepper has launched its third legal blog, Better Building: The Responsible Developer's Blog, devoted to legal issues and information related to responsible building practices in the construction and real estate industries.

Sustainability and climate change are reshaping the land use, real estate, and construction environments, and extend to municipal, business, energy/utility, and litigation practices. Foster Pepper has used its extensive reach and experience in these areas to craft sustainable solutions for its clients. will serve as an extension of these activities and be a resource for clients and other interested parties providing legislative updates, industry news, and other relevant information.

According to Greg Clark, Foster Pepper construction litigator and lead blogger,

“As the green/sustainability industry evolves and more and more legislation is introduced, we wanted to ensure our clients have the information they need as they plan and develop their projects.” He continued, “We intend to broadly cover news and trends and provide legal information related to both public works and private projects, and become a valuable resource for those striving to be responsible builders.”

With offices in Seattle and Spokane, Foster Pepper PLLC provides a full range of legal services to businesses, municipalities and individuals. In 2005, the firm entered its second century of service to clients and communities across the country and internationally.