Green Design & Building

Legal Issues When Historic Preservation Goes Green

Originally Published 2010

By Gary L. Cole AIA, Esq.

[Author’s Note: The following paper was presented on October 21, 2010 at the 2010 Traditional Building Exhibition and Conference in Chicago. Fair warning – it’s a bit longer than most LawArk posts. Well, a lot longer. I’d originally intended to post it in parts, but instead, decided to post it all at once to be chewed in bite-sized chunks at a reader’s leisure.

And, as always: Nothing in the following post or paper should be construed as legal or architectural advice – the contents are entirely the unsolicited opinions of the author. Parties should always consult their legal or design professionals for specific advice and information.]

The following is a bullet-point summary of the paper’s main points:

▪ Local governments that have enacted historic preservation ordinances (HPOs), and, that are considering enacting green building ordinances (GBOs) which might affect local or National Register-designated historic properties, should proceed with caution because:

– unlike the underlying legislation for most local HPOs – the NHPA of 1966, which was deliberated by the U. S. Congress and is well-vetted after more than four decades since its enactment – the entire premise for GBOs, i.e., “anthropogenic global warming” is becoming increasingly controversial, rendering GBOs increasingly vulnerable to legal challenges;

– tying compliance with GBOs to third-party energy and resource-efficiency standards such as LEED, especially for politically motivated reasons and without proper consideration of local economic development, may subject such GBOs to legal challenges;

– GBOs that fail to require prior local approval of adopting changes to third-party standards such as LEED may also subject such GBOs to legal challenges; and

– GBOs that fail to balance carrots and sticks – incentives and requirements – may have a chilling effect on local development.

▪ Depending on how GBOs are drafted – with or without due consideration of HPOs – the two ordinances may impose conflicting requirements on owners and developers undertaking the rehabilitation of local historic properties as follows:

– compliance with a GBO may impact the character-defining features of an historic property, thereby running afoul of an HPO and preventing permitting from a local preservation commission as well as disqualifying a project for historic tax incentives; and/or

– compliance with a local HPO and the National Register may prevent a property from complying with a GBO, especially as relates to achieving any required green building ratings, thereby affecting permitting and any possible financial incentives.

▪ The paper concludes with possible mitigation strategies for dealing with conflicts between HPOs and GBOs, and suggestions for cities considering enacting GBOs.

Traditional Building Exhibition & Conference, Chicago, October 21, 2010 – “Legal Issues When Historic Preservation Goes Green”

Introduction: I’d like to thank everyone for coming here today. I’m going to start by giving a brief introduction of myself, and why I think a discussion about possible frictions between green building ordinances and historic preservation laws is both timely and relevant.

My name is Gary Cole, and I’m an Illinois licensed architect, and Illinois and Florida-licensed attorney. I received a Bachelor of Architecture . . .

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The New ConsensusDOCS 310 Green Building Addendum: Avoiding Green Legal Liability With Actions Over Words

Originally Published 2010

By Gary L. Cole AIA, Esq.

ConsensusDOCS, the construction industry’s leading standardized construction contracts and general analogue to the American Institute of Architect’s Contract Documents, recently unveiled a new contract addendum for “green building” projects – the ConsensusDocs 310 Green Building Addendum.” The two most interesting things about the new document are: (1) that it exists at all; and, (2) that ConsensusDOCS has very cleverly taken steps to shield its member-users from what, to some, is the Achilles Heel of the entire green building movement: that in any useful design, construction or legal sense, the term “green” has no reliably consistent meaning at all. That the new ConsensusDocs 310 Green Building Addendum achieves its goals by contractually defining a project’s greenness through actions instead of words is perhaps its most admirable achievement.

“Green Building” – “Green Living” – “We’ve gone Green!” In any real design, construction or legal sense, exactly what does “green” mean? And what does “green building” mean? Ask a hundred people . . .

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Are Architects and Other Designers Missing Out On the Gold in the Green?

Originally Published 2010

By Gary L. Cole AIA, Esq.

[Disclaimer: Nothing in the following article should be construed as legal or accounting advice, nor endorsements of any parties referenced within – the contents are entirely the opinion of the author. Parties interested in learning more should always consult their tax, legal and other professionals for specific advice and information.]

Architects, engineers, contractors and other designers of energy-efficient public projects may be eligible for substantial tax benefits under the Energy Policy Act of 2005 – though it appears than many are unaware of this opportunity to effectively increase their project compensation.

Under Section 179D of the Internal Revenue Code (the “IRC”) – created as a part of the Energy Policy Act of 2005 – owners of energy-efficient commercial buildings, which generally includes federal, state and local properties, may take a tax deduction of up to $1.80/SF square foot of qualifying construction. The $1.80/SF maximum deduction is allocated at $.60/SF for each of the three following improvements: (1) the interior lighting system; (2) the heating, cooling, ventilating, and hot waters systems; and, (3) the building envelope.

While that’s great for owners of income-producing commercial properties – how does it help architects, engineers, contractors and other designers increase their compensation on such projects?

In an apparent effort to incentivize the design and construction of green public buildings, Section 179D of the IRC includes a clever provision that allows owners of “Government-Owned Buildings” to “. . . allocate the § 179D deduction to the person primarily responsible for designing the property (the designer).

In other words, since the federal, state or local agency that owns the energy-efficient building doesn’t pay income taxes – and therefore doesn’t need and can’t take tax deductions – they can allocate their tax deducations to the “designer” (defined as “. . . the person that creates the technical specifications for installation of energy efficient commercial building property . . .”) of the building.

Let’s do the math. Suppose the “designer” designs a 100,000 SF building that qualifies for the maximum deduction of $1.80/SF. Since 100,000 multiplied by $1.80 equals $180,000, the owner can allocate a tax deduction of $180,000 to the designer.

Nice as this is, it’s important to understand . . .

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At last! Green Professional Liability Insurance for Architects and Engineers

Originally Published 2009

By Gary L. Cole AIA, Esq.

[DISCLAIMER: The following discussion is intended for general informational purposes only and is expressly not offered as legal or architectural advice, nor does it constitute advertising or a solicitation of any kind. And most of all – readers should always seek legal advice about their specific situations only from their attorneys, and architectural advice only from their architects.]

First it was the lawyers. Now, professional liability insurers are dipping their toes in the reclaimed waters of the green building movement.

Argo Insurance Group recently announced its “comprehensive insurance solution for architects & engineers servicing “green” developers and owners.”

Underwritten by Lloyd’s of London, Argo’s intent is to provide architects and engineers with claims coverage for green design’s unique risks, including:

• failure of projects to achieve a required LEED certification;

• failure of projects to meet their specified energy performance criteria; and

• failure of projects to qualify for certain economic incentives related to their green certification.

While some builders’ risk carriers already offer “green” endorsements and the insurance industry in general is actively tracking the green building movement’s rapid growth, professional liability coverage for architects and engineers involved in green design and construction is something new – and welcome.

Some may see the need . . .

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The Real Green Goblin – Emerging Legal Liability for Green Design Professionals and Contractors (Part 2.1)

Originally Published 2009

By Gary L. Cole AIA, Esq.

[NOTE]: The voice employed in Law/Ark posts is intentionally non-legal. Herein, you will find no wherefores. And, while I welcome and warmly appreciate the readership and comments of my fellow attorneys, these posts are written mostly with Law/Ark’s other readers in mind – those of you out there responding to your passions and answering your callings by designing, building and developing green projects.

And, despite the sometimes playfully polemical tenor of these posts, they’re not intended to discourage you from that pursuit, but, rather, to encourage you to pursue them with the proper forewarning and forearming.

Part 2.1 (Part 1 was posted May 18, 2009)

This is Part 2.1 of the “Green Goblin” Series, of which Parts 2.2 and 2.3 will follow shortly. The series will wind it all up with Part 3, which will address specific legal and design/construction practice approaches for avoiding the pitfalls discussed in the series.

The Green Goblin series can be summarized in one statement: “unsupportable claims about the performance of “green” design and construction may inspire a new understanding of the American legal system by those who make such claims – as defendants.”

Part 1 of this series touched on something I called “unfulfilled expectations” in green design and construction – essentially, what was expected did not occur, and/or what occurred was unexpected. Unfulfilled expectations is a simplified way of referring to some manifestation of a “breach of contract.” Breaches of contract can arise . . .

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