Many of the inherent risks associated with brownfield redevelopment can be effectively managed. The Fund uses a disciplined and structured approach to manage risk to an acceptable level.
The Fund's investment process begins with a selective screening of potential projects. If a potential opportunity meets the Fund's basic investment criteria and wins approval from the Fund's Investment Committee, then it will be subjected to an intense due diligence program aimed at substantiating the investment hypothesis. The Fund is prepared to make a significant investment in this pre-acquisition due diligence process to ensure that the environmental condition of the property and planning parameters are fully understood, that the authorities support the proposed remediation plan, that risks can be managed, that there is a high degree of stakeholder support for the project and that a realistic exit plan is in place.
ENVIRONMENTAL LIABILITY INSURANCE
The Fund places environmental liability insurance coverage on its projects to provide an added level of comfort for vendors and future owners alike. The insurability of a brownfield project is an important confirmation of the Fund's remediation plan for a given brownfield site. Access to this potent risk management tool can be difficult for non-brownfield specialists.
Using its extensive network of qualified consultants and contractors, the Fund implements integrated site-specific remediation strategies which address the environmental and planning challenges associated with its brownfield redevelopment projects. Remedial programs are carefully designed to meet the objectives of a multitude of stakeholders. The overall objective is to obtain the necessary regulatory approvals and closure on environmental issues while managing the expectations and risks associated with a project.
The Fund selects the most qualified consultants and contractors for its individual projects. Contractual arrangements are used to ensure proper control and division of responsibilities between the various parties on-site. The Fund also retains independent Qualified Persons to ensure that remedial activities will objectively meet regulatory requirements.
REGULATORY SITE CLOSURE
The Fund obtains regulatory site closure on its brownfield projects. Vendors can be confident that the Fund has both the expertise and financial strength to carry out the remediation plan to its completion. The filing of the Records of Site Condition (RSC) in Ontario—and corresponding closure mechanisms in other provinces—provides protection from regulatory environmental liability.
The high level of experience and integrity of the Fund's management team is integral to the Fund's risk management approach. Both an honest assessment of the risks and good judgment are required to ensure that project risks will be managed properly.