Top Ten Things You
Should Know About Brownfields (provided
by XL Environmental)
Brownfields
is a market and a process, not an environmental regulation
The reuse of
a site can actually help in lowering the anticipated remedial costs
Over 40 states
have Environmental Regulations, called Voluntary Cleanup Regulations,
that are designed to encourage Brownfield Redevelopment.
Brownfield
projects are driven by financial concerns more that redemption costs,
that is the reuse of the site may allow for spending large amounts
of money for remedial activities
Superfund sites
can now be considered for brownfield projects
There is no
"Master List" of brownfield type properties available in one centralized
location. "All Brownfields are local"
There are many
"partners" to a Brownfield Redevelopment project; host municipalities,
developers, environmental consulting and contracting firms and financial
sources. In a given transaction all partners have different needs
and at different times.
The environmental
liabilities of a Brownfield site can be transferred without the
physical property transferred. This process can be very helpful
with corporate Brownfields.
Environmental
Financial Management is now a key element to Brownfield Redevelopment
Project, in both the public and private markets.
Environmental
Insurance is the keystone to a sound environmental financial management
program.
Who Needs
Insurance? The following is a list of inherent environmental risks that
face participants in a brownfields redevelopment project:
Financial Company or Developer: The discovery of environmental
issues on the site may make redevelopment out of reach financially.
Contamination discovered during redevelopment or aggravation of
existing contamination by a consultant or contractor may result
in additional cleanup costs and increased regulatory oversight.
Purchaser: The discovery of residual contamination
due to improper cleanup or possible future environmental problems
may result in additional cleanup costs and increased regulatory
oversight.
Property Owner / Seller: The spread of existing
contamination during remediation, adjacent property value diminution
or, in some cases, business interruption due to inadvertent spread
of contamination and third-party bodily injury and property damage.
Municipality or City Government: An environmental
incident which may occur following redevelopment could trigger
an investigation of the property. Contamination could be linked
to improper cleanup during the municipality or city's ownership.
The municipality or city could then incur additional costs. The
spectre of contamination can make marketing the property difficult.
Contractor, Consultant, Project Manager: Contracting
or consulting activities may aggravate or result in additional
contamination, cleanup expenses or third-party bodily injury and
property damage. Failure of the remedial design during the actual
remediation or during a period of performance affects the timing
of the entire project.
Local Redevelopment Authority (LRA): Decisions
regarding the development or implementation of the redevelopment
plan for a Base Realignment and Closure Act installation can now
be made that recognize subsequent changes of intended use. Pollution
and remediation legal liability coverage may assist LRAs with
sales and leasing of portions of the site as they become available
during the reuse process. In instances where the LRA desires to
use the property prior to complete cleanup, remediation cost containment
may be used to quantify all environmental costs.
What Does
"Basic Environmental Liability Coverage" Mean?
Basic Environmental Liability coverage offers insured companies
protection against third-party bodily injury or property damage
claims arising from on-site pollution conditions and against on-site
contamination discovered during the policy period.
Are There
Limits To Insurance Protection?
The environmental insurance market is currently offering limits
of liability up to $100 million.
How Do
Insurance Programs Work? (Per Site? Per Project? Per Client?)
In a brownfields scenario, it is per project. There are specialized
programs which would cover real estate portfolios as well. Environmental
insurance programs are tailored very carefully to the needs of the
clients whether it be for a specific project or for day-to-day business
operations.
How Often
Do You Renew Insurance Coverage?
For a brownfields project, a typical policy has multi-year terms.
Policy could be issued for 2, 3, 4 or 5 years. For bigger projects,
the policy could have a 10-year term.
What Is
An Average Deductible?
Typically, there are no deductibles. Some policies might require
a Self-Insured Retention (SIR)
