Monday, December 03, 2007

What's good for the goose is good for the gander.

I have been reading a certain agreement between Cypress Equities and the Edmonds School District for the current Lynnwood High School site across from Alderwood Mall. Unfortunately, I haven't yet made it past page 20.

Section 10. Environmental Contingencies

Notwithstanding Developer's approval of the condition of the Real Property during the Feasibility Study Period, Developer shall have the right to terminate this Agreement due to either of the environmental issues described in this Section 10.

10.1 Should the Developer discover Hazardous Materials contamination (not caused by Developer) on the Real Property between the Phase II Termination Date and the Closing Date, and, in Developer's reasonable, good faith business judgment such Hazardous Materials contamination cannot be remediated or eliminated in a timely and economically feasible manner by Developer's use of commercially reasonable efforts, then Developer shall deliver written notice of same to Owner ("Developer's HazMat Notice"). Within forty-five (45) days after the date on which Owner receives Developer's HazMat Notice, Owner shall deliver written notice to Developer stating whether or not Owner agrees to remediate or eliminate the Hazardous Materials contamination at issue, at Owner's sole cost and expense ("Owner's HazMat Response Notice"). Should Owner elect to remediate or eliminate the Hazardous Materials contamination at issue and such remediation or elimination will be completed by Owner no later than one hundred eighty (180) days after Owner's HazMat Response Notice, Owner shall promptly proceed to perform such remediation work and Developer shall have no right to terminate this Agreement. If Owner elects to remediate or eliminate the Hazardous Materials contamination at issue but does not complete such remediation or elimination within one hundred eighty (180) days of the HazMat Response Notice, then Developer shall have the right to terminate this Agreement by delivering written notice of termination to Owner within sixty (60) days after Developer's receipt of Owner's HazMat Response Notice. If Developer timely exercises its right of termination under this Section 10.1, this Agreement shall terminate on the date on which Owner receives Developer's termination notice, all Earnest Money (including any portion of the Earnest Money previously released to Owner, which portion shall be returned to Developer without interest) shall be returned to Developer, and the Parties shall have no further rights or obligations under this Agreement except for those that expressly survive the termination of this Agreement.

What this means is that if the Developer hits contamination, the District must rush in, correct the problem and cover all of the expense for doing so. They must also remediate the contamination within 180 days - not an easy thing for a public agency to accomplish. Unless District management has a friend waiting in the wings with their engines running.

Two problems surface here.

First, I hope the District does not include such language in their lease for the Maintenance and Transportation site. The problems at that site couldn't possibly be corrected in 180 days. The cost for such remediation would quickly gobble the lease proceeds for a number of years and crossing into the 181st day could dissolve your ground lease.

Second, why wouldn't such a Hazardous Materials clause be included in the purchase of the new Administration site? Afterall, if its good enough for the private sector, why not use it to the advantage of the District? It's almost as if the District wasn't interested in protecting public resources.

Editor's Note: Section 10.2 covers environmental conditions, like an excessively high water table, that could result in a similar termination of the Agreement, release of Earnest Money and departure of the Developer - though without an opportunity for the District to correct the problem. Termination would be at the discretion of the Developer.


Anonymous said...

What ever happened to the environmental investigation at the new ESC site?

Anonymous said...

Do you have anything to do with this one? Damn , where are the troops to safe our school district throw these dirty people out of office., why o why haven't we seen any firing? these people need to go!

Anonymous said...

The Department of Ecology is working on it. They have requested documents from the District. (I they are more forthcoming to their request than they were with mine.)

As they are very thorough, it is difficult to provide a time-line.

Anonymous said...


Who is Martin LLC? local or out of state?

Why did they do a quick claim?

Anonymous said...

Mr. Zandberg,

I thought you should know that we are discussing your blog in our MPA coursework. It is quite bewildering how this school district appears to think they are advocating for the appropriate use of public funds.