Better Building: The Responsible Developer's Blog

2012 Continuing Construction Education

Greg Clark — Tue, 24 Jan 2012 08:08:27 -0800

Does The Responsible Developer take advantage of construction industry opportunities for continuing education? Absolutely!

Here are some great local and national seminars to attend that provide the most current news and information on public and private development and construction:

1. For the developer or contractor interested in public schools, here is a great opportunity, on two dates in two cities:

The Washington Association of School Business Officials
Capital Project & Facilities Workshop
March 14, 2012 in Yakima and March 20, 2012 in Renton:

Bidder Responsibility Criteria and GC/CM & Design Bid Build
Legal Tools for Effective School Construction Contracting
Construction Budgeting & Accounting and State Match

Foster Pepper's own Greg Guedel will be speaking on the first topic.

2. For the developer or contractor involved in bidding government projects, there is the Seminar Group's Construction Bidding on March 15, 2012 in Seattle:

The Bidding Process
Alternative Public Project Procurement Process
Insurance Considerations in the Bidding Process
Contractor and Municipality Perspectives on Bidding Construction Projects
Strategies for Bidding Claims

Foster Pepper's own Tom Ahearne will be speaking on the third topic.

3. For the developer or contractor looking for a comprehensive national construction seminar on both public and private projects, this annual event is not to be missed:

The ABA Forum on the Construction Industry Midwinter Meeting on February 2-3, 2012 in Houston:

Design Control and Delegation
Current Issues Facing Complex Project Funding
Open Book Accounting in Cost Reimbursable Contracts
A Study of Issues Posed by Schedules on Complex Cases
A Review of Good and Bad Assurance/Quality Contract Case Studies
Practical Tips in Navigating Project Labor Disputes
Others

This Editor looks forward to seeing you there.

How to Know When Claims Are Time Barred

Greg Clark — Tue, 27 Dec 2011 08:51:48 -0800

What does the Responsible Developer do first with regard to a notice of claim arising out of a completed project?

She does the math to see whether or not the claim is time barred.

Whether you are making a claim or defending against one, a first good step is to quickly gather the information to figure out whether the claims at issue are time barred. If the claims are barred, then it could be a waste of time and money to pursue them. Yet time barred claims are made all the time, most are later dismissed. In some cases the defending party is also awarded their fees and costs. Sometimes these claimants found out too late but some just failed to do the analysis.

In order to know when a claim is time barred you need to do some project research. Most of the time the claims at issue for a typical real estate developer will arise out of a contract dispute based on written documents, such as a construction contract, purchase sale agreement, or a lease. Yet there are also times when a “contract” is really just an invoice or some other writing that may not meet the legal test to be a “written contract.” So quickly find and read those contracts and agreements.

A second step is to figure out what events start the clock running on your contract claim. These events generally can be when a contract was fully executed, when the scope of work under a construction contract was completed and when the claim event at issue was discovered.

The third step is the hard part, you need to do the analysis and apply the math. The analysis is to determine what statute of limitations applies and the math is to determine how many years have expired since the contract was performed, and how much time you have left until the claim is time barred. Generally, the statutory claim time periods are three years for oral contracts (which includes writings that do not meet the legal test for a written contract) and six years for a formal written contract. Both the three and six year periods may be subject to what is called the “discovery rule” which can extend either statute. In case this analysis is not already complex enough, there is another statute, called the statute of repose, that acts as a bar to claims even if the discovery rule were to otherwise apply.

At about this point in the analysis many clients roll their eyes and call their lawyer to help them figure it out. This is a natural reaction given that this analysis can be tough even if you have a legal background. So to help with the analysis here, below is handy bar chart for construction claims.

The first red line is the three year statute of limitations for oral contracts (may be written but lack essential terms). The second is the six year statute of limitations for written contracts (typical formal contract). The third red line is the six year statute of repose which bars claims that have not timely accrued. If the claims on your project are based, even in part, on a breach of performance by third parties (like designers or subcontractors), your contract may require those third parties to defend and indemnify you, so you need to know what events give rise to duty to defend and indemnity claims.

Again, expect your analysis to require modification as you gather more information. If it's really complex and you think the claim is close to being time barred, call your lawyer, now, and good luck!

Before Contracting, Review Your Contractors' Insurance Policies and Don't Rely Upon the Insurance Certificate/Accord.

Colm Nelson — Wed, 09 Nov 2011 09:44:10 -0800

Part of being a responsible developer is ensuring you are insured. Many developers are familiar with the term “additional insured,” because their form contract drafted years ago requires that the general contractor (the “named insured") identify the developer as an additional insured under the contractor policy. Developer’s rarely look at the actual policy, relying upon the general contractor’s Certificate/Accord and, therefore, believing they have the same coverage as the general contractor. This is a mistake.

More and more insurance policies now provide different coverage for the additional insured than the named insured, depending on what the underlying construction contract provides. For example, even though the named insured may have insurance for post-construction property damage resulting from defective work, the additional insured will not have such coverage unless “the written contract or written agreement requires you [the named insured] to provide the additional insured such coverage.” Without this coverage, the developer could be denied the benefit of a defense (lawyers paid for by the insurance company) and indemnification (insurance company pays judgment or settlement up to policy limits) in an action against the developer by purchasers for construction defects and property damage.

Therefore, for developers building condominiums or any project that may have risk associated with “tail litigation” related to property damage (such as water intrusion), the best practice is to obtain and review your contractors’ policies prior to execution, so that the construction contract can be modified to trigger as much coverage as possible.

Snohomish Developers Forum - Tuesday, November 15

Greg Guedel — Tue, 18 Oct 2011 08:12:39 -0800

The City of Snohomish and the Cascade Land Conservancy invite you to a Developers Forum for Snohomish’s Pilchuck District, a special redevelopment area in the heart of Snohomish, Washington. This innovative redevelopment strategy recently was recognized with a 2011 VISION 2040 Award from the Puget Sound Regional Council. We hope you will appreciate the legislative changes already enacted for this area, and that you will provide feedback regarding the practical realities of land development.

The forum will take place on Tuesday, November 15, 2011, 7:30-10:30 am at CCR Restaurant, 215 Cypress Avenue, Snohomish, WA 98290. A hearty, complimentary breakfast will be served.

The Pilchuck District is located in between the Pilchuck River and the nationally registered historic downtown district. The District is bringing change to an area that has a desirable location for residential and retail opportunities. The District would also be suitable for a destination lodging and conference facility to complement the tourism and the casual and competitive sports recreation industry that historic Snohomish currently has and continues to develop. Snohomish plans to revitalize The Pilchuck District neighborhood into a vibrant community using several innovative programs, including transfer of development rights (TDR), complete streets, design standards that make use of the river front, and market-based land use planning. The City will share what has already been done in the area to assist development.

The forum will be interactive in that you will be invited to share the realities of development in today’s economy and to make recommendations to the City and CLC staff on what it will really take to implement the District plan and kick off active development.

We look forward to your participation as we continue to create land development policies that reflect the suggestions of experienced builders. If you are able to join us please RSVP to the City's Economic Development Manager Debbie Emge at emge@ci.snohomish.wa.us or 360-282-3197 by November 9, 2011.

Public Works Seminar / Webinar - November 2, 2011

Greg Guedel — Tue, 11 Oct 2011 10:11:12 -0800

Join Foster Pepper attorneys and special guest speakers for this informative discussion on how municipal agencies can make the most of their public works project dollars.

Public Works Contracting: How to Get the Best Value from a Weak Economy

Wednesday, November 2, 2011 | 10:30 am – 2:30 pm
Foster Pepper PLLC | 30th Floor Conference Center
1111 Third Avenue | Seattle, Washington

Please respond by: Friday, October 28, 2011

REGISTER HERE

Questions?
Registration and other questions (ADA Accommodations, special meal requests, etc.) should be directed to events@foster.com.

More information can be found HERE.

TOPICS

Low Price = Good Value? Establishing Bidder Responsiblity and Performance Capacit
(Steve DiJulio | Foster Pepper PLLC)
When Low Price is Not Enough - Utilitizing Alternative Procurement Methods
(Greg Guedel | Foster Pepper PLLC)
Project Management - Turning a Good Contract into a Good Project
(Michael Purdy | Michael E. Purdy Associates)
The View from the Other Side - Contractor Perspectives on Facilitating Project Success
(Tom Peterson | Hoffman Construction Company)

CLE (Attorney) credits pending | Certificates of Completion available for other organizations

Schedule:
10:15 am Registration
10:30 am - 2:30 pm Program/Q&A (Lunch provided)

For more information, visit Foster Pepper's EVENTS page or REGISTER.

The Big Green Pay Off

Greg Clark — Mon, 10 Oct 2011 08:36:11 -0800

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

Greg Clark — Tue, 06 Sep 2011 09:55:01 -0800

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 building...in 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!

Can Design Professionals in Washington Effectively Limit Their Liability Anymore?

Colm Nelson — Fri, 19 Aug 2011 10:37:08 -0800

With the evolution of the Independent Duty Doctrine comes more uncertainty for design professionals and, arguably, the entire construction community in general. Until recently, claims for damages resulting from delay or construction defects were typically considered breach of contract claims and were limited by and subject to any liquidated damages provisions or liability limitations in that contract. Whether that is now the law in Washington is uncertain.

As commented on by other bloggers, the Washington State Supreme Court abolished what was called the “Economic Loss Doctrine.” The doctrine acted to bar parties from suing others under tort theories and limited who they could sue (that being the party they contracted with), when their damages were “economic” and derived from breaches of contract. Much litigation ensued over what that actually meant. For instance, confusion arose as to whether property damage caused by defective construction should be considered “economic” damages or not. To help clarify the law, in a very split opinion, Justice Fairhurst announced the Independent Duty Doctrine. Affiliated FM Ins. Co. v. LTK Consulting Serv., Inc., 170 Wn.2d 442, 453 (2010). Under the new doctrine, in short, if the complained damage was caused by a breach of an independent tort duty, a duty owed whether a contract existed or not, the injured party may have the right to sue in tort. Why is this important? Arguably, a waiver of consequential damages provision or a limitation of liability provision may not act to bar those damages when they are claimed under a tort theory. And now this issue is already working its way through the courts.

In Donatelli v. D.R. Strong Consulting Engineers, Inc. 2011 WL 3056564 (Wash.App. Div. 1, 2011) (unpublished), the Court of Appeals upheld a trial court decision refusing to summarily dismiss claims of negligence and misrepresentation against an engineer (both tort claims). The plaintiff alleged the engineer allegedly breached its duty "to complete the Project in a timely, competent, and cost effective manner" and misrepresented the duration of the work and its cost. The engineer's delays caused the owners to miss the market and their project was ultimately foreclosed. Under prior law, these "economic damages" would likely have been summarily dismissed. Now, the plaintiff may continue with the claims in the trial court.

This case is particularly interesting because the contract limited the engineer's damages to the contract price or the fee charged, whichever is greater. However, since the tort claims remain viable, the plaintiff may be able to skirt that contract provision by successfully prevailing upon the tort claims, depending on the language in the limitation. If the parties don't settle, this issue may go to the Supremes, with amicus coming from the engineer associations.

How Green Is My City?

Greg Clark — Wed, 03 Aug 2011 14:42:45 -0800

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 Time.com). 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.

Project Insurance Risks

Greg Clark — Fri, 08 Jul 2011 15:25:48 -0800

Does the Responsible Developer maintain adequate liability insurance on each project?

Yes, absolutely! A major underinsured or uninsured loss can devastate your project.

The last decade saw construction project insurance premiums for commercial general liability skyrocket to the point where many developers joked that the insurance premiums were only slightly less than the actual policy limits!

This meteoric rise in premiums was due to extensive litigation where policy limits were routinely paid out during the 1990s and early 2000s for defect and water intrusion damage claims. You remember, many insurers either left the WA market or would only insure lower risk builders. As the 2007 recession deepened some developers, depending on the type of project, opted to reduce coverage or worse, to go bare on the completed operations side.

In the last decade some other insurers have entered the WA market and the premiums for many types of liability insurance have decreased. But are you still at risk of being underinsured?

Yes.

Because in some egregious cases the reason the premiums are less, is that if you held that policy up to the sun, it would not block the light due to all the "holes" in it. Those holes represent policy exclusions that drastically limit or eliminate some of the most critical coverages. Here's an example. One insurer from Oregon now sells reasonably priced liability policies to developers and contractors. The policy limits appear to be the typical $1 million per occurrence and $2 million aggregate. So the insured feels adequately insured. There is, however, an exclusion buried deep in the policy for water intrusion damage (a very common occurrence in the PNW) and the policy caps that coverage at only $15,000. 00. No that is not a misprint, a $1,000,000 policy with a maximum coverage limitation of only $15,000 for water damage. Imagine that exclusion in the event of an extensive roof leak or other water related damage.

Another example is a well known insurer from Nebraska that decided to place certain requirements on policy holders in order to obtain the benefit of coverage (yes more than just paying the premium). The policy requirements demand that if you are the developer or general contractor, that you will only get the benefit of your policy coverage and limits if you have all of your subcontractors and suppliers name you as additional insureds and must have them sign indemnity agreements. While that is always a good practice, if you have 20 trades on a job or turnover during the work, it can be tough to be named by all the trades and have all of them sign indemnity agreements. If, however, you fail to obtain all the required additional insured endorsements and agreements, you may find you have limited coverage or none at all.

So what is the Responsible Developer supposed to do? A great start is to work with a reliable insurance broker and get sample policies with the current exclusions and actually read them all.

Even better is to work with a lawyer that knows insurance coverage and related litigation and have them advise you before place the policy. Between the two, you should be able to discern whether you are really adequately insured or if you are unnecessarily exposing yourself and your project to significant underinsured or uninsured risks.

Lastly, even if you are the consummate do-it-yourselfer, please, read the policy....before you buy it and put it in the file drawer.

More US Homes Should Be Passive

Greg Clark — Mon, 20 Jun 2011 10:20:31 -0800

Should Responsible (American) Developers build more "Passive" homes?

German developers answer, Jawohl, bauen der Passiv Haus!

On June 9th the Passivhaus Institut issued a press release recapping the 15th International Passive House Conference that was held in Innsbruck, Austria. Highlights included 1200 attendees from 50 countries and 100 exhibitors presenting Passive House components.

A "Passive House" (see above) is essentially a super insulated virtually air-tight building that is primarily heated by passive solar gain and by internal gains from people, electrical equipment, etc. Energy losses are minimized and any remaining heat demand is provided by an extremely small source. The intended result is an impressive system that saves up to 90% of space heating costs. Think of it as a 1,650-square-foot version of that super-insulated bottle that keeps your coffee hot or your iced tea cold, except in reverse. Its ultra-tight shell keeps extreme temperatures out, most of the time with little to no mechanical intervention. And its main power sources are things nature provides for free: sunlight, shade, earth, and breezes.

As with other technology, Germany and other European nations are far ahead of the US. According to Builder more than 20,000 single and multifamily homes have been built in Europe but only a dozen have been built in the US. Builder [online] (and other sources) stated that the additional cost for a Passive House was only 10-20 percent more that a standard home. Hmm, spend 10-20 percent more and save up to 90 percent of future space heating costs? Do the math in your area and given how long the home should perform, decide if it is worth it for you.

If you want to see one of the few Passive home projects in the US you do not need to go far. There is a completed project called Courtland Place in Seattle's Rainier Valley and a nine unit project in development called Urban Olympic multifamily Passive House.

Wind Wars Episode I-PNW Energy Companies v. BPA

Greg Clark — Wed, 15 Jun 2011 07:39:29 -0800

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.

Eye for an eye, really? Irresponsible developers pay heed to the Code of Hammurabi!

Colm Nelson — Thu, 09 Jun 2011 09:47:35 -0800

Since the dawn of civilization, irresponsible builders did not survive in the marketplace. They did not survive, period. Under the ancient Code of Hammurabi of Babylon (circa 1800 BC) any builder who negligently built a home that later collapsed and killed the home owner “shall be put death.” Recently, citing to the Code, the Supreme Court of Washington recently, sternly reminded owners, engineers and contractors of their responsibility for worker safety. Michaels v. CH2M Hill, Inc., 2011 WL 2077653 (Wash).

In 2004, a digester dome at Spokane’s sewage treatment plant collapsed, killing one City of Spokane employee and injuring two others. The massive digester had a capacity of 2.25 million gallons. Its purpose was to take raw solids, circulate them for several weeks at a high temperature in an anaerobic process, and turn the solids into fertilizer. The injured parties, who were standing on and adjacent to the digester when it collapsed, sued CH2M Hill Inc., the project engineer that had contracted with the City as a consultant for the 10-year capital improvement project to upgrade the plant.

The Plaintiffs alleged, in part, that CH2M had failed to properly advise them and the City, in writing, of the downstream effects of altering the direction of sewage flow at a valve-like transfer station leading to the digester. Prior to the accident, the workers noticed pressure rising in the digester and, in an attempt to relieve that pressure, began conducting a transfer to move sludge from that digester to another. However, CH2M had recently suggested a design change for that valve and related system, which had been implemented, and the effect of that change was significant. Instead of transferring sewage out of the digester, the new system simply transferred the sludge to a “deadhead”, causing no relief in pressure whatsoever. Unfortunately, the City workers did not know this and believed the transfer would relieve pressure. Ultimately, the digester’s dome collapsed, causing one of the workers who was working on top of the dome to fall into the digester and die, while the other two were blown clear by a wave of sludge and suffered serious injury.

CH2M raised numerous defenses to the claims, namely it was immune from suit under the design professional immunity statute. The trial court rejected CH2M’s argument and, after direct review, the Washington Supreme Court affirmed. The majority opinion concluded the negligence at issue did not occur on a “construction project,” making the immunity site inapplicable. The court also held that there is no immunity from “the negligent preparation of design plans and specifications.” According to the trial judge, CH2M did not perform any engineering analysis of the effects the design changes had on the system and failed to prepare and distribute a written analysis of the changes, subjecting it to liability. The concurring opinion, by Justice Madsen, agreed with the ultimate decision, but held there was no need to analyze whether the negligence occurred on a construction project. If a designer’s plans or specifications are deemed to be negligently deficient, the designer is liable, end of analysis, according to Justice Madsen.

The lesson from this case is to clearly allocate the responsibility for implementing a written protocol to advise parties, including workers, of the effects of design and/or construction changes.

When Green Conflicts: Wind vs. Water

Greg Clark — Mon, 30 May 2011 12:25:23 -0800

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.

Proving Green=Energy Savings

Greg Clark — Wed, 11 May 2011 12:25:42 -0800

Does the Responsible Developer need to track Green energy savings?

Absolutely, whether voluntary or mandatory, it is your best interest as the Responsible Developer because it means you are saving money or at least offsetting the cost of the money you spent on all that Green energy saving technology. If can also show you that your building performs better which makes it more attractive to tenants and prospective buyers!

If tracking energy use is voluntary, you still need to do it as part of good risk management. You need to at least track performance before any applicable warranties have ran, because monitoring will tell you if actual performance is within the guarantees, warranties or performance specifications for your building. If before that time energy use and cost are unexpectedly high it may indicate you have a problem that needs to be immediately investigated. While there is probably a contract requirement for you to timely notify the applicable design professionals and contractors, it is always a good idea to consider hiring a unbiased and objective energy use audit consultant (link is a sample reference only there are many available locally). This becomes critical when, in the face of well documented sub-par energy performance, your project team is doggedly representing that all is as it should be.

If tracking energy use is mandatory (yes many state and federal authorities are requiring mandatory production of records showing energy consumption) then you have no choice.

Locally, as of today, May 12, the City of Seattle's Department of Planning and Development is requiring that 800 commercial property owners of non-residential buildings over 50,000 sq. ft. must start tracking energy use and must report on October 3, 2011. Then, for both non-residential and and multifamily residential buildings over 10,000 sq. ft., annual reporting begins on April 1, 2012 (no not a belated April Fools joke).

These effected property owners must employ use of the EPA's Energy Star Portfolio Manager that is used to set "energy use benchmarks". This energy information must then be provided to the parties in real estate transactions (buyers, tenants and lenders).

So with this information becoming generally available to players in the RE market, this new "energy bench marking" is expected to be used by local RE agents to help owners see where they stand in the market and how competitive their building(s) are regarding energy use. Kidder Mathews was already working with its clients to do this voluntarily and has not had much push back from owners.

So again, whether mandatory or not, spending money on tracking the energy performance of your buildings means businesses and consumers that value green built will be willing to pay more, if you have empirical proof of performance.

You're Invited to Learn More About the Bullitt Foundation's Living Building

Jeremy Eckert — Thu, 28 Apr 2011 10:10:00 -0800

On May 4th, the Bullitt Foundation is hosting a free event to showcase the Cascadia Center for Sustainable Design and Construction. The Cascadia Center is designed to be the world's most efficient commercial building built in the world, and the nation's first mid-rise commercial building to achieve "Living Building" certification. "Living Building" certification requires the Cascadia Center to achieve 20 benchmarks, including the on-site production of 100% of the building's energy and water needs. The center would also be evaluated after one year of the building's operation (a response to the criticism that LEED-certified buildings fail to perform to green design standards over time).

Previously, the Capitol Hill blog and the Responsible Developer blog reported on the project opponents’ attempt to block the State’s most sustainable building with, ironically, the State’s most fundamental environmental law (SEPA). Earlier this month, a Hearing Examiner heard the SEPA-based appeal, and the Bullitt Center substantially prevailed. Currently, the project opponents are contemplating appealing the Hearing Examiner’s decision to Superior Court. While the building is a prime example of sustainable development, the Cascadia Center is unfortunately also a prime example of how SEPA can be used to delay a project and increase project cost. Earlier this year the Responsible Developer blog discussed the role of SEPA and sustainable development, which is available here.

Bullitt Foundation (owner), Point32 (developer), Miller Hull (architect), and the project’s proponents for moving the Cascadia Center forward. I’m looking forward to learning more on May 4th.

The Bullit Foundtion’s Cascadia Center Event
Wednesday, May 4th
6:00 – 7:30pm
Illsley Ball Nordstrom Recital Hall
At Benaroya Hall
200 University Street
Seattle, WA 98101
www.cascadiacenter.info

Why Developers Should Track All Warranty Claims

Greg Clark — Wed, 20 Apr 2011 06:22:38 -0800

Does the Responsible Developer track all warranty claims? Absolutely, it is just good business!

It is axiomatic that when a development project is complete that there are a number of warranties that must be tracked and managed as part of the post project completion entitlements and obligations. This risk management process applies to all projects, public and private, and depending on who you are in the project hierarchy, it is a continuation of the project financial analysis.

Yet many parties to the project myopically focus solely on the contractual written warranty period, which typically is one year. The Responsible Developer, however, tracks all relevant warranty periods including those express and implied at law warranties. Why? Because anything less may just be throwing money away. Who can afford to do that in these challenging economic times?

The actual process is relatively simple. Once a project achieves substantial completion, the following warranties should be calendared and tracked:

1. 90 days prior to expiration of contractor's 1 year warranty.

2. 90 days prior to expiration of any manufacturers' warranties.

3. 180 days prior to expiration of all (3,4 and 6 year) contract statutes of limitation and repose.

The reason you calendar these dates is so that you can inspect and test the work, materials and systems in your project for any premature failures or damage and give your self enough time to document it and provide that written information to the party the owes you the warranty obligation-before that party is immune from suit.

Some public developers may be less concerned about the expiration of statutes of limitation because Washington law provides that where the work was for the benefit of the state the six year statute of limitations does not apply. A public entity, however cannot afford to rest on that laurel too long, because many contractors are either corporations or limited liability companies that after the project may become dissolved and immune from suit. While there are artful ways to draft around such future warranty impediments in the contract, developers can easily monitor the status of their contractor's legal status by using the information maintained by the Washington Secretary of State and Labor and Industries.

The reason you as the Responsible Developer need to make this effort is so that in the event a post completion inspection reveals latent defects in a product or work, you will be able to timely make a claim and either obtain repairs, insurance money or both. If you fail to calendar these dates or make the effort, then you may just be throwing money away. Imagine being asked by tax payers or investors why no one had the foresight to include this analysis as part of your project.

Well now you know what the Responsible Developer does as an integral part of maximizing the value of all of the warranties it may be a beneficiary of.

Green Building Means Green Infrastructure

Greg Clark — Mon, 18 Apr 2011 09:05:47 -0800

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.

Upcoming Better Building Events

Kelly Angell — Mon, 04 Apr 2011 09:59:18 -0800

If you’re interested in learning more about sustainable development, networking with other responsible developers or sponsorship opportunities, here is a sampling of the many upcoming events and programs in the Puget Sound region this spring:

Leaders in Livability: AIA Seattle Welcomes Dow Constantine: April 7, 5:30pm - 7pm
Join AIA Seattle and Cascade Land Conservancy to get beyond the talk and the PowerPoint and hear from successful leaders who have used creativity to shape real change in our communities. King County Executive Dow Constantine will give his county-wide perspective on the challenges and opportunities of promoting livability on a region-wide basis. This is the second of a three-part series that provides unique and dynamic perspectives on building more livable, walkable and healthier cities. This program features a 45-minute interview with an opportunity for audience Q&A.

Introduction to Built Green®: April 12, 2:30pm – 4:30pm
Thinking about joining Built Green®? Attend this two-hour introduction to the program to answer questions such as: How do I certify a project? How does the program work? Why should I become a member?

CREW Seattle & Sound: April 14, 11:30am – 1:00pm
What if every act of design and construction made the world a better place? Come hear how the first project in Washington State built to the Living Building Challenge standard achieved the highest levels of sustainability. Buildings designed to Living Building Challenge standards are net zero energy and water, and all materials used in construction are scrupulously screened to avoid toxic ‘red list’ materials. Join Commercial Real Estate Women (CREW) Seattle & Sound for lunch to learn more about the Challenge and the construction of the Bertschi School Living Science Building on Seattle’s Capitol Hill.

SOUTHSound Green Tour and Seattle Green Tour: April 16-17, 10:00am - 4:00pm, various locations
Hosted by the Northwest EcoBuilding Guild, both the South Sound Green Tour and the Seattle Green Home Tour are free and open to the general public. The tours will highlight a variety of green building, remodeling and retrofitting techniques. Learn more about how homes can approach net zero energy use, Built Green®, NW Energy Star for Homes, and LEED for Homes.

Pacific Northwest Regional Conference on Sustainability: April 29 – May 1
This conference provides a unique opportunity for engineers and scientists in the Pacific Northwest to exchange ideas and learn about the sustainability of energy, water, and environmental systems. The conference will cover a wide range of topics including sustainable infrastructure development, industrial ecology, sustainability in process design, renewable energy, water conservation and waste minimization.

Green Festival: May 21 – 22, Qwest Event Center
Green Festival inspires and promotes the connection between people, communities and businesses. Festivities include presentations by more than 125 authors, leaders and visionaries, informative workshops, films, activities for kids, organic beer and wine, food, live music, and a marketplace of more than 350 green local and national businesses and organizations. Keynote speakers include Amy Goodman, John Perkins, Jeffrey Smith, David Korten, Zoe Weil, and Edward Humes. Get a one-day pass for $10 or weekend pass for $15 when you purchase online.

Low Impact Development – Stormwater Management for Sustainable Design and Water Efficiency: June 16, 9:00am – 5:00pm
This course provides an overview of low-impact development (“LID”) approaches and resources for building industry professionals. Critical for the Pacific Northwest where water quality and salmon habitat protection are key issues, LID offers opportunities for sustainable site design and water efficiency. Intended for environmental professionals, landscape architects, architects, facility managers, and those who are interested in incorporating LID into existing sites.

Register Now for Foster Pepper's Annual Land Use & Environmental Seminar

Jennifer Ramirez — Fri, 01 Apr 2011 13:45:05 -0800

Join Foster Pepper attorneys on May 19, 2011 for a look at new regulatory developments and positioning for the future in the areas of land use and environmental law. This complimentary seminar for industry professionals will cover topics including:

Financing New Projects in 2011
New and Upcoming City of Seattle Regulations
New Legislation and Case Law Update
How Greenhouse Gases and Climate Change are Impacting Entitlements
Water Supply: Impact of WA Supreme Court Municipal Water Law Ruling

DETAILS:

Thursday, May 19, 2011 | 8:30 am - 1:00 pm
Foster Pepper PLLC | 30th Floor Conference Center
Seattle, Washington

REGISTER by May 13, 2011.

For more information, visit the EVENT page.

Registration and other questions (ADA Accommodations, special meal requests, etc.) should be directed to events@foster.com or 206.447.2694.