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State-Sponsored Brownfields Insurance Programs

State-Sponsored Brownfields Insurance Programs. Presented to State of New Jersey Presented by 4. Benefits of Brownfields Redevelopment. Job Creation Urban Revitalization New Community Services Increased Tax Revenue Reduction of “Greenfield” Development

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State-Sponsored Brownfields Insurance Programs

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  1. State-Sponsored Brownfields Insurance Programs Presented to State of New Jersey Presented by 4

  2. Benefits of BrownfieldsRedevelopment • Job Creation • Urban Revitalization • New Community Services • Increased Tax Revenue • Reduction of “Greenfield” Development • Attraction of Out-of-State Business

  3. Major Impediments to Brownfields Redevelopment • Risk of Environmental Claims & Litigation • Potential Discovery of Unknown Contamination • Risk of Regulatory Re-openers • Risk That Cleanup Costs Will Exceed Estimates • Unavailability of Private Financing Due To Lenders’ Concerns Over Collateral Impairment Due To Contamination

  4. Key to Success… Environmental Insurance Is Critical To Mitigating The Risks Of Brownfield Redevelopment, Especially For Smaller Sites

  5. Need for Environmental Insurance • Protection from Third-Party Liability Claims & Litigation • Cleanup Coverage for New Contamination • Cleanup Coverage for Unknown, Pre-Existing Contamination • Coverage for Cleanup Cost Overruns for Known Contamination • Protects Lenders Financial Interest in Contaminated Properties

  6. Benefits…If We Provide it,They Will Come! • Access to Insurance for Smaller Sites • Pre-Designed Insurance Contracts • Broad Coverage Grants & Premium Discounts • Lower Deductibles & Self-Insured Retentions • Streamlined Application & Approval Process • State Oversight of Insurer Practices & Procedures

  7. Target Customers • Site Owners • Developers • Investors • Local Governments • Lenders

  8. State Programs Massachusetts Brownfield Redevelopment and Access to Capital Program (BRAC) • Over 200 Projects in Program • Leveraged Over $80 Million in Cleanup Funds • Leveraged Over $1 Billion in Loans & Investments • Over 12,000 Jobs Created

  9. State Programs (cont.) California Financial Assurance and Insurance for Redevelopment (FAIR) • Broad Scope (all sites up to $5 million in cleanup costs) • Pre-Negotiated Policies • Discounted Premium Rates • Accommodates Very Small Brownfields (i.e. under $1 million in clean-up costs)

  10. State Programs (cont.) Wisconsin Groundwater Protection Program (Natural Attenuation) • State is Named as Insured • Provides Coverage for Groundwater Contamination Only • Protects State Against Unanticipated Cleanup Costs • Provides Developer with Full Liability Release

  11. States in Pilot or Study Phase • Pennsylvania • Connecticut • New York • Maryland • Ohio • Virginia • Colorado

  12. Federal Interest The USEPA is studying the feasibility of a federally sponsored environmental insurance program for Superfund sites

  13. Why MGPEnvironmental Partners? • Long involvement in brownfields remediation & redevelopment • Experience in advising governments on design & implementation of state- sponsored environmental insurance programs • Multi-disciplined and highly experienced environmental professionals • Innovative & solution-oriented • Proven track record

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