HomeMy WebLinkAboutBPMC Memorandum ATERWYNNE LLP 12.22.2009ATERWYNNE up
MEMORANDUM
TO: Bradley Lake Project Management Company
FROM: Kirk H. Gibson
DATE: December 22, 2009
RE: Update on FAA Camera Issues
This memorandum addresses the status of the discussions between AEA/BPMC and the
FAA regarding FAA’s request to have a camera placed at the Bradley Lake facility. No decision
is requested or needed. This issue has been dormant for some time because of an impasse in
contractual discussions and, ultimately, the end of the construction season. This update is
presented so the BPMC can consider how it wants to proceed when access to the facility for such
activities is again manageable. The issues that remain are a concern for AEA/BPMC because the
BPMC is the party ultimately responsible for the costs that result from effect of the language.
Background
Over the course of the past year since the idea of placing a camera at the Bradley Lake
facility arose, the attorneys for the FAA and BPMC discussed the various responsibilities
outlined in the contract governing the relationship between the FAA and BPMC._ The
representatives could not agree on the contractual language imposing certain obligations on
BPMC. It is my position that the language proposed by the FAA attorneys was overreaching and
placed unnecessary burdens on the BPMC. The challenges arise from the FAA wanting to use
its traditional lease for outlining the obligations and responsibilities of the parties to the camera
placement arrangement. We have proposed that a license is more in line with the activities being
proposed.
What follows is a description of the three areas where the FAA's Regional Counsel had
some outstanding issues, and my response. The issues are:
Quiet Enjoyment
The proposed agreement contains a clause that ensures that we are entering into an
agreement with a party that has the right to do so by requiring AEA/BPMC to warrant that fact.
We would like to remove the provision, but would be agreeable to the clause being modified to
remove the language, "and warrants ....." Our rationale is as follows: FAA is not paying rent
for the ability to use the site, so it is unreasonable to require AEA/BPMC to covenant that it will
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Memorandum to Bradley Lake Project Management Company
(Re: Update on FAA Camera Issues)
December 22, 2009
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protect the FAA’s possession from all persons claiming possession, e.g., as a result of the act of
the AEA, its predecessors or successors-in-interest, or by the enforcement of any title superior to
that of the property owner. As a “tenant,” the FAA would have the right to terminate the tenancy
if the express or implied covenant of quiet enjoyment is violated or a landlord fails to cure the
breach. I presume that, in this case, the AEA/BPMC (i) does not want to incur the obligation to
remedy an alleged breach based on the claim of a party claiming possession for the benefit of the
FAA and (ii) would be happy to have the FAA terminate the license based on any claim that the
covenant of quiet enjoyment was breached by a person claiming possession. As a compromise,
the following would be acceptable: "AEA warrants that it has good and valid title to the
premises, and rights of ingress and egress."
Attorney's Fees and Venue
The FAA objected to the adding of a provision regarding attorney's fees being awarded to
winners of any dispute and establishing venue in Alaska for any disputes arising under the
agreement. The FAA wanted to have federally-approved dispute methods, as authorized under
law by governing any disputes under the agreement with any such dispute resolution activities
being conducted in Washington, D.C. Since the FAA is basically a guest, the AEA/BPMC
should reject this request. Our proposed language provides for attorneys’ fees to the prevailing
party and that the dispute be heard in Anchorage where the AEA and the licensed land are
located.
Remediation Clause
The FAA revised the agreement to remove the hold harmless wording recommended by
us and make it AEA's responsibility to remediate contamination not caused by the FAA’s use of
the property. We revised the language to remove the limitation that the contamination had to be
directly related to “Government's use of AEA's property pursuant to this License ... [regarding]
... the installation, operation and maintenance of the Camera” and, instead, required the FAA to
remediate if related to the FAA’s use of the Premises. The FAA's language request is no
different than if the FAA asked to come over to your house and then wanted to change the house
rules while the FAA was a guest. I also removed our obligation to remediate all hazardous
materials and hold the government harmless for its damages and the claims of third parties. The
FAA’s counsel is using typical lease form and applying typical concepts to an atypical scenario.
The FAA is basically the AEA’s guest. It makes no sense that the AEA would agree to pay all
the FAA’s costs and expenses related to hazardous materials claims as a result of agreeing to
allow the FAA to use, rent free, a portion of the AEA’s property. Under such circumstances the
FAA can simply terminate and leave the premises; rather than being able to require AEA to clean
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Memorandum to Bradley Lake Project Management Company
(Re: Update on FAA Camera Issues)
December 22, 2009
Page 3
up or pay damages for something it does not want to clean up (or pay for costs that the FAA may
desire to incur). An example of a possible situation is as follows: if there is a finding that there
is a higher level of lead in the soil near the camera than normally acceptable. The FAA could
react by sending in the federal hazmat teams and send AEA (in the end, the BPMC) a bill for
$50,000. Does AEA/BPMC want this exposure?
Next Steps
This memorandum is being presented to provide an update. The BPMC may want to
consider how it wants to approach the issues raised over the next few months, as it is expected
that the FAA will begin inquiring as to how the AEA/BPMC wants to proceed. The BPMC may
want to install its own camera and allow access to FAA as an alternative, if having a camera is
useful to Bradley Lake operations.
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