Industrial Development, Pollution Control And Solid Waste Financing

The Industrial Development, Pollution Control and Solid Waste Financing Group of Orrick's Public Finance Department concentrates on financings for privately owned industrial, power and similar projects. Reflecting restrictions imposed by the Tax Reform Act of 1986, our more recent financings have focused on solid waste disposal and resource recovery projects. At the same time, we have continued our leadership in “small-issue” industrial development bond financings in California. We also have extensive experience under the old air and water pollution control rules, as well as financings for “two-county” utility projects and other exempt facilities.

Members of this group, while serving as bond counsel for the majority of projects, have diverse experience in representing all parties to private activity bond transactions, including the issuer, the underwriter (including as special tax counsel), the developer/borrower, the trustee, the letter of credit bank, or the equity investor in a leveraged lease. In the resource recovery area, we also represent communities in negotiating service contracts with private developers, waste flow control ordinances and contracts as well as energy and recycled materials sales agreements. The majority of our work relates to projects in California, but we have also recently worked on projects in New York, Connecticut, South Carolina, Florida, Texas, Michigan, Kansas, Washington, West Virginia, Utah, Alaska, Hawaii, Oregon and Nevada. Since 1985, we have acted as counsel for 600 bond issues aggregating more than $20 billion. Our experience in all of these financings encompasses virtually every financing structure and technique, including: fixed or variable rate, municipal credit, joint municipal credit, letter of credit, project revenue credit, corporate guarantee or corporate general fund backing, leveraged lease or single investor lease and combinations of the foregoing.

Significant projects or bond issues for which we served as counsel in some capacity since 1985 include the following:

• Bond Counsel for two privately-owned, gas-fired cogeneration, independent power projects which are able to use tax-exempt financing because of sale of electricity to a "two-county" private utility company or a municipal utility. One of these issues was a full "project financing" without credit enhancement, and was among the very first financings of this type accomplished in the U.S.;
• Negotiation of service contracts and, for the first three communities, assistance in bond financing for mass-burn resource recovery projects in Charleston (SC), Stanislaus County (CA), Los Angeles (CA), Fresno County (CA), and San Bernardino County (CA);
• Bond counsel (primarily) or other counsel role in virtually every biomass or alternative-fuel power project financed with tax-exempt bonds in California, totaling 16 projects using over $650 million of bonds;
• Bond counsel for financing of air, water, solid waste and sewage pollution control projects for the three principal California investor-owned utilities (Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric Company), including facilities at two nuclear power plants and a geothermal power system, involving about $2 billion in bonds;
• "Two-county rule" financings (directly or indirectly) for San Diego Gas & Electric Company, Tucson Electric Power Company, Hawaii Electric Company and Southwest Gas Company;
• Bond or underwriter's counsel for financing tire-burning power plants in Connecticut and Nevada for Oxford Energy Company and waste-coal power plants in West Virginia;
• Counsel for landfill and solid waste remediation projects throughout the country for Occidental Petroleum Corporation and Occidental Chemical Corporation;
• Bond counsel for the California Statewide Communities Development Authority (CSCDA), a joint powers agency sponsored by the County Supervisors Association of California, the League of California Cities and California Manufacturers Association, which has used composite bond offerings to become the largest issuer of small issue bonds in California. CSCDA issued more than 50% of the entire statewide total of such bonds over the past three years;
• Counsel for the State of Nevada Department of Business and Industry Industrial Development Bond programs since 1982;
• Counsel for composite bond programs of Alameda and Los Angeles Counties and the California Pollution Control Financing Authority and counsel for numerous individual bond issues for industrial and commercial development and solid waste disposal and pollution control; and
• Counsel for national, composite small-issue bond financing/refinancing programs for Hexcel Corporation and McKesson Corporation.