• Equity Fund

• Kilmer Projects

• The Fund targets brownfield projects where the total redevelopment budget falls in the $5 to $15 million range, with a maximum of $20 million equity invested in any single project.
• The Fund will acquire a brownfield site and will provide indemnification to the vendor for environmental liability.
• Redevelopment consists of remediation to regulatory site closure and often rezoning to a higher-and-better end land use.
• When the redevelopment is completed, the restored site is sold to a developer or end-user, who will complete the development process through the vertical build-out of the site.

The Fund is able to offer vendors of brownfield properties indemnification from environmental liability. Vendors of brownfields should be aware that standard "as is, where is" transaction language will not necessarily protect past owners from potential regulatory environmental liability. The Fund uses approved site closure mechanisms together with environmental legal liability insurance to back its indemnification to vendors. Corporate owners with a sophisticated understanding of brownfields have recognized the merit of the Fund's approach.

In addition to Fund's usual practice of purchasing brownfield sites outright, an opportunity also exists-under the right circumstances-to joint venture with the vendor on projects. The Fund recognizes that, for some vendors, there might be a real benefit to joint venturing on the redevelopment of their environmentally-impacted properties.

The Fund was established in response to several factors which improved the risk-reward relationship of brownfield redevelopment specifically in Canada:

1. Legislative reforms governing site closure and limiting exposure to regulatory environmental liability.
   
2. Land-use planning reforms aimed at curbing urban sprawl and promoting sustainable growth and urban intensification.
   
3. The availability of sophisticated risk management products, like environmental liability insurance.
   
4. Municipal incentives promoting brownfield redevelopment.
   
5. Stricter corporate disclosure requirements for contingent environmental liabilities.

Kilmer Projects

West End Brownfield Cleanup - Catalyst for Longbranch

Consortium led by Kilmer Brownfield Equity Fund is Awarded SDTC Funding to Demonstrate Clean Technology Project

July 15, 2010 - Toronto, ON - The Kilmer Brownfield Equity Fund L.P. announced that it was successful in it's application to Sustainable Development Technology Canada (SDTC) for demonstration of a Clean Technology Project on a former industrial property (see insert).

June 1, 2010 - The Kilmer Brownfield Equity Fund L.P. Announced that it recently acquired three brownfield properties for redevelopment in Toronto, Montreal and Guelph.

In December 2009, the Fund acquired an 11-acre, former automotive parts manufacturing site in Toronto's Long Branch neighbourhood in southwest Toronto (formerly Etobicoke). The site's manufacturing history dates back to the 1950's and the site and surrounding area are impacted by a variety of contaminants from industrial activities. The property was acquired jointly with the Whitecastle New Urban Fund L.P., which specializes in urban infill projects, and will be rezoned for mid- and high-rise residential uses.

Also in December 2009, the Fund acquired a 13-acre, former aerospace manufacturing site in Montreal's borough of Saint-Laurent. The site will be redeveloped into mid-rise residential complexes with 1,000 units. To enable the transaction, Kilmer was able to satisfy the vendor's stringent requirements for risk transfer and performance guarantees. According to Pamela Kraft, the Fund's development manager, this transaction, with a sophisticated U.S.-based, FORTUNE 100 vendor, exemplifies the importance of constructive problem-solving and a well-crafted purchase agreement for the management of risk and responsibilities to promote the redevelopment of brownfields.

In February 2010, the Fund acquired a 9-acre, former distillery, foundry and appliance manufacturing site in Guelph, Ontario. The site will be redeveloped for a mix of high-rise, mid-rise and townhouse residential uses while preserving several important historical elements on the site. The site is strategic to the City of Guelph as it supports its plan to revitalize the historic character of its downtown area while still meeting the objectives of Ontario's Smart Growth intensification initiatives. This site is located within Guelph's Community Improvement Plan (CIP) area and is eligible for various financial incentives to assist in its redevelopment.

All three sites are located within identified urban intensification areas for mixed-use and are well-serviced by public transit. From a sustainability perspective, the mixed-use built form is recognized as the most energy efficient approach.

The Fund is actively examining further brownfield opportunities.

SDTC Funded Project

Lead organization:
Lakeshore EMPC Two L.P., Toronto, Ontario, an affiliate of the Kilmer Brownfield Equity Fund L.P.

Project title:
First Full-scale Application of ZVI-Clay Technology in Canada to a cVOC-impacted Brownfield Property

Environmental Benefits:
Clean Soil / Clean Water / Climate Change
Economic Sector: Waste Management

Consortium Members:
Lakeshore EMPC Two L.P., an affiliate of the Kilmer Brownfield Equity Fund L.P.
WNUF Lakeshore L.P., An affiliate of the Whitecastle New Urban Fund L.P.
EnviroMetal Technologies Inc. (ETI)

Project Description:
Many sites on which chlorinated organic solvents have been used — typically former industrial and dry cleaning sites — have residual soil and ground water contaminant issues which are currently difficult to deal with at source locations and which impede future redevelopment. The lack of effective and proven remedial technologies for this source contamination has resulted in the favoured use of the “Dig-and-Haul” approach in Canada, with contaminated soil hauled off-site for landfill disposal.

This project will demonstrate the first commercial-scale brownfield remediation application of ZVI-Clay in situ treatment, which involves mixing both zero valent iron (ZVI) and clay into soil and ground water contaminated with chlorinated volatile organic compounds (cVOCs) to treat source locations.

On-site treatment and material re-use are more sustainable remedial approaches than traditional landfill disposal and clean soil importation. ZVI-Clay will be used to facilitate the remediation of the 10.6-acre brownfield property in Toronto with extensive cVOC contamination in both soil and ground water. Once remediated, this former industrial property will be redeveloped for residential use in conformance with the City of Toronto’s Official Plan.

This project intends to demonstrate to the Canadian marketplace and regulators that this technology can effectively address cVOC source contamination and thus enable remediation and site redevelopment on other affected brownfield sites across Canada while promoting more sustainable methods of remediation.

Kilmer Brownfield Fund Completes Mississauga Project

October 17, 2008 - The Kilmer Brownfield Equity Fund L.P. successfully completed the remediation and sale of the 11-acre former brownfield property on South Sheridan Way in Mississauga, Ontario. Records of Site Condition were filed with the Ontario Ministry of the Environment in September 2008 and the property was sold on September 24, 2008 to O.R.E. Development Corporation, a major industrial/commercial developer, for further development and build-out.

For further information on this project please refer to the article: “Identification and Remediation of a Brownfield Property” from Environmental Science & Engineering Magazine, November 2008 (reprinted with permission)

• Kenneth Tanenbaum, President and Managing Partner
• David Harper, M.Sc., P.Geo., Managing Partner, Environmental Risk Management
• Andrew Himel, MBA, MRICS, Managing Partner, Finance
• Pamela Kraft, MCIP, RPP, PLE, Managing Partner, Development and Planning

Kilmer Brownfield Management Limited
Scotia Plaza, Suite 2700
40 King Street West, Box 127
Toronto, Ontario M5H 3Y2
Main: 416-635-6100
Fax: 416-635-7697
E-mail: brownfieldinfo [at] kilmergroup.com

www.kilmergroup.com/brownfield/