Better Building: The Responsible Developer's Blog

Complimentary Seminar/Webinar - Women In the Built Industry

Greg Guedel — Thu, 09 May 2013 11:40:12 -0800

Women in the Built Industry

Thursday, May 30, 2013 | 9:30 a.m. – 2:45 p.m.
Foster Pepper PLLC | 30th Floor Conference Center
1111 Third Avenue | Seattle, Washington

Foster Pepper invites you to participate in this complimentary seminar and webinar on May 30, 2013 as it focuses on success strategies for female professionals in all areas of the construction industry. Women business owners, managers, technical and trades professionals are fundamental to the construction industry, yet confront unique challenges in creating business opportunities and career pathways in both the private and public sectors. This seminar features presentations and discussion with industry leaders, who will share their experiences and guidance for achieving individual and organizational goals within the many construction disciplines, and provides the opportunity for direct networking with the speakers and guests.

Topics and Presenters

Women in the Built Industry – Challenges and Opportunities
Allison Raduziner | Pilchuck Business Consulting

Winning Projects: From the Initial Contact to the Interview
Karen Johnston | Johnston Training Group, Inc.

Current Legal Developments in the Construction Industry
Kelly Lennox | Foster Pepper PLLC

Getting It Done: The Process of Delivering Value through Contemplative Action
Darbi Krumpos | Built Works LLC CMS

Legal Issues in the Workplace – Employment Law, Discrimination and Policy Solutions
Katie Carder McCoy | Foster Pepper PLLC

Pathways For Success – Lessons Learned from Industry Leaders
Liz Evans | Associated General Contractors of America

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

Schedule:
9:30 a.m. Registration
10:00 a.m. - 2:45 p.m. Program/Q&A (Lunch provided for in-person attendees)

TO REGISTER TO ATTEND IN PERSON OR VIA WEBINAR, CLICK HERE.

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

Greg Clark — Wed, 06 Mar 2013 10:12:28 -0800

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

Absolutely!

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

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

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

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

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

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

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

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

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

No Time Bars on PW Projects But No Insurance Either?

Greg Clark — Tue, 05 Feb 2013 14:42:10 -0800

Does the Responsible Developer/General Contractor and its subcontractors run the risk of not being insured in construction defect claims on public projects?

Yes, according to a new Washington Supreme Court case. How can that happen?

In can happen because, while no time may run against the King (public owner), time will absolutely run against the contractors when their insurance policies expire.

The new decision "WA State Major League Baseball Stadium Public Facilities District v. Huber, Hunt & Nichols-Kiewit", was actually part of an earlier decision from 2009. The earlier decision was that the statutes of limitation and repose did not bar the (public) owner's suit against the general contractor. The new decision is that the general contractor, provided it had well drafted contracts with pass through provisions, has no time bars between it and the implicated subcontractors.

So if a public owner sues a general contractor beyond the applicable statutes of limitation and repose, the general can in turn join subcontractors. That seems to be fair. Most claims made this far out will be completed operations claims for allegedly defective construction and resultant property damage. The general contractor and its subcontractors will all have incurred tens or hundreds of thousands of dollars in premiums to purchase commercial general liability insurance for the loss at issue. This insurance asset was purchased so the collective contractors would not have to pay these types of claims out of their own coffers.

This new decision is problematic in several ways. First, the owner's claim was more than 10 years from substantial completion. So if this was a private project the owner's claim would have likely been time barred. But the court ruled that based on ancient European laws involving doctrines like sovereign immunity, where "no time runs against the King" (along with "the King can do no wrong"). For public policy considerations, this "no time runs against the King" doctrine may be in the best interest of the tax payers. One also hopes that contractors who work on these public projects will now incorporate the cost of that future risk into their bids, knowing they could be sued more than 10 years after completion.

The second problem is that if the public owner does make a claim 10 years later, the general has to expect that many of its subcontractors would be defunct (bankrupt, victims of the recession, etc.). Tendering claims to defunct subcontractors may not get the general contractor any benefit, like money or services such as repairs of the defective construction. Well, if nothing else, the general contractor can at least rely on the benefits of their own insurance and their subcontractors' insurance, right?

Maybe not, and this is the third problem. Even if the public owner's contractor is viable, and or the key subcontractors are also viable, there is another cold hard fact: after 10 years there may be no insurance money available for anyone because those policies EXPIRED! If the claim is large and there is no insurance, even a general contractor may become insolvent, and that does not help tax payers.

Many insurance policies contain expiration dates. Here's they key language from one CCIP (commercial contractors insurance policy) that insures a national commercial general contractor doing public works projects here in Seattle:

Products-Completed Operations Hazard includes all bodily Injury and Property Damage occurring or discovered away from premises you own or rent within 10 years or the time period required by the contract, whichever is less.

Another popular OCIP insurer's policy contains this language:

The expiration of this policy period for the "products-completed operation hazard" is determined by applicable law or statute to a maximum extended policy period of ten (10) years.

So imagine you are the responsible contractor, you spend money on the best insurance you can buy, insure all of your subs, and a public owner sues you 11 years after substantial completion. You tender to your insurer, but your insurer does not have to pay a dime, because your policy expired!

For future public projects in Washington, the responsible general contractor would want to purchase policies without expiration dates. If the insurance market does not sell such a product, perhaps public contractors should take this issue up with the Legislature and the Office of the Insurance Commissioner. It seems wholly inequitable for the courts to rule that are no statutory time bars to public owners' claims against their contractors, but then allow the insurance industry to sell policies with time bars for any claims made after 10 years. Especially so when these contractors purchased those policies as the primary asset to protect them from the risks of those future claims.

Who Knows What Evil Lurks Beneath...The Site?

Greg Clark — Mon, 17 Dec 2012 14:49:22 -0800

Does the Responsible Developer in her contracts delegate responsibility for the cost of removing unsuitable soils, boulders, junk, debris and unknown water sources and a host of other things that could be lurking under the site, that could impact project cost?

Of course, it can happen on any project, especially in the Puget Sound area.

There are almost no local tunnel, bridge, highway, or other infrastructure projects where the contract does not specifically address the risk of what are called "differing site conditions." A "differing site condition" is called that because it is a physical condition, that differs in type or amount, from what was expressly found or expected to exist under the site.

The risk allocation for differing site conditions is typically set forth in the RFP and prime contract and based on site borings, engineering, geotechnical and other investigative reports. The information about what is known is shared with bidders and the costs of dealing with certain conditions are addressed as a set cost per unit, to be billed to a contingency or allowance fund that typically will have a cap. If or when the contractor encounters these conditions he can make a claim against the allowance of contingency. If, however, the prime contract also limits the contractors' ability to tap other sources once these funds are exhausted, the contractor may be barred from further recovery.

Here are some samples of what bidders can expect to see in the RFP.

Bidder Declarations

The Bidder declares that he/she has carefully examined the Contract Documents for the construction of the project, has personally inspected the site, is satisfied as to the quantities involved, including materials and equipment, and the conditions of work involved, including the fact that the description of the quantities of work and materials, as included herein, is brief and is intended only to indicate the general nature of the work and to identify the said quantities with the detailed requirements of the Contract Documents, and that this Proposal is made according to the provisions and under the terms of the Contract Documents, which Documents are hereby made a part of this Proposal.

Each Bidder must be aware of the conditions relating to the execution of the work, inspect the site and become thoroughly familiar with all the Contact Documents. Failure to do so will not relieve the successful Bidder of the obligation to enter into a Contract and complete the contemplated work in strict accordance with the Contract Documents. It shall be the Bidder’s obligation to verify all information concerning site and subsurface conditions.

Prior to bid opening, the Owner will make available to prospective Bidders any available information concerning subsurface conditions and surface topography at the worksite. Investigations conducted by the Engineer of subsurface conditions were made for the purpose of study and design, and neither the Owner nor the Engineer assumes any responsibility whatever in respect to the sufficiency or accuracy of borings, or of the logs of test borings, or of other investigations that have been made, or of the interpretations made thereof, and there is no warranty or guarantee, either expressed or implied, that the conditions indicated by such investigations are representative of those existing throughout such area, or any part thereof, or that unforeseen developments may not occur.

Logs of test borings, geotechnical reports, or topographic maps showing a record of the data obtained by the Engineer’s investigations of surface and subsurface conditions that are made available shall not be considered a part of the Contract Documents, said logs representing only the opinion of the Engineer as to the character of the materials encountered and are available only for the convenience of the Bidders.

After the bidder is awarded the work, the Responsible Developer mitigates against differing site conditions claims by incorporating terms into the contract that are called "Site Condition Warranties." These warranties are common in public projects. Here are some examples.

Site Condition Warranties

Contractor agrees, represents, and warrants, that it has examined and thoroughly familiarized itself with all existing conditions affecting the Work, including:

1. All laws, rules, and regulations applicable to, or affecting the Work;

2. All conditions impacting transportation, disposal, handling, and/or storage of materials, equipment and/or supplies,

3. The character of materials, equipment and/or supplies and facilities necessary in the scheduling and execution of the Work and providing facilities to maintain Owner's operations; and

4. All site conditions that would impact Contractor's ability to successfully complete the Work on budget, on time, and within the required parameters set forth in this Contract.

This provision attempts to secure against the unanticipated site conditions that might impact the project. The provision requires the contractor perform a minimal examination of the site to ensure that the site is adequate for the various activities at the site, including the site use, the delivery and storage of materials on site, the ability for multiple trades to work on the site, and the general suitability of the site of the purpose of the project.

Unless substantial site investigation, such as core drilling analysis, occurs, subsurface conditions are often an unknown for the contracting parties. The presence of different soil types, large rock formations or aquifers can dramatically increase the costs of construction as well as the cost associated with construction. The contract should address the subsurface conditions in order to minimize the risk that these conditions will impact the project.

Subsurface and Site Conditions Disclosed

Contractor has examined all available records and documents and has made a field examination of the site and has informed itself regarding surface and subsurface conditions, and surface and subsurface water conditions. All records or documents Owner possesses have been disclosed to Contractor. These records and documents were made with reasonable care and accuracy. Owner does not warrant or guarantee as to the accuracy of these records or documents or any interpretation or conclusions that may be drawn from such records or documents. Contractor acknowledges this and agrees it has formed its own opinion regarding surface and subsurface conditions and surface and subsurface water conditions. These records and documents are incorporated by reference to this Contract.

Impact of Differing Subsurface and Surface Conditions.

Should Contractor discover surface or subsurface conditions materially different from those anticipated by Owner and Contractor, and the differing surface or subsurface conditions prevent the successful completion of the Work under the terms of the Contract, Contractor shall notify shall notify Owner within 24 hours of discovery. The failure to notify Owner shall make the Contractor liable for any and all damages, including cost overruns, arising from such failures to act.

Use of Information

Information derived from inspection of logs of test borings, or pits, geotechnical reports, topographic maps, or from drawings showing location of utilities and structures will not in any way relieve the Contractor from any risk or from properly examining the site and making additional investigations, or from properly fulfilling all the terms of the contract documents.

Site Investigation and Representation

The Contractor acknowledges that he has satisfied himself as to the nature and location of the work, the general and local conditions, particularly those bearing upon availability of transportation, disposal, handling, and storage of materials, availability of labor, water, electric power, roads, and uncertainties of weather, stream or river stages, or similar physical conditions at the site, the conformation and conditions of the ground, the character of equipment and facilities needed preliminary to and during the prosecution of the work, and all other matters which can in any way affect the work or the cost thereof under this Contract.

Potential Legal Bar to Compensation

If the Contractor does find differing site conditions that are arguably compensable but beyond what the contract funds provided, there is another risk. If the Contractor's "notice of claim" is untimely and/or not in compliance with other contract provisions, the claim may be barred because Washington Courts have ruled that claim notice provisions must be strictly construed, even if the Owner was not prejudiced.

Currently there are several ongoing and future projects in the Pacific Northwest where differing site conditions are likely to arise, examples include the 520 Bridge, the Alaskan Way Viaduct and Bored Tunnel, the Sound Transit light rail expansion and the Columbia River Crossing. Given the history of our area, who knows what lurks beneath these sites.

Regardless, in the event a claim manifests itself, the Responsible Developer and Contractor need to know how to efficiently interpret what the contract will allow or bar. Doing so will reduce the cost of the claim and mitigate the cost of ADR or litigation. So if you are contemplating involvement in a major excavation, expect differing site conditions and just plan accordingly, which means plan for the worst. It's the responsible thing to do.

Insurance Claims In An Improving Housing Market

Greg Clark — Wed, 07 Nov 2012 10:10:28 -0800

Does the Responsible Developer faced with an insured claim use counsel to maximize insurance proceeds?

Absolutely. Construction has changed so have the insurance policy exclusions. If the Developer wants the full benefit of the premiums paid, she will likely need counsel. But why is this insurance issue timely?

Here’s why.

The elections are over and recent real estate reports are great, showing improving markets for homes, apartments and even condos.

The National Association of Home Builders has reported that the number of U.S. housing markets showing consistent improvement rose from 22, by November 2012, to a total of 125, marking a third consecutive monthly gain. This new high point provides the latest evidence that housing has turned a corner due to rising demand from consumers who are increasingly confident about the direction of local home values.

The Puget Sound Business Journal reports that apartment buildings are trading hands for sky-high prices in Seattle. The cost of developable land also is way up. A key driver behind the prices are record high rents, but what will happen when those thousands of units now under construction open? With most of those units being downtown there may be an apartment glut.

Some savvy developers are hedging their bets by permitting their multifamily projects as apartments or condos, depending on the highest projected value. The cost of liability insurance for an apartment project is a fraction of the cost for a condo project and developers are having to pay the higher insurance premiums, just in case the best decision is to sell the units as condos.

Insurance is a common denominator to all these projects, and is an asset you buy, hoping to never use. Why? Because many insurance companies are loathe to pay and will file lawsuits to deny or limit payment. This adversarial relationship between insurer and insured goes back to the Republic of Genoa in the 15th Century. Insurers were easily found when it was time to accept policy premiums but scarce when it was time to pay for losses.

That relationship has not changed, but construction has.

Due to radical improvements in design, construction methods and materials, fewer projects experience the catastrophic rot and collapse type property damage of the prior decades. But that creates a huge dilemma, if there are defects in the work but only limited property damage; the insurer may have little or no obligation to pay, leaving the policyholder to fund an expensive repair at its own cost. Fortunately there are law firms that specialize in policy holder insurance coverage and know how to trigger insurance for property damage and other insured claims.

Foster Pepper is one of those firms that has thrived in recession by successfully employing pre-litigation claim strategies and when needed, litigation, trials and appeals, to force insurers to pay. We have recovered hundreds of millions of dollars for our public and private real estate, owner and construction clients in construction and design defect, collapse and other property damage claims. Our Insurance and Construction Practice Groups work in tandem with expert appraisers, engineers, architects and cost estimators, to investigate property damage due to construction or design defects and analyze your claim in order to maximize the coverage in your insurance policies.

If your insurer denies your claim, or the sum you are offered is a fraction of the actual repair cost, please give us a call. We recently represented a regional real estate developer for property damage to a local large multifamily project. Our client was able to collect policy limits of $10,000,000.00.

Prevailing Wages and Worker Classification Problems

Greg Clark — Tue, 18 Sep 2012 08:54:32 -0800

Does the Responsible Public Developer conduct investigations to determine whether workers are accurately classified and fully paid?

Yes, but the process is costly to everyone involved: the owner, contractor, the subcontractors and laborers. Here's why.

Prevailing wage law, both Federal (the Davis-Bacon Act, 40 U.S.C. 276a) and State (RCW 39.12) provide that prevailing wages will be paid to workers under rates established by job location (county) and by worker trade classification (carpenter, painter, laborer, etc.). In Washington State the rates are published and updated by the Department of Labor and Industries. The owner and DOL also conduct audits to determine whether workers who are laborers are also performing work that falls under the definition of another higher paid classification. This is called classification jumping and it can be intentional or accidental. Fines accompany intentional classification jumping, and in the worst case, a contractor who repeatedly and/or falsely underpays workers can be barred from public works (debarment).

When a public owner has reason to think classification jumping may have occurred, it will examine payment application and time cards, and conduct worker interviews to determine what specific tasks they performed on a given day, and the total hours worked on each day for each task. The owner will then compare the results to the actual payment records for those workers. A violation may be found where a laborer doing site clean up also spent time assisting other skilled workers but was not paid the higher of the two classification rates.

To get to this point, the owner will have incurred the costs of the persons conducting the audit, the cost of interpreters, the cost of conferring with legal counsel and possible delay depending on the stage of the project.

The general contractor will have incurred the costs of withheld retainage to cover any additional payment due to workers, time spent participating in the audit and the cost of their own counsel. The costs of an owner broadly reclassifying significant laborer hours to carpenter hours on a large project can be devastating to the general and their subcontractor.

The subcontractor may have the most exposure, especially where it owes broad indemnity obligations to the general contractor. If the process is contested, then the DOL will make a final determination. The general contractor may also pass through to its subcontractor the costs to litigate, seek reconsideration or review.

Then there is the cost to the workers, even if they end up being paid at a higher wage. What they incur is the time away from work being interviewed by the owner, DOL and being called to testify about any lost wages. They also risk that their employer may not be in a position to hire them on other projects.

To avoid the entire audit process and the potentially huge costs, best efforts should be made by construction professionals to keep excellent records, perform self audits to ensure all workers are accurately classified and worked only the appropriate hours, were fully paid and were not allowed to perform work that places them in higher wage classifications. Do this, and owners and the DOL should have little reason to investigate.

What you need to know about the Security in Bonding Act of 2012

Greg Clark — Tue, 31 Jul 2012 10:00:32 -0800

Does the Responsible Developer need to keep informed about bonds requirements on Federal government projects?

Absolutely. Here is a timely legislative update in the form of a guest blog from Sara Aisenberg of Surety Bond Insider:

On December 1, 2011, HR 3534 was introduced. The U.S. House of Representatives passed this bill — also known as the Security in Bonding Act of 2012 — on May 15, 2012. Originally, the Senate Homeland Security and Government Affairs Committee planned to discuss the bill in late June. However, there's only one week left until the month-long Senate recess, and industry insiders are concerned that the bill has not yet been addressed.

The legal lingo

So, what is the Security in Bonding Act of 2012? HR 3534 amends chapter 93 of existing surety bond requirements stated in the United States Code by adding the following statutes.

"Sec. 2. Surety Bond Requirements. If another applicable law or regulation permits the acceptance of a bond from a surety that is not subject to sections 9305 and 9306 and is based on a pledge of assets by the surety, the assets pledged by such surety shall—
(1) consist of eligible obligations under section 9303(a); and

(2) be submitted to the official of the Government required to approve or accept the bond, who shall deposit the assets with a depository described under section 9303(b).; and

(3) in the table of contents for such chapter, by adding at the end of the following:

‘9310. Individual sureties.’”
"Sec. 3. Gao Study. (a) Study- The Comptroller General of the United States shall carry out a study on the following:
(1) All instances during the 10-year period prior to the date of the enactment of this Act in which a surety bond proposed or issued by a surety in connection with a Federal project was—

(A) rejected by a Federal contracting officer; or

(B) accepted by a Federal contracting office, but was later found to have been backed by insufficient collateral or to be otherwise deficient or with respect to which the surety did not perform.

(2) The consequences to the Federal Government, subcontractors, and suppliers of the instances described under paragraph (1).

(3) The percentages of all Federal contracts that were awarded to small disadvantaged businesses (as defined under section 124.1002 (b) of title 13, Code of Federal Regulations) as prime business enterprises (as defined under section 26.5 of title 49, Code of Federal Regulation) as prime contractors in the 2-year period prior to and the 2-year period following the date of enactment of this Act, and an assessment of the impact of this Act and the amendments made by this Act upon such percentages.

(b) Report- Not later than the end of the 30 year period beginning on the date of the enactment of this Act, the Comptroller General shall issue a report to the Committee on the Judiciary of the House of Representatives and the Committee on Homeland Security and Government Affairs of the Senate containing all findings and determinations made in carrying out the study required under subsection (a).”

What it means

Unless you went to law school and use your legal knowledge on a daily basis, legal lingo can be difficult to decode. If you work in the construction industry, however, you need to know what’s stated in HR 3534. If passed, the bill would:

ensure that the payment protections for small businesses serving as subcontractors and suppliers on federal projects are preserved
ensure that assets pledged to back individual surety bonds on federal construction projects are only those that are stable and secure (such as U.S. Treasury bonds and notes) and are placed in the care and custody of the federal government so they may be liquidated quickly and easily to pay all valid bond claims
eliminate instances where individual surety bonds are pledged with insufficient or illusory assets, harming the federal government and the many small businesses that furnish goods and services on federal construction contracts
ease the current administrative burden placed on federal contracting officers in determining whether various assets posted on federal construction projects comply with federal regulations and are sufficient to protect the contracting agency and subcontractors and suppliers

If you’re a construction industry professional, you should know that these legislative revisions provide extra protection, especially for suppliers, taxpayers, subcontractors and other small business owners.

It is the hope of many that the Senate approves HR 3534 before the month-long break commences on August 1. If the bill is not reviewed before this time, the Senate and House plan to address the issue before general elections — which begin on November 6, 2012 — take place.

Sara Aisenberg is the executive writer for the Surety Bond Insider, a blog that reports on the latest news in the surety industry. As part of the educational outreach program for SuretyBonds.com, Sara stays up-to-date on the latest surety legislation changes to help entrepreneurs fulfill business requirements of all kinds.

Time To Dust Off And Inspect Your Indemnity Shield

Greg Clark — Fri, 29 Jun 2012 07:07:51 -0800

An indemnification agreement is a shield that protects you from liability and the cost of litigation. Does the Responsible Developer timely inspect and revise its form contracts due to changes in the law?

Yes, because if your old contract contains provisions that are now unenforceable they are not worth the paper they are written on and will not shield you from liability.

Example. Most of you were aware of a very onerous litigation result, where a design professional that entered into a contract for a small fee, ended up having to pay several hundred thousand dollars to defend another party. The designer paid these costs due to a contract provision that required them to defend and indemnify the other party for that party's own negligence. Well you already know this, bad facts result in new law, and the designers and their lobbyists went to Olympia to seek redress from the legislature and got it. The bill was SHS 1559 and it became effective this month.

Many feel the new statute restores fairness in design and construction contracts. Fairness is good but certainty (or at least clarity) in contractual risk allocation is even better.

Regardless of how you feel about the new statute, what you need to know and do, is how to comply with the new law when drafting contracts with designers and contractors and the provisions related to the duties to defend and indemnify.

You were probably very familiar with the language in the original statute, RCW 4.24.115. It only addressed the duty to indemnify and not the duty to defend (which in some cases the costs incurred under the duty to defend can greater that the cost to indemnify, especially in protracted multi party litigation). The recent amendment to RCW 4.24.115 now voids any provision contained in a construction contract purporting to indemnify, including the duty and cost to defend, another against liability for damages arising out of bodily injury to persons or damage to property:

(a) Caused by or resulting from the sole negligence of the indemnitee and his or her agents or employees, is void as against public policy and unenforceable.

(b) Caused by or resulting from the concurrent negligence of (i) the indemnitee or the indemnitee's agents or employees, and (ii) the indemnitor, or the indemnitor's agents or employees, is valid and enforceable but only to the extent of the indemnitor's negligence, and only if the provision specifically and expressly provides therefor….

So owners, developers, designers and general contractors who contract with sub-consultants, and subcontractors, review and modify your contracts to ensure that your shield is intact and that the duty to defend and indemnify language will comply with, and be enforceable under, the new statute in situations where there could be concurrent negligence between the contracting parties. Note: your revisions must specifically address the duties to defend and indemnify where there is concurrent negligence and state that the duty to defend will not be enforceable to the extent of the indemnitor's sole negligence.

Oh, just in case your shield is dented and tarnished, we can help you inspect and repair it!

Concrete Evidence the Housing Market is Improving

Greg Clark — Tue, 19 Jun 2012 07:31:15 -0800

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

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

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

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

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

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

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

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

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

What Makes It GREEN? 2012 Winners Announced

Kelly Lennox — Thu, 26 Apr 2012 08:15:11 -0800

Six Projects Receive AIA Seattle What Makes It GREEN? Award

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

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

Honorable mentions went to:

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

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

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

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

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

Rebuilding can be more important than building.

Greg Clark — Wed, 04 Apr 2012 11:11:18 -0800

Does the Responsible Developer volunteer to help rebuild communities?

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

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

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

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

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

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

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

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

Hope Springs Eternal

Greg Clark — Tue, 20 Mar 2012 10:42:15 -0800

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

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

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

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

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

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

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

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

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

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

INTERVIEW TRANSCRIPT

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

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

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

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

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

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

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

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

Good Sam Puyallup awarded LEED Gold

Greg Clark — Mon, 20 Feb 2012 13:47:16 -0800

Does the Responsible Developer aspire to LEED for health care facilities?

Local Washington cities and health care providers say, Yes!

The latest addition to Puyallup’s MultiCare Good Samaritan Hospital, the nine-story, $300-million Dally Tower, has received the Green Building Institute’s LEED Gold award.

The hospital tower, which doubled the space at Good Samaritan, is the state’s first hospital structure to win the Gold award for energy and resources conservation, said Tacoma’s MultiCare Health System, the hospital’s parent company.

The gold award was based on the new building’s water and energy saving features and environment-friendly construction methods. The building and parking structure replaced surface parking lots and a public street, and also replaced impervious surfaces with permeable green space. The structures added no new impacts to the stormwater system.

Other sustainable features include:

• Ecoroofs, bioswales and rain gardens that gather stormwater runoff.

• An energy-efficient building form that minimizes east-west exposure; sun shades on the windows to reduce heat gain.

• Renewable, recycled and regionally sourced materials; certified wood, low-VOC interior finishes and linoleum and rubber flooring.

• Reduction of potable water use by 20 percent compared with a normal hospital.

• HVAC system with low-velocity ducting, high-efficiency chillers and mid-building air handlers.

• Air drawn 100 percent from outside the building to help control infections, and a heat-recovery system to conserve energy.

The architect for the project was the Good Sam Design Collaborative which included Clark/Kjos Architects and GBJ Architecture. Skanska USA was the general contractor.

Another area hospital serving southeast King and northeast Pierce counties, Enumclaw’s St. Elizabeth Hospital, last summer was awarded a LEED Silver designation. St. Elizabeth is owned by Tacoma’s Franciscan Health System.

So to sum up the attributes of Green hospitals, its good for the environment, it saves energy and reduces costs, it's also gorgeous, and, it's undeniably healthy (see new USGBCCleanMed protocol).

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!