Fixed price cleanups as useful tools to eliminate risks in brownfields redevelopment

摘要

Stringent environmental regulations that impose significant and costly requirements for the cleanup of contamination from historical operations previously created an atmosphere where developers, inventors and lenders are hesitant to involve themselves with environmentally impaired Brownfields properties. Traditional risk shifting mechanisms such as contractual indemnity and escrow provisions are being replaced or supplemented by new innovative environmental liability and Brownfields restoration insurance products. Environmental cleanup cost cap and pollution liability policies can protect developers, sellers, investors and lenders from third party claims, costs associated with addressing areas of unknown contamination discovered after closing and during development, legal defense costs, as well as cleanup costs that exceed a guaranteed cost estimate. Environmental Waste Management Associates, LLC (EWMA) has pioneered a fixed-price cleanup program known as SECUR-ITSM, backed by a combination cleanup cost cap and pollution liability insurance policy. The program is used by developers to effectively eliminate the environmental risks and unexpected cost of developing Brownfields because the insurance policy covers all risks both known and unknown. Under this program, the fixed price guarantee and policy can be issued prior to regulatory approval of a cleanup plan and with minimal paperwork or initial investigation. This program is attractive for developers because it caps their environmental liabilities at a site and addresses any unexpected cleanup costs which may have otherwise delayed or jeopardized the development. The discussion will outline case studies of Brownfields redevelopment projects in which the SECUR-ITSM program worked to successfully allocate environmental risks associated with redevelopment of contaminated properties. EWMA assisted a national developer in the rehabilitation of former cosmetics manufacturing facility regulated by state and federal authorities into a mixed-use commercial facility. EWMA used a variety of cleanup technologies to remediate both soil and groundwater contamination, including the ISOTEC patented remediation technology for extensive chlorinated solvent soil and groundwater contamination. EWMA's remediation system replaced a pump and treat system. EWMA completed the work for 50% of the projected cleanup cost in a fraction of the time proposed by a competitor. A second case study will cover EWMA's remediation that converted a million square foot paper cup manufacturing facility on 130 acres into an adult residential and assisted living community. Over 100 areas of concern were addressed in two years. The developer will be reimbursed approximately 75% of its cost through public funding for Brownfields.