Green Building Law Blog : Green Building Lawyer & Attorney : Shari Shapiro: Calliope Communications, LLC

The Federal government has long been a leader in constructing green buildings, and LEED has been the Federal standard of choice. The Department of Energy issued a final rule updating its recommended certification standards and levels for all Federal buildings on October 14, 2014. 

The Final Rule does not tell Agencies which rating system to use.  Rather, if the Agency chooses to use a rating system, such system must meet the following characteristics:

1. Allow assessors and auditors to independently verify the criteria and measurement metrics of the system;
2. Be developed by a certification organization that (i) provides an opportunity for public comment on the system, (ii) provides an opportunity for development and revision of the system through a consensus-based process;
3. Be nationally recognized within the building industry;
4. Be subject to periodic evaluation and assessment of the environmental and energy benefits that result under the rating system; and 
5. Include a verification system for post occupancy assessment of the rated buildings to demonstrate continued energy and water savings at least every four years after initial occupancy. 

Sounds a lot like LEED or Green Globes to me, so unless something else comes into the marketplace, Federal buildings are likely to use the LEED standard.

The DOE's rule is based, at least in part, on a General Services Administration (GSA) report on green building rating systems issued on October 25, 2013, and available here.  The GSA recommended LEED-2009 Silver or 2 Green Globes v 2010.  It also contained a variety of other recommendations, including keeping current with the rating systems as they evolve. 

The GSA's recommendation is an interesting one for two reasons:

(1) the GSA requires its buildings to be LEED Gold, and

(2) the recommendation was not supplemented to recommend LEED v4, even though the GSA did evaluate LEED v4. 

Since the Final Rule does not have a recommended rating system, and most agencies are unlikely to parse whether a particular rating system other than LEED complies with these characteristics, the GSA's recommendations are likely to become the Federal default.  

 

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Yesterday, the City of Kansas and the County of Wyndotte sued the General Services Administration for moving the EPA Region 7 headquarters from an older LEED building in the Kansas City central business district to a former Applebee's headquarters in Lenexa, Kansas. The complaint is available here.

This is a fascinating suit in that it highlights the paradox of a green building on an unsustainable site. Lenexa can only be described as a typical midwestern sprawling suburb, and the proposed new EPA headquarters is in an office park.  A Google earth map of Lenexa is available here and the proposed building is available here. 

The lawsuit alleges that the GSA violated two executive orders mandating that Federal facilities be sustainable and located in urban cores.

EO 12,072 requires:

Federal facilities and Federal use of space in urban areas shall serve to strengthen the Nation’s cities and to make them attractive places to live and work” and mandates that such Federal space “shall conserve existing urban resources and encourage the development and redevelopment of cities.

and Executive Order 13,514 which mandates, among other things, that

the head of each Federal agency to “advance regional and local integrated planning by . . . (iii) ensuring that planning for new Federal facilities or new leases includes consideration of sites that are pedestrian friendly, near existing employment centers, and accessible to public transit, and emphasizes existing central cities. . . ."

The GSA defends its decision to move from a green building in the central business district to a suburban office park on two grounds--it is cheap and it is green: 

GSA spokeswoman Angela Brees said she could not comment on the lawsuit, but reasserted the agency's claim that the Lenexa building was the cheapest available, even when considering the cost of moving to a new office. [The building] also scored highest on technical criteria that include sustainability and design, she said. The owners of the building, which has been given a Silver rating by the U.S. Green Building Council's Leadership in Energy and Environmental Design program, have vowed to upgrade it to meet LEED Gold standards and get a Platinum rating for operations and maintenance by the time employees arrive.

Putting aside the environmental implications, I would argue (and the Complaint alludes to it as well) that the Lenaxa decision does not hold up on a purely economic basis, let alone an environmental one.   The new site is located outside of the central business district, and has little access to transit.  This means that every time an EPA employee has to go to a  meeting, the courthouse and to other businesses in the course of their official duties, they must do so by car.  

Currently, the Federal government reimburses private vehicle travel at $.51 per mile.  Previously, the distance from the EPA headquarters to the Kansas City Federal Courthouse was .6 miles.  The distance from the Lenaxa facilitiy to the Federal courthouse is 21 miles.

According to the New York Times, the Applebee's HQ rent is more than the current rent.  On top of that, based on the above calculation, the taxpayer will be paying a $20 surcharge for every trip of an EPA Region 7 lawyer, paralegal, witness to the courthouse.  Of course, it will also mean the same $20 surcharge for any other trip of any Region 7 employee travelling to the Kansas City CBD on official business. 

Utilmately, it appears that this will not be a green decision, in either sense of the word.

 

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 The General Services Administration is one of the largest owners of real estate in the country, composed primarily of office buildings and courthouses, land ports of entry, and warehouses.  The GSA owns and leases more than 354 million square feet of space in 8,600 buildings across the nation.

The GSA is also the owner of one of the greenest real estate porfolios.  As of the summer of 2010, the GSA had 48 LEED-certified owned and leased buildings with approximately 150 more working towards accreditation. Eighteen of those projects exceeded the minimum with LEED Gold certifications, and one GSA lease, the FBI Regional Office in Chicago, achieved a Platinum LEED rating for Existing Buildings.  The GSA has required LEED Silver certification for its projects for some time, and now requires that new Federal buildings achieve LEED Gold certification.

While I was at GreenBuild in Chicago, I had the chance to sit down with Kevin Kampschroer, GSA's Director of the Office of Federal High-Performance Green Buildings and Eleni Reed, GSA's Chief Greening Officer.

We talked about GSA's experience greening the Federal government's real estate portfolio, implementing the GSA's LEED Gold requirement and the challenge--and benefits--of trying to do four times as many contracts as the GSA normally does because of the influx of $5 billion in Stimulus funding. 

Here is what they said:

GBLB: What has the GSA done with the Stimulus money? 

KK: The GSA has a bit of a different position than other agencies because the GSA actually enters into the contracts with builders and other receipients, as opposed to granting funds to states and other entities that ultimately contract with the recipients.  As of the end of September we had awarded $5 billion [for greening the Federal real estate and fleet].  After the award, it takes some time for the contractor to get the contract and hire the people and do the work, but we have made $1 billion in payments so far.

GBLB: What was impact of the Stimulus money on the GSA?

KK:  As a result of the Stimulus, we awarded four times as many contracts as the GSA usually does in the same period of time.  This forced us to find ways to be more efficient in what we were doing.  For example, we started "speed dating."  Where decisions had to be made, we put all the decision makers in a room togther to come to a decision quickly.  Executives and managers had to delegate some of the decision-making to ensure efficiency. 

Because the projects had to be "shovel ready," many of the designs were already done.  The designs met our specifications, but were not necessarily the best possible designs--the most you can do with the budget that you have.  Going forward, we are retooling our performance criteria and specifications to spur teams to be more innovative and creative with the budget they have.

For example, the National Renewable Energy Laboratory is a net-zero building.  We gave the team specifications, and we incentivized the team by paying them mroe the closer they got to the goals.

For other projects, we had a relatively brief minimum performance criteria which was a goal statement for the project.  It has resulted in more rapid and more innovative designs. However, this requires accepting a shift in risk to the Government side.  But the less risk you take, the less you get [in terms of innovation and design.]

This also has implications for allocating capital.  The GSA has to allow for approximation up front and not require everything to be fixed from the beginning of the project.  

GBLB:  Now that you have all these green buildings, what are you going to do next?  

ER: We are looking to get good metrics about whether we are doing what we set out to do [in terms of building performance].  We have 250 buildings with baseline metrics across a wide variety of project types so we should be able to get some good data. 

GBLB: How will the experience with the Stimulus funds impact the agency going forward? 

KK: We will be more efficient and more effective.  We will have achieved significant improvement in our portfolio [of buildings].  The budget will be extremely lean in the future.  It will be important to apply the lessons we have learned [about how to do projects more efficiently] to operating and maintaining the buildings to prevent deterioration.  We have an opportunity in tracking the performance of the inventory over time and across the portfolio.

GBLB: What about your requirement that GSA projects achieve LEED Gold certification?

KK: We select contractors who know that this is the expectation.  We have been doing LEED Silver for a decade, this is raising the bar to LEED GOld, but the architect and engineering firms know how to do it. 

When we budget the project, we have adjusted the process to allow for LEED Gold certification.  We have done studies on standard versus green construction, you can do LEED Silver for less than conventional construction because of integrated design. 

GBLB: Have you ever had a project fail to get the mandated certification? 

KK: The way we started out was that our goal was LEED Silver.  We have had building that did not reach that level of certification, but never had one that failed to acheive minimum LEED certification.

For more on the GSA's efforts, Architecture Week had an article by Kevin, and Kevin's testimony before the House Subcommittee on the GSA's Stimulus efforts is available here.

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I have been tracking the green stimulus spending since June 2009. In November 2009, actual dollars spent on green projects was $1.5 billion.  Now, in November 2010, dollars actually paid to date on green projects is approximately $11 billion.  It amounts to approximately 7% of contract spending from the Stimulus bill (which does not include tax benefits), and 2.6% of the total stimulus money paid to date. 

By agency, the spending on green breaks out as follows:

	Allocated	Paid Out	Unit	% Paid
DOE	33.29	9.4	Billion	28.24%
Energy Efficiency/Renewable Energy	16.50	4	Billion	26.06%
EPA (9/30)	7.20	4	Billion	62.22%
GSA	6.10	1.42	Billion	23.28%
Green Buildings	5.50	1	Billion	18.18%
DOT	40.40	22.3	Billion	55.20%
High Speed Rail	3.00	1	Billion	33.33%
Total Agency	86.99	38	Billion	43.22%
Total Green	32.20	11	Billion	33.48%
Total Contract Spending	275.00	156.7	Billion	56.98%
Total Stimulus	787.00	403.4	Billion	51.26%
% Green of Contract Spending	11.71%	6.88%
% Green of Total Stimulus	4.09%	2.67%

[I used the same methodology as described in detail here. If you are a data geek like me, you can do your own number crunching at Recovery.gov and the agency recovery sites who do weekly reporting in Excel on the allocation and spending of the Stimulus money.  There is a wealth of information available, and I welcome any input or different statistical or mathematical analyses from the Green Building Law Community.] 

At the initiation of the Stimulus, Obama touted the green components of the stimulus bill.  He has also been very positive on the prospect of green jobs. Opponents of the stimulus bill, and waning support of green initiatives and green jobs in general, has been on the rise.

So the question becomes: what is the value of the 3% of the Stimulus that went to green iniatives, and was the return on investment higher or lower than the other initiatives that were funded by the stimulus? The answer to the ROI question is "yes"-- Agencies tasked with green funding (DOE, EPA, GSA) hold 3 of the top 10 most efficient job creating agencies that were allocated stimulus funding:

 

	Stimulus Funds Paid	Jobs Created	Dollars Per Job
Department of Justice	$2,013,343,173	16330.59	$123,286.62
National Science Foundation	$817,277,981	5503.36	$148,505.27
Department of the Interior	$1,545,986,174	10047.13	$153,873.41
Department of Education	$66,652,472,918	341668.74	$195,079.22
Department of Energy	$9,691,290,357	42262.17	$229,313.60
General Services Administration	$1,493,185,840	5773.82	$258,613.16
Department of Housing and Urban Development	$7,270,460,291	27640.01	$263,041.16
Department of Homeland Security	$598,741,846	2137.91	$280,059.43
Environmental Protection Agency	$4,608,982,170	16233.68	$283,914.81

  By contrast, the two departments which spent the most money, the Department of the Treasury (tax cuts) and the Social Security Administration only created 188 direct jobs.

Department of the Treasury	$8,575,280,379	144.27	$59,439,109.86
Social Security Administration	$13,727,406,290	44.75	$306,757,682.46

It will be argued that the tax cuts, etc. indirectly created jobs by pumping more money into the economy.  But there is a direct way to measure the impact of a single green dollar.  To address this, I looked at the statistics for the GSA.  Unlike other agencies which allocate money through states to programs or disperse it to individual taxpayers, the GSA contracts directly with builders and other direct contract fund recipients to build or renovate federal buildings.

As of September 30, 2010, the GSA had saved or created 5773.82 jobs (how you have .82 of a job I can't say). The stat is here. The GSA was 16th in the agencies recieving funding, and the12th net job creating agency.  But on a job per dollar basis, the GSA the 6th most efficient job creating agency at $258,613.16 per job created.   

Do not fall into this statistical trap "$258k per job? We could have created five $50k jobs for that money!"  Remember, this dollars per job includes materials and costs of the jobs involved (bricks, mortar, etc.), which also have downstream job creating effects (brick makers, concrete haulers, etc.).

Tomorrow, I will post an interview I had at Greenbuild with Kevin Kampschroer, the Director of the Office of Federal High-Performance Green Buildings at GSA in which he gave insight not only into the GSA's experience with the Stimulus spending, but also on the long term impacts the Stimulus spending had on the operation of the GSA itself. 

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In July, I wrote an analysis of the “green” spending in the American Reinvestment and Recovery Act—ARRA, also known as the “stimulus bill.” I concluded that as of July the spending on green programs accounted for only .28% of the total allocation for those programs in the ARRA-- $33.2 million had been paid out for green stimulus programs, and an additional $307 million in public transit dollars.

So…where are we four months later? More money has been paid out--about $1.5 billion--but it pales in comparison to the $83.8 billion  paid out in tax benefits as of 11/06/09, and spending on non-green projects.

Here are the stats in detail:

Energy Efficiency/Renewable Energy--Department of Energy

As of 7/17/09 the Department of Energy had paid out $264,457,144. $16,796,000 had been awarded for energy efficiency and renewable energy projects, of which $3,189,150 had actually been awarded. BOTTOM LINE IN JULY: $3 million

As of 11/06/09, the Department of Energy had paid out $1,346,197,498. $16,796,000 had been awarded for energy efficiency and renewable energy, of which $10,651,341,856 had actually been awarded, and $347,779,891 paid out. BOTTOM LINE IN NOVEMBER: $347.8 million.

Increase from July: $344.8 million.

High Performance Green Buildings--General Services Administration

As of 7/17/09 overall the GSA has paid out $12,743,040. of available $656,418,268 of which $6,807,468 has been paid out for federal buildings, which includes high performance building projects. According to the GSA, $4,500,000,000 was appropriated by Congress, $318,750,279 obligated to date (contracts awarded) and $230,771 outlayed to date (work completed & paid).
 

As of 10/06/09 overall the GSA has paid out $333,444,141, of which $67,324,333 been paid out for federal buildings, which includes high performance building projects.

Public Transit--Department of Transportation

As of 7/17/09 the DOT has paid out $773,662,175 of a total available $22,188,399,591. For rail and other transit funding, including Amtrak, obligations of $3,921,784,326.72, outlay of $306,918,718.00 (this includes state block grants).  BOTTOM LINE IN JULY: $307 million in public transit funding outlaid as of 7/17/09.

As of 10/30/09 the DOT has paid out $5,551,384,466 out of a total available $30,514,836,708. For rail and other transit funding, including Amtrak, obligations of $7,539,142,781.45, outlay of $824,343,952.21 (this includes state block grants).  BOTTOM LINE IN NOVEMBER: $824 million in public transit funding outlaid as of 10/30/09.

Increase from July: $517 million.

Everything the EPA Is Doing--Environmental Protection Agency

As of 7/17/09, EPA has paid out $30,515,805 of the $5,713,481,497 it was allocated. Assuming that all that the EPA does is in some way green related, and this is a big assumption on my part, as much of the EPA funds have been dedicates to water resources and cleanup of hazardous sites, that adds another $30 million. BOTTOM LINE IN JULY:  $30 Million

As of 11/06/09, EPA has paid out $365,636,685. Assuming that all that the EPA does is in some way green related, and this is a big assumption on my part, as much of the EPA funds have been dedicates to water resources and cleanup of hazardous sites, that adds another $366 million. BOTTOM LINE IN NOVEMBER:  $366 Million

Increase from July: $336 million.

So?

The overall spending—i.e. money that has been paid out for green projects—in the first 10 months of 2009 amounts to over $1.5 billion. This is not nothing, and a vast improvement from the summer. On the other hand, $83.8 billion has been paid out in tax benefits as of 11/06/09, and allocation on highway infrastructure by the Department of Transportation alone was $20.2 billion of which $3.7 billion has been paid out. 
 

**A word about methodology--all of the above statistics were gleaned from Recovery.gov , the Recovery websites of the individual agencies, and my personal agency contacts.  For the DOT recovery site, go here.  For the GSA recovery site, go here.  For the DOE recovery site, go here. For the EPA recovery  site, go here.  There is a wealth of information available, and I welcome any input or different statistical or mathematical analyses from the Green Building Law Community.**

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Yesterday I was asked whether enough support was being given to develop the green building industry in the United States.  It led me to wonder where the so-called "green" stimulus package had wound up six months later.  I had criticized the stimulus bill for being less green in reality than in rhetoric here.  The answer to where we are now that the bill is being implemented? A light shade of chartreuse, not the deep forest I would have preferred.  By my calculations, a total of $33.2 million has been paid out for green stimulus programs, and an additional $307 million in public transit dollars, of the allocated $119 BILLION.  That is .28% of the total allocation by my calculations. 

Here are the stats in detail:

 The allocations in the Stimulus Bill for categories which include green:

• Infrastructure funding has been allocated $111 billion (this includes transit)
• Energy has been allocated $8 billion. 

[Please compare this to the $288 billion for tax relief].

Energy Efficiency/Renewable Energy--Department of Energy

As of 7/17/09 the Department of Energy has paid out $264,457,144.  $16,796,000 has been awared for energy efficiency and renewable energy projects, of which  $3,189,150 has actually been awarded.  BOTTOM LINE: $3 million

High Performance Green Buildings--General Services Administration

As of 7/17/09 overall the GSA has paid out $12,743,040. of available $656,418,268 of which $6,807,468 has been paid out for federal buildings, which includes high performance building projects.

UPDATE: The GSA provided me with specific information on the High Performance Building Program.  According to the GSA, $4,500,000,000 was appropriated by Congress, $318,750,279 obligated to date (contracts awarded) and $230,771 outlayed to date (work completed & paid)

BOTTOM LINE: $230,771

Public Transit--Department of Transportation

As of 7/17/09 the DOT has paid out $773,662,175 of a total available $22,188,399,591. For rail and other transit funding, including Amtrak, obligations of $3,921,784,326.72, outlay of $306,918,718.00 (this includes state block grants).
BOTTOM LINE: $307 million in public transit funding outlaid as of 7/17/09.  

 Everything the EPA Is Doing--Environmental Protection Agency

As of 7/17/09, EPA has paid out $30,515,805 of the $5,713,481,497 it was allocated.  Assuming that all that the EPA does is in some way green related, and this is a big assumption on my part, as much of the EPA funds have been dedicates to water resources and cleanup of hazardous sites, that adds another Bottom Line $30 million. 

So what do all these numbers mean? 

I think, as I did when the ultimate stimulus bill was passed that the overall amount is not enough.  What we know now is that the money is being spent slower than anticipated.  If the concept was to stimulate the economy in 2009, $33.2m probably is insufficient.  The entire practice of architecture is dying on the vine, without help there will be few innovators left to help green the next building wave.  Something needs to be done to facilitate getting the green stimulus dollars to those projects that need them--I have heard of LEED projects which are dying because they cannot access private funds--sooner rather than later.

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