Innovative Legal & Economic Solutions
KMCL has engaged and allocated environmental risks in thousands of commercial, real estate, and lending transactions.
As a firm, one of our principal strengths is our ability to resolve environmental issues in corporate, real estate, and financing transactions. We are practical problem solvers who fight to get the deal done. This tenacity has helped us salvage countless deals others considered doomed.
There is simply no "one size fits all" approach to contaminated property transactions. We create customized solutions to maximize value for our clients.
Please contact any KMCL attorney for more information on this area of practice.
Commercial Mortgage-Backed Securities (CMBS)
KMCL has literally written the book on the environmental aspects of commercial mortgage-backed securities. As exclusive environmental counsel to both servicers and lenders, we have been involved in the environmental assessment, response and management of thousands of contaminated properties throughout the United States.
Our services include management of technical personnel, environmental compliance cost calculation, development of contractual terms and conditions to address complex environmental problems, and analysis of hundreds of federal, state, and local environmental laws.
KMCL is a recognized leader in the specialized area of brownfield redevelopment.
We have enrolled and managed the cleanup and closure of contaminated sites under voluntary cleanup and brownfields programs in dozens of jurisdictions. In the process, we maximize opportunities for available liability protections, including perfecting innocent and bona fide prospective purchaser protections.
Georgia Voluntary Remediation Program Act
KMCL attorneys represented an industrial advocacy organization in the passage of the ground-breaking Georgia Voluntary Remediation Program Act of 2009 (VRP), which for the first time brought expedited risk based corrective action to hazardous site cleanups in Georgia.
Our attorneys led the legislative drafting effort and were key players in agency and stakeholder negotiations, and we were instrumental in getting the VRP effectively opened for business in April 2010 by adoption of a new and revised application process.
We are the first lawyers in Georgia to enroll a client utilizing the new and revised VRP application process.
We have considerable depth in using environmental insurance products to solve problems in transactions. We have worked both on the placement of environmental insurance and on claims arising under those policies. This experience makes us especially well suited to understand the important differences between buying insurance and actually getting a carrier to pay for an environmental problem.
KMCL lawyers are also experienced in exploiting less commonly employed cost recovery sources to bridge economic gaps in transactions caused by environmental problems, such as negotiated settlements with liable parties outside the transaction in question and even government assistance to pay for investigation and cleanup.
Other transactional services we offer include:
- Counseling buyers, seller and lenders on optimum deal structures to limit liability and maximize value;
- Working with sellers to address environmental issues in advance of marketing in order to minimize the impact on price and time to closing;
- Advising buyers of individual properties, bundled transactions and large portfolios regarding cost effective and time efficient methods to value potential environmental risks;
- Hiring consultants and managing due diligence, including, for example, Phase I and II assessments, wetlands and NEPA studies;
- Drafting and negotiating traditional representations, warranties and indemnities, as well as specialty contracts, such as pre- and post-closing escrows and holdbacks for remediation of contaminated properties;
- Evaluating environmental compliance and arranging for timely transfer of a wide variety of permits and licenses;
- Notifying and negotiating with federal, state and local agencies for NFA letters and similar governmental approvals;
- Obtaining environmental insurance when it makes sense.
- Acting as environmental counsel for developer of a $2 billion mixed‐use project involving legacy environmental issues. Providing comprehensive support services from start to finish and overseeing the post-closing remediation effort to obtain final regulatory closure.
- Acting as exclusive outside environmental counsel to a real estate special servicer firm, supervising thousands of due diligence efforts per year for a variety of commercial, industrial, and multi-family properties throughout the United States.
- Acting as national environmental counsel for special servicers in CMBS transactions and asset managers for distressed property portfolios in which the firm has managed environmental matters for more than 10,000 properties located throughout the United States.
- Assisting a Fortune 100 telecommunications company with its more complicated UST sites, especially in connection with preparing the properties for sale, assisting with marketing properties, and negotiating the terms of sale. Supervising environmental consultants to ensure speedy remediation and compliance with applicable laws and regulations, including trust fund reimbursement requirements. Negotiating environmental indemnities with buyers of the UST sites and negotiating the cleanup requirements with environmental regulators.
- Assisting a national real estate company in making a successful bid on a portfolio with nearly 600 properties under a due diligence window of only 90 days. Developing a system for rapid assessment and valuation of environmental risks that provided the client with sufficient information to craft a bid with a specific dollar discount for all environmental risks and no environmental contingencies, a feature which proved central in winning the bid.
- Assisting a real estate company in buying a shopping center that had languished on the hazardous site inventory for approximately eight years and which had been the subject of numerous notices and deficiencies, a consent order, and finally an administrative order. As part of the acquisition, we achieved EPD approval in four weeks of a prospective purchaser corrective action plan, thereby securing a Brownfield limitation of liability.
- Assisting one of the largest industrial real estate developers in the U.S. with the acquisition, development, leasing, and disposition of its trucking distribution centers. Developing internal leasing protocols for their international hazardous materials shippers.
- Capitalizing on a cost-recovery lawsuit to develop extensive evidence of participation by other potentially responsible parties. This led to a multi-party settlement with the U.S. EPA and a greatly reduced share of cost to the clients.
- Managing the environmental due diligence in connection with a combined city and county redevelopment project. Successfully enrolling the site under the state brownfields program. Negotiating with the agency to obtain a fast-track NFA determination that allowed the deal to close by year-end deadline.
- Negotiating the pre-litigation assumption of cleanup responsibility on the part of a major chemical company on behalf of a “brownfield” purchaser in Georgia. The chemical company was one of several potentially responsible parties at the site of a spill of chlorinated solvents. Assisted the client in submitting an application for a limitation on liability under the state Brownfield law, and counseled on the availability of tax abatement to recoup further costs.
- Orchestrated the acquisition of a defaulted mortgage, foreclosed on the property to determine diminution in value claims, and thereby precipitated a settlement on behalf of a utility client sued by the current owner of a former site. Managed the cleanup of the site to anticipate the redevelopment to include various commercial uses. The client then sold the property subject to restrictive covenants at a price representing a profit over the reacquisition costs.
- Providing environmental representation for international lending and investment institutions in various domestic and international transactions ranging from equity deals and joint ventures to base-load lending work and distressed property workouts. Helping to get a difficult retail portfolio financing closed by negotiating a private indemnification agreement with a third-party multi-national that operated an adjacent contaminated site.
- Providing ongoing regulatory support for a national convenience store/gasoline retail company in real property acquisitions involving USTs and environmental impacts. Successfully negotiating disputed state trust fund reimbursements.
- Providing ongoing representation to client in the acquisition and resale of several 100-year-old closed industrial brownfields sites in Canada and the U.S., including oversight of Phase I and II assessments, structuring and oversight of pre- and post-closing remediation plans, and obtaining pollution liability and cost cap environmental insurance.
- Representing a client who owned an industrial building that had been used for a dying and weaving facility for approximately 20 years. Facing a long list of stringent environmental requirements, and lacking any viable regulatory alternative, the parties agreed to proceed with the sale of the property without formal Brownfield protection subject to a post-closing remediation agreement under which the client purchased environmental insurance to protect both the buyer and itself from third party claims, and the client agreed to perform whatever cleanup was affirmatively required by the government.
- Representing a major corporation in the environmental due diligence and compliance aspects of a $1 billion acquisition.
- Representing a foreign manufacturing company in the due diligence associated with expanding its operations into the United States through the acquisition of numerous United States plants and facilities. Resolving the transfer of dozens of environmental permits, including permits for facilities whose operations were out of compliance.
- Representing a major convenience store company that sold over 75 locations. Dealing with numerous issues that arose regarding corrective actions.
- Representing a rapidly growing suburban church in an especially unusual Brownfield transaction. The church was land-locked by an abutting city hall property. Directly across the street from the church sat a partially vacant contaminated property mired in receivership both because of the environmental problem and the loss of its anchor tenant. KMCL attorneys helped the church buy the mortgage on the property across the street from a CMBS pool using a limited liability company. Through a complex series of transactions, the church doubled the size of its campus, and the municipal government gained a greatly expanded city hall complex.
- Representing a real estate investment company buying one of the first sites ever removed from Georgia’s hazardous site inventory. Aiding in securing environmental insurance to protect against the risk that the state agency might change its mind. Securing coverage under the environmental insurance policy for the costs of defending against both the state claim and a toxic tort claim brought by an adjoining landowner when the state changed its mind and re-listed the property. Several years later, we helped the client sell the property at full fair market value.
- Representing an environmental consulting firm, who in turn represented the seller of a contaminated industrial park. Negotiating a three-way liability transfer agreement where the consultant agreed to assume liability for the property and to perform a cleanup pursuant to the state voluntary cleanup program. Negotiating an environmental insurance policy that protects the consultant from the potential for the cost of cleanup to exceed current estimates and from third-party liability.
- Representing independent power producers in connection with environmental and regulatory matters related to the development and acquisition of peaker power plant projects in the Southeast.
- Representing numerous buyers and sellers of gas stations/convenience stores and other UST sites across the Southeast, including portfolios involving hundreds of sites. Conducting preliminary environmental due diligence, including review of environmental compliance histories and review of remedial work performed at sites. Evaluating the status of funding of remedial work through environmental insurance and state UST trust funds and negotiating provisions of purchase and sale agreements related to UST issues, including environmental representations and warranties, environmental covenants, and complex special environmental indemnity apportioning UST (and other) liabilities between the parties.
- Representing numerous private and municipal entities in landfill gas transactions, including all aspects of drafting and negotiating offtake, acquisition, and EPC agreements.
- Representing the former owner of a site that had been impacted by residues of the client’s historical operations and by the remnants of a former municipal incinerator and a railroad. The site was further complicated because it was underlain by fractured bedrock (making a cleanup technically difficult), was adjacent to a river (making possible ”ecotoxicity” effects a matter of concern), and was scheduled to be part of a riverfront urban redevelopment project. We overcame all of these obstacles, leading to successful redevelopment.
- Representing the seller of a heavily contaminated property located in a historic district, which prevented use of conventional cleanup methods. Working with the technical consultants, the team developed a comprehensive cleanup and redevelopment strategy that included (1) a renegotiation of applicable clean up standards; (2) development of innovative clean up methods; (3) development of comprehensive set of real estate controls and restrictions that permitted redevelopment of the property in a way that protected human health and the environment; and (4) development of a contractual package with the purchaser that gave it the comfort needed for itself and its lenders. The parcel is now a model for urban redevelopment within the city.
- Supporting environmental due diligence in client’s massive divestiture of millions of acres of timberlands, including oil and gas carve-outs, and structuring of complex remediation mechanisms for impacted locations and innovative carbon sequestration allocations.
KMCL attorneys have been described as providing “superlative legal skills, scientific knowledge, and regulatory awareness.”