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Public entities’ growing interest in going green is resulting in more regulatory risk for building owners, observers say.
For instance, under the District of Columbia’s Green Building Act 2006, all privately funded construction projects beginning this year are required to be certified under Washington-based U.S. Green Building Council’s Leadership in Energy and Environmental Design program. Publicly owned, funded or financed projects already had to meet the requirement.
Rod Taylor, Windermere, Fla.-based managing director of Aon Corp.’s environmental services group, said, statutory requirements that buildings meet LEED standards typically are applicable only to public buildings.
However, “There are cities that have ordinances that require that all buildings after such and such a date have to meet at least the LEED building standards, so you could wind up being in violation of some municipal ordinance related to the requirement to achieve certification,” he said.
“The regulatory risk would be not achieving a level of green status that the municipality wants, and therefore having to go back and doing something different,” said Keith Jurss, Chicago-based senior vp of professional liability for the national construction practice of Willis North America Inc. “There can also be increased costs in just entering that particular market,” knowing green, rather than standard, construction is required.
Edward B. Gentilcore, a shareholder and director with law firm Sherrard, German & Kelly P.C. in Pittsburgh, pointed to the California Green Building Standards Code that went into effect Jan. 1, 2011, and is commonly known as CalGreen.
“If I violated it now, am I at risk of not getting my occupancy permit due to a failure to achieve compliance with CalGreen? I would argue yes, to the extent these green requirements are incurred as part of any local municipal building code,” he said.
Furthermore, failure to comply with, for instance, a certain standard of storm water control could put the success of obtaining the certification at risk, he said.
In addition, some municipalities want such buildings constructed on brownfields rather than uncontaminated land, Mr. Jurss said, which increases the potential for “increased costs associated with having to assess and evaluate what might be a previously contaminated sites that need to be remediated” before construction can begin.
Appropriate environmental remediation is required, as is regulatory approval before building on a brownfield, “so there could be increased costs associated with that,” Mr. Jurss said.