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Environment                                                  wwwwwwArticles
CRUCIAL ISSUES IN DEVELOPING BROWNFIELDS
Peter Weiner of
Paul, Hastings, Janofsky & Walker LLP
INDEX:
(click on a topic to see the information!)

1. DEVELOPER WANTS TO PURCHASE 400 ACRES OF LAND

2. DEVELOPER HAS SEVERAL HURDLES TO OVERCOME

3. CLEANUP COSTS ARE NOT IN THE BUDGET

   QUESTIONS SPARKED BY THE HYPOTHETICAL

    Disclaimer

1. DEVELOPER WANTS TO PURCHASE 400 ACRES OF LAND

A commercial real estate developer is interested in purchasing 400 acres of vacant land in Metropolis. The land has some freeway and rail access, and might be used for mixed commercial, retail, truck distribution, and residential apartment use. Part of the property was once part of a steel mill. Another part was converted from mill use to a municipal solid waste landfill that closed twenty years ago. A corner of the site once had a gas station, but all tanks have been removed.

2. DEVELOPER HAS SEVERAL HURDLES TO OVERCOME
 
                                                                     
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Developer likes the asking price for the property, but is worried about (1) potential cleanup costs, (2) the time it may take to make the property developable, (3) limits that may be placed on development, and (4) liability that may attach to owning the property. Because of local politics, he also wants to know whether part of the property could be used for a new school or a community park.

3. CLEANUP COSTS ARE NOT IN THE BUDGET
 
                                                                     
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Finally, he cannot afford much in the way of cleanup costs until the property is developed, and is not sure of his ability to finance cleanup or infrastructure costs. Developer asks the following questions.

QUESTIONS SPARKED BY THE HYPOTHETICAL
 
                                                                     
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1. Who’s in charge here: is it the State or Federal government? If the feds, is it a Superfund site? If the State, is there more than one State agency that could have jurisdiction? If so, is there some way to get them all to cooperate?

2. I’ve heard about getting one agency to be the "lead" on a site. How do you do that and is it worth it?

3. My consultant tells me that the cleanup costs are within reason. How do I know whether to trust that conclusion? What if he’s wrong? If I send him on to the site to do sampling, do I have any risk of liability?

4. Do cleanup costs vary with my planned use of the property? What type of deed restrictions are likely if I don’t clean up to some sort of pristine level?

5. My consultant also tells me that there is a proposed Remedial Action Plan for the part of the site that was used solely as a steel mill, a No Further Action letter for the gas station that shut down in 1997, and no agency involvement in the landfill parcel. Does that mean that the cleanup is pretty well defined? If not, how long will it take to get signoffs?

6. Will my ability to develop the property turn on cleanup approvals? Completion of cleanup? Wouldn’t that take years?

7. I’ve heard that EPA and States can grant immunity to purchasers of contaminated property? How can I get that, and what protection would it give me?

8. What kind of insurance is available to guard against liability for personal injury, increased remediation costs, and offsite property damage? Is it costly? Won’t indemnities from the seller be sufficient?

DISCLAIMER: This discussion is general in nature and is not intended to and does not create a lawyer/client relationship. This discussion should in no way be relied upon or construed as legal advice, particularly since most legal outcomes are highly dependent on the facts of a particular case or situation. This discussion is provided on the condition that it cannot be referred to or quoted in any legal proceeding; if this condition is unacceptable to you, immediately delete this email and do not keep a copy of it in any form. The reader or recipient is strongly urged to consult with a lawyer for legal advice on these matters. Any reliance on the discussion information by someone who has not entered into a written retainer agreement with the lawyer providing the discussion information is at the reader's or recipient's own risk.

YADDA, YADDA, YADDA

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