Message from the Chair
It was great to see so many of you at the ACC Mid-Year Meeting in New York. While the CLE credits are very useful, I most enjoy the people I meet and the relationships I have built over the past 17 years as an Association of Corporate Counsel (ACC) member.
The ACC Annual Meeting will take place October 15-18 and we want to see you there! ACC has so many resources to help you in your substantive practice, but do not forget about the networking/personal side. We are a very collegial group that wants to get to know and help each other in our careers. Most of us have an unmanageable workload, in addition to family and other obligations. Notwithstanding, we have come to the conclusion that the annual meetings are worthwhile and important because our professional lives will not simply take care of themselves. If you have not been to one of our events recently, go online and register now for the ACC Annual Meeting in Washington DC Oct 15-18. We look forward to seeing you in our nation’s capital!
Dawn Haghighi Chair Real Estate Committee - firstname.lastname@example.org
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Patrick K. Yu, General Counsel, East Coast Abstract
Patrick K. Yu is General Counsel of East Coast Abstract, Inc. with offices in Garden City and Manhattan. At ECA, Mr. Yu counsels clients on title insurance products and, if requested, assists them in clearing title exceptions. Prior to joining ECA, Mr. Yu was in private practice where he represented individuals and companies in all facets of real estate matters, including real estate acquisitions and sales, commercial leasing, construction contracts, and landlord tenant litigation. Prior to being in private practice, Mr. Yu appraised commercial real estate for Grubb & Ellis in New York City. He regularly blogs on real estate related matters. Mr. Yu is active in community affairs. He is a founder and Board member of the Asian Real Estate Professional Association. He serves as a member on the Real Property Law Committee and Housing Court Committee of the New York City Bar Association and is the chair of the Real Property Law Committee of the Nassau County Bar Association. Mr. Yu received his B.S. in Urban Studies from Columbia University, M.S. in Real Estate Investment and Development from New York University and J.D. from University of Notre Dame. He is admitted to practice in the state of New York; the U.S. District Court, Eastern and Southern District of New York. Mr. Yu may be contacted at 516-794-9100 or Patrick@eca-abstract.com.
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So What Are You Working On?
We recently asked a few of our members what they were working on. Here is what they had to say.
Darryl Austin, General Counsel, Forerunner Development
We have been focusing on the adaptive reuse of Historic warehouse properties lately. Today, I am putting together a plan for zoning and site approvals with respect to a proposed mixed-use building with commercial on the ground floor and over 100 residential units above. I am also evaluating the financing requirements for a couple of student housing projects we have in the concept stages.
Elena B. Antonetti, Executive Counsel, Travelers
I oversee the corporate real estate legal group which supports enterprise matters involving leased & owned real estate used for office space & related facilities and construction contracts. In addition, I manage complex technology transactions. In 2017, my big focus has been on innovation, automation and implementation of streamlined contracting process flows, as well as alternative service delivery models by outside counsel and contractors.
Erik Valderhaug, Associate General Counsel and Vice President, Everest Properties
My company recently began selling ownership interests in apartment properties to real estate investors participating in 1031 exchanges. I have been focused on the laws and regulations pertaining to Delaware Statutory Trusts, real estate syndications, and “tax-deferred” exchanges.
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Top 5 Environmental Issues Affecting Commercial and Real Estate Transactions
We asked Karl Heisler from Katten Muchin about his Top 5 Environmental Issues affecting commercial and real estate transaction. Feel free to follow up with Karl on any of these topics email@example.com.
- Lender Liability. The secured creditor exemption in the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) was designed to shield a secured creditor from CERCLA liability where the only connection between the creditor and the contaminated facility is an ownership interest intended to secure a payment obligation. The exemption does not, however, protect lenders from accepting as collateral commercial real estate that may be worth less than the loan amount due to environmental impairments. In its most recent Semiannual Risk Perspective, the Office of the Comptroller of the Currency warned that the commercial real estate marketplace was rapidly expanding and that lenders should be wary of “easing underwriting standards and practices in commercial lending as lenders strive for volume and yield.” Lenders are responding by developing internal environmental risk management plans consistent with best practices and by requiring the borrowers to conduct Phase I environmental site assessments.
- President’s Fiscal Year 2018 Budget. President Trump proposed a nearly 1/3rd reduction in the budget for the U.S. Environmental Protection Agency (“EPA”), from $8 billion to $5.7 billion. The proposal would reduce funding for enforcement by 24%; for the Superfund by nearly 24%; and for state implementation of federal environmental programs by nearly 40%. Opposition to the proposal from congressional Republicans suggests that such stark reductions are unlikely, but it is reasonable to assume that EPA’s budget will be reduced in Fiscal Year 2018 – perhaps significantly. Significant EPA budget reductions could lead to less environmental enforcement and longer lead times for permitting and agency approvals. The prospect of less robust enforcement may also lead prospective purchasers to pursue more robust environmental due diligence instead of relying on prior regulatory oversight.
- CERCLA Bona Fide Prospective Purchaser Defense. CERCLA imposes sweeping liability on property owners, and the available defenses and exemptions are remarkably limited. In 2002, Congress sought to encourage the acquisition and remediation of Brownfields sites by adding the bona fide prospective purchaser defense. The first court to address this defense in any detail, however, left open the possibility that a standard indemnification provision could disqualify a purchaser from asserting it. See Ashley II of Charleston, LLC v. PCS Nitrogen, Inc., 791 F. Supp. 2d 431 (D.S.C. 2011), aff’d 714 F.3d 161 (4th Cir. 2013), cert. denied, 134 S. Ct. 514 (2013). Many commentators simply disregard this part of the Ashley II decision, believing that the court just got it wrong.
- Superfund Reforms. EPA Administrator Scott Pruitt announced in May that he is asserting the authority to select the remedy in certain CERCLA settlements when the estimated remedy exceeds $50 million. Pruitt’s directive was designed to “facilitate the more-rapid remediation and revitalization of contaminated sites and to promote accountability and consistency in remedy selection.” As a practical matter, the directive may make it easier to settle CERCLA liability and may be just the first step toward a broader effort to expedite larger cleanups.
- Subsurface Intrusion. Subsurface intrusion, which includes vapor intrusion, is the migration of chemical vapors from underground releases into buildings, and it remains a hot topic in environmental due diligence. In 2013, ASTM revised its Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process in 2013 to clarify that the “all appropriate inquiries” standard requires an assessment of vapor migration. In 2015, EPA released technical guidance for assessing and mitigating the vapor intrusion pathway from subsurface vapor sources to indoor air. In May, EPA added a subsurface intrusion component to the National Priority List (“NPL”) Hazard Ranking System. A carryover from the Obama Administration, the new rule allows EPA to list sites on the NPL solely due to vapor intrusion issues.
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The Real Estate Committee is nearly 2,000 members strong, and one of our best resources is each other. The eGroup postings are a forum for members to exchange ideas, share best practices, template forms, and many other resources. Members may submit eGroup inquiries, and any member may respond. If you are concerned about using your name, you may respond anonymously. As a reminder, eGroup responses are informational only, and are not considered legal advice or counsel. We highly recommend that you take advantage of this resource. Postings may be found here.
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Real Estate Committee members who are interested in authoring a blog post, an on-line article or an ACC Docket article should contact Darryl Austin at firstname.lastname@example.org.
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Call for Resource Library Suggestions
to hear from you! What forms,
templates or tutorials would you like added to the Resource Library. Please email your requests to Elena email@example.com.
In addition, every month ACC hosts a webcasts
that goes over how to search the Resource Library and explains all that it
offers. It is a 30-min presentation and the archived version of the November
presentation can be found at here.
Call for Legal Quick Hit Topics.
What programs would you like to see presented as a
legal quick hit? Please email your requests to Elena firstname.lastname@example.org. I
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Save the Dates
2017 ACC Annual Meeting, October 15-18 (Washington, DC.)
Even if you already selected your educational sessions, you still have time to retrieve and edit your registration statement and attend the Real Estate lunch meeting and the Real Estate educational programs listed below.
Monday 10/16 4:30PM – 6PM
402 - Preparing Your Facility for an Unannounced Environmental/Safety Government Agency Inspection
Presented by the ACC Environmental & Sustainability and Real Estate Committees
Increasingly stringent US environmental and safety laws and regulations are making compliance efforts more burdensome and resource-intensive. This panel will illustrate these challenges through the depiction of a mock, unannounced environmental and safety agency inspection of a facility. Starting with facility preparation and continuing with the surprise inspection, panelists will work with audience volunteers to play key roles during this exercise. Panelists will also explore how to proceed if the surprise inspection is being conducted pursuant to a search warrant.
Monday 10/16 1:15PM – 2:30PM
Real Estate Committee Lunch
All ACC members are invited! You don’t have to be a committee member to attend and attendance doesn’t mean you have to make a time commitment. Participation in ACC Committees offers an opportunity to benchmark with peers and recognized industry leaders. We encourage you to attend any of the committee business breakfast or lunch meetings to learn more about the broad range of activities offered. These meetings, limited to ACC members, also present an opportunity to participate in planning future Annual Meeting programming.
Tuesday 10/17 9AM – 10:30AM
509 - Advanced Issues in Leasing
Presented by the ACC Real Estate Committee. Moderated by Elena Antonetti, Executive Counsel at Travelers & Programs & Publications Chair of ACC Real Estate Committee
In this hands-on session, experienced real estate attorneys will discuss and draft advanced lease clauses. Learn about tax clauses (e.g., disparate tenant claims to tax abatements, lender tax escrows, and tax protest funding); common area maintenance and operating expenses (e.g., audit rights, escalation caps, and maintenance versus improvements); exclusivity and restricted-use clauses (e.g., mixed-use challenges, density issues, and subleasing restrictions); and condemnation and indemnification clauses (e.g., material impact, partial abatement of critical use areas, damage award reservation, interplay with insurance policies, and available remedies). This interactive session promises hypothetical scenarios and checklists to engage participants
Tuesday 10/17 11AM – 12:30PM
605 - CFPB & HUD’s Oversight of Real Estate Issues—A Regulator’s Perspective
Presented by the ACC Real Estate and Financial Services Committees. Moderated by Dawn Haghighi, General Counsel at PCV Murcor & Chair of ACC Real Estate Committee and Raghu Nandan, General Counsel at Sunstreet Mortgage & Vice-Chair of ACC Real Estate Committee
This interactive panel discussion with regulators from the US Consumer Financial Protection Bureau (CFPB) and Housing and Urban Development (HUD) will give an overview of the regulatory environment for the real estate industry. Whether you are in-house at a fund that offers financing for loan programs, or at a title company offering escrow services, you will want to hear what this panel has to say. Topics will include regulatory issues surrounding single-family and multi-family housing, as well as regulation of housing assistance programs offered by HUD.
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