Projects & News
On Oct. 9, 2019 and at the Society of Environmental Professionals’ (SEIP’s) Annual Conference, Michael Hill summarized means by which captives, “rent-a-cell” captives, and other Alternatives could fill gaps left by AIG and other Traditional Insurers’ exit or partial exit from the Environmental Insurance market. Hill described the importance of these Alternatives in today’s retracting market, and means by which Alternatives can support activities that reduce climate impacts . Such activities include not only Brownfield cleanups (which EPA has found reduce vehicle miles traveled by over 40% on average), but also Solar Parks, Carbon Credits, Decommissioning of Nuclear Power Plants, and more. The Presentation can also be accessed here.
On May 15, 2019 — and at the >3,000-acre former McClellan Air Force Base that was using Alba’s post-2011 Cost Cap Alternative to accomplish two fixed price cleanups — we were able to substitute two Letters of Credit (LOCs) to serve as the over >$13M in cost overrun reserves. Using the LOCs saved over $600,000 per year.
On February 7, 2019, Michael Hill co-led a CLE webinar, Environmental Insurance, Captive Alternatives, and Contractual Transfers in the Context of Contaminated Property Cleanups and Transfers. The webinar reviewed traditional and alternative insurance products (e.g., Pollution Legal Liability, Cost Cap, Excess of Indemnity) as well as captives, contractual liability transfers and other tools in the context of the cleanup and/or transfer of contaminated properties. The webinar was designed for attorneys in the fields of real estate, environmental and bankruptcy serving industrial clients, governments, Brownfield developers, remediation contractors, “PRP” groups, and others.
On December 13, 2018, the U.S. Government acquired 97 “brownfield” acres in St. Louis where it will construct a $1.8B campus for the National Geospatial-Intelligence Agency (“NGA”). To protect against cleanup and third-party claims from pre-existing pollution conditions, Alba helped the Air Force, NGA, Army Corps of Engineers and the City of St. Louis (1) obtain a Pollution Legal Liability (“PLL”) policy; and (2) create a PLL Alternative in the form of an escrow account covering risks not addressed by the PLL. The new campus will be home to 3,000 jobs and bring significant tax revenue to the City. These 2018 placements were required because the City hoping to host the project in 2017 purchased a 10-year PLL policy whose “fine print” undercut virtually all of its purported coverage. As just examples, the PLL excluded pollutants: (i) found in fill material, yet fill material covered the entire site; or (2) found during redevelopment, yet the entire purpose of the policy was to enable and support redevelopment. Because the City (as transferor) was unwilling to assume the risk of pollution costs and the U.S. Government (as transferee) was legally constrained from assuming them, the 2018 comprehensive replacements were needed.
On Oct. 3, 2018, EPA presented its first annual “National Federal Facility Excellence in Site Reuse Award” to the 3,500-acre former McClellan Air Force Base. As stated by EPA, the redevelopment “now supports more than 17,000 jobs and has generated $580 million in public and private investment.” EPA’s News Release recounts transfers of the former Air Force Base to what is now the McClellan Business Park dating back to 2007, when the Air Force accomplished the first ever Early Transfer of an NPL site owned by the military. Alba assisted the Air Force in the 2007 transfer as well as each of the three since, two of which required use of a “post-Cost Cap” Alternative designed by Alba and described in detail here.
In April 2018, BCP Investors broke ground on its 2018 10-acre expansion of its already highly acclaimed 2013 (20-acre; $105M; 1,000-job) brownfield redevelopment at the same site. Prior to BCP’s redevelopment, the property had for decades housed a large oil refinery and terminal. Alba assisted BCP with the 2013 redevelopment as well as the 2018 expansion.
On November 1, 2017, the International Risk Management Institute (IRMI) interviewed Michael Hill regarding Alba’s multi-disciplinary approach and other factors related to environmental risk management. The interview also covered issues such as the insurance industry’s greatest challenges and its “next frontier.”
On March 28, 2013, EPA’s Inspector General released a Report, EPA Should Increase Fixed-Price Contracting for Remedial Actions, noting FPCs’ cost-saving and other benefits and requiring EPA to do more. The Report noted the many benefits of fixed-price contracting, including significant cost savings, increased competition, and achievement of socio-economic goals. As reflected in the Report, EPA agreed to make fixed-price contracting a more standard policy moving forward.
A May 16, 2006 Department of Defense study provides the best data available on the effectiveness of Fixed Price Cleanups. Tracking Performance on the Army’s Performance Based Contracts. Covering 42 contracts, the data show that cleanups are completed at costs that are, on average, 21% below the cost of traditional cleanups ($478M v. independent government estimates of $723M). According to the Study, FPCs contractors generally “meet or beat” schedules and do so with quality “from good to going beyond requirements.” Id., at 4, 24, 31, 33 (May 16, 2006). The primary driver of the cost reductions is the alignment of interests that insurance-supported contracts allow.