At the recent National Deal Flow Conference in Chicago, participants in the Developers Section meeting addressed an interesting and little discussed issue: the difficulty in overcoming bureaucratic inertia and employee resistance in convincing a property owner to offer a brownfield property for sale and then bringing the redevelopment of that site to fruition.
Take, for example, a company that owns a contaminated former manufacturing site. The CFO of that company understands that the rules of accounting prevent the company from writing off the liabilities associated with that site until a cleanup is completed — a process that could take years. That CFO may direct that the property be sold or the liability transferred to a third party who will assume all liabilities, thereby permitting the owner to write off the company’s liabilities immediately. However, in-house counsel and environmental managers often will have their own agendas that cause them to resist the disposition of the
