From: | lschnapf@aol.com | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Date: | 1 Jun 2007 20:25:30 -0000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reply: | cpeo-brownfields | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subject: | [CPEO-BIF] Re: Brownfields Digest, Vol 34, Issue 1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
There does seem to be anecdotal evidence that some companies are being incentivized to divest mothballed properties so they do not have to reflect the AROs on their books. However, when asked, the companies will likely indicate that the particular transaction made economic sense or met its "aspirational goals".
My understanding that the reduced market value of the property would be one metrics that need to be included in the FIN 47/FAS 143 calculus.
Larry Larry Schnapf
55 E.87th Street #8B/8C New York, NY 10128 212-876-3189 home 212-756-2205 office 212-593-5955 fax www.environmental-law.net website -----Original Message----- From: brownfields-request@list.cpeo.org To: brownfields@list.cpeo.org Sent: Fri, 1 Jun 2007 3:00 pm Subject: Brownfields Digest, Vol 34, Issue 1 Send Brownfields mailing list submissions to brownfields@list.cpeo.org To subscribe or unsubscribe via the World Wide Web, visit http://www.cpeo.org/mailman/listinfo/brownfields or, via email, send a message with subject or body 'help' to brownfields-request@list.cpeo.org You can reach the person managing the list at brownfields-owner@list.cpeo.org When replying, please edit your Subject line so it is more specific than "Re: Contents of Brownfields digest..." Today's Topics: 1. Report from the March, 2007 Consultation on Brownfields Subsidies (Lenny Siegel) 2. Sarbanes-Oxley Act putting mothballed sites on market (bobh@np.craigslist.org) 3. Sarbanes-Oxley & de-mothballing (Kris Wernstedt) 4. Re: Sarbanes-Oxley Act putting mothballed sites on market (Peter B. Meyer) 5. RE: Sarbanes-Oxley & de-mothballing (Frink, Neal) 6. RE: Sarbanes-Oxley & de-mothballing (peter ) Attached Message
Report from the Consultation on Brownfields Subsidies
Lenny Siegel and Peter Meyer May 31, 2007 On March 14, 2007 twenty-five people from diverse constituencies met in Washington, DC for the first Consultation on Brownfields Subsidies. The overall question facing the participants was, "How can we generate the best possible public returns to provision of subsidies for investments in brownfield redevelopment?" Participants in the Consultation, hosted by the Urban Land Institute, heard presentations from local government officials from Louisville, Kentucky and Indianapolis, Indiana. Both described their efforts to target development to blighted geographic areas within their jurisdictions. Then an official from brownfield-redeveloper Cherokee Denver and a community organizer described the planned Gates Rubber site development, just south of downtown Denver. To download our report on the meeting, go to http://www.cpeo.org/pubs/Subsidies.pdf. No consensus was pursued, just an exchange of experience and informed opinion. The organizers offer a selective summary of some of the diverse ideas discussed. These ideas and the first exchange will be used by the organizers to pursue funding for a broader, recurring forum that will develop common ground across the various stakeholder groups engaged in brownfields activity on the subsidies issue. -- Lenny Siegel Director, Center for Public Environmental Oversight c/o PSC, 278-A Hope St., Mountain View, CA 94041 Voice: 650/961-8918 or 650/969-1545 Fax: 650/961-8918 <lsiegel@cpeo.org> http://www.cpeo.org Attached Message
The article claims that the Sarbanes-Oxley Act, at least in the Bay Area in California, is compelling companies to put warehoused brownfield sites on the market. I'd be interested to know if CPEO subscribers, based on their own brownfields practice and experiences, would tend to agree with this assessment about Sarbanes-Oxley. Bob Hersh CPEO Brownfield Market Conditions Improving Commercial Property News May 31, 2007 By Ethan Fry A self-described “recovering banker” kicked off CPN’s San Francisco Property Opportunities conference Thursday by saying a “perfect storm” of positive conditions will make brownfield rehabilitation much more attractive to developers and investors. Peter Hollingworth, president & CEO of Continental Environmental Redevelopment Financial L.L.C., said during his keynote address that among the main positive factors are improving political conditions, more realistic expectations from regulatory bodies, better technology and improving public awareness. ...In addition, Hollingworth noted, more sites are coming on the market because of the Sarbanes-Oxley Act that prohibits companies from warehousing brownfield sites and forces them to put them--and the cost associated with cleaning them up--on their balance sheets. For the entire article, see: http://www.cpnonline.com/cpn/specialties/article_display.jsp?vnu_content_id=1003592453 Attached Message
Bob, I've had a fair number of developers or developer reps tell me in interviews that they'd welcome enforcement efforts or drivers like SOX to get more properties out on the market, but it's all been anecdotal (and some off the record). I'd love to conduct a more systematic assessment of how this might bear out in practice, or even get a better sense how many warehoused properties owned by public companies might be affected by this. This is a great interest of mine and I also would like to hear what practitioners and others on this list think. So let's hear some chatter. Kris ************************************* Kris Wernstedt Urban Affairs and Planning Virginia Polytechnic Institute and State University Alexandria Center 1021 Prince Street, Suite 200 Alexandria, Virginia 22314 703-706-8132 (voice), 703-518-8009 (fax) krisw@vt.edu, www.uap.vt.edu/thePeople.htm ************************************* > -----Original Message----- > From: brownfields-bounces@list.cpeo.org > [mailto:brownfields-bounces@list.cpeo.org] On Behalf Of > bobh@np.craigslist.org > Sent: Friday, June 01, 2007 9:50 AM > To: brownfields@list.cpeo.org > Subject: [CPEO-BIF] Sarbanes-Oxley Act putting mothballed sites on > market > > The article claims that the Sarbanes-Oxley Act, at least in the Bay > Area in California, is compelling companies to put warehoused > brownfield sites on the > market. I'd be interested to know if CPEO subscribers, > based on their own > brownfields practice and experiences, would tend to agree with this > assessment about Sarbanes-Oxley. > > Bob Hersh > CPEO > > Brownfield Market Conditions Improving > > Commercial Property News > May 31, 2007 > By Ethan Fry > > A self-described "recovering banker" kicked off CPN's San Francisco > Property Opportunities conference Thursday by saying a "perfect storm" > of positive conditions will make brownfield rehabilitation much more > attractive to developers and investors. > > Peter Hollingworth, president & CEO of Continental Environmental > Redevelopment Financial L.L.C., said during his keynote address that > among the main positive factors are improving political conditions, > more realistic expectations from regulatory bodies, better technology > and improving public awareness. > > ...In addition, Hollingworth noted, more sites are coming on the > market because of the Sarbanes-Oxley Act that prohibits companies from > warehousing brownfield sites and forces them to put them--and the cost > associated with cleaning them up--on their balance sheets. > > For the entire article, see: > http://www.cpnonline.com/cpn/specialties/article_display.jsp?v > nu_content_id=1003592453 ************************************* Kris Wernstedt Urban Affairs and Planning Virginia Polytechnic Institute and State University Alexandria Center 1021 Prince Street, Suite 200 Alexandria, Virginia 22314 703-706-8132 (voice), 703-518-8009 (fax) krisw@vt.edu, www.uap.vt.edu/thePeople.htm ************************************* Attached Message
I'll echo Kris Wernstedt's comment (since we heard it together at times).
For the sake of clarity, however, let me correct an error in the opening extract from the article. Quoting the extract: "...In addition, Hollingworth noted, more sites are coming on the market because of the Sarbanes-Oxley Act that prohibits companies from warehousing brownfield sites and forces them to put them--and the cost associated with cleaning them up--on their balance sheets." -- This is half wrong and half correct. The costs will have to be carried on balance sheets under FASB 147 and FIN 43 if the properties are retained (and that means that companies will have to get cleanu pcost estimates -- which means they will have a new incentive to get site assessments done and thus might be exposed to state immediate response requirements if they do such assessments), but there is NO PROHIBITION on warehousing or mothballing the sites if the firms want to retain them. In fact, one of the interesting questions going forward is whether the costs of carrying the liability on the books -- continuing to mothball sites -- will be high enough to drive owners to permit or promote mitigation and redevelopment despite the new liabilities that could arise for the PRP from the reuse of the sites. If the carrying costs are high enough, then new sites will be driven to the market. ==> that's precisely what I'd like to study. Peter Meyer Attached Message
SOX was given teeth relative to warehoused/mothballed sites with issuance of FIN 47 ("Accounting for Asset Retirement Obligations - An Interpretation of FASB Statement 143"). FIN 47, which issued in March 2005, was effective for fiscal years ending after December 2005. The requirement for publicly traded companies to account for AROs should have been some impetus for unloading some of the "inventory" of mothballed/warehoused sites. I'm just not sure how one measures the impact. It would be interesting to compare booked AROs pre- and post-issuance of FIN 47 for some select companies. Maybe someone from the accounting world can shed light on how visible AROs are on publicly available balance sheets for publicly traded companies. - NEAL Neal A. Frink, Esq. Dinsmore & Shohl, LLP 1900 Chemed Center 255 East Fifth Street Cincinnati, OH 45202 513.977.8359 (phone) 513.977.8141 (fax) www.dinslaw.com -----Original Message----- From: brownfields-bounces@list.cpeo.org [mailto:brownfields-bounces@list.cpeo.org] On Behalf Of Kris Wernstedt Sent: Friday, June 01, 2007 10:38 AM To: brownfields@list.cpeo.org Subject: [CPEO-BIF] Sarbanes-Oxley & de-mothballing Bob, I've had a fair number of developers or developer reps tell me in interviews that they'd welcome enforcement efforts or drivers like SOX to get more properties out on the market, but it's all been anecdotal (and some off the record). I'd love to conduct a more systematic assessment of how this might bear out in practice, or even get a better sense how many warehoused properties owned by public companies might be affected by this. This is a great interest of mine and I also would like to hear what practitioners and others on this list think. So let's hear some chatter. Kris ************************************* Kris Wernstedt Urban Affairs and Planning Virginia Polytechnic Institute and State University Alexandria Center 1021 Prince Street, Suite 200 Alexandria, Virginia 22314 703-706-8132 (voice), 703-518-8009 (fax) krisw@vt.edu, www.uap.vt.edu/thePeople.htm ************************************* > -----Original Message----- > From: brownfields-bounces@list.cpeo.org > [mailto:brownfields-bounces@list.cpeo.org] On Behalf Of > bobh@np.craigslist.org > Sent: Friday, June 01, 2007 9:50 AM > To: brownfields@list.cpeo.org > Subject: [CPEO-BIF] Sarbanes-Oxley Act putting mothballed sites on > market > > The article claims that the Sarbanes-Oxley Act, at least in the Bay > Area in California, is compelling companies to put warehoused > brownfield sites on the > market. I'd be interested to know if CPEO subscribers, > based on their own > brownfields practice and experiences, would tend to agree with this > assessment about Sarbanes-Oxley. > > Bob Hersh > CPEO > > Brownfield Market Conditions Improving > > Commercial Property News > May 31, 2007 > By Ethan Fry > > A self-described "recovering banker" kicked off CPN's San Francisco > Property Opportunities conference Thursday by saying a "perfect storm" > of positive conditions will make brownfield rehabilitation much more > attractive to developers and investors. > > Peter Hollingworth, president & CEO of Continental Environmental > Redevelopment Financial L.L.C., said during his keynote address that > among the main positive factors are improving political conditions, > more realistic expectations from regulatory bodies, better technology > and improving public awareness. > > ...In addition, Hollingworth noted, more sites are coming on the > market because of the Sarbanes-Oxley Act that prohibits companies from > warehousing brownfield sites and forces them to put them--and the cost > associated with cleaning them up--on their balance sheets. > > For the entire article, see: > http://www.cpnonline.com/cpn/specialties/article_display.jsp?v > nu_content_id=1003592453 ************************************* Kris Wernstedt Urban Affairs and Planning Virginia Polytechnic Institute and State University Alexandria Center 1021 Prince Street, Suite 200 Alexandria, Virginia 22314 703-706-8132 (voice), 703-518-8009 (fax) krisw@vt.edu, www.uap.vt.edu/thePeople.htm ************************************* _______________________________________________ Brownfields mailing list Brownfields@list.cpeo.org http://www.cpeo.org/mailman/listinfo/brownfields NOTICE: This electronic mail transmission from the law firm of Dinsmore & Shohl may constitute an attorney-client communication that is privileged at law. It is not intended for transmission to, or receipt by, any unauthorized persons. If you have received this electronic mail transmission in error, please delete it from your system without copying it, and notify the sender by reply e-mail, so that our address record can be corrected. Attached Message
Neal: Although not specifically "a brownfields question", does FIN 47 refer to decommissioning nuclear facilities and other forms of cleanup? Peter Strauss -----Original Message----- From: brownfields-bounces@list.cpeo.org [mailto:brownfields-bounces@list.cpeo.org] On Behalf Of Frink, Neal Sent: Friday, June 01, 2007 7:15 AM To: Kris Wernstedt; brownfields@list.cpeo.org Cc: Frink, Neal Subject: RE: [CPEO-BIF] Sarbanes-Oxley & de-mothballing SOX was given teeth relative to warehoused/mothballed sites with issuance of FIN 47 ("Accounting for Asset Retirement Obligations - An Interpretation of FASB Statement 143"). FIN 47, which issued in March 2005, was effective for fiscal years ending after December 2005. The requirement for publicly traded companies to account for AROs should have been some impetus for unloading some of the "inventory" of mothballed/warehoused sites. I'm just not sure how one measures the impact. It would be interesting to compare booked AROs pre- and post-issuance of FIN 47 for some select companies. Maybe someone from the accounting world can shed light on how visible AROs are on publicly available balance sheets for publicly traded companies. - NEAL Neal A. Frink, Esq. Dinsmore & Shohl, LLP 1900 Chemed Center 255 East Fifth Street Cincinnati, OH 45202 513.977.8359 (phone) 513.977.8141 (fax) www.dinslaw.com -----Original Message----- From: brownfields-bounces@list.cpeo.org [mailto:brownfields-bounces@list.cpeo.org] On Behalf Of Kris Wernstedt Sent: Friday, June 01, 2007 10:38 AM To: brownfields@list.cpeo.org Subject: [CPEO-BIF] Sarbanes-Oxley & de-mothballing Bob, I've had a fair number of developers or developer reps tell me in interviews that they'd welcome enforcement efforts or drivers like SOX to get more properties out on the market, but it's all been anecdotal (and some off the record). I'd love to conduct a more systematic assessment of how this might bear out in practice, or even get a better sense how many warehoused properties owned by public companies might be affected by this. This is a great interest of mine and I also would like to hear what practitioners and others on this list think. So let's hear some chatter. Kris ************************************* Kris Wernstedt Urban Affairs and Planning Virginia Polytechnic Institute and State University Alexandria Center 1021 Prince Street, Suite 200 Alexandria, Virginia 22314 703-706-8132 (voice), 703-518-8009 (fax) krisw@vt.edu, www.uap.vt.edu/thePeople.htm ************************************* > -----Original Message----- > From: brownfields-bounces@list.cpeo.org > [mailto:brownfields-bounces@list.cpeo.org] On Behalf Of > bobh@np.craigslist.org > Sent: Friday, June 01, 2007 9:50 AM > To: brownfields@list.cpeo.org > Subject: [CPEO-BIF] Sarbanes-Oxley Act putting mothballed sites on > market > > The article claims that the Sarbanes-Oxley Act, at least in the Bay > Area in California, is compelling companies to put warehoused > brownfield sites on the > market. I'd be interested to know if CPEO subscribers, > based on their own > brownfields practice and experiences, would tend to agree with this > assessment about Sarbanes-Oxley. > > Bob Hersh > CPEO > > Brownfield Market Conditions Improving > > Commercial Property News > May 31, 2007 > By Ethan Fry > > A self-described "recovering banker" kicked off CPN's San Francisco > Property Opportunities conference Thursday by saying a "perfect storm" > of positive conditions will make brownfield rehabilitation much more > attractive to developers and investors. > > Peter Hollingworth, president & CEO of Continental Environmental > Redevelopment Financial L.L.C., said during his keynote address that > among the main positive factors are improving political conditions, > more realistic expectations from regulatory bodies, better technology > and improving public awareness. > > ...In addition, Hollingworth noted, more sites are coming on the > market because of the Sarbanes-Oxley Act that prohibits companies from > warehousing brownfield sites and forces them to put them--and the cost > associated with cleaning them up--on their balance sheets. > > For the entire article, see: > http://www.cpnonline.com/cpn/specialties/article_display.jsp?v > nu_content_id=1003592453 ************************************* Kris Wernstedt Urban Affairs and Planning Virginia Polytechnic Institute and State University Alexandria Center 1021 Prince Street, Suite 200 Alexandria, Virginia 22314 703-706-8132 (voice), 703-518-8009 (fax) krisw@vt.edu, www.uap.vt.edu/thePeople.htm ************************************* _______________________________________________ Brownfields mailing list Brownfields@list.cpeo.org http://www.cpeo.org/mailman/listinfo/brownfields NOTICE: This electronic mail transmission from the law firm of Dinsmore & Shohl may constitute an attorney-client communication that is privileged at law. It is not intended for transmission to, or receipt by, any unauthorized persons. If you have received this electronic mail transmission in error, please delete it from your system without copying it, and notify the sender by reply e-mail, so that our address record can be corrected. _______________________________________________ Brownfields mailing list Brownfields@list.cpeo.org http://www.cpeo.org/mailman/listinfo/brownfields _______________________________________________ Brownfields mailing list Brownfields@list.cpeo.org http://www.cpeo.org/mailman/listinfo/brownfields _______________________________________________ Brownfields mailing list Brownfields@list.cpeo.org http://www.cpeo.org/mailman/listinfo/brownfields | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
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