PUBLICATION OF ASSOCIATED BUILDERS AND CONTRACTORS OF MICHIGAN SUMMER 2009
ABC members leading green building industry Also: Green building resource guide ABC of Michigan pushes green tax incentives
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Inside
Executive Perspective 4 Green efforts drive legislation, education and construction practices.
members lead construction 5 ABC industry in “going green” ABC members are leading the green path to sustainable construction practices and environmental conservation. Two of the top three green contractors in Michigan are ABC members.
of Michigan develops 10 ABC legislation for green tax incentives
ABC of Michigan helped introduce amendments to the Michigan Business Tax that allow owners to claim green projects and LEED professional accreditation costs on 2009 tax returns.
Green building resources 11 A guide to obtaining LEED accreditation, certification and eco-friendly resources in your area.
Development: 12 Business Green could mean liability By Willis HRH
Before navigating the green certification process, industry professionals should consider a few key risk management tactics.
19 Advertisers Index Photo courtesy of the Grand Rapids Art Museum
VOLUME III, ISSUE II
Legislative Update ABC prevents prevailing wage expansion in Hire Michigan First bills. 14 On the cover and above: Rockford Construction built the world’s first LEED certified art museum, the Grand Rapids Art Museum, where the community gathered for a recent music festival. Cover photo courtesy of Steve Hall © Hedrich Blessing. Photos on right: Kincaid Henry Building Group renovated Lansing’s Old Town Medical Arts Building to be LEED certified.
www.abcmi.com
Spotlight on Members Long Plumbing celebrates 60 years of business. 17 Summer 20 09 3
ASSOCIATED BUILDERS and CONTRACTORS of MICHIGAN BOARD of DIRECTORS John Parish – Chairman Parish Corporation – Central MI Chapter Rod Kloha – Vice-Chairman Circle “K” Services – Saginaw Valley Chapter David Sheffield – Secretary/Treasurer Onslow-Sheffield, Inc. – Southeastern MI Chapter
ABC members continue to be at the forefront of the ever-changing demands of customers and the marketplace. ABC chapters are leading the industry in Michigan and across the country.
Dan Kozakiewicz – Past Chairman Three Rivers Corp. – Saginaw Valley Chapter Bill Buyak Capital Steel – Central MI Chapter Jim Cripps Cripps Fontaine Exc. – Western MI Chapter Gary Hengesbach Westphalia Builders – Central MI Chapter Mike Laundra Alloy Construction – Saginaw Valley Chapter Dave Mollitor Consolidated Electrical – Western MI Chapter Bill Molnar Wm. Molnar Roofing Co. – Southeastern MI Chapter Eric Monroe Rockford Construction Co. – Western MI Chapter Michael Poggi Pinnacle Insurance Partners – Western MI Chapter Jim Struble RCI Electric – Southeastern MI Chapter Jack VandeGuchte Sobie Company – Western MI Chapter Daniel Welch Welch Tile & Marble – Western MI Chapter Michigan Merit Contributors Publisher: Christopher Fisher Managing Editor: Mary Boardway, CAE Publication management: Lezotte Miller Public Relations, Inc. Advertising: Arion Media Printing: Bradford Printing Michigan Merit (ISSN# 1938-9051) is the official publication of Associated Builders and Contractors Inc. of Michigan (ABC of Michigan) and is published quarterly at 120 N. Washington Sq, Suite 805, Lansing, MI 48933, (517) 853-2545. Please direct all inquiries to the previous address. Articles written by outside authors do not necessarily reflect the views of Associated Builders and Contractors Inc. of Michigan. ABC of Michigan reserves the right to reject or edit all material submitted for publication. The appearance of an advertisement in Michigan Merit does not constitute endorsement of the advertiser, its products or services, nor do Michigan Merit or Associated Builders and Contractors Inc. of Michigan guarantee or warrant any claims or offers made by the advertisers. Permission to reprint in whole or in part is hereby granted, provided the following credit line is used: “Reprinted by permission from Michigan Merit, a publication of Associated Builders and Contractors Inc. of Michigan.”
4 Summer 20 09
According to Engineering News Record, nine of the top 10 green building firms in the country are ABC members. In Michigan, two of the top three are ABC members. Members of ABC also helped organize U.S. Green Building Chapters in From the efforts of Michigan, furthering our industry’s our members to the commitment to sustainability.
dedication of ABC of Michigan and our chapters, it is clear that the Merit Shop helped pioneer green construction and continues to lead the industry.
ABC chapters in Michigan offer classes, seminars and training opportunities that focus on green building and sustainability. ABC has also teamed up with legislators to author and introduce green building legislation that not only incentivizes sustainable building construction, but also rewards Michigan-based firms for investing in employees by offering significant Michigan Business Tax credits to cover the cost of employees to become LEED Accredited Professionals or Green Advantage Certified. From the efforts of our members to the dedication of ABC of Michigan and our chapters, it is clear that the Merit Shop helped pioneer green construction and continues to lead the industry. As sustainability becomes more of a priority in the market place, the Merit Shop stands ready to do its part in the green movement, because ABC and our members have already made it their priority. Yours for the Merit Shop,
Chris Fisher President
Michigan Merit
The Gerald and Jane Ann Postma Center in Grand Rapids was constructed by Pioneer Construction as a LEED certified project (above and below).
ABC members lead green industry Associated Builders and Contractors is leading the way in the “green” building industry by adapting environmentally-friendly and sustainable construction methods. ABC is spearheading efforts to support green building and leading the National Green Building Committee, which is composed of green industry professionals. ABC of Michigan has drafted a bill to amend Michigan’s business tax act by adding green building incentives (see article on page 10). And, ABC chapters in Michigan offer green training opportunities regularly. As more consumers become concerned about the environment, demand for buildings that use less energy or more renewable energy has increased. The construction industry is “going green” with more use of renewable resources, such as solar, geothermal and rainwater, and focusing on a building’s impact on human health and the environment during its lifecycle. www.abcmi.com
ABC heads green path Many ABC members are at the forefront of the green industry with innovative and environmentally creative green building practices. In 2008, 53 of the Top 100 green contractors in the country were ABC members, generating more than $15 billion in revenue with more than 2,800 LEED APs on staff. Nine ABC members are listed in the top 10. In Michigan, two of the top three green companies are ABC members. In the 1980s, ABC firms pioneered methods to incorporate environmentally preferred techniques and materials into construction projects. Through green practices, ABC firms went on to become founding members of the USGBC.
Turning green Building projects can receive green building certification while professionals can receive green building accreditation. Green Summer 20 09 5
Rockford constructed the Inner City Christian Federation in Grand Rapids. It is LEED certified.
building practices are used in design, construction, operation, maintenance and waste removal during a commercial or residential project. ABC offers craft and apprenticeship training for green building in more than 20 construction crafts. The U.S. Green Building Council (USGBC) developed the Leadership in Energy and Environmental Design (LEED) rating system to measure a building or personal performance of energy savings, water efficiency, CO2 emissions reduction, improved indoor environmental quality and use of environmentally-friendly resources. Buildings can become LEEDcertified by completing a LEED Rating System checklist while employers and employees can become LEED Accredited Professionals (AP) by passing a LEED certified training test. Supervisory level contractors and managers can register for Green Advantage Training certification. Unfortunately, some companies and organizations take part in “greenwashing,” in which companies’ state their products and policies are environmentally friendly, but spend more time marketing than actually implementing green • Sustainable or “green building” design and practices. construction is a process which creates the Anotherto challenge by green opportunity use our faced resources more builders and contractors is the efficiently and responsibly. perception that green products and • LEED Professional Accreditation distin- practices are more expensive than guishes building professionals with traditional ones. In the ‘90s greenthe knowledge and skills trend to and successfully building was a new green steward the green “building” process. products were more expensive
Rennovated by Kincaid-Henry, the Old Town Medical Arts Building in Lansing is LEED certified and features a geothermal system.
The company anticipated a shift in the Lansing area commercial building market and partnered with community businesses to strategically use green methods to compete. Henry and Kincaid were involved in forming a USGBC chapter in Lansing as a green building education resource. “We noticed that the Lansing area had not shifted to green building yet,” explains Henry. “We realized that green practices were a growing consumer demand and we wanted to implement that in our focus on urban revitalization.” Kincaid Henry recycles all job site waste materials. “Prices on green products Michigan members now cost the same as traditional pave green way ” says Henry. Co-partners and of Ryan ThreeRyan RiversHenry is a member the U.S. products, Green Building Council, the nation’s Kincaid Henry completed the leader in making green buildings available to everyone. Kincaid founded East Lansing-based renovation of the 1905 three-story, Kincaid Henry Building Group, 20,000-square-foot Old Town Inc. in 2005 on green building. due to their scarcity. Now, as green building practices are more widely used, green products and service prices have decreased. A variety of green products, services and designs have also made market prices drop. Many companies that already implement green practices note the LEED certification process is a tough hurdle during the first few projects. Applying for certification requires specific criteria and documentation, which can be difficult for first-time green builders and contractors. Many in the green industry state the process becomes easier with repetition.
Rivers LEED accredited employees standGreen in front of a solar panel project. Three Rivers is the GreatThree Lakes Bay Region’s LEEDer. (Left to right) Kelly Sapp, Joel Keister, Jacob Bartuszevige, Andy Weisbrodt,
•
6 Summer 20 09 Three Rivers Corporation has 11 Leadership in Energy and Environmental Design Accredited Professionals (LEED AP).
Ted High, Keith Wirth, Rick Parker, Kristin Riddle and Wes Kohn.
Michigan Merit
Medical Arts Building in Lansing in May. The project features a water cistern that collects and treats rain water, 95 percent recycled drywall that was manufactured in Michigan, indigenous landscaping that requires no irrigation, 65-space concrete parking lot to reduce fossil fuels usage on site, low volatile organic compound (VOC) spray foam for insulation that saves on energy costs and a geothermal system, which pulls heat from the ground, with 20 wells to heat and cool the building. “The building requires no gas services due to the geothermal system,” says Henry. “Green is not designing a certain building; it’s planned from a cost-saving purpose.” Kincaid is LEED AP accredited and Henry is currently studying to complete the exam. Grand Rapids-based Pioneer Construction is recognized as the second-leading green builder in Michigan and has built a reputation for expertise in the green field. The company began implementing eco-friendly practices more than 10 years ago when it noticed the rising demand for green building. “We believe that the green trend has become more than a trend, but a reality of the construction industry,” says Pioneer Owner Tim Schowalter. “It creates a healthier and more productive work space.” Pioneer has completed 21 green projects and is currently working on five others. Pioneer requires recycling efforts on all projects, reduces the amount of VOC used and employs new heating and cooling systems and building designs
that conserve energy. “We are recycling on average 91.6 percent of all jobsite waste,” explains Schowalter. “We also buy materials that are locally or regionally extracted and fabricated to cut down on energy consumption used in transporting the materials.” Pioneer’s main green focus is using products with low VOC content, including finishing materials such as paint, caulk and carpet. Pioneer has sent more than 20 staff members to green building training, including after-hour classes designed to prepare employees for LEED accreditation. The company employs five LEED APs. Midland-based Three Rivers Corporation has 11 LEED APs on staff including architects, superintendents, project managers and estimators. “A few years ago, almost none of our clients had heard of green building,” says Three Rivers President Dan Kozakiewicz, noting that learning the LEED rating
system process was the biggest challenge. “Today, many of our clients ask about green building or LEED before we mention the benefits. With repetition, the process gets easier.” Three Rivers is currently involved in several projects expected to receive LEED certification. The company recently completed a private aircraft hangar at a Michigan-based airport and started Ieuter Insurance Group’s new office building. “We have always strived to be
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Summer 20 09 7
(Left) The LEED Gold Verne Place, downtown Grand Rapids, was constructed by Pioneer. (Right) MacKenzie Companies conducts a demolition project where materials will be recycled and reused.
good stewards of our environment,” Triangle has completed five green Rockford Construction, one of says Kozakiewicz. projects in the past 12 months and the top 100 green builders in the Others, such as The MacKenzie is currently working on five others, United States and one of the top Companies, a leader in the including two school facilities and three in Michigan, built the world’s construction contracting field for Triangle’s own headquarters. first LEED-certified art museum, more than 25 years in central During work on the Lacks Cancer the Grand Rapids Art Museum and Michigan and Florida, has been active Center at St. Mary’s Health Care, the nation’s first LEED-certified in the recycling market since it was Grand Rapids, Triangle encountered a church. Rockford has received LEED founded. unique challenge. As Michigan’s first certification on 14 projects and has “We believe communities hospital seeking LEED certification, seven currently pending. In addition, should embrace the use of the project was a LEED “guinea 17 Rockford projects are in the prerecycling products on site,” says pig.” The building development was construction or construction phases. E.T. MacKenzie Vice President of extensively researched to meet the “Contractors had not thought Operations Michael Marks. different needs of the hospital and about how we impact the MacKenzie, based in Grand Ledge USGBC. environment until LEED was formed. near Lansing, provides site It was a benchmark that cleanup and restoration of awakened the industry,” says One of Michigan’s first LEED certified hospitals, the environmentally contaminated Mike VanGessel, president Saint Mary’s Health System Lacks Cancer Center, was built by Triangle Associates. properties, underground & CEO of Rockford. “The storage tank removals, soil construction industry is one of and groundwater remediation the largest energy consumers and environmental site and producers of waste, 40 assessments. percent of landfill waste is “A lot of our work involves from construction. replacement of old sanitary The company has 16 sewers, which stops sewage LEED APs on staff and a overflows into rivers,” says sustainability coordinator. Marks. Rockford’s projects feature Grand Rapids-based Triangle the latest in green elements Associates, Inc., built one including green roofs, of the state’s first LEED for geothermal wells and Homes certified apartment the most energy efficient complexes, and some of the systems. first green education facilities ABC is dedicated to and hospitals. advancing members’ ability “We have been involved to support customers and with 22 LEED and sustainable thrive in the green building projects since 2000, 19 of industry. For more resources which were LEED certified,” and information on education says Mitchell G. Watt, AIA, see the list on page 11 or visit Triangle vice president/chief www.greeconstructionatwork. business development officer. com. MM “We have 26 LEED accredited professionals on staff.” 8 Summer 20 09
Michigan Merit
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Summer 20 09 9
ABC of MI pushes green tax incentives Legislation to amend the Michigan Business Tax by adding green building incentives has been introduced with ABC of Michigan’s guidance. It would allow owners to claim green projects and LEED professional accreditation costs on 2009 tax returns. “Green building is an ever growing and important component of the construction industry,” explains Chris Fisher, ABC of Michigan president.
“Businesses should be recognized for their green efforts and receive proper tax incentives.” House Bills 4926 and 4927 are part of a bi-partisan effort led by ABC, the Michigan Association of Home Builders and Rep. Ken Horn (R-Frankenmuth) and Rep. Jeff Mayes (D-Bay City) to offer incentives for sustainable building techniques. HB 4927 focuses on commercial construction.
Rep. Jeff Mayes
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Michigan Merit 11322 ABC Ad Revision Magazine.indd 1
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Green Resources
Under the bill, construction users would be able to claim up to $50,000 or 50 percent of the LEED certification cost for each building. LEED certification costs would include third-party commissioning, consulting and verification costs. To qualify, buildings need to meet or exceed the silver level LEED certification standard for human and environmental health, sustainable site development, water savings, energy efficiency, materials selection and indoor environmental quality within 365 days of the official certification date of the project. The bill defines green building, commercial green building, industrial green building, LEED certification and residential green building. A second portion of the bill would allow companies that invested in an employee’s professional LEED accreditation or Green Advantage certification to claim 50 percent of qualified expenses or $2,000 for each employee. Qualified expenses include salary or wages, fringe benefits, classroom instruction costs and training associated with obtaining LEED professional accreditation. Both bills were referred to the House Tax Policy committee in May and are currently awaiting a committee hearing. MM
Rep. Ken Horn
www.abcmi.com
Leadership in Energy and Environmental Design (LEED) is a U.S. Green Building Council (USGBC) certification system that measures how well a building, community or individual performs in energy savings, water efficiency, CO2 emissions reductions, improved indoor environmental quality, stewardship of resources and sensitivity to product impacts. For more information on education and resources offered in your area contact the following: n Central Michigan Chapter: President Russ Cunningham, 517-394-4481 or russ@abccmc.org Chapter: Director of Education James Kubiak, 989832-8879 or Jkubiak@abcsvc.org
n Saginaw Valley
n Southeastern
Michigan Chapter: Director of Education Carol Eberhardt, 248-298-3600 or eberhardtabcsemi@cs.com n
Offers NCCER Green Build curriculum for apprentice and craft training.
n Western
Michigan Chapter: President/CEO John Doherty, 616942-9960 or jdoherty@abcwmc.org
n ABC’s
Green Web site: www. greenconstructionatwork. com: Offers information on green building, resources and green industry news.
n U.S.
Green Building Council: www.usgbc.org: Provides information on LEED.
n Green
Building Pages: www. greenbuildingpages.com: Design and decision-making tool for professionals and consumers.
n Green
Building Michigan Incentives: www.dsireusa. org/gbi/incentivelist.cfm and www.goodtobegreen.com/ mi_energy_grants.aspx
n Green
Building Initiative: www. thegbi.org: Explains how to adopt green practices in residential and commercial projects that result in energyefficient, healthier and environmentally sustainable buildings.
Green Building Certification Register a project or review the LEED Rating System Checklist to determine if a project is eligible for certification.
n www.usgbc.org:
n Eligible
projects for LEED certification must meet green building and performance measures under the following rating systems: 1. New construction 2. Existing buildings 3. Commercial Interiors 4. Retail 5. Schools 6. Core and Shell
LEED Professional Accreditation LEED accreditation refers to an individual’s knowledge and skills to successfully steward the LEED certification process. LEED Accredited Professionals (LEED APs) earned the credential by completing a program and exam. Contractors, subcontractors and trades people can earn a Green Advantage Certification, which is certified training in the latest green building practices, technologies and techniques for on-the-job workers and supervisors. provides information on how to obtain LEED accreditation.
n www.usgbc.org:
n Green
Advantage Training: www. greenadvantage.org: offers resources and how to obtain the environmental certification.
Green Building Materials and Products Offers product certification and tests and materials to use.
n www.usgbc.org:
n Green2Green:
www. green2green.org: information on green products and materials. Offers side-by-side comparison of a variety of products. Summer 20 09 11
Green construction, green liabilities By: Willis HRH (Reprinted by permission)
Certification often requires careful and patient navigation of a maze of compliance rules and rating standards. 12 Summer 20 09
Construction professionals will need more than a yellow-brick road to reach the Emerald City of certified green construction. Green construction is growing in popularity for several reasons – energy efficiency, good public relations and better treatment in the insurance marketplace – and to reap the benefits, certification is a must. Getting certification often requires careful and patient navigation of a maze of compliance rules and
rating standards and raises important questions about who is responsible, and potentially liable, for making sure a building achieves the increasingly coveted emerald-green light. Little has been published about design and construction risk management issues in the context of green construction, and to date, there have been only a few claims to use as a guide. As the volume of green construction increases, however, Michigan Merit
so will the number of green claims. We recommend that our architect/ engineering/construction professional (A/E/C) clients consider a few key risk management tactics. First, though, we suggest a thorough understanding of the ratings systems at play.
LEED in use since 1998 The most familiar rating system is LEED by USGBC. While it has been in use since 1998, only in the past few years has the volume of rated projects begun to register an impact on the construction industry as a whole. USGBC’s objective in developing the rating system was to promote environmentally friendly “whole building” planning, design and construction practices and to establish a common standard for measurement of building performance. The four categories of certification are:
n LEED
Certified (26 to 32 points) Silver (33 to 38 points) n LEED Gold (39 to 51 points) n LEED Platinum (52 or more points) n LEED
The more points a building scores, the more it is assumed to be environmentally friendly. According to USGBC’s website, 96 buildings are now LEED Platinum, and more than 1,696 buildings are currently LEED Certified. Complicating the picture is that under the USGBC umbrella, there are other discrete LEED programs for different project types, such as LEED for schools. USGBC and other entities are all non-governmental organizations, but an increasing number of municipal, state and federal government entities are adopting – and in many cases further modifying – USGBC and other standards, using them as the basis for green building programs targeted at greening large public,
and sometimes private, construction projects. In more and more jurisdictions, green criteria are being tied to zoning and other development incentives.
When is a standard a standard? Of growing concern is the use of the LEED rating and other systems as the basis for a project owner’s qualification for funding or grant eligibility, receipt of tax credits, increased floor-area ratio and other zoning or planning incentives. Serious ramifications may befall the facility that fails to achieve the applicable standard. However, responsibility for such failure is often unclear. The uncertainty is exacerbated by the widespread trend in construction documents and specifications to contain broad generic performance criteria continued on page 16
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Summer 20 09 13 5/19/2009 12:06:30 PM
Hire MI First battle continues After months of debate the state Senate passed the controversial Hire Michigan First package of bills, but without language that would debar contractors from future work. ABC gathered support among business groups to eliminate key components of Hire Michigan First that involve prevailing wage and union hiring preferences, including the elimination of a provision that debarred any contractor with more than one violation of the state prevailing wage act, even if it was a minor technical violation that was immediately corrected. The other amended provision was eliminating a mandate that requires contractors to employ a 100 percent Michiganbased workforce, unless their company is signatory to a collective bargaining agreement. Organized labor and its legislative allies attempted to restore the prevailing wage and union hiring bias on the Senate floor, but were unsuccessful.
Repeal prevailing wages on roads and schools Rep. Tom McMillin (R-Rochester) introduced House Bill 4968, which would eliminate road and school construction from prevailing wage requirements.
14 Summer 20 09
Rep. Tom McMillin
With the support of ABC, the bill will follow what other states have done to ensure that uncompetitive prevailing wage mandates do not siphon away tax dollars from other vital areas. Numerous studies from think tanks, academic institutions, state and federal governments and other sources have demonstrated a significant increase in construction costs because of prevailing wage requirements. The prevailing wage law increases the cost of construction by 10 to 15 percent and additional costs are passed along to Michigan taxpayers. Repeal of the state prevailing wage law would have saved taxpayers an estimated $216 million in 2002, while the repeal of local prevailing wage laws could have saved another $16 million. (These figures represent $250 million and $19 million in 2007 dollars.) Exempting just the public school districts from the law would have saved $109 million in 2002, or $126 million in 2007 dollars.
ABC champions CTE education ABC hosted a town hall meeting with three members of the House Education Committee, Dr. Derrick Fries from Eastern Michigan University, Brindley Byrd of the Capital Area Construction Council, ABC Southeastern Michigan Chapter CET Director Carol Eberhardt and ABC Southeastern Michigan Chapter Executive Director Mark Sawyer. The panel spoke before a capacity audience on the need for passage of House Bill 4410, sponsored by Rep. Joel Sheltrown, (D-West Branch) that will provide students
Michigan Merit
Elsenheimer also hit upon his desire to see Michigan become a right to work state. Bishop and Elsenheimer also encouraged members to start looking at running for House or Senate seats, noting that a caucus of ABC members could give the proper insight on how to spend taxpayer dollars. Other speakers included Secretary of State Terri Lynn Land, Mackinac Center for Public Policy President Joe Lehman and Inside Michigan Politics founder Bill Ballenger.
From left, Reps. Douglas A. Geiss, Sheltrown and Tim Melton at the ABC Southeastern Michigan Chapter town hall meeting.
with a career technical pathway to graduation. “Our students need high quality skills to be ready for college and careers,” says Sheltrown. “Studying advanced academic classes can help, but students getting National Career Readiness Certifications in CTE programs are developing skills they can use to get good jobs or continue training in community college. Our job market is not one-size-fits-all, so our training opportunities need to reflect that.”
State legislative conference draws legislators, members The 2009 ABC of Michigan Legislative Conference held in Lansing on April 30 pulled together political experts and state legislators to tackle tough issues facing the state of Michigan and ABC members. The state’s budget deficit, use of federal stimulus package
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funds, project labor agreements, prevailing wage, right to work legislation and potential new House and Senate leaders were discussed. “We have lost our focus in the state and we need common-sense leadership,” explained state Senate Majority Leader Mike Bishop (R-Rochester). “ABC members have great participation in government, and we need you now to demand leadership that will drive this state forward.” Bishop outlined a plan to make Michigan a competitive business state again by creating a growth environment. “We need to create a competitive state that allows business to prosper. As we move forward and diversify, we are going to see a turnaround, but we need the demand from the people,” he said. State House Minority Leader Rep. Kevin Elsenheimer (R-Bellaire), who supports repealing the MBT, said the yield on MBT in April was the lowest on state business taxes since the Great Depression.
Senate Majority Leader Mike Bishop
Summer 20 09 15
Manage risks of green construction wording that blurs responsibility for compliance and fails to clearly define the designer’s and contractor’s respective compliance duties. Contracts should clearly allocate the risk in the event of failure to achieve the applicable standard and discuss redress in the event of a loss of an entitlement under zoning and planning regulations. Contracts should also address the impact on payment and performance bonds in the event of a failure to comply. Conceptually, LEED certification is similar to the Americans with Disabilities Act (ADA) in that it involves subjective judgments and factors including the owner’s use of the project and the willingness to incur additional expenses. The factors are not within the A/E/C’s control.
Standard of care difficult to define The diversity of rating systems, criteria and standards creates a volatile environment in which it is increasingly difficult to define a suitable standard of care for the professional services deployed in the design and construction of green facilities. To avoid uncertainty over what may constitute standard of care, contracts should clearly state what is meant by “green”
16 Summer 20 09
continued from page 13
and identify the standard(s) that will apply to the specific project. Responsibilities should be clearly stated. For example, “The A/E/C shall exercise its professional skill and care in accordance with the Standard of Care to provide services compliant with the LEED requirements and procedures, but cannot guarantee LEED Certification.”
The buck stops – where? Who is responsible for determining the paperwork and documentation required for certification? Who is responsible for preparing, reviewing, approving and submitting the application? What is the timeframe for submittal? Contracts are often unclear on such critical questions. Contracts must establish responsibility for appeal and/or resubmission – as well as mitigation and possible rework – in the event that certification is denied or the desired level not attained.
When green is not green-lighted The failure of a project to achieve LEED certification – or a failure to deliver the benefits represented to the project owner – is the root cause of the disputes and claims we
have seen to date. The damages flowing from such alleged failures can be significant. Depending on the contractual provisions and indemnities respecting performance and fitness of purpose, such allegations may trigger the Warranty and Guarantee exclusion – or potentially the Project Finance exclusion – of a Professional Liability policy and result in an uninsurable loss. The green city awaits, but to arrive unscathed, your firm’s risk management approach should include working closely with the various stakeholders in a green project to identify and understand the legal and risk allocation issues inherent in certification and performance. (Data, figures, etc. from www.usgbc.org). MM For more information, please contact: David Grigg – 212.915.8171 david.grigg@willis.com Melody Wofford – 615.872.3475 melody.wofford@willis.com Atha Forsberg – 303.218.4023 atha.forsberg@willis.com Published with permission of Willis HRH, the North American arm of Willis Group Holdings.
Michigan Merit
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Northville firm celebrates 60th year Long Plumbing Co. has served Northville and surrounding communities for 60 years. Glenn and Lois Long started the business in 1949 out of their home in Northville. In 1964, Glenn Long acquired property in downtown Northville and constructed a new building. Continued business growth built on customer satisfaction in 1974 led to the construction of the current office and showroom on Main Street in Northville. The company has been an ABC member since 1974. “In early years, our membership with ABC provided invaluable access to the tools we needed as a merit shop firm,” says Jim Long, owner, Long Mechanical, the parent company of Long Plumbing. “We produced large projects that, at the time, had not been done by open shop contractors. ABC offered us the tools to combat heavy pressure and successfully complete projects. “We now use the ABC educational offerings to train our staff,” says Long. “We continue our ABC membership because we are committed to the merit shop principles embodied by ABC. We are proud to be ABC members.” Long Mechanical Inc. offers commercial, industrial and institutional mechanical contracting, residential and commercial plumbing/heating/cooling and bath and kitchen remodeling services. Jim Long, son of Glenn and Lois, is a past president of the Southeastern Michigan Chapter of ABC. MM
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