1 / 23

Hyatt Regency Miami

Hyatt Regency Miami. Wednesday, February 29, 2012 – Orchid C. Preparing for the Next Phase of Your LRA. LRA Overview. Michael A. Houlemard, Jr. Executive Officer, Fort Ord Reuse Authority. What Really Is an LRA?. City, Jurisdiction, or Joint Powers Authority

aliza
Download Presentation

Hyatt Regency Miami

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Hyatt Regency Miami Wednesday, February 29, 2012 – Orchid C

  2. Preparing for the Next Phase of Your LRA LRAOverview Michael A. Houlemard, Jr. Executive Officer, Fort Ord Reuse Authority

  3. What Really Is an LRA? • City, Jurisdiction, or Joint Powers Authority • Funded by local resources (taxes, levies, exactions, fees, etc.) • Risk averse, often with general fund envy • Not always sophisticated in understanding financial markets • Tasked with reusing marginal properties

  4. Fort Ord Experience • Fort Ord Reuse Authority (FORA) was created by state law in 1994 • Broad powers to plan, oversee, finance, and implement base reuse programs • 24-member Board of Directors • Responsibilities over 45 square miles • June 30, 2014: Authority Act expires

  5. Applications/Use of Insurance (Fort Ord) • General Liability • Pollution Legal Liability • Cost Cap/Risk Management • “Additional Insured”

  6. The Fort Ord Story LRA’sObligation for Costs in Excess (unlimited) Army’sObligation for Costs in Excess Cost-Cap Insurance Policy Anticipated Cost of Remediation/Grant Amount from Army

  7. Environmental Services Cooperative Agreement • Elected to complete munitions removal • Cost Cap insurance policy ensures completion of remediation program • Pollution Legal Liability policy addresses post-cleanup liability • Would/Could this be done today?

  8. Preparing for the Next Phase of Your LRA LRAs in a Post-Cost-Cap World Michael Miller – Drinker Biddle & Reath LLP

  9. Costs in Excess of Initial Grant • Possible Solutions (1) No DoD Risk (2) All DoD Risk (3) Hybrid (4) “Other”

  10. Costs in Excess of Initial Grant (1) No DoD Risk: Oakland Army Base (2002) “Costs in excess of the [Army’s] maximum funding obligation will not be paid.” § B.5.1.

  11. Costs in Excess of Initial Grant No DoD Risk LRA’s Obligation for Costs in Excess (unlimited) LRA’s Obligation for Costs in Excess (unlimited) Army’s Obligation for Costs in Excess Cost-Cap Insurance Policy Army’s Obligation for Costs in Excess Anticipated Cost of Remediation/Grant Amount from Army

  12. Costs in Excess of Initial Grant (2) All DoD Risk Lowry Air Force Base (2002) “The funding obligation of the LERA . . . is limited to: funds actually received by the LERA from the Air Force . . . plus [] funds paid to the LERA or named insured from the insurer(s) . . . pursuant to the Cleanup Cost Cap . . . .” § 401.C.

  13. Costs in Excess of Initial Grant All DoD Risk LRA’s Obligation for Costs in Excess (unlimited) LRA’s Obligation for Costs in Excess (unlimited) Army’s Obligation for Costs in Excess (unlimited) Army’s Obligation for Costs in Excess Cost-Cap Insurance Policy Anticipated Cost of Remediation/Grant Amount from Army

  14. Costs in Excess of Initial Grant (3) Hybrid Camp Bonneville (2011) Area 1: LRA has risk Area 2: (i) Contingent fund established by Army; (ii) if costs exceed, parties will amend agreement to provide LRA with additional funding Area 3: Parties agree to discuss additional funding as needed

  15. Costs in Excess of Initial Grant Hybrid Area 1: LRA has risk LRA’s Obligation (unlimited) Initial Grant Area 1

  16. Costs in Excess of Initial Grant Hybrid Area 2: (i) Contingent fund established by Army; (ii) parties will amend agreement to provide LRA with additional funding Amend Agreement to Provide LRA with Additional Funding Army’s Obligation Initial Grant Area 2

  17. Costs in Excess of Initial Grant Hybrid Area 3: Parties discuss additional funding as needed To Be Addressed After Further Investigation Initial Grant Area 3

  18. Costs in Excess of Initial Grant (4) Other (a) Thorough Delineation = No DoD risk (b) Conservative Estimates = Any excess funds returned to DoD (c) DoD takes layer of risk, remainder left with LRA (d) LRA takes layer of risk, remainder left with DoD

  19. Costs in Excess of Initial Grant Mike Miller – Partner, Drinker Biddle & Reath LLP Preparing for the Next Phase of Your LRA Potential Financial AssuranceAlternatives Mark E. Kleiner, PE

  20. A Little Bit of History

  21. Strategies/Financial Assurance • Comprehensive Due Diligence • Engage Regulatory Agencies • Conservative Estimating to Cushion Initial Grants • Contingent Funds • Phased Approach – Not a one-time transfer

  22. Funding for Comprehensive Due Diligence • OEA Grants • Economic Development Agency Grants • Low Interest Loans • Tax Incremental Financing • If Not an NPL Site • USEPA Brownfield Grants • State Brownfield Grants • Contractors

  23. Lessons Learned • Not a Take-It-or-Leave-It • Must Have Redevelopment Plan with Tenants in Hand • Horse Trading • Bounding Risk Through DD

More Related