Davenport Green Week Presentation

Emily A. Green & Patrick R. Drueke - Attorneys at Law


What is Sustainable Development?

Development that meets the needs of the present without compromising the ability of future generations to meet their own needs


Sustainable Development Concepts

Brownfield RedevelopmentGreen Building/LEED Certification


Abandoned, idled, or under-used industrial or commercial properties where expansion or redevelopment is complicated by real or perceived environmental contamination.

What are Brownfields?


Why Brownfields?Challenges and Opportunities●Challenges

Real or perceived environmental contamination Demolition costs and issues Economic conditions associated with certain locations

●Opportunities Acts as a catalyst for remediation and health and safety risk

management that may not otherwise be addressed Shifts development focus away from “greenfield” sites

− Protects green and open spaces, reduces sprawl and, in turn commuting distances

− Reduces impact of additional infrastructure on environment and promotes walking and transit use

− Reduces construction material costs by reusing portions of existing structures, where possible, and makes use of existing infrastructure

General accessibility to highways and other high-density services


Brownfield: Multi-Party,Muli-Component Projects

Parties Developer Local Brownfield Redevelopment Authority Michigan Department of Environmental Quality (DEQ) Local Units of Government (LUG) (core communities) Michigan Economic Development Corporation (MBT

Credits) Environmental Consultants Lawyers Local Communities


Brownfield Redevelopment Process

Four Main Components:1) Determine Brownfield status2) Determine whether cleanup is

necessary3) Seek potential funding sources for

cleanup and development4) Cleanup and redevelopment


Is the site a Brownfield?

● Is the site a “facility” as defined under Part 201 of the Natural Resources and Environmental Protection Act; and/or

● Is the site located In a Qualified Local Unit of Government and blighted or functionally obsolete?


Determine Whether Cleanup Is Necessary

Part 201 of the Natural Resources and Environmental Protection Act● Cleanup liability protection for new owners and operators

Baseline Environmental Assessments● Due care obligations

Prevent exacerbation of existing contamination Prevent unsafe exposures to hazardous substances Anticipate and take precautions to avoid foreseeable acts of

third parties● Risk-based cleanup options

Remediation based on proposed land use


Seek Potential Funding Sources for

Cleanup and Development● Brownfield Redevelopment Financing Act

and Clean Michigan Initiative Grants and loans to local units of

government Tax increment financing for

environmental and infrastructure costs● Michigan Business Tax Credits● Federal Brownfield Assessment and Cleanup

Grants


Grants● Brownfield Redevelopment Grants

Eligibility and limitations− Up to $1,000,000 per project− Michigan Department of Environmental Quality (DEQ) awards to

local units of government (LUG) and Brownfield Redevelopment Authorities, not developers

− Applicant cannot be a liable party and funds cannot be used to benefit a liable party

● Brownfield Assessment Grants Through a federal grant, DEQ provides 10 investigations per year at no

charge Purpose of the assessment is to evaluate property for redevelopment

before a party commits to purchase and/or redevelopment Eligibility and limitations

− LUG must submit application− Liable parties are usually ineligible


LoansBrownfield Redevelopment Loans● Eligibility and Limitations

DEQ awards to local units of government and Brownfield Redevelopment Authorities

Cannot benefit a liable party 15-year term 5-year grace period with no payments or interest

accruals Can be repaid using TIF through a Brownfield

Redevelopment Authority


Tax Increment Financing (TIF)● Generally

Allows developer to capture taxes from the increase in value of the developed land

Can be used to reimburse a developer for eligible activities (environmental-related costs)

Additional advantage in “core communities” (site preparation, demolition, lead and asbestos abatement and public infrastructure)

● Eligibility and Limitations Brownfield Redevelopment Authority approval (Brownfield

Redevelopment Plan) Michigan Economic Growth Authority approval (for use of

school taxes)


Michigan Business Tax Brownfield Credits

● Brownfield Credit Available for up to 12.5% of eligible investments for qualifying

projects 3 categories of credits:

− Large credits – investments greater than $10 million− Small credits – investments between $2-$10 million− Mini credits – investments of $2 million or less

● Total of $40 million in credits available per year● 2008 legislation created MBT Brownfield tax credit in the

amount of 20% of eligible investment for certain “urban development area projects”


Cleanup and Redevelopment

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Future of Brownfield Redevelopment

● Land Policy Institute at Michigan State University Case Study Potential Application of Renewable Energy on Brownfield Sites: A

Case Study of Michigan− Advantages of renewable energy on Brownfields:

Ready market for end product due to proximity to energy consumption and grid transmission

Available land with few current competing uses Existing transportation systems Sustainability and reduction of collective carbon footprint Flexibility to adapt sites to higher uses in the future

− Potential to create over 17,500 construction, maintenance and operation jobs and more than $15 billion in new investment dollars


Future of Brownfield Redevelopment

● Taking advantage of additional economic incentives• Michigan Business Tax Credits

− Historic Rehability Credit − Renaissance Zone Credit

• Energy Efficiency and Alternative Energy Credits● Incorporating Additional Sustainable Features

• Green roofs• Landscaping to decrease stormwater runoff• Alternative energy sources• Green Building / LEED Certification


U.S. Green Building Council

USGBC’s MissionTo transform the way buildings and

communities are designed, built and operated, enabling an environmentally and socially responsible, healthy and prosperous environment that improves the quality of life.


Why Make a Building “Green”

● Buildings consume more than 30% of the total energy in the United States;

● Buildings consume more than 60% of the total electricity in the United States; and

● Approximately 5 billion gallons of potable water is used each day to flush toilets.


LEED Version 1.0

Launched in 1998Created from a committee composed of

architects, realtors, a building owner, an attorney, environmentalist and industry representatives.

Any ideas as to why a cross section might have been important?


Leadership in Energy& Environmental Design (LEED)

The Current LEED Rating Systems:


LEED Certification Levels

Certified:26-32 pointsSilver:33-38 pointsGold:39-51 points

Platinum:52-69 points

As of July 31, 2008:12,706 registered projects, totaling 3,532,219,069 square feet.


LEED New Construction& Major Renovations v2.2

Credit Categories:• Sustainable Sites• Water Efficiency• Energy & Atmosphere• Materials & Resources• Indoor Environmental Quality• Innovation & Design Process


Credit Category Point Assignments

15 points

13 points 17 points

14 points

5 points5 pointsInnovation & Design

Sustainable Sites

Energy & Atmosphere

Materials &ResourcesIndoor EnvironmentalQualityWater Efficiency


Sustainable Sites

Goals:• Develop only appropriate sites• Reuse existing buildings and/or sites• Protect natural and agricultural areas• Reduce need for automobile use• Protect and/or restore sites


Water Efficiency

Goals:• Reduce the quantity of water needed

for the building• Reduce municipal water supply and

treatment burden


Energy & Atmosphere

Goals:• Establish energy efficiency and system

performance• Optimize energy efficiency• Support ozone protection protocols• Encourage renewable and alternative

energy sources


Indoor Environmental Quality

Goals:• Establish good indoor air quality• Eliminate, reduce, manage the sources of

indoor pollutants• Ensure thermal comfort and system

controllability• Provide for occupant connection to the

outdoor environment


Benefits of Integrated Design

• Integrating relationships among the building project elements

• Creates greater value and successful sustainable development


Synergies for Vegetated Roof Systems

• Reduction of roof rainwater runoff• Reduction of heat island effects• Reduced cooling loads for the building• Reduced electric power demands• Added layer of insulation to help prevent

heating energy loss• Protects roof membrane from sun rays• Communicates leadership in sustainability• Provides habitat for birds and wildlife


Emerging Legal IssuesHB 4124 (Introduced January 27, 2009): • Permits a taxpayer to claim a credit equal

to 50% of the total cost for the construction of a green building and the expenses incurred to obtain LEED certification or $50,000.00, whichever is less.


City of Grand Rapids CommissionResolution No. 74599

All construction and renovation projects involving municipal buildings larger than 10,000 square feet and a cost of $1 million or more must receive LEED certification.


Key Issues• Negotiate and draft contracts keeping in mind that the LEED

rating system requires the allocation of responsibility.• The professionals and consultants building the project should

have experience and be familiar with sustainable design, the specific rating systems, and the certification process.

• Your contract must specify the materials, systems, and products required to achieve the necessary level of green performance.

• You must know the state and local legislation which governs green building standards, or that otherwise offers incentives for such projects.

• Because “green” design is non-traditional you cannot rely on a contract that might be used for a traditional built structure.


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