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Nestled between downtown Seattle and the Capitol Hill district, the Bullitt Center will open on Earth Day, April 22. Builders of the six-story, 50,000 square-foot building claim it will be the “greenest” office building on the planet. Ground broke in August 2011, and since then few green building details have been left unturned, from water efficiency, renewable energy and choice of construction materials. If anything close to a zero-impact office building exists, the Bullitt Center is it.

Inside, tenants will benefit from abundant natural light, plenty of fresh air and overall a healthier environment than can be found in most commercial buildings. The builders bypassed the U.S. Green Building Council’s LEED certification in favor of the strenuous Living Building Challenge standards.

The Bullitt Center’s approach towards environmental sustainability starts with the design of the site. Cisterns will store rainwater, and “grey water” from sinks and showers will funnel through the building’s green roof. Perched on Madison Street, the Bullitt Center will be flanked by a planting strip that will make the approaching sidewalk more pleasant for local workers and residents. Solar arrays will provide as much electricity as the building requires. Medium-height sidewalk plantings will also create a physical separation between pedestrians and vehicle traffic. The building’s planners chose the transitional Madison-Miller neighborhood for the opportunity to add more commercial space to a mostly residential area; Madison Street’s role as a link to several neighborhoods in Seattle also factored in the building’s location.

In tune with the ideals behind the Living Building Challenge, the Bullitt Center takes inspiration from nature and creates a work environment that is practical, yet also healthy for its inhabitants. Architectural details that are aesthetically pleasing yet practical include higher ceilings (eliminating an additional floor possible under local building codes) and a central glass-enclosed staircase that encourages tenants to use the stairs instead of the elevator. Exposed wood, Forest Stewardship Council (FSC) certified, is a reflection of the local Pacific Northwest natural environment.

Tenants include the University of Washington’s Integrated Design Lab, the Cascadia Green Building Council and, of course, the Bullitt Foundation. In a phone conversation with spokesperson Brad Kahn, he explained that currently the building has leased out 40 percent of its space and negotiations are underway with prospective tenants and the Bullitt Center feels very optimistic about leasing the entire space. Suites ranging from 2,000 to 8,000 square feet are available: larger offices include a kitchen and a shower for those who will commute by bicycle. Should a cleaner and healthier built environment indeed evolve after the Bullitt Center’s opening, watch for architects and developers around the world to take notice.

Read more about 3p’s coverage of green building and construction.

Leon Kaye, based in Fresno, California, is a sustainability consultant and the editor of GreenGoPost.com. He also contributes to Guardian Sustainable Business; his work has also appeared on Sustainable Brands, Inhabitat and Earth911. You can follow Leon and ask him questions on Twitter or Instagram (greengopost). He will explore children’s health issues in India next month with the International Reporting Project.

Image credit: BullittCenter.org and John Stamets, photographer

One of the most interesting debates going on now in the CSR universe is about fair tax payments. So far it has been mainly focused in the UK, where it was revealed that companies like Starbucks, Google and Amazon pay little or no tax on their earnings, but it echoes all around the globe with a growing number of stakeholders looking to hold companies accountable for their tax (avoidance) strategies.

Last week, my colleague Harry Stevens made the case why companies like Google or Starbucks shouldn’t be blamed for minimizing their tax bill. Today, I’d like to make the case for why they should. Actually, this is not so much about Google or Starbucks as it is about the inclusion of tax fairness in the CSR agenda, or in other words, why you can’t call yourself a responsible company and minimize your tax bill to the lowest possible amount at the same time.

I’ll try to answer this question by looking at four of the main arguments used by those who believe legal tax avoidance and CSR have nothing to do with each other.

1. This is capitalism

Schmidt is right that this is capitalism, but just like there are different search engines or browsers, there are also different types of capitalism. I believe Schmidt can see the differences between capitalism that is guided by short-termism and led to the 2008 financial meltdown, and sustainable capitalism that abandons “the pernicious orthodoxy of short-termism” and seeks to maximize long-term economic value.

Bottom line: There is no contradiction between paying a fair share of taxes and being a capitalist – it is just about the type of capitalist you want to be.

2. It is legal and, hence, acceptable

Apparently these techniques are indeed legal, but here are couple of other things that are legal, such as: cutting down trees in rainforests, sourcing blood minerals from Congo, working with suppliers in China that release hazardous materials into rivers or with factories in Bangladesh that put their employees in jeopardy, or not paying for externalities. Yet, we have expectations from companies that call themselves responsible to do more than just comply with the law in these cases – after all, it is widely assumed that CSR begins where the law ends. So why should tax payments be any different?

Bottom line: While tax systems should be revised, legality is no excuse for not doing the right thing, no matter if you’re talking about natural resources, working conditions or tax payments.

3. Fiduciary duty to maximize profits

Now, Friedman (followed by others like Prof. Aneel Karnani) made this claim with regards to corporate social responsibility (CSR) activities in general, not paying more taxes. It only shows that basically there is no difference between CSR activities and tax payments when it comes to fiduciary duty and you can’t separate between the two – if one is acceptable then so is the other and vice versa.

Bottom line: Tax fairness is no different than other CSR issues when it comes to fiduciary duty, and hence there’s a good chance that the courts won’t interfere in the case of paying more taxes than required by the law as long as there’s a potential benefit to shareholders.

4. There is no business case for paying more taxes

I’m not familiar with any research about the business case for paying more taxes, but looking at what happened with Starbucks, for example, you can clearly see the risks of inaction – losing customers, jeopardizing relationships with important stakeholders, hurting the brand, and so on. These risks can eventually translate to shrinking sales and shareholder value. The other side of the coin is the creation of shareholder value in companies that will take action to pay their fair share of taxes.

Bottom line: There a business case for tax fairness, but is it stronger than the business case for ethically-sourced coffee or selling $1 reusable cups? Probably not.

Raz Godelnik is the co-founder of Eco-Libris and an adjunct faculty at the University of Delaware’s Business School, CUNY SPS and Parsons the New School for Design, teaching courses in green business, sustainable design and new product development. You can follow Raz on Twitter.

UPS electric vehicles from 1930's

I have known a number of people in the golden state who wanted to start a home based business selling baked goods, but didn't because they lacked access to a commercial kitchen. As of January 1, people who want to use their kitchens to prepare food for sale in California can now do so. The Homemade Food Act (AB1616) went into affect on that date.

Signed by Governor Jerry Brown last September, AB1616 allows Californians to sell "non-hazardous" food to grocery stores and restaurants for annual revenue up to $35,000 in 2013. That will increase to $45,000 next year and $50,000 in 2015. The new law puts California into the ranks of at least 32 other states that have passed similar laws.

AB1616 specifically states that a city or county "shall not prohibit a cottage food operation" but must do one of the following:

• Classify a cottage food operation as a permitted use of residential property for zoning purposes


• Grant a nondiscretionary permit to use a residence as a cottage food operation that complies with local ordinances


• Require any cottage food operation to apply for a permit to use a residence for its operation

California Assembly member Mike Gatto (D-Los Angeles) introduced the bill after one of his constituents had his business shut down by the Los Angeles Department of Environmental Health for selling homemade bread to a cheese shop. Gatto stated back in September that he is "proud to have delivered this victory to my constituents and to aspiring business owners throughout the state that are looking for ways to develop their businesses and purchase healthier, more locally produced foods for their families."

"I am happy that the Governor has joined me in my efforts to restore economic activity to our neighborhood economies and to the state of California by allowing people to produce and healthy, nutritious or culturally relevant foods in their homes," Gatto said.

The Homemade Food Act is good for the golden state's economy

"As California’s economy recovers from the deepest recession since the Great Depression, it’s important that state government bolsters local job growth," said Governor Brown. "Simply put, these bills make it easier for people to do business in California."

Cottage food laws, as homemade food laws are often called, are particularly important during rough economic times. During high unemployment, cottage food laws allow people to make a living by using their own kitchens. The unemployment rate in California is 9.8 percent (the national rate is 7.8 percent), and the unemployment rate in my home county of Fresno is 14.4 percent.

Cottage food laws do two other key things, as a post by the website, cottagefoodlaws.com mentions: they allow local foods to be produced in our communities, and they allow our communities to have "choice, variety and the opportunity to make the local economy viable."

California's Homemade Food Act seems like a win-win situation for everyone.

Photo: Flickr user, Steve A. Johnson

World Bank Group president Jim Yong Kim and United Nations Deputy Secretary General Jan Eliasson announced the two international organizations will work together much more closely to address and help solve some of humanity's most pressing problems, sustainability, health care and education prominent among them.

Pointing out that the two organizations have traditionally collaborated, “the founders of both organizations had more serious intentions and wanted us to be working as a team, not only on headquarters level, but out there in the field where the people of the world need our help,” Eliasson states in a World Bank video.

“With the leadership of Yong Kim and Ban Ki-moon, I know from personal experience of meetings that we are on to something which I would hope lead to a qualitative and quantitative new step in our cooperation.”

Millennium development goals, sustainability and conflict

Demonstrating their ability to work effectively as a team worldwide would provide a big boost to the credibility of both organizations at a time when governments and societies face the challenges associated with a globalized financial and economic system, as well as global and cross-border environmental challenges, such as climate change, he said.

In their video, Kim notes that he is the first former UN employee to serve as president of The World Bank Group. “I think there are so many issues in which the Bretton Woods institutions and the UN simply have to work together.

"Often in the field what we've found is that despite best intentions, it didn't work together effectively... On issues that range from health care to sustainability to the rule of law, there are so many things that are so important to the world, and I think that there are specific things we can work on."

“We feel that those are the very foundations of the future economic growth that's going to provide the jobs, that's going to provide the future, long-term sustainability, and there's no question that a multilateral system that's joined together at the hip, working together, can be much, much more effective.”

“We live in an age, in a time, where we're actually going to test whether multilateralism works, whether the international solutions work, and if we do not produce good formulas for today's problems that work out in the field, the mulilateral structure will lose it's credibility. So, there's much at stake,” Eliasson said.

“The multilateral system is absolutely indispensable; it's indispensable for the world. We've got to make the case; we've got to make the case more clearly. I think one of the ways that we can make the case more clearly is by showing that we can work together effectively...if we can do that in every country of the world,” Kim continued. "We work very effectively in certain instances, especially in emergencies, but if we can work together effectively in every country, in every country in the world, I think there will be no doubt, and everyone will understand that the multilateral system is absolutely indispensable for the world.”

Last September, Cleantech Group organized a Water Innovation Summit in Berkeley, California, bringing together stakeholders across the water sector including utilities, investors, entrepreneurs, policy and thought leaders. Organized in a workshop-style format, this two-day event generated thought-provoking conversations on issues such as the utility perspective on innovation, smart water networks and sustainable water management in the oil and gas.

When it comes to water, most conversations are usually important and interesting. Still, we chose to focus on four key takeaways from the summit that we feel will have a growing importance in the near future:

1. Make sure water crises are not wasted – “Never waste a good crisis," Rahm Emanuel once said, and it’s true not just for politics but also for water. The summit participants talked how innovation at a water utility is driven mainly by 3 C’s: Cost, Crisis, and Cool. They agreed that “while all three C’s are of significant importance to a utility, Crisis culled the most attention as growing populations force water providers to seek new sources of water.”

Water crises can be not just an enabler of innovation (Israel is a good example with its innovative drip irrigation techniques and desalination technologies), but also a game changer, helping change the opinions of policy makers and the public. For example, the New York Times reported how in 2009, while his city suffered from a the third year of a severe drought, San Diego Mayor Jerry Sanders changed his position on recycling wastewater after hearing from biotechnology industry executives that water shortages posed a threat to their businesses and might force them to move away from San Diego.

2. Water becomes the Achilles' heel of fracking – The interrelationships between water and energy (aka the water-energy nexus) is becoming more of an interest for energy companies as energy is becoming a thirstier resource. As the International Energy Agency wrote in its 2012 World Energy Outlook, “water is growing in importance as a criterion for assessing the physical, economic and environmental viability of energy projects.”

One of the examples is hydraulic fracturing, or fracking, which is a water-intensive extraction method and has accounted for a significant portion of the increased demand for water in recent years. This trend will only intensify as shale gas production is expected to reach about half of the total gas production in the U.S. by 2035.

The summit participants noted that oil and gas companies are now championing various water innovation opportunities as they realize that water can become their Achilles' heel when it comes to fracking – if fracking competes for water with domestic use, its chances to overcome any sort of public debate are pretty low.

3. It’s agriculture, stupid! – While we tend to focus many times on the consumption of water for energy production or domestic use, we shouldn’t forget that agriculture is by far the top water user. According to UN Water, worldwide agriculture accounts for 70 percent of all water consumption, compared to 22 percent for industry and 8 percent for domestic use (although in developed countries the percentage of industry and domestic uses are higher).

It is not surprising, then, that among the summit participants there was a unanimous agreement that agriculture is “the most important sector in water management.” Following the first point here, it is also not surprising to find out that crises such as subsequent droughts in main farming areas are opening the door for innovative solutions, including water reuse, drip irrigation, and the onset of a water rights market.

Yet these solutions require investments which might become an obstacle as farmers, as Aric Olson, President of Jain Irrigation USA, noted, “can only pass on so much of their costs to customers.” Governments will have to support these investments, which given the vast use of water in agriculture can be the best bang for their buck.

4. Overcoming the "Yuck Factor"– Language matters, and therefore we’ll see growing efforts to replace water solutions terms that don’t give the public much appetite to adopt them, with more suitable ones. Take "recycled wastewater" – many people still refer to this concept as "toilet to tap." This association was used by those opposing an initiative to recycle wastewater in San Diego in 1998 to win public support and take the initiative off the table at the city council.

The notion of treated sewage hooks into the intuitive concept of contagion and contamination, explains Carol Nemeroff, a psychologist at the University of Southern Main. To overcome this, a city must “unhook the current water from its history,” she adds. In Singapore, for example, where about 15 percent of its water originates from recycled wastewater, it is called “NEWater.” Sounds a bit more attractive, right?

And if we’re already getting into language matters, isn’t it time to get rid of the linkage between "waste" and "water?" “It is time to shift our focus away from the elimination of something undesirable to the opportunity to recover valuable resources such as water, energy, nutrients and beneficial products,” recommended Black & Veatch in their 2012 water utility report. This sentiment was also echoed in one of the summit’s recommendations – to change recycled water’s legal categorization as a “waste stream,” explaining that this does little (if anything) to boost its social image.

[Image credit: Cleantech Group]

Raz Godelnik is the co-founder of Eco-Libris and an adjunct faculty at the University of Delaware’s Business School, CUNY SPS and Parsons the New School for Design, teaching courses in green business, sustainable design and new product development. You can follow Raz on Twitter.

You’ve likely heard the statistics – Africa’s economic growth is staggering. During a period in which the global economy is bogged down by a recession and the rest of the world flounders at well under a 2 percent annual GDP growth rate, Africa has seemingly defied the economic landscape registering growth rates of 4.5 percent in 2010, 5.0 percent in 2011, around 6 percent in 2012, and projections exceeding 7 percent by 2015 (UNDP).

Morningstar captured the attention of the investment world last week when it ranked Nile Pan Africa Fund, the only US mutual fund focused exclusively on Africa, number one in performance out of 543 funds in it’s Diversified Emerging Markets Category for the year ended December 31, 2012.

Yet most in the global West refuse to be too impressed by the numbers. Most companies and investors in North America and Europe still balk at the notion of doing business with Africa. After all, we’re talking about Africa – the poorest of the poor. But is it wise to dismiss these reports so effortlessly? Don't most great investors only become successful by risking their assets for the potential of gain when and where others are unwilling to do so?

Smart investment depends upon some degree of due diligence, and I think it’s fair to say that most Westerners simply do not know Africa, much less its investment climate. Most of us have never spent time in Africa and traditional media – our largest window into that world - has been tinted to emit an overwhelming gloom over the “dark continent.” In his book, Africa, Altered States, Ordinary Miracles, Richard Dowden explains how "persistent images of starving children and men with guns have accumulated into our narrative of the continent (because) journalists are sent to get 'the story'…'keep it simple' is the message. Editors want breaking news but have little interest in explanations. The media's problem is that, by covering only disasters and wars, it gives us only a slice of the reality of Africa.”

And so, while most in the West turn a blind eye to reports of stellar economic progress, others are busy cashing in. Leading the investment surge is China, whose direct investment in Africa has leaped from less than $100 million in 2003, to around $15 billion in 2012.

Certainly, there has been much uneasiness globally around the impacts of China’s increasing involvement in Africa. In an Economist article entitled, Africans are asking whether China is making their lunch or eating it, Oliver August pointed out the harm resulting from China’s overall lower quality standards, lack of social and environmental responsibility in business practices and poor labor relations.

Yet, while the debate rages, the fact remains - China is by far Africa’s largest trading partner. On paper, and in the minds of many Africans, this means that China is doing far more than the Western world to both benefit from and contribute to Africa’s robust economic growth.

"We look forward to Chinese enterprises' investments,” says Bernadette Artivor, Executive Director of the Namibia Investment Center. “Investment helps us to fund the construction of transportation and medical infrastructure.” Meyo Akoulouze Maryse, an officer with the Cameroun Investment Promotion Agency, took it one step further. "I am fairly certain that trading with China is better than with Western countries, since China is now rising so quickly. China knows how to develop an economy rapidly. Our relations are good.” Deborah Brautigam‘s book The Dragon’s Gift offers a more complete understanding of the reality behind China’s relationship with Africa.

Concern about China’s approach is no doubt justified, however, one would be hard pressed to argue against Africa’s need for responsible investment dollars. In an age when investors are increasingly aiming to create a positive impact with their money, it is interesting that so many choose to criticize China rather than investing in Africa’s development themselves.

So, what does the world’s second largest economy see that investors in the west are missing?

For starters, Africa is home to much of the world’s best agricultural land, an already enormous and booming labor force, the world’s fastest growing middle-class, rapidly developing infrastructure and governments which are taking enormous strides to liberalize their markets. 

Dig deeper into market opportunities and you will find an IT sector poised to explode. Since 1998, the number of cell phones on the continent has grown from fewer than four million to more than 500 million. A great example of one bold mobile telecommunications company who is reaping rewards in this booming market is Bharti Airtel. After investing over $1 billion in its mobile operations in Africa, the Indian company boasted a profit of US $13 billion in Africa for 2010/11 fiscal year.

According to ITNews Africa, mobile transactions are also revolutionizing future of banking in Africa. Safaricom Kenya’s M-Pesa has taken hold of the East African mobile money industry with it’s “text-me-money” technology which allows users to store money, pay utility bills and complete commercial transactions on their mobiles. Most consumers in the U.S. aren’t even doing that yet. Time Magazine quoted the opinion of California-based mobile-banking innovator Carol Realini, Executive Chairman of Obopay, “Africa is the Silicon Valley of banking. The future of banking is being defined here… It's going to change the world.“

As for the notions of pervasive obstacles and booby traps that terrify the masses from investing in Africa, ask Carsten Brinkschulte, former CEO of Synchronica, a UK-based mobile messaging service provider, whether Africa is worth the risk. “The negative publicity that plagues Africa as a business destination is outdated. While corruption, poor infrastructure and institutional bureaucracy can certainly make for a challenging business environment, Synchronica has found the continent to be incredibly entrepreneurial and backed up with a wealth of highly skilled, resourceful and incredibly talented people.”

Even a few of our most recognizable corporate giants have mingled with the budding economic behemoth in ways that reflect serious commercial interest combined with commitment to positive impact in local communities. Microsoft has long held a commercial, albeit nourishing presence in Africa and Walmart turned heads recently by acquiring Massmart, a leading retailer in Sub-Saharan Africa which happens to rank among the world’s top ESG performers. Visa made a big statement that underscores its perceived alignment between providing financial services to East Africa and improving its balance sheet. Last year, it opened a regional headquarters in Nairobi, Kenya while also establishing an intensive partnership with the government of Rwanda. A handful of our corporate leaders are reaping the rewards for their willingness to pioneer commercial approaches to help develop Africa, yet the idea is still far from entering the mainstream.

Larry Seruma, Chief Investment Officer at the aforementioned Nile Capital Management calls Africa “the world's most underappreciated, undervalued growth story."

Who will take the next great risk to enter an even greater story?

ThredUP is not just a successful online marketplace of “practically new kids' clothing,” but also a company on a mission – “becoming an iconic brand in American homes around making smart choices as a consumer,” explains James Reinhart, its co-founder and CEO. On its way there, ThredUP has made few transitions, most notably last March when it shifted from a peer-to-peer marketplace into an online consignment store.

This transition seems to be successful in terms of volume - 7,000 new customers join ThredUP every month with a 46 percent retention rate as Reinhart told AllThingsD.com in October. Yet not all parents were happy of this shift – “This is such a bad move for the company. They have completely forgotten what made them unique and different for their loyal customers. ThredUP was more than just used clothes...it was a community that this new venture totally ignores. I'm sad that they have taken this path,” was one of the comments following the transition last March.

These sorts of business model adjustments and will likely become increasingly common as a growing number of companies in the sharing economy start looking, just like ThredUP, to shift from being a great story to being a good business. This is why the story of ThredUP’s evolution is an important one – should other companies look at it as an example to follow or to avoid?

ThredUP originally started as a peer-to-peer clothing platform that focused on men’s and women’s shirts. The idea, explains Reinhart, was to capitalize on underutilized assets in everybody’s closets - all the stuff we have there and don’t really wear. Reinhart and his team understood that clothing exchange was a good idea but not a good business because they didn’t manage to generate enough traffic.

So then ThredUP decided to move on to kids’ clothing. Kids, as the company reports, use more than 1,360 articles of clothing by age 17. Not only that this is a costly expense, but parents must also constantly look for ways to get rid of old clothes and make room for the new ones. Hence, ThredUP believed that kids’ clothing are a bigger consumer problem and will provide the company with a better opportunity to scale up and generate improved business results.

ThredUP wanted to bring affordability and convenience to the kids’ clothing market, creating an online swapping platform where parents could trade boxes of used clothes directly with each other. This marketplace became quite successful with 300,000 customers who exchanged about 2 million items in total. Yet, impressive as it may sounds, it wasn’t enough.

The problem as ThredUP learned was that to succeed in such a business, where the business model is based on receiving a small fee for every transaction, you need an enormous scale, such as what you find on eBay for example. But no matter how well ThredUP served the hundreds of thousands of parents that used its platform, it wasn’t eBay and even with 500+ new customers per day joining the site, it was nowhere near to becoming large enough to sustain itself financially.

ThredUP had a very clear choice to make – either it continues to act as a great community service with little chance to succeed as a business, or it needed to make a change in its business model, putting business before community. It chose the latter, announcing on March 7, 2012 that “we’ve made the difficult decision to shut down our swapping service, and focus exclusively on our concierge experience and new consignment shop.”

The re-vamped website, the company explained, takes all the legwork out of traditional peer-to-peer swapping, and “makes sharing and accessing used kids clothing easier than ever.” The process works like this – parents send ThredUP a post-ready bag at no charge  filled with their kids’ clothing. The bag is then evaluated by the company and the parents get paid for items that meet ThredUP’s rigorous acceptance criteria – about 20-30 percent of each item’s resale value. These items will then be offered for sale on ThredUP’s online consignment store. Items that ThredUP won’t accept for reselling are entered into its 100% Re-Use Program.

And the results? According to TechCrunch’s report last October, ThredUP has rapidly grown its user base since it started with the new model and is now trending toward 400,000 customers. Reinhart also said in his interview that ThredUP receives 6,000-10,000 pieces of clothing a day.

These figures are pretty impressive, although of course it’s still far from eBay, where millions of items are listed, bought, or sold daily. Reinhart himself said that ThredUP is looking to vertically expand to “anything you can put in our prepaid bag,” which might suggest that the company doesn’t believe it can generate good business solely from kids’ clothing.

So far, investors seem to have faith in this path - last October, a new investor (Highland Capital Partners) led ThredUP’s $14.5 million Series C round, announcing that “ThredUP is disrupting the $30 billion resale industry by moving something families have been doing offline for generations, online,” and bringing the company’s total raise to date, to $23 million.

While it’s too early to predict whether ThredUP will evolve into a good business, the company has already showed that it’s impossible to be both Freecycle and eBay. Companies need to make a clear choice if their mission is focused on the business component or the community component of their operation and act accordingly. The sooner they figure it out, the better their chances are to succeed.

[Image credit: thredUP]

Raz Godelnik is the co-founder of Eco-Libris and an adjunct faculty at the University of Delaware’s Business School, CUNY SPS and Parsons the New School for Design, teaching courses in green business, sustainable design and new product development. You can follow Raz on Twitter.

A lawsuit brought by Massachusetts auto dealers against Tesla Motors seeking to prevent the company from selling its electric vehicles in company-owned retail stores has been dismissed.

The suit, brought by the Massachusetts State Automobile Dealers Association (MSADA) in Norfolk County Superior Court, alleged that Tesla was violating state franchise laws by opening a company-owned store in Natick, Mass., last September. Judge Kenneth Fishman dismissed the case based on the auto dealers’ lack of standing and failure to state a claim.

“We are delighted by the outright dismissal of this case and the validation that we are operating our business in compliance with the laws and expectations of the Commonwealth of Massachusetts,” said Elon Musk, Tesla co-founder and CEO.

The suit is the latest in a series of legal challenges brought against Tesla for pursuing an unusual company-owned store model "to accelerate the adoption of electric vehicle technology." Car dealers in New York, Massachusetts, Illinois and Oregon have sued the company for opening company-owned stores that compete with dealerships, which they say is illegal.

“They claim they’re operating under the guise of a non-sales showroom, and we call that out as an outright scam,” Robert O’Koniewski, executive vice president of MSADA, told AutoNews. "If you read the statute, it’s pretty clear: a factory cannot own a store, and a dealer can sue for injunctive relief if they feel the public is being harmed.”

But Tesla claims that its stores, usually located in malls, are designed to educate consumers about the benefits of driving electric vehicles. George Blankenship, a veteran Apple marketer hired by Tesla in July 2010 to build the company's retail strategy and network, said Tesla has studiously complied with state statutes regarding car dealerships.

"We do what we’re capable of doing, and we do whatever they let us do," Blankenship told AutoNews. "It’s unique for each location. If we can’t be a dealer in a mall, we won’t do reservations on-site. We tell people where to go on our website to make a reservation."

Car dealers have successfully prevented Ford and General Motors from opening factory-owned stores in the past, so Tesla will have to tread carefully as it pursues its company-owned model. Still, Musk said Tesla is "confident that other states will also come to this same conclusion" as Massachusetts.

Tesla has over 20 showrooms in North America and over 30 worldwide. The company is also building a network of fast charging stations, called Superchargers, to allow Model S drivers to recharge their vehicles for free on long distance trips. Musk told the New York Times last November that Tesla expects its Supercharger network to cover the entire United States by the end of 2013.

Tesla and its Model S have had a successful year by many metrics. Tesla’s stock price has jumped over 44 percent since this time last year, and the Model S, which the company introduced in the United States in June 2012, was named 2013 car of the year by Motor Trend, Automobile Magazine and Yahoo! Autos.

“Our aspiration with the Model S was to show that an electric car truly can be better than any gasoline car, which is a critical step towards the widespread adoption of sustainable transport,” Musk said upon receiving the Motor Trend recognition. Musk says Tesla’s ambition is to build a great car, not just a great electric car.

Nevertheless, the Model S retails for over $50,000, rendering it prohibitively expensive for most motorists. Tesla has sold just over 250 Model S sedans thus far, which is an almost microscopic drop in the bucket compared with the 404,886 Toyota Camrys sold in 2012, for example.

Musk insists, however, that Tesla is making its technology more affordable, and the company plans to release a $30,000 model in coming years. The “absolute goal of Tesla from the beginning has been to provide a car that you can afford,” said Musk. “There is no effort spared to try to get there as soon as humanly possible.”

[Image credit: pacecharging, Flickr] [Image credit: David Shankbone, Flickr]