Can Your Environmental Lawyer Be a Profit Center?
September 18, 2017
I still remember a site inspection that I performed more than 30 years ago. I had already represented Company X for some time and was not surprised when its President approached me. However, I was a bit taken back when he said, “What are you doing here?’’ I got the message loud and clear that my presence was not appreciated and likely forecasted expenditures for environmental work and legal fees, neither of which the company president had any interest in.
Given this historic perspective, let’s fast forward to the present where changes in Environmental Law and the common perception of the role of lawyers has expanded the functional areas where legal expertise is needed. We are still very important in providing our clients with the risk analysis and compliance information that business people require in making business decisions. But now, much more is, or should be, expected of us.
This is particularly true in the area of site development where legal input can be extremely valuable in the identification of target sites and in the selection of remedial strategies, including the use of ELURs. With regard to site development, the potential for using the state Brownfield programs may eliminate the need to comply with the Transfer Act and the need to address groundwater plumes which have left the property. Further, use of these programs may facilitate the issuance of a Covenant Not To Sue by DEEP.
When compared to the liabilities associated with a traditional conveyance subject to the Transfer Act, entrance into a Brownfield program may sufficiently reduce liability and cleanup costs to make a previously unattractive site a prime target for future development.
Of course, the factors discussed above impact lenders as much as buyers and sellers. Collateral value and the desirability of a loan are impacted by the cost of cleanup and the assessment of liability. We are no longer in a world ( and haven’t been for some time) where the presence of contamination is a deal killer. It is simply a factor to be considered, and a measure of creativity in structuring a transaction can make a big difference in a property’s marketability.