As published in Scotsman Guide's Commercial Edition, March 2010.
Property-developers have grappled with how to approach sustainability ever since the U.S. Green Building Council (USGBC) launched its Leadership in Energy and Environmental Design (LEED) green-building-rating system in 1993. Regardless of how developers have handled certification, the number of state, federal and municipal agencies that require it is increasing.
Private-interest groups and professional associations also are influencing changes to local and national building codes. The Obama administration also has placed a green economy high on its agenda.
Commercial mortgage brokers with land-developer clients must understand how recent changes to the LEED program and to building industries can affect their and their clients' businesses. Now more than ever, developers must deal with sustainability. If it is not with a voluntary program like the USGBC's LEED-rating system, it likely will be through stricter enforcement of building codes or other government mandates.
Recent changes to the system can affect developers' decisions on whether to pursue a LEED rating -- and potentially how lenders view development projects. Here's how.
The USGBC altered its organization and the LEED program significantly in recent years. In 2008, the organization established the Green Building Certification Institute (GBCI) to administer the LEED-certification process, as well as its professional-credentialing program. Then in 2009, the USGBC released the latest version of the LEED-rating system, known as version 3.
This latest update upgraded and standardized existing LEED-rating systems and established a consistent, 100-point base system for all rating tools. It also enhanced its online document-management system. Finally, the council selected and announced new partners that will perform certification reviews, all of which follow an International Organization for Standardization process.
The most significant change affecting developers who want to certify their projects with the USGBC is the establishment of minimum program requirements (MPRs), however. These are a written set of criteria and rules that building-owners must accept, employ and follow if they wish to gain and maintain project certification.
The MPRs set forth certain agreements between the building-owner and the GBCI. One agreement requires a building-owner to provide data on the facility's actual energy and water use in a five-year period. Building-owners have three options for compliance:
They can record the energy- and water-use data and submit the information to the GBCI.
They can grant the GBCI access to their building-management systems and allow it to mine the applicable data.
They can allow their local utility providers to give the information to the GBCI directly.
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