Beginning Our Discussion of the Ground Lease Liability Relief Model

Posted: February 24, 2011 | Author: | Filed under: Uncategorized | Leave a comment »

Brownfield Ground Lease is a blog site that I have established for the purpose of creating an ongoing nationwide dialogue around the subject of utilizing ground leases as an oft-preferred real property development model at contaminated real property sites.

The jumping off point for this discussion is the already-enacted law, California Senate Bill 989, which I drafted and shepherded through the California legislature and which became effective in California on January 1, 2007.  That law provides for significant environmental cleanup liability limitations for a developer who conducts a real estate development project under a ground lease, rather than taking actual fee title to the property.  The basic tenet of the SB 989 law is that the ground lease developer does not have to clean up contamination of deep soil or deep groundwater, or contamination that is migrating offsite to another property.  The “Bona Fide Ground Tenant” developer must merely make the site safe for its intended human use.

My intention is to use this blog site in conjunction with a “White Paper” that I am preparing on this very ground lease liability bifurcation topic.  The White Paper and the blog are intended to serve as a resource to real estate developers, renewable energy developers, property owners, cities, redevelopment agencies, lenders, federal and state environmental and land use regulators, and the environmental community.

The White Paper is co-sponsored by the California Business Properties Association (“CBPA”), who also helped build the original trade group coalition in support of the original SB 989 legislation.  The California Department of Toxic Substances Control (“DTSC”) is an additional partner in this White Paper development, as are the various private sponsors of the White Paper development and outreach efforts.  The U.S. EPA is providing assistance with the White Paper outreach, development and preparation, as is the National Renewable Energy Laboratory (“NREL”).

Early Focus on Solar and Renewable Energy Projects:

While the Bona Fide Ground Tenant concept is useable at almost any contaminated site where development is to occur, I will be focusing this blog for the first few months on the topic with the most immediate practical nationwide application, the siting of renewable energy projects on landfills and other contaminated sites.

This is especially timely because of the ongoing EPA/NREL(DOE) partnership on the “Repowering America” Initiative.  Working with the EPA, I am organizing and moderating a panel on this very topic on April 5 at this year’s Brownfields 2011 conference in Philadelphia.  The first several weeks of this blog will be designed to bring readers up-to-speed on how this bifurcated ground lease cleanup concept works, and to prepare the readers for participation in the panel discussion in Philadelphia.  It is also my intention to use this conference and blog as the opportunity to begin organizing and coordinating the establishment of state-by-state “working groups” to help jumpstart the ground lease concept immediately at renewable energy sites across the country.