This document outlines an introduction to environmental law class that covers: - Presentations from an environmental attorney and consultant on environmental law and due diligence. - An overview of key environmental agencies and laws at the federal, state, and local levels, including CERCLA, RCRA, the Clean Water Act, NEPA, and state-level laws. - When environmental issues typically arise in real estate development, such as during due diligence, contracting, entitlements, and remediation. - The purpose and form of environmental due diligence, including using Phase I and Phase II investigations to understand liability and comply with regulations.

1. Emily Murray
Allen Matkins Leck Gamble Mallory & Natsis LLP
Eddie Arslanian
ENVIRON International Corporation
March 21, 2012
Legal Issues In Real Estate Development
Introduction to Environmental Law
USC RED 562

2. INTRODUCTIONS/CLASS OUTLINE
• Introductions
• Presentations
• Environmental Law Overview
• Environmental Consultant Perspective
• Mock Case Study

3. ENVIRONMENTAL AGENCIES
Federal
• Environmental Protection Agency (EPA)
California
• California EPA
• Regional Water Quality Control Boards (RWQCB)
• Department of Toxic Substances Control (DTSC)
Local Level
• Local City and County Departments

4. ENVIRONMENTAL LAWS - FEDERAL
• Comprehensive
Environmental
Response,
Compensation, and
Liability Act (CERCLA)
• Liability
• EPA Enforcement
• Private Party Cost
Recovery

5. ENVIRONMENTAL LAWS - FEDERAL
• Resource
Conversation and
Recovery Act
(RCRA)
• Disposal of
waste and
hazardous
waste

6. ENVIRONMENTAL LAWS - FEDERAL (CONT.)
• Clean Water Act
• Liability
• Permits
• National Environmental
Protection Act (NEPA)
• Endangered Species Act

7. ENVIRONMENTAL LAWS - STATE
• Hazardous Substances Account Act – State
Superfund
• Hazardous Waste Control Law (Cal-RCRA)
• Porter-Cologne Water Quality Control Act
• California Environmental Quality Act (CEQA)
• Common Law

8. WHEN DO ENVIRONMENTAL ISSUES ARISE?
• Pre-Purchase
• Due Diligence
• Contract Negotiation
• Entitlements /
Development
• CEQA / NEPA
• Remediation
• Litigation

9. DUE DILIGENCE – PURPOSE AND FORM
• Purpose:
• Know what you’re buying
• Protect yourself from liability
• Comply with the law
• Satisfy lending institutions
• Form:
• Phase I / Phase II Investigation

10. DUE DILIGENCE PURPOSE: DEFENSES TO LIABILITY
• Adjacent Landowner
• Innocent Landowner
• Release precedes ownership
• All appropriate inquiry; did not know or have
reason to know of contamination
• Cooperation and access
• Bonafide Prospective Purchaser
• Release precedes ownership
• All appropriate inquiry; knew of contamination
• Cooperation and access

11. •ASTM Standard
•Satisfies “all
appropriate inquiry”
requirement
•Phase I
•Phase II
Source: Marc Defoe, 2003; SF Bay Regional Water Control
Board, Brownfields)
DUE DILIGENCE FORM: PHASE I AND II

12. PROTECT YOURSELF: NEGOTIATE YOUR DEAL
• Indemnification
• Shift liability to seller, other liable parties
• Price reduction
• Allocate responsibility for cleanup activities

13. PROTECT YOURSELF: NEGOTIATE WITH AGENCIES
• “No Further
Action” Letter
• Comfort Letter
• Prospective
Purchaser
Agreements

14. PROTECT YOURSELF: INSURANCE
• Insurance

15. ENVIRONMENTAL LAW: OTHER CONCERNS
• Entitlements / Development
• CEQA / NEPA
• Remediation
• Litigation

16. QUESTIONS?