EPA

New Law to Allow Tenants to Showcase Their Energy Efficiency Efforts

Posted on by abrahamwien18

By Robert Carr, National Real Estate Investor, 5/15/2015

{ View the original article here. }

lightbulb
Office tenants who became believers in energy conservation in the heyday of the building sustainability movement about two decades ago only to watch building owners take all the credit have cheered a recent new law that will support, track and promote their efforts at being green.

President Barack Obama signed the Energy Efficiency Improvement Act of 2015 on April 30. The bipartisan-sponsored law promises to align the interests of building owners and tenants with regard to investments in cost-effective energy efficiency and water conservation measures, create studies that will examine successful sustainable practices, enact data-tracking systems and provide ways to promote voluntary tenant compliance.

The law, also known as the “Tenant Star” act, includes a new federally-sponsored green building designation that’s similar to the U.S. Environmental Protection Agency’s (EPA) popular Energy Star system. Energy Star, enacted in 1992, provides an energy-efficient rating system for building products, residential homes and commercial buildings. In a recent report, the EPA said the Energy Star system reduced utility bills for residents and businesses by $34 billion in 2014.

However, tenants, the backbone of energy use in commercial buildings, have neither had a consistent national program to measure efficient energy use, nor a way to tout their specific efforts. Allison Porter, vice president of sustainability services for commercial real estate services firm DTZ, says tenants will now have the same kind of opportunities as Energy Star provides for owners to turn data into a basis for action. The new law will allow space occupiers to take responsibility for their usage and receive recognition for conservation efforts, she says.

“Although whole-building measures like Energy Star are a valuable tool, it’s also crucial to acknowledge that tenants’ use of a space has a huge impact on how a building performs,” Porter says. “By encouraging tenants to design and build energy-efficient spaces, Tenant Star will help align the interests of tenant and landlord. I expect that this alignment will clear a path for a new wave of investment in energy-efficient office space, especially coming at a time when the cost of efficient technologies commonly used in office interiors, such as LED lighting and occupancy sensors, has decreased significantly.”

Porter is joined by many other tenant sustainability supporters in her praise of the new law. Anthony Malkin, chairman, president and CEO of New York City-based Empire State Realty Trust Inc., said in a statement that the new law will align office tenants with their landlords to make smart, cost-effective investments in energy-efficient leased spaces. “Broad adoption will save businesses billions of dollars on energy costs in the coming years,” he said.

Jeffrey DeBoer, president and CEO of the Washington, D.C.-based Real Estate Roundtable, which brings together commercial property owners, developers and managers to address national policy issues, called the legislation “a triple win that will spur the economy by creating jobs, enhancing energy security and preserving our environment by cutting greenhouse gases.”

Implementation

The General Services Administration (GSA), responsible for all federal government leasing in the country, will take responsibility for the first section of the law, also known as the Better Buildings Act of 2015. According to the act, the GSA will create model commercial leasing provisions for energy efficiency by Oct. 31, and may begin enacting these provisions in federal leases. The GSA will also publish these provisions and share them with state, county and municipal governments.

The Secretary of Energy is responsible, under this law, to create a study within one year on the feasibility of significantly improving energy efficiency in commercial buildings through design and construction, by owners and tenants, of spaces that will use energy efficient measures. The study will include, among other requirements, such metrics as return on investment and payback analyses, comparisons of spaces that use these measures and those that don’t, impact on employment and actual case studies and data on the spaces where these measures are implemented. The department will start seeking input on this study after Aug. 1.

In addition, to allow tenants to start touting their green policies, the EPA will create the Tenant Star designation as an offshoot of Energy Star. Not only will tenant data be added into the 23-year-old collection program already in place, the new designation will recognize tenants in commercial buildings who voluntarily achieve high levels of energy efficiency in their leased spaces. The EPA will also create a voluntary program to recognize owners and tenants that use energy efficiency in designing and creating new and retrofit space.

Al Skodowski, director of sustainability with commercial real estate services firm Transwestern, says this new law will help those companies that have been fully engaged in driving green practices for many years.

“The birth of Tenant Star, as another tool to help our tenants understand their use, reduce energy consumption and to save money, is a very exciting opportunity that will help us continue to improve efficiency in the industry,” he says.

Top 25 Cities with Most ENERGY STAR Buildings

Posted on by abrahamwien18

April 10, 2014
View the original article here

The EPA announced the sixth annual list of the top 25 U.S. metropolitan areas with the most ENERGY STAR certified buildings. The cities on this list demonstrate the economic and environmental benefits achieved by facility owners and managers when they apply a proven approach to energy efficiency to their buildings.

The Top 10 cities on the list are: Los Angeles; Washington, D.C.; Atlanta; New York; San Francisco; Chicago; Dallas; Denver; Philadelphia; and Houston.

“Not only are the ENERGY STAR’s top 25 cities saving money on energy costs and increasing energy efficiency, but they are promoting public health by decreasing greenhouse gas emissions from commercial buildings,” said Administrator Gina McCarthy. “Every city has an important role to play in reducing emissions and carbon pollution, and increasing energy efficiency to combat the impacts of our changing climate.”

Energy use in commercial buildings accounts for 17 percent of U.S. greenhouse gas emissions at a cost of more than $100 billion per year. ENERGY SSTAR-certified office buildings cost $0.50 less per square foot to operate than average office buildings, and use nearly two times less energy per square foot than average office buildings.

The data also show that more than 23,000 buildings across America earned this certification by the end of 2013. These buildings saved more than $3.1 billion on utility bills and prevented greenhouse gas emissions equal to the annual electricity use from 2.2 million homes.

First released in 2008, the list of cities with the most ENERGY STAR-certified buildings continues to demonstrate how cities across America are embracing energy efficiency as a simple and effective way to save money and prevent pollution. Los Angeles has remained the top city since 2008 while Washington, D.C. continues to hold onto second place for the fifth consecutive year. Atlanta moved up from the number five to number three. For the first time, Philadelphia entered the top 10, ranking ninth.

Commercial buildings that earn EPA’s ENERGY STAR must perform in the top 25 percent of similar buildings nationwide and must be independently verified by a licensed professional engineer or a registered architect. These certified buildings use an average of 35 percent less energy and are responsible for 35 percent less carbon dioxide emissions than typical buildings. Many types of commercial buildings can earn the title, including office buildings, K-12 schools, hotels and retail stores.

Products, homes and buildings that earn the label prevent greenhouse gas emissions by meeting strict energy efficiency requirements set by the U.S. EPA. In 2013 alone, Americans saved an estimated $30 billion on their utility bills and prevented greenhouse gas emissions equal to the annual electricity use of more than 38 million homes with the help of ENERGY STAR. The label can now be found on products in more than 70 different categories, with more than 4.5 billion sold. More than 1.5 million new homes and 23,000 commercial buildings and industrial plants have earned the label.

The 2014 Energy Star Top Cities are:
1. Los Angeles
2. Washington, DC
3. Atlanta
4. New York
5. San Francisco
6. Chicago
7. Dallas-Fort Worth
8. Denver
9. Philadelphia
10. Houston
11. Charlotte
12. Phoenix
13. Boston
14. Seattle
15. San Diego
16. Minneapolis-St. Paul
17. Sacramento
18. Miami
19. Cincinnati
20. San Jose
21. Columbus, Ohio
22. Riverside, Calif.
23. Detroit
24. Portland, Ore.
25. Louisville

More on the 2013 top cities: www.energystar.gov/topcities

More on Energy Star certified buildings: www.energystar.gov/buildinglist

New Phase I Environmental Assessment Standard Just the Starting Point for Managing the Purchase of Contaminated Property

Posted on by abrahamwien18

February 25, 2014
Peter R. Duchesneau
Partner, Manatt, Phelps & Phillips, LLP
View the original article here

On December 30, 2013, the U.S. Environmental Protection Agency (“EPA”) adopted ASTM E1527-13, an updated Phase I environmental assessment standard for performing all appropriate inquiries to establish landowner liability protections under the U.S. Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”). This new Phase I protocol clarifies the previous standard for all appropriate inquiries, which is an important first step, but not the only one for establishing landowner liability protections. With the adoption of ASTM E1527-13, buyers of potentially contaminated property should take the opportunity to revisit the other requirements and scope of landowner liability protections. By doing so, prospective purchasers will not only better their chances of effectively establishing such protections, but can also better manage risks that may fall beyond them.

CERCLA Landowner Liability Protections
Under CERCLA, existing property owners are strictly liable for the cleanup of contamination of their property, including new owners who acquire the property years after the contamination occurred. To promote the development of contaminated property, on January 11, 2002, President Bush signed the Small Business Liability Relief and Brownfields Revitalization Act, Public Law 107–118 (‘‘the Brownfields Amendments’’), which amended and clarified CERCLA by establishing three forms of landowner liability protections for new owners of contaminated property: the bona fide prospective purchaser (“BFPP”), the contiguous property owner, and the innocent landowner.

To qualify for these CERCLA landowner liability protections, the Brownfields Amendments provide that parties purchasing potentially contaminated property must comply with a number of requirements, including undertaking ‘‘all appropriate inquiries’’ into the ownership and use of the property prior to purchase. On November 1, 2005, the EPA promulgated regulations that set standards and practices for all appropriate inquiries and authorized the use of ASTM E1527-05 to comply with the rule.

ASTM E1527-13 Phase I Standard
In November 2013, ASTM International published ASTM E1527-13, “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process,” replacing ASTM E1527-05. In many respects, ASTM E1527-13 is the same as its predecessor. However, the new standard contains some important revisions, including a clarification that all appropriate inquires must include an assessment of vapor migration and vapor releases on, at, in or to the subject property. Other revisions to the standard include updated definitions of “Recognized Environmental Conditions” (“REC”), “Historical Recognized Environmental Conditions,” and “de minimis conditions,” as well as the addition of a new form of REC, “Controlled Recognized Environmental Conditions.” ASTM E1527-13 also contains additional requirements pertaining to regulatory agency file and records review and clarification of the “User” obligations.

A New Property Owner’s Post-Acquisition Obligations
For the most part, the requirements to establish the three protections are similar, including the necessity of performing all appropriate inquiries prior to purchasing property. While many prospective purchasers diligently attempt to perform all appropriate inquiries, the other requirements can be overlooked, as can the limitations of CERCLA landowner liability protections.

Perhaps of most concern are real property transactions where contamination or other recognized environmental conditions are identified in the course of performing all appropriate inquiries. Despite such knowledge, as a BFPP, the new owner can largely be exempt from CERCLA liability for preexisting contamination. Yet the requirement to establish the BFPP defense does not end with performing all appropriate inquires under ASTM E1527-13 prior to purchase. Buyers also have important obligations after the acquisition of property.

Parties seeking the benefit of the BFPP protections must establish, by a preponderance of evidence, each of the “painstakingly detailed statutory elements,” as one court put it in the course of rejecting a bid to secure the BFPP protections. See U.S. v. Slay, 2013 U.S. Dist. LEXIS 46204, n. 6 (2013). In all, there are eight statutory elements, including that a new property owner must provide all legally required notices with respect to the discovery or release of hazardous substances at the property; exercise appropriate care with respect to the hazardous substances found at the facility by taking reasonable steps to stop any continuing release, prevent threatened future releases and preventing or limiting exposure to previous releases; and provide full cooperation, assistance and access for response actions.

A number of courts have recently declined or otherwise expressed doubt as to BFPP claims due to the claimants’ failures to demonstrate they met their post-acquisition obligations. For instance, in Saline River Properties, LLC v. Johnson Controls, Inc., 823 F. Supp. 2d 670, 686 (E.D. Mich. 2011), the court held that the defendant had failed to demonstrate that it had not impeded performance of a response action when it broke up a concrete slab alleged to have caused hazardous substances beneath the barrier to migrate into additional soils and groundwater. In Voggenthaler v. Maryland Square, 724 F.3d 1050, 1062-1063 (9th Cir. 2013), although the Court of Appeals remanded the issue to the trial court, it expressed skepticism that the party would be able to establish a BFPP defense and show it prevented further harm and limited exposure to preexisting contamination after it demolished a building and took no steps to remove the contaminated soil or limit its spread. Similarly, in PCS Nitrogen v. Ashley II of Charleston, 714 F.3d 161, 180-181 (4th Cir. 2013), the court found that a party’s delay in filling in sumps and not stopping runoff amounted to failure to exercise appropriate care, thwarting its BFPP defense.

Environmental Risks Outside CERCLA Landowner Liability Protections
Even where a party can establish CERCLA landowner liability protections, the scope of such protections warrants careful consideration for buyers of contaminated property. There are a number of environmental risks that fall outside the purview of the CERCLA landowner liability protections. For instance, the protections do not extend to releases of fuel from underground storage tanks, given CERCLA’s petroleum exclusion. Nor do the protections necessarily apply to state cleanup claims or toxic tort actions, with laws varying by state. For example, under the California Land Reuse and Revitalization Act of 2004, an agreement with a state environmental agency must be entered into before the land owner liability protections will attach. Buyers must also be astute of contractual provisions for property acquisitions that may stymy the protections.

Despite the potential limitations of the CERCLA landowner liability protections, ASTM E1527-13 establishes a valuable starting point for buyers to assess potential environmental risks of real property and achieve CERCLA landowner liability protections. However, prospective purchasers need to remember that all appropriate inquiries is only the start and just one element for managing environmental risk when acquiring contaminated property. Other means to manage risk may be necessary, and new property owners should take care not to neglect post-acquisition obligations to achieve landowner liability protections.

Peter R. Duchesneau is a partner in the Los Angeles office of Manatt, Phelps & Phillips, LLP. His practice focuses on environmental law involving litigation, administrative proceedings, regulatory compliance and business transactions. He holds a B.S. degree in Chemical Engineering; is admitted to practice before the U.S. Patent and Trademark Office; and regularly advises clients on corporate and real estate transactions, Brownfields, and environmental due diligence. Mr. Duchesneau can be reached at (310) 312-4209 or [email protected].

This column is part of a series of articles by law firm Manatt, Phelps & Phillips, LLP’s Energy, Environment & Natural Resources practice.