Description
Understand the features, nuances, complexities and risks of leaseleaseback projects.LeaseLeaseback can be a very effective tool for project delivery and has been enjoying increasing popularity. It involves an owner leasing a site to a developer who, in turn, develops the project and leases it back to the owner. The developer can be paid over the course of construction and for a postconstruction occupancy period, or the developer can fully finance the project until completion, with the lease payments commencing at project completion. Either way, owners are given flexibility to engage developers early in the project, before the plans and specifications are completed, resulting in more collaborative projects with less claims and delays. Unlike in designbuild projects, owners will retain design responsibility. Done correctly, the projects can be quite successful. Done incorrectly, owners and developers can be exposed to significant risk, including in some states, disgorgement of all monies paid and liabilities for conflicts of interest.
Date: 2020-02-28 Start Time: End Time:
Learning Objectives
History and Philosophy
Advantages
• Collaboration Early in the Project
• Faster Project Delivery at a Lower Price
• Reasonable and Reliable Budgets and Schedules
• Fewer Change Orders and Claims
• Third-Party Financing of the Project If Needed
Restrictions and Concerns
• Legal Authority to Use It and Legal Restrictions
• Contracting Authority
• Regulatory Approvals and Restrictions
• Conflicts of Interest
• Disguised Construction Contracts
• Third-Party Financing Might Be Required
• Even With Collaboration, Owner Still Bears the Risk of Design
• Skilled Labor Requirements
• Practical Considerations for the Project
• Restrictions on Competition
• Getting Qualified Lease-Leaseback Providers
• Getting a Fair Price
• Cost of Financing
Summary Lease-Leaseback Agreements
• Site Lease
• Facilities Lease
• Setting the Lease Term
• Setting and Structuring the Lease Payments
• Construction Related Documents: Balancing Typical Construction Documents Against
Avoiding a Disguised Construction Contract
CLE (Please check the Detailed Credit Information page for states that have already been approved) ,Additional credit may be available upon request. Contact Lorman at 866-352-9540 for further information.
Eileen M. Diepenbrock, Esq.-Diepenbrock Elkin Dauer Stephens McCandless LLP
