On November 21, the U.S. Court of Appeals for the District of Columbia, in Detroit International Bridge Company v. Government of Canada, et al., affirmed the ruling of the U.S. District Court for the District of Columbia that a 2012 “Crossing Agreement” between State of Michigan officials and the Government of Canada authorizing the construction of a second bridge to span the Detroit River separating Detroit and Windsor, Canada, was a legal exercise of their legal authority.
On November 21, the California Fifth District Court of Appeal issued its decision in Association of Irritated Residents v. Kern County Board of Supervisors, 2017 WL 5590096, a challenge to the County’s Environmental Impact Report (EIR) and approval for modifications at the Alon Bakersfield Refinery. Among other things, the Association of Irritated Residents (AIR) claimed that, since crude oil processing was shut down when work on the EIR began, the EIR should have considered the refinery’s inactive condition as the “baseline,” treating impacts of resuming typical operation as impacts of the new project. Rejecting AIR’s argument, the court held that, since refinery operations fluctuated over time, the use of data from operations in a representative prior year to identify the baseline level of activity was appropriate under the California Environmental Quality Act (CEQA). Continue reading
On October 19, 2017, the U.S. Department of Transportation (DOT) released a draft Strategic Plan (the Plan) for public comment. The Plan establishes goals and long-term objectives for increasing investment and streamlining federal environmental review and approval of transportation infrastructure projects over the next five years (Fiscal Years 2018-2022). Comments on the draft Plan are due by November 13, 2017. Continue reading
On August 15, 2017, President Trump issued Executive Order 13807 (EO 13807), which seeks to streamline federal environmental review and approvals of major infrastructure projects by imposing new timelines and procedures. The EO aims to hold federal agencies accountable to a two-year deadline for all federal authorizations for infrastructure projects, including highways and transit, airports and ports, fossil, nuclear and renewable energy, pipeline and water projects.
EO 13807 defines “major infrastructure projects” as those which require both a full Environmental Impact Statement (EIS) under the National Environmental Policy Act (NEPA) and multiple permits, approvals and/or other forms of authorization from federal agencies, and for which sufficient and reasonably available funding has been identified. The EO requires the Office of Management and Budget (OMB) to establish a federal goal of completing NEPA review and permitting in “not more than an average of approximately two years” from the notice of intent to prepare an EIS. The goal must be incorporated in each federal agency’s strategic and annual performance plans and progress must be reviewed by agency leadership.
On August 2, 2017, the California Governor’s Office of Planning and Research (“OPR”) released its first update to the General Plan Guidelines (the “Guidelines”) since 2003. The Guidelines provide guidance to cities and counties throughout California on the preparation and content of their General Plans, which govern land uses and zoning within their jurisdictions. The updated Guidelines contain new recommended policies, information resources, and reflect recent legislation regarding General Plans.
Data centers trigger visions of windowless, concrete boxes located at the periphery of suburban office parks. That perception may fade in the coming years. With new technologies, such as cloud computing, blockchain platforms, the Internet of Things, artificial intelligence, big data and mobile apps demanding instant access to data, the industry is seeing global growth and innovation, including “micro” centers closer to end users, underwater and floating data centers, “mega” centers and green data centers.
Infrastructure investment is a global phenomenon with long-term implications for the regions and countries involved. As illustrated by two announcements last week, the United States and China have very different visions.
Rebuilding America’s aging infrastructure is one task that most economists and civil engineers, and most Americans, agree should be at or near the top of President Donald Trump’s agenda. President Trump touted his background as a real estate developer to convince voters that he was best positioned to identify priorities and bring various interest groups together to structure concrete solutions. If he can harness bipartisan support for fixing or upgrading roads, bridges, tunnels, railways, airports, dams and other critical infrastructure, while satisfying Congressional budget hawks, he will fulfill one of his most consequential campaign promises. However, the just announced Trump Tax-Cut Plan, while light on technical detail, would almost certainly enlarge the budget deficit and will complicate any legislative push for infrastructure funding.
As any builder will tell you, it is impossible to know with certainty the exact amount a project is going to cost. Variables affecting the cost run the gamut from labor and material costs to delays for unforeseen conditions, weather or other causes. The longer a project is expected to take, the more uncertain the project’s costs become. For this reason, contingencies are included in budgets by all parties involved: owners, contractors, subcontractors and, occasionally, lenders. Ideally, these contingencies will allow the project to absorb delays and other unexpected events without the owner being forced to contribute additional equity (and “balance the loan”) at the time. The owner will desire maximum flexibility over the re-allocation of the contingency(ies) to line items that will then be funded by the lender—while the lender will want to “control” the use of contingency line items to the extent possible.
With this in mind, let’s look at some of the competing motivations at play and “typical” loan agreement provisions regarding the use (or re-allocation) of contingency(ies) to other line items in the Project Budget.
Public development and infrastructure projects are on the rise in California. This is a good thing for the economy. But it also means that private property will often be needed to complete these projects. Public agencies may acquire private property upon payment of just compensation, without the owner’s consent, through an eminent domain action. Property near highways, railroads, public utilities, government buildings and other public facilities are frequent acquisition targets for expansion of these facilities, as are those properties in the path of development of growing cities. But virtually any property may be subject to public acquisition, either through condemnation of the entire property or of easements in the property.