BROWNFIELD REDEVELOPMENT

PHILADELPHIA BROWNFIELD REDEVELOPMENT LAWYERS

Real estate transactions often require finesse, but when the transaction involves land contaminated with hazardous substances – also known as a brownfield – there is no margin for error. According to the Environmental Protection Agency (EPA), the United States currently has more than 450,000 brownfields. Brownfields often take the form of industrial buildings where plant wastes were historically buried in the back yard, or gas stations where gasoline spills or gradual releases have contaminated the soil and groundwater over many years of operations. However, many other commercial properties that don’t appear to generate chemical wastes themselves may still require cleanups of contamination, either from other types of businesses that were previously conducted there, or from contamination that has migrated from nearby properties.

The cost of cleaning up a contaminated property is often unknown, creating uncertainty for both seller and buyer about whether a sale can be successfully completed. The seller and buyer also face questions about who will pay for the work, who will be responsible for any potential liability, and how to avoid the threat of enforcement action by federal and state regulatory agencies.

Frequently, a seller must decide whether to clean up a property voluntarily, before or after completion of the sale transaction. A buyer must decide whether it is willing to buy a property “as is”, taking on potential liability for cleaning up any contamination, or whether it should structure the sale transaction to provide financial and legal assurances to protect against future liability. For example, a buyer who has carefully documented that it has performed a full and complete “due diligence investigation” may be eligible to raise an “innocent landowner” defense to litigation under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), or an “innocent purchaser” defense under state law.

Alternatively, where a buyer qualifies as a “bona fide prospective purchaser”, it may be able to negotiate with EPA and/or the state regulatory authorities to enter into an advance written agreement documenting the previous existence of the contamination and relieving the buyer of the responsibility for cleaning it up.

To limit environmental liabilities from contaminated properties, it is imperative that sellers or buyers of contaminated brownfield properties retain qualified, competent counsel before entering into a purchase and sale agreement. For example, when a client entered into an eight million dollar transaction to sell an Ohio shopping center contaminated by releases of perchloroethylene (PCE) and trichloroethylene (TCE) from a dry cleaner-tenant, Our team negotiated terms of the sale agreement designed to require the buyer to perform a cleanup under a state brownfields program, and to include the seller in the release from future liability that the buyer would obtain from the State.

Michelman & Bricker, P.C. understands the unique and novel legal issues presented by the purchase and sale of contaminated land. Our Philadelphia brownfields redevelopment lawyers have a demonstrated history of success in assisting parties in conducting due diligence investigations, including performing a Phase I or Phase II Environmental Site Assessment (ESA) to determine the extent of any preexisting contamination. Such due diligence investigations help prospective buyers become fully informed about the extent of contamination before they purchase a property, so that they can walk away from a transaction without liability if the financial risk is too great, or structure adequate protection for the buyer if the risk can be properly managed. When our Firm’s client wanted to buy a commercial property located across the street from an oil refinery, we assisted the client in hiring and managing a limited but cost-effective groundwater investigation by an environmental consultant which disclosed massive petroleum hydrocarbon contamination, structured the transaction to allow the buyer to walk away when the seller refused to take any legal responsibility for the necessary clean-up.

Financial Assistance Often Available for Brownfields Clean-Up

Federal and state brownfields programs provide financial assistance to municipalities and public redevelopment authorities interested in rehabilitating brownfield properties within their communities. Such governmental and public A variety of community and economic development grants and loans, and tax credits, may assist such public agencies in reducing urban blight and returning vacant and under-used land to productive use. Philadelphia brownfields clean-up lawyers can assist with the process of acquiring potential brownfields properties, putting a redevelopment plan into place, selecting and approving a private developer, securing funding for the project, and navigating the complicated maze of design and construction permits to complete such a project in compliance with numerous federal and state regulations. A brownfields redevelopment lawyer can also assist the municipal and public authority in negotiating with federal and state regulatory agencies to limit the future liabilities of the developer and future purchasers of the cleaned-up property.

Philadelphia Brownfields Clean-up Lawyers at Michelman & Bricker, P.C.: Qualified Counsel for Brownfield Redevelopment

Philadelphia brownfields redevelopment lawyers at Michelman & Bricker, P.C. assist buyers and sellers of brownfields. When the cost of a clean-up can be more than offset by the profits from redeveloping a property, a brownfield can present an enticing scenario for the savvy investor. However, underestimating the time, effort, regulatory red-tape, and potential liability of brownfield redevelopment can be costly. Experienced Philadelphia brownfields clean-up lawyers can help you avoid these pitfalls.

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