Last month, the Ontario Municipal Board considered a variance dispute in Toronto’s Kingsway neighborhood. Specifically, the Board considered arguments from the applicants that the “modernist” design for their proposed 3-story home at 7 Ashwood Crescent - for which they intended to seek LEED certification and would replace an existing bungalow – qualified for a variance to Toronto’s Official Plan and the Ontario Planning Act on the basis that its proposed green features and third-party certification constituted “extenuating circumstances.”

In its decision rejecting the applicants’ request, the Board noted that their case “opened with emphasis on LEED. The architect’s letter called LEED ‘the best guarantee with respect to the quality’” of the project and that “environmental sustainability will be promoted.” (As you review the decision, note that the Board did not provide any overt criticism or critique of LEED, nor did it point to any authority addressing LEED or other green building performance issues).

However, the Board did state that it “must be cautious . . . concerning ’sustainability’ and various trademarks for ‘green building’ – not for fear of overextending the cause of environmental innovation but, on the contrary, of trivializing it. The Board takes notice that, with so many reported attempts by all and sundry to oversell environmental benefits (notably to expedite approvals), a new word was coined in North America – ‘greenwashing.’ It also applies to construction.” The Board also pointed out that razing the existing bungalow “in the name of environmental sustainability” would “surprise at least some observers.”

Nevertheless, while the Board did note that the term “sustainability” is used in Toronto’s Official Plan, it held emphatically that the project’s claims “promoting environmental sustainability” are “no shortcut” around the statute (which provides that a variance can be authorized if it is minor, desirable for the appropriate development or use of the property, and maintains the general intent and purpose of the municipality’s plan). The Board stated that “[t]here is simply no statutory authority for [third-party environmental certification labels] to sidestep land use planning requirements . . . ‘Certification by a private third party’ is no substitute for a transparent and legally mandated public process, and no guarantee of good planning.”

While interesting on their own, the applicants’ arguments before the Board also reminded me of those that were successfully advanced in the Destiny USA litigation here in New York, 889 N.Y.S.2d 793 (App. Div., 4th Dep’t 2009). There, as you may recall, and contrary to the Board’s decision in 7 Ashwood Crescent, the Appellate Division used the project’s “unique” green features and “revolutionary” construction financing to carve out an exception to well-settled law, holding that injunctive relief requiring the lender to continue funding the project was proper (notwithstanding, as one justice pointed out in dissent, that it was unclear how Destiny would be irreparably harmed).

We’ll add 7 Ashwood Crescent to Destiny USA on our roster of decisions connecting well-settled real estate and construction legal principles with third-party green building certification, and continue monitoring whether other, similar applications and proceedings manifest themselves here in 2011.

Many thanks to Marshall Leslie for passing along a copy of the Board’s decision.