Commercial Land Use and Redevelopment

Within every municipality exists a zoning regime that governs residential, industrial, and commercial land use and redevelopment.

Climate change is playing a major role with respect to land use. Over the past few decades, storms and rising ocean levels have impacted our state’s shorelines, sometimes unearthing contamination. Liability may arise in any of these contexts, and commercial land use is no exception.

Brownfields are an integral subset of viable commercial land use – they provide an opportunity for re-development. While some developers see a contaminated property as being too risky, with the right counsel and experts assisting, commercial redevelopment can be incredibly lucrative.

The federal statute that provides oversight, regulation, and liability in the contaminated commercial land use arena is known as the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”). This statute is customarily referred to as “Superfund,” and the United States Environmental Protection Agency oversees its implementation.

Anyone purchasing a contaminated property that falls into the Superfund category has a few options to avoid liability. Prior to the purchase, the buyer may apply for and receive a bona fide prospective purchaser designation. In the commercial land use industry, this designation creates a defense to liability for cleanup of the site. To qualify, the purchaser must not be associated with any other party that is liable for site cleanup costs.

Working with an experienced and savvy environmental attorney is a necessity under the above program, and to assist any prospective lender. Contrary to common misperception, parties acting to provide financing are not automatically responsible for cleanup costs in a commercial land use purchase. In Rhode Island, the statutory regime provides liability protection for several specific entities, including lenders. So long as the lender refrains from undertaking any management of the facility, this protection is available to it.

As with any commercial land use transaction, both buyer and seller need legal counsel to ensure that the conveyance documents provide adequate liability coverage. With environmental issues, it is especially important to work with an experienced environmental attorney. Simply hiring a business attorney that does not have specific knowledge of indemnity provisions, escrow holdbacks, and the state’s equivalent of CERCLA is a mistake.

Contaminated properties can be unique and lucrative investments, with the right network of professionals working to protect the buyer or seller. There is a huge opportunity in purchasing an unused commercial property and turning it into a profitable asset.

Brownfields properties are not for everyone; only those developers that have an eye for opportunity will customarily seek out commercial land use reuse in this way. Indemnity can be daunting, as environmental liability has the tendency to appear impenetrable. But, the more you involve yourself with these transactions, the more it becomes clear that there is a way to navigate contaminated property sale, purchase, and redevelopment.

The attorneys at Desautel Law have the experience and confidence you need to assist you or your company with the benefits related to commercial land use and redevelopment.

To learn more about Desautel Law and how it can represent you regarding commercial land use and redevelopment, call us at 401.477.0023 today.

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