Green Building Litigation Update

Posted on August 18, 2010 by greenbuildingsubcommittee

Gidumal v. Site 16/17 Development LLC, et al., N.Y. County Index No. 105958/10 (New York County Supreme Court, May 5, 2010), is the first reported case against a developer of a green building alleging the developer failed to deliver a project as represented during pre-construction.

On May 5, 2010, unit owners of the 31-story, 264-unit Riverhouse condominium located in Battery Park City, filed a $1.5 million lawsuit against the project’s developer, Sheldrake Organization, and the building’s manager, Centurion Real Estate Partners, for breach of contract under the condominium offering plan and fraud based upon alleged misrepresentations in the offering plan about the building and its units.

Riverhouse was marketed as being at the cutting edge of green technology and advertised as a LEED Gold-rated building, which is supposed to feature fresh filtered air, filtered water, eco-friendly materials and low energy consumption.  The green features the developer allegedly promoted include a geothermal heating and cooling system, photovoltaic cells, low-E double-pane windows, a green roof, Energy Star appliances, recycled-content and locally-sourced building materials, a $1 million wastewater treatment plant, and a 60kW microturbine installation.

The complaint alleges that owners consistently experienced cold drafts and insufficient heat in their units and that the air temperature for heating the units was too low, which the plaintiffs claim are signs that the building is not maximizing energy efficiency.  The complaint further asserts that the pipes are not insulated, the heating unit covers are not sealed, and the air filters are clogged.

It will be interesting to follow this case and see if it paves the way for more green lawsuits based upon contract and fraud theories arising from a developer’s offering plan or pre-sale/pre-construction representations to purchasers.

Submitted by Jeffrey S. Wertman of Berger Singerman (JWertman@bergersingerman.com).

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Green Building Health and Productivity Benefits for Employees: First Steps Toward Scientific Evidence

Posted on August 16, 2010 by greenbuildingsubcommittee

A Michigan State University (MSU) study has taken a preliminary step toward providing scientific evidence on the health and productivity benefits of green construction and operations. Part of the allure of  green buildings is the promise of higher returns due to better employee productivity and health and less absenteeism. Green commercial developments potentially create a win-win situation for investors, landlords, and tenants. Historically, these particular goals have been difficult to measure and verify.  The MSU study, published in the online version of the American Journal of Public Health, documents two case studies of occupants who moved to LEED certified office buildings from conventional office buildings.  According to the study abstract and press release, participants self-reported reductions in both absenteeism and work hours adversely affected by respiratory conditions such as asthma and allergies, as well as reductions in stress and depression. They also self-reported increases in productivity.  Although this study design does not provide evidence of direct causation, the correlation between the LEED-mandated higher standards in Indoor Environmental Quality and better employee health and productivity is consistent with such a theory, and provides a solid beginning for further research.

Submitted  by Peyton White Lumpkin, Esq., LEED AP

The Lumpkin Law Firm P.A.

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Florida Opportunity Fund Seeks Applications for Clean Energy Investment Program

Posted on August 16, 2010 by greenbuildingsubcommittee
 
The Clean Energy Investment Program, launched by the Florida Opportunity Fund with an initial $36 million in funding, is now accepting applications for investment opportunities that advance the adoption of renewable energy and energy-efficiency technology across the State.
 
 The Clean Energy Investment Program will provide qualifying Florida businesses with investments in three primary areas of focus:
  •   Facility and equipment improvement with energy-efficient and renewable energy (EE/RE) products. Examples of potential opportunities would include a manufacturing or assembly business upgrading or expanding operations with energy-efficient equipment, a data center converting to energy efficient servers or cooling units, or a business seeking to retrofit or upgrade its facilities with energy efficient or renewable energy products and materials.
  •  Acquisition or demonstration of renewable energy products. For example, the program would evaluate a business looking to acquire or upgrade a solar or other renewable energy generation system or a technology provider seeking to demonstrate its commercially available renewable energy or energy efficient products for the first time in Florida. 
  • Process improvement of existing production, manufacturing, assembly or distribution of operations to increase energy efficiency or reduce consumption. This could include a warehousing, distribution or storage business implementing activities to conserve energy or streamline operations, an industrial materials company upgrading its water usage and treatment processes to conserve energy and improve the efficiency of existing operations, or an agricultural inputs provider improving excavation or handling processes to increase the energy efficiency of its operations.

“The program is a first of its kind for Florida. Beyond the goal of transforming the State’s energy profile, this is also designed to be a catalyst for jobs,’’ said Jennifer Dunham of Florida First Partners, manager of the Florida Opportunity Fund. “We expect to see job growth from businesses that integrate or produce energy efficient or renewable energy products and technologies. We also anticipate that companies will be able to expand their operations and become more competitive as a direct result of the achieved cost savings and other efficiencies.”

In evaluating opportunities that apply for the first series of clean energy investments, the Florida Opportunity Fund will consider businesses that have existing operations in Florida, companies with a significant presence in the State or businesses that are establishing Florida operations using EE/RE products, techniques and technology. Applicants that show significant reduction in energy consumption or are seeking to implement or demonstrate commercially available energy-efficient or renewable energy products and technologies represent the targeted audience of this program.

The clean energy program is managed by the Florida Opportunity Fund, one of the primary State-sponsored efforts designed to generate economic growth and long-term funding for an array of strategic programs. The Clean Energy Investment Program received funding this Spring from the Florida Energy and Climate Commission.

“This is a timely program for Florida businesses to access capital for reducing energy consumption, and to stimulate the adoption of clean energy solutions,” said Jim Murley, Chairman of the Commission. The State also hopes to see private investment increase to provide a capital infusion to this emerging industry in Florida. 

Applications for the program are now being accepted. Interested participants should visit the program’s Web site at http://www.floridaopportunityfund.com to access the application and additional program details.

 

For more information, visit the program’s Web site – www.floridaopportunityfund.com.
 
Submitted by The Florida Opportunity Fund.

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