Commentary

Turning Up the Heat State mandates high-performance design and construction practices

The state’s new high-performance buildings law will help create a more sustainable, green business community in Colorado.

By Matt Vineyard and Gene Commander

A new law recently took effect in Colorado requiring the Office of the State Architect, in consultation with the Colorado Commission on Higher Education, to adopt a High Performance Standard Certification Program for state-assisted facilities.

While the legislature has advanced a policy encouraging increased resource efficiency for several years, this new law will require a deeper level of commitment and collaboration among project team members.

The new legislation applies to projects that: 

• Are designed, constructed or substantially renovated (at a renovation cost that exceeds 25% of the value of the property) with state funds or with funds guaranteed by a state agency that constitute at least 25% of the project cost;
• Contain at least 5,000 gross sq ft;
• Contain a heating, ventilating and air conditioning system; and
• Have not begun the design phase before Jan. 1, 2008. 

Higher education buildings constructed with student fees (aka “202 Projects”), buildings financed by the Colorado Housing Authority or the Division of Housing in the Department of Local Affairs, and local government buildings constructed with severance tax revenue are exempt from the program.

The OSA recently issued its HPSCP, effective Sept. 1, 2007, and any state agency controlling a project that falls within the above criteria must achieve the highest performance certification attainable under the U.S. Green Building Council’s LEED standards. The state has identified LEED gold certification as the stated goal for all new construction. 

The new law requires the new high-performance standards to meet the following guidelines:

• Be quantifiable, measurable and verifiable;
• Reduce facilities’ operating costs by reducing the consumption of energy, water and other resources;
• Result in the recovery of increased capital costs over time by reducing long-term energy, maintenance and operating costs;
• Improve the indoor environmental quality of the building to create a healthier workplace;
• Encourage the use of local products and materials harvested, created or mined within the state;
• Protect the state’s environment;
• Comply with the U.S. Secretary of the Interior’s standards for the treatment of historic properties 50 years of age or older unless the State Historical Society determines that the property is not of historical significance.

Exemptions

Certain renovation projects may be excused from the highest certification requirement when it is not practical to do so because of the historical nature of the building or when the increased renovation cost, including the time value of money, cannot be recouped within 15 years. In those circumstances, the agency must obtain a written certification from an accredited professional (e.g., a LEED-accredited professional) that the renovation is as consistent as possible with the HPSCP.

The new legislation also includes additional exemptions. If the state agency responsible for the project estimates that the initial cost increase to achieve compliance will exceed 5% of the project’s total cost, then the General Assembly’s Capital Development Committee must examine the estimate before approving any appropriation for the project. 

A project also may be exempt from the program if the executive director of the Department of Personnel and Administration determines that there are extenuating circumstances, although such circumstances are not defined in the statute.
 
Industry Experience

Colorado’s leading design and construction firms bring critical knowledge and experience to project teams working to comply with the new legislation. While the state program is new, these firms have been promoting sustainable green practices for many years in an effort to encourage increased resource efficiency. 

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Building owners (public and private), architects and constructors are embracing the benefits of the high-performance building design and construction process that elevates their relationship and cooperation early into the design phase. The industry is paying more attention not only to the energy consumption of an operating building, but also its overall impact on the environment through the life cycle of the building from construction through final decommissioning.

As new building codes and state-mandated, high-performance green building standards become more widely accepted and used, the design and construction industry must lead the effort to incorporate these practices and technologies into their project delivery systems. The new HPSCP legislation may influence how the state procures future design and construction services from the private sector for state-assisted facilities. 

Incorporating high-performance design goals into projects will require greater coordination between the design professionals, construction team and state agency personnel throughout the design and construction process. It is essential to set the project goals early in order to fully incorporate them into the programming, functionality, design, construction and, ultimately, the use of the building.  Project goals will need to reviewed at each stage of the process to ensure the project is meeting the agreed-upon priorities. While some design goals such as improved ventilation and energy performance are complementary, other competing goals such as developing the site to meet density requirements versus orienting the building to maximize open space must be carefully balanced.

Budget Impact

Although the HPSCP’s net impact on future capital expenditures is unknown at this time, the Colorado Legislative Council noted in a recent staff fiscal note that the program will likely increase state capital expenditures because “high-performance building standards typically increase initial construction costs up to 20%, sometimes more, for major renovations.”

However, in our experience, typical high-performance design in new construction often results in more modest increases of 1 to 7% if the project is planned and constructed in accordance with LEED standards. In the short term, the initial cost premium will have to be paid through each state agency’s capital budget process. However, the targeted 15-year payback period is intended to reduce the impact of the increased initial project cost over time and produce continued net savings over the life cycle of the facility.

In light of the program’s potential impact on future capital expenditures, it was wise for the legislature to include a provision in the new law requiring the DPA to report annually to the Capital Development Committee about the contracting documents, project guidelines and reporting and tracking procedures being used to implement the program. With proper checks and balances, the HPSCP should be able to achieve positive fiscal results for the state’s taxpayers while promoting increased resource efficiency.

The state’s new green building law will help create a more sustainable, green business community in Colorado. In addition, the law will likely reduce long-term operating costs, enhance the value of our state buildings and increase occupant productivity. Thoughtful design, construction and performance tracking will be vital to the success of these projects, and Colorado’s leading design and construction firms have the expertise and experience to help the state achieve increased resource efficiency through high-performance building practices.

Matt Vineyard is a senior project manager and LEED-accredited professional with JE Dunn Construction. Gene Commander is a shareholder in the Denver law office of Shughart Thomson & Kilroy PC. He has practiced real estate and construction law in Denver for more than 25 years and is vice chair of the firm’s construction practice group.

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