1. Structuring Deals and Allocating Liability: When the Responsible Party Won’t Take Responsibility The Greenfield Tap and Die Project, Greenfield, Massachusetts EPA Brownfields 2006 Conference November 12, 2006 Jeffrey M. Bernstein, Esq. Managing Director Bernstein, Cushner & Kimmell, P.C. Boston, Massachusetts

2. Evaluating Options for Clean-up and Reuse  Who is responsible for the contamination?  Identify parties responsible for contamination.  Determine if responsible parties have assets that could be applied to cleanup.

3. What If No Viable Party Is On The Scene? If no viable party is available...  Is a taking possible?  Sale to a private party at a reduced purchase price?  Are funding sources available for assessment or remediation, pending pursuit of responsible parties?  What is the position of the affected community and local officials?

4. Determine Goals for Redevelopment Prior to Negotiation/Legal Process  What is the highest and best use of the property?  How does property use relate to the village or downtown and overall development objectives?  Do the existing buildings/structures have any real value, as opposed to sentimental value?  Who can conduct the clean-up and who can fund it?

5. What Will Happen To The Property After Clean-Up?  Flip  Partnership  Current owner continues to own property, acts as primary developer  Lease or sale through redevelopment agency type entity  RFP/Solicitation

6. The Negotiation Process  What tools exist?  Will state or federal regulators get involved?  What role does political pressure/involvement play in the process?  Is there a role for mediation/alternative dispute resolution?

7. The Negotiation Process (continued) How does the outcome of the negotiation process get documented?  Settlement agreements  Purchase and sale agreement  State Administrative Consent Agreements  Covenants not to Sue  Federal Prospective Purchaser Agreements

8. Follow-up Implementing and enforcing the settlement

9. Case Study Greenfield Tap and Die - Greenfield, MA

10. Case Study: Greenfield Tap and Die - Greenfield, MA

11. Site:Two parcels, seven acres on the Green River. Gateway to downtown (Routes 5&10) 1886-1994: Metal-working and related operations, employed thousands.  TRW and predecessors on one parcel.  Greenfield Industries, Inc. on second parcel.  Both used, stored, disposed of oil & hazardous materials at Site.  Site is substantially contaminated. 1997-2001: Town acquires site for non-payment of taxes.  Town conducts site assessment and response action. 1999-2001: Greenfield negotiates with TRW & GII.  MA DEP participates. 2001: Complex, innovative 3-component settlement reached.

12. Case Study: Greenfield Tap and Die - Greenfield, MA Settlement Agreement Between Greenfield and GII GII paid Greenfield $325,000 and released claims against Greenfield. Greenfield released claims against GII and provided indemnification. Settlement Agreement Between Greenfield and TRW Greenfield: Remediates GII’s contamination, demolishes buildings. TRW: Remediates all other contamination; provides financial guarantees to Greenfield, future owners and tenants at Site. Institutional controls allow variety of uses, work below grade must comply with Health & Safety Plan. Environmental Insurance policy (10 years/$10,000,000) Administrative Consent Order – Massachusetts, DEP, Greenfield, TRW, and GII In exchange for cleanup, state granted Covenant Not to Sue and Contribution Protection, with potential reopeners.

13. The End Result in Greenfield  Town issues RFP in 2005, not development specific  Developer selected (the Gralia Group) to construct assisted living facility; Town received $50,000 for parcel, including $22,500 in back taxes  The Arbors, as it will be called, will have 75 rental units, and is expected to cost $10.5 million to construct  Assisted-living apartments are to be marketed primarily to "the frail elderly who need assistance with activities of daily living." Expected average age of occupants is 85, most will be female, all able to remain out of nursing homes because of the assistance available 24 hours on site  All permitting is complete  Town provided tax increment financing agreement deal with property tax assessments and adjustments for ten years

14. Structuring Deals and Allocating Liability: Closing Comments  Multiple options  Community involvement often critical  Liability endpoints important, but creative alternatives exist  Possible to structure different kinds of settlements with different parties  ADR and expedited decisionmaking important