Managing And Mitigating Environmental Risks - Urban Land Institute
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Transcript of Managing And Mitigating Environmental Risks - Urban Land Institute
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Managing and MitigatingManaging and MitigatingEnvironmental Risks
Urban Land InstituteReal Estate Development Process: Part 1
Sheraton Dallas Hotel
January 20, 2012
b y :Sally A. LongroySally A. Longroy
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Overview
Environmental Liability ExposureEnvironmental Liability ExposureEnvironmental Site AssessmentsG t l Li bilit P t tiGovernmental Liability ProtectionContractual Liability ProtectionEnvironmental Insurance
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Environmental Liability Exposure
Environmental Impacts CERCLA & State Equivalents CERCLA & State Equivalents Status liability – Owners/Operators Joint and several Joint and several Strict Retroactive Perpetual
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Environmental Liability Exposure
Other Federal and State Statutes Clean Water Act Clean Water Act
√ Wetlands√ Storm water management√ g
Endangered Species Act
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Environmental Liability Exposure
Increased Development Costs Waste management Waste management Waste water Asbestos Wetlands Lead paint
Land-use Restrictions Claims from Third Parties Unknown Environmental Conditions
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Environmental Site Assessment
All Appropriate Inquiry (Phase I) Identifies Recognized Environmental de es ecog ed o e a
Conditions (RECs) Components Records review Site reconnaissance I t i Interviews Report Qualified environmental professional Qualified environmental professional
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Environmental Site Assessment
AAI Does Not Cover:
Radon Mold
Petroleum Asbestos in
b ildi
Municipal solid waste
Wetlandsbuildings Lead-based paint Lead in drinking
Wetlands Endangered
species A h l i l d
gwater
Indoor air pollution/vapor
Archeological and cultural
Regulatory pollution/vapor intrusion
g ycompliance
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Environmental Site Assessment
If Contamination Issues → Phase II Invasive Sampling of p g Soil Ground water Surface water Sediment
Release Reporting Obligations
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Governmental Liability Protection
CERCLA Defenses Innocent Landowner Innocent Landowner Contiguous Property Owner Bona fide Prospective Purchaserp
Requires “All Appropriate Inquiry” ASTM E1527-05 – consistent with final
rule on AAI Codified at 40 CFR Part 312
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Governmental Liability ProtectionTexas Voluntary Cleanup ProgramTexas Voluntary Cleanup Program
Remediate to meet Texas standardsRemediate to meet Texas standards Certificate of Completion – releases future
owners and lenders from liability to Texasowners and lenders from liability to Texas Must apply before taking title Must apply before performing remediation Must apply before performing remediation
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Governmental Liability ProtectionTexas Innocent Owner/OperatorTexas Innocent Owner/Operator Program
Immune from liability if Property contaminated by release or Property contaminated by release or
migration from off-site source or sources, and
Did not cause or contribute to the source or sources of the contamination
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Governmental Liability ProtectionTexas Innocent Owner/OperatorTexas Innocent Owner/Operator Program
IOP Certificate of Completion confirms eligibilityeligibility
IOP Certificates are not transferable
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Governmental Liability ProtectionTexas Municipal Setting Designationp g g City ordinance restricts potable use of
groundwaterg Eliminates exposure pathway so may Lower cleanup standards Lower cleanup standards Reduce investigation/remediation
requirements Reduce remediation costs
TCEQ certifies the ordinance
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Contractual Liability Allocation
Disclosure Obligations Remediation Agreements Remediation Agreements “As Is”
Li bilit R l P i i Liability Release Provisions Indemnity Provisions Successor Property Owner Problem
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Environmental Insurance
Clean Up Cost Cap may not be available may not be available
Site Pollution Liability Insurance Green Building Restoration Green Building Restoration Storage Tank Liability Insurance
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TrendsTrends
Th k Y !Thank You!Questions & AnswersQ
P r e s e n t e d b y :Sally A. Longroy