BROWNFIELDS INVESTING

Abstract: A Brownfields investment vehicle, and a system and method for investing in Brownfields-related projects (100) are provided that are capable of supporting all aspects of a Brownfields remediation/development/redevelopment project, while shielding investors (105) from environmental liability. The Brownfields fund makes, for example, non-recourse, participating capital investments or Brownfields Value Contracts ("BVC") (112) to a number of "special purpose vehicles" (110) for specific Brownfields projects (112) according to fund investment criteria determined by a fund manager (115). An investor's risk of incurring environmental liability is substantially reduced by providing that the Brownfields fund is completely passive with respect to the Brownfields project, taking no security or mortgage interest in the Brownfields.

Description: BROWNFIELDS INVESTING FIELD OF THE INVENTION The present invention relates to a system and method and financial vehicle for investing in Brownfieids. BACKGROUND INFORMATION For many years, contaminated properties have been considered a current and future liability to their owners (current and future), and to the communities in which they are located. The market value of real property is directly affected by contamination and pollution. Valuation of real property is negatively effected by risks that are not quantifiable in terms of time and/or money. Valuation affects decision making during cleanup of contaminated property, and, likewise, decision making during remediation affects valuation, of the contaminated property and surrounding properties. The result has been that many of these properties are idle and abandoned in spite of their potential value. "Brownfieids" generally includes real properties in a contaminated or stigmatized condition. Brownfieids may include, for example, abandoned, idle or under-utilized sites, urban, rural, industrial or non-industrial real property where development, expansion or redevelopment is complicated by real or perceived contamination. In contrast, "Greenfields" are undeveloped properties located mainly in suburban or rural areas. Fear of contamination is one factor that may steer real estate development to Greenfields, with unintended but nonetheless undesirable consequences such as urban sprawl, habitat destruction or loss of land suitable for agriculture. Conversely, redevelopment of Brownfieids is expected to create economic opportunities through physical improvements, job creation, tax revenues and improved urban planning. Additionally, by redeveloping Brownfieids, Greenfields, including, for example, agricultural land, may be preserved and further deterioration of urban cores can be minimized. There is also a substantial unmet need for private investment (e.g., debt, equity and hybrid investments) in Brownfieids remediation. This is primarily due to the exposure (or fear of exposure) by investors to environmental liability. The Environmental Protection Agency's (the "EPA") Environmental Financial Advisory Board (the "EFAB") spend two years researching issues related to financing Brownfieids remediation, and issued five reports. The EFAB's core conclusion, set forth in a published letter dated May 31, 1997, from Robert O. Lenna and John C. Wise to EPA Administrator Carol M. Browne, was "wide-scale and long-term success of Brownfieids redevelopment must be sustainable in the private sector." However, there continues to be relatively few capital sources for these projects due to the perceived risk. The risk includes: (1) financial risk, either because the environmental risk is unknown or because it is difficult to measure; and (2) liability associated with environmental risk, including liability for past effects of contamination (lender liability) and liability of borrowers from noncompliance that could affect their ability to meet financial obligation and the value of the collateral. There is public acknowledgment and support for the need for private investment in Brownfieids remediation. The EPA has now attenuated previous, more burdensome requirements, and has developed risk-based criteria for cleanup to allow the cleanup levels to be based in part on the future use of land, which is directly related to the potential for exposure to contaminants of concern. In a report dated December 1997, the EFAB stated the following: In virtually every Brownfieids project scenario, the absence of a viable redevelopment project results in the perpetuation of two environmentally undesirable trends: (1) urban decay (environmentally, and further deterioration of existing taxpayer- paid infrastructure, and lack of economic opportunity for nearby residents); and (2) destruction of "Greenfields" to build development that could locate on Brownfieids sites. In our view, those two undesirable trends are not sustainable in the long term as a matter of national environmental or economic policy. We believe that requiring clean-ups to meet appropriately- protective risk-based standards will both: (1) protect the public health and the environment; and (2) help to avoid the perpetuation of those two environmentally undesirable trends. In addition to risk-based cleanup criteria, public support for Brownfieids remediation exists in the Taxpayer Relief Act of 1007. Under this Act, a taxpayer may be able to deduct qualified remediation expenses incurred to clean up properties in several targeted areas. Moreover, taxpayers meeting the requirements of the Taxpayer Relief Act of 1997 are eligible to fully deduct Brownfieids cleanup costs in the year in which the costs are incurred, rather than capitalizing and amortizing the costs over several years. Moreover, certain recent revisions to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) are aimed at protecting passive investors. In particular, CERCLA Section 101(20)(A) contains a secured creditor exemption which eliminates certain liability for lenders who hold indicia of ownership in a Brownfieids facility primarily to protect their security interest in that facility, provided they do not participate in management of the facility. Despite the widespread public acknowledgment of the need for large private investment in Brownfieids remediation, and despite the public support for such private investment in the form of rational environmental regulation and tax incentives, there is no useful method or vehicle for large-scale, long-term investment in Brownfieids remediation. Conventional private investment in remediation of Brownfieids includes only small funds investing on a project-by -project basis, with the quantity of capital available being small in relation to the remediation and development cost of the project financed. Because the remediation costs of individual projects financed is often so large in relation to the type of funds available, the investment risks are large, for financing the cleanup phase, and the cost of capital, therefore, high and the success of the process may be dependent upon the market for the land and development subsequent to clean up, increasing the risk. Moreover, the legal and financing phases are long and expensive. Financial failure of a single project in such a financial model is a disaster for all of the investors. However, if the ultimate development of the property is also considered, the cost of remediation becomes economically feasible in relation to the long-term value. Moreover, environmental remediation liability, i.e., the legal duties under applicable federal, state and local statutes and regulations regarding environmental liabilities, may attach not only to the owners of the Brownfieids, but also to "operators." Operators may include, for example, lenders and others who participate in decision making regarding the Brownfieids. Thus, lenders investing in properties needing remediation can themselves become liable for remediation costs if lenders take mortgages to secure their loans. This risk of direct exposure to environmental remediation liability further chills investor interest and increases the cost of privately-financed remediation of Brownfieids. Thus, historically, only a small number of investors were able and willing to invest privately in projects involving Brownfieids remediation and they expect high returns relative to the risk. This capital cost is another barrier to the feasibility of these projects. Because of the traditional high risks associated with Brownfieids remediation investment, few vehicles exist for such investment. Moreover, few managers have developed expertise sufficient to administer the few such investment vehicles that do exist. There are approximately 5000 registered professional investment advisors for management of a wide variety of investments in stocks, stock portfolios, bonds, and stock and bond funds. There are only a few dozen registered professional real estate investment managers, and only a handful of these managers control the majority of the market (75%). These managers offer very traditional pure equity, first mortgage and participating mortgage products not suited to the this type of investment. However, this investor base is the best source for long term capital. With few sources of investment capital available for financing Brownfieids remediation, Brownfieids' owners must often rely on their own financial resources to provide the funds for remediation. These owners include most major industrial corporations, family owned businesses, government entities, farmers, developers and many others. This further constrains resources available to the ongoing business interests of these owners, and therefore, redevelopment is delayed indefinitely. Moreover, real estate developers typically encounter substantial project delays with attendant costs because there is no single mode of financing that will cover all phases (e.g., acquisition, entitlement, development and construction) of a project. Developers must first arrange financing for acquiring the property and developing plans and designs. The project then typically halts for weeks or months while the developer arranges construction financing. Near the end of the construction phase, the project may be effectively halted again while the developer seeks and arranges permanent financing or sells the project. All three stages of financing are typically provided by separate sources, and financing fees may be required in connection with each stage of financing. Thus, there is a substantial need for a single source of financing to address all stages of a real estate project to lower the cost of capital and facilitate faster completion of a projection. This will also make projects that are not feasible today become feasible including redevelopment of Brownfieids. Furthermore, the three stages of financing are typically carried as full debt on the developer's balance sheet. Carrying environmental project-related debt on the balance sheet reduces the developer's and/or owner's equity, and, therefore, reduces the developer's and/or owner's ability to borrow funds for new projects, expansion, or to support normal operations. Accordingly, there is a need for a method of financing real estate development without reducing a developer's equity or borrowing power ("off balance sheet" financing and/or investment). SUMMARV The present invention responds to the need for private investment in projects involving Brownfieids remediation/development/redevelopment. In accordance with an example embodiment of the present invention, a Brownfieids investment vehicle (financial instrument), and a system and method for investing in Brownfields-related projects are provided that are capable of supporting all aspects of a Brownfieids remediation/development/redevelopment project, while shielding investors from environmental liability. In one example embodiment, a Brownfieids investment fund is established in accordance with certain criteria. The Brownfieids fund provides capital on a non-recourse basis through Brownfieids Value Contracts ("BVC") to a number of approved "special purpose vehicles" for specific Brownfieids projects according to fund investment criteria determined by a fund manager . These "special purpose vehicles" meet technical and financial criteria established by a fund manager. The present invention substantially reduces an investors risk in incurring environmental liability by providing that the Brownfieids fund is completely passive with respect to the Brownfieids project, taking no security or mortgage interest in the Brownfieids property. BRIEF DESCRIPTION OF THE DRAWINGS Fig. 1 shows an overview of an overall architecture of a system for Brownfieids development investing according to an example embodiment of the present invention. Fig. 2 shows an overview of criteria that the Brownfieids fund, the special purpose vehicle and the Brownfieids project may be required to meet, according to the example embodiment of the present invention. Fig. 3 illustrates examples of general fund investment criteria 210 used by the fund manager in determining whether or not the Brownfieids fund should make a BVC to a Brownfieids project. Fig. 4 illustrates examples of general project investment criteria 220 that the fund manager may require a particular Brownfieids project to meet in order for the Brownfieids fund to make a BVC therein. Fig. 5 illustrates examples of technical project criteria which the Brownfieids project may be required to meet in order to qualify for a capital investment from the Brownfieids fund through a BVC. Fig. 6 shows example technical criteria which the special purpose vehicle may be required to meet in order to be approved by a fund manager. Fig. 7 illustrates examples of approved entity structures according to the example embodiment of the present invention. Fig. 8 shows the overall architecture of a computer based system for Brownfieids development investing. Fig. 9 is a flowchart showing an example method for establishing a fund and for approving special purpose vehicles and their respective Brownfieids process, according to an example embodiment of the present invention. Fig. 10 shows an overview of cash flows associated with the present invention. Fig. 11 is a flowchart illustrating the administration of cashflows in accordance with the present invention. DETAILED DESCRIPTION Overview: Figure 1 shows an overview of the overall architecture of a system for Brownfieids remediation, development and redevelopment investing according to an example embodiment of the present invention. As illustrated, a Brownfieids investment fund 100 is established in which investors 105 invest (e.g., provide capital). In accordance with the example embodiment of the present invention, the Brownfieids investment fund 100 may be any type of business organization created for financing Brownfieids projects according to the present invention, including, but not limited to organizations such as a limited liability partnership, a limited liability company, a trust or other corporation. The investors 105 may be, for example, parties who provide capital to the Brownfieids fund for the purpose of earning a return on their capital through BVCs 112 made by the Brownfieids fund. These investors 105 may be, for example, accredited investors under federal securities laws, qualified investors, sophisticated investors, ERISA investors, private placement investors, or any other type of private equity investor. The Brownfieids fund 100 makes, for example, non-recourse, participating capital investments or "Brownfieids Value Contracts" ("BVC") 112 to a number "special purpose vehicles" 110, for specific Brownfieids projects 120 according to fund investment criteria determined by a "fund manager" 1 15. In the example embodiment of the present invention, a BVC 112 may include, for example, a financial obligation resulting from application and compliance with specific criteria to create value in development or redevelopment of Brownfieids and provides returns from that value to investors. For example, the BVC 1 12 may set forth terms and conditions such as: i) the amount of capital to be provided to a special purpose vehicle, such capital may be provided in a lump sum, or in installments; ii) details of an interest in future cashflows provided to the Brownfieids fund by the special purpose vehicle, iii) performance requirements of a project, iv) reporting requirements, etc. Each special purpose vehicle owns a respective real estate interest in one or more Brownfieids projects, and, thus, undertakes some or all environmental remediation liability with respect to their respective Brownfieids . These special purpose vehicles 110 may include, for example, the original owner of the Brownfieids and/or another entity to whom the original owner has transferred ownership. Each of the special purpose vehicles 110 and their respective Brownfieids projects 120 may be qualified by the fund 100 according to criteria as determined by the fiind manager 115. Brownfieids projects may include, for example, environmental remediation, and one or more of the following: land planning, zoning, construction and infrastructure construction (e.g., streets, sewers, lighting, architectural planning and design, establishing real estate property access from existing highways to the project), communication infrastructure constructions (e.g., telephone, fiber optic access, satellite access and cable access), demolition and remodel. The fund manager 1 15 may be, for example, a business organization, individual or group of individuals which act as a money manager for the Brownfieids fund 100. The fund manager 1 15 may have authority to establish criteria for qualifying a particular special purpose vehicle and associated Brownfieids project 120 for a BVC, and may solicit money from investors 105 in order to fund these BVCs. The fund manager 1 15 may, for example, administrate and report on the operations of the Brownfieids fund 100. In accordance with the present invention, the risk of environmental remediation liability for the investors 105 is greatly reduced since the investors 105 are completely passive with respect to the ownership and operations of the Brownfieids. The investors 105, for example, have no ownership interest in the Brownfieids, have no security interest or mortgage interest in the Brownfieids, and, thus, have no obligations of environmental remediation. Instead, upon providing a BVC to a special purpose vehicle 1 10 for a particular Brownfieids project 120, the Brownfieids fund 100 may acquire a financial interest in future cash flows from the Brownfieids project 120. Criteria Overview: As noted above, the fund manager 115 may set forth various criteria for approving BVCs to special purpose vehicles for Brownfieids projects. As shown in Fig. 2, the fund manager 115 may define general fund investment criteria 210 for the Brownfieids fund itself. Furthermore, the fund manager 1 15 may set forth general project criteria for a Brownfieids project 220, technical criteria for the Brownfieids project 230, technical criteria for the special purpose vehicle 240 associated with the Brownfieids project, and entity structure criteria 250. Assuming the fund manager believes that the Brownfieids fund itself, the particular special purpose vehicle in issue and the Brownfieids project in issue meet all of the required criteria, the fund manager may recommend BVC approval. In the example embodiment, an Independent Investment Committee 250 may be required to concur with the recommendation of the fund manager 115 before a capital investment is finally approved. The Independent Investment Committee 250 may be comprised of persons having expertise in areas of environmental engineering, environmental law, real estate development, real estate development project feasibility analysis, real estate finance and real estate investment fund analysis. The member of the Independent Investment Committee typically should have no interest in the fund or in any entity any way involved in investments reviewed by the Committee. General Fund Investment Criteria: Fig. 3 illustrates examples of general fund investment criteria 210 used by the fund manager in determining whether or not the Brownfieids fund should make an investment in any BVC. As shown in element 305, in accordance with the example embodiment of the present invention, the Brownfieids fund may invest in BVCs only after receiving a minimum level of investment into the fund. In effect, the Brownfieids fund must have a certain amount of capital available with which to invest in BVCs. Additionally, the Brownfieids fund must invest in more than one Brownfieids project and more than one BVC(element 310). In an alternative embodiment of the present invention, the Brownfieids fund may invest in only one Brownfieids project, and one or more BVCs. Also, the overall investment in the Brownfieids fund should be large relative to the size of the BVCs in which the fund invests (element 315). For example, the Brownfieids fund may be required to manage between $500 million to $1 billion dollars worth of money, securities, and other assets. A typical BVC may be worth, for example, between $5 million dollars and $50 million dollars. Larger and smaller projects are, of course, possible. Moreover, the duration of the Brownfieids fund, itself, must be long-term relative to the duration of the BVCs in which the fund invests (element 320). For example, the Brownfieids fund may have a duration of three to ten years, while typical BVCs may have durations of 12 months to 120 months. Each of the criteria 305, 310, 315 and 320 are established to ensure that the Brownfieids fund adequately spreads its financial risk. Additionally, in accordance with the present invention, the investors in the Brownfieids fund must be completely passive with respect to all of the Brownfieids projects in which the Brownfieids fund invests through a BVC (element 325). Neither the investors, nor the Brownfieids fund itself should take any ownership interest in the Brownfieids. For example, neither the investors nor the Brownfieids fund should take a security interest or mortgage interest in the Brownfieids. Accordingly, the risk of the investors of the Brownfieids fund incurring environmental remediation liability is greatly reduced, if not eliminated. Finally, the possibility of leveraging the fund may be a factor (element 330) to reduce the cost of the BVC. General Project Investment Criteria: Fig. 4 illustrates examples of general project investment criteria 220 that the fund manager may require a particular Brownfieids project to meet in order for the Brownfieids fund to make a BVC. In accordance with the example embodiment of the present invention, the duration of the financing (i.e., the duration of the BVC) for a particular Brownfieids project must be less than a predetermined authorized duration (element 405). Additionally, the target rate of return for the Brownfieids fund must be greater than a predetermined minimum (element 410). Furthermore, the investment or capital investment amount to the particular BVC must be greater than a predetermined minimum amount (element 415) and less than a predetermined maximum amount (element 420). Technical Project Criteria: Fig. 5 illustrates examples of technical project criteria 230 which the Brownfieids project may be required to meet in order to qualify for a capital investment from the Brownfieids fund. In accordance with the example embodiment of the present invention, the cash flow participation in the particular BVC should be at a predetermined level (element 501). For example, the capital investment made by the Brownfieids fund to the special purpose vehicle for the particular Brownfieids project may be exchanged for future cash flow of the Brownfieids project. That is, the Brownfieids fund may be entitled to a share of the revenue of the Brownfieids project until the capital investment (plus interest or return) is recovered, in accordance with the terms of the BVC. The fund manager may also set forth the types of real estate development approved for the Brownfieids project (element 502). For example, the building of an industrial complex may be an approved type of Brownfieids project, while the building of an apartment building may not be. The fund manager may revise criteria from time to time in response to changes in various markets. As shown, the Brownfieids project may be required to meet certain geographic standards (element 505). For example, in an example embodiment of the present invention, the Brownfieids may be required to be located in one of a number of acceptable states or counties in the United States. Moreover, demand for the proposed development project in the particular geographic area should be adequate. Additionally, the type of contamination associated with the Brownfieids may be required to be in one of a number of contamination categories (element 510). For example, in one embodiment of the present invention, contamination due to an oil spill or leakage may be within an "approved" category, while contamination due to nuclear waste may not be. Also, the fund manager may set forth certain standard for risk management in association with the Brownfieids project (element 520). For example, the special puφose vehicle may be required to assure that adequate and trained staff qualified to perform the proposed development of the Brownfieids project will be used and risk management is appropriate (e.g., insurance, indemnities). Finally, the fund manager may require evaluation of all available government subsidies, grants, etc (element 525). Technical Criteria For Special Purpose Vehicles: Figure 6 shows example technical criteria which the special puφose vehicle (240) may be required to meet in order to be approved by a fund manager. The special puφose vehicle may be required to have a certain level of expertise in real estate development (element 605). For example, the special puφose vehicle may be required to have been involved with at least a specified number of large-scale real estate development projects. For example, the special purpose vehicle may be required to have principals with minimum net worth requirements and references. Additionally, the special puφose vehicle may be required to have a certain minimum level of expertise in pollution remediation (element 610). Moreover, the special purpose vehicle may be required to have expertise in environment risk management (element 615). Finally, the special puφose vehicle may be required to have a certain expertise in land use planning (element 620). In one embodiment of the present invention, criteria 610, 615 and 620 may be met by the special puφose vehicle by, for example, retaining, or consulting or partnering with a technical consultant in these areas. The fund manager may also evaluate the financial strength of the special puφose vehicle to meet contractual obligations (element 625) Approved Entity Structures: As noted above, the fund manager may also establish approved entity structures for the special purpose vehicle (element 250). Fig. 7 illustrates examples of approved entity structures. Approved entity structures may include, for example, a joint venture between an original owner of the Brownfieids and a real estate developer (element 705), a limited liability company, partnership, trust or coφoration formed and owned by a real estate developer (element 710), a limited liability company, partnership, trust or coφoration formed and owned by an original owner, a real estate developer and other partners (element 715), and a limited liability company, partnership, trust or coφoration formed and owned by a developer and partners to purchase Brownfieids over time with fixed installments, contingent installments or fixed installments in combination with cash flow participation (element 720). Other entity structures are, of course, possible. Moreover, the original owner of the Brownfieids may be so anxious to remove the Brownfieids from its balance sheet that the original owner actually pays another entity, e.g., a special puφose vehicle, to accept title to the Brownfieids. Computer Based System: Fig. 8 illustrates a computer based system for Brownfieids investing in accordance with an example embodiment of the present invention. Information concerning the Brownfieids fund may be stored, managed and updated at a central site 800. The central site 800 may include, for example, one or a number of server systems 801 (each including, for example, a processor, memory, and various peripheral devices). The central site 800 may also include a number of databases (stored on storage devices) 802 coupled to one or more of the server systems 801. The fund manager may access and update the Brownfieids fund information using, for example, a fund manager workstation 803 coupled to the central site 800 via a network 804. The network may include, for example, a telecommunications network, a local area network, a wide area network, the Internet, etc. Of course, it is also possible that the fund manager workstation is directly coupled to the central site 800. The fund manager workstation 803 may be required to log into one of the server systems 801 in order to access and update information. Investors (current and potential) may request or access information concerning the Brownfieids fund, review and update investor account information, authorize fund transfers into the Brownfieids fund, etc., using investor workstations 805 coupled to the central site 800 via a network 806. The network 806 may include, for example, the Internet, and investor workstations 805 may be provided secure links to the central site for some types of transactions. Other networks such as a telecommunications network, a local area network, a wide area network, etc., are, of course possible. Each investor workstation 805 may be required to log into one of the servers 801 at the central site 800 in order to access and/or update information. Special purpose vehicles may also request or access information concerning the Brownfieids fund, review and update special puφose vehicle account information, transmit Brownfieids project proposals, using, for example, SPV workstations 807 coupled to the central site 800 via a network 806. Each SPV workstation 807 may be required to log into one of the server systems 801 in order to access and/or update information. Fund Formation/Approval Process: Fig. 9 is a flowchart showing an example method for establishing a fund and for approving special puφose vehicles and their respective Brownfieids projects. This method may be partially or completely performed using the computer based system shown in Fig. 8. The method may also be carried out without any computer based system. In accordance with an example embodiment of the present invention, initial fund guidelines are established for the Brownfieids fund in accordance with the general fund investment criteria described above (step 905). These guidelines may be input, for example, from the fund manager terminal and stored in databases at the central site. Once the guidelines are established, the Brownfieids fund begins accepting funds (i.e., investments or capital) from investors (step 910). In accordance with the present invention, the investors may transmit funds to the Brownfieids fund via, for example, mail, electronic funds transfer, hand delivery, or may authorize a funds transfer via an investor workstation or via a telephone. As soon as the investment level is high enough (steps 915, 910), the Brownfieids fund determines whether or not prospective special puφose vehicles meet the technical criteria (step 920), as discussed above in connection with Fig. 6. Also, the fund manager determines whether or not the special puφose vehicle is in the form of one of the pre-approved entity structures (as described in connection with Fig. 7, for example) (step 925). A list of the pre- approved structures may be stored at the central cite in, for example, one of the databases. The fund manager may use an expert system or another computer-based system to compare the details of the form of the special puφose vehicle (provided by the special puφose vehicle in connection with the proposal) with the pre-approved entity structure. Alternatively, the fund manager may manually perform the comparison . If the special puφose vehicle is not in the form of a pre-approved entity structure, the fund manager may need to review details of the structure of the special purpose vehicle to determine whether or not the special piupose vehicle is in an acceptable form (steps 926, 927). (In an alternative embodiment of the present invention, the pre-determined entity structures are merely suggested structures.) Assuming the special puφose vehicle meets the technical criteria (for example, as described in connection with Fig. 6) and the form of the special puφose vehicle is determined to be acceptable, the Brownfieids fund receives a project proposal from the special puφose vehicle (step 930). A Brownfieids project proposal may be transmitted to the fiind manager via, for example, mail, facsimile, hand delivery, etc., or may be electronically transmitted to the central site via an SPV workstation. Details of the proposal may be manually or automatically entered and stored at the central site. In the example embodiment of the present invention, once a particular proposal is received, Next, the fund manager determines whether or not the proposed Brownfieids project meets the general project investment criteria, for example, as described in connection with Fig. 4 (step 940). If not, the proposal is rejected (step 975). If the proposed Brownfieids project does meet the general project investment criteria, the fund manager determines whether or not the proposed Brownfieids project meets the technical project criteria, as described in connection with Fig. 5 (step 945). If either of these criteria are not met, the proposal is rejected (step 975). According to the present invention, the fund manager may perform steps 920, 940 and 945 using a computer rules-based system (other systems are possible). For example, each of the general project criteria, technical project criteria and technical criteria for the special puφose vehicle may be stored in the system in the form of a rule. Using the rules-based system, the details of the project proposal may be compared to the stored rules. Thus, steps 920, 940 and 945 may be performed automatically at the central site. Alternatively, the criteria may be stored in databases, and printed out by the fund manager. The fund manager could then manually compare the details of the project proposal to the criteria. If all of the above-described criteria are met, the fund manager recommends approval of a capital investment to the special puφose vehicle for the Brownfieids project (step 955). The proposal is then reviewed by the Independent Investment Committee (960) for final approval. The Independent Investment Committee may review the proposal as compared to the same criteria used by the fund manager, or may review the proposal in terms as compared to other criteria. Finally, if the Independent Investment Committee approves the proposal (step 965), the special puφose vehicle and proposed Brownfieids project is finally approved (step 970), thus the Brownfieids fund provides a capital investment to the special puφose vehicle for the proposed Brownfieids project through the terms of a BVC. Otherwise, the proposal is rejected (step 975). An indication that the capital investment has been approved or rejected may be transmitted to the special puφose vehicle electronically by the central site. Alternatively, the fund manager or the Independent Investment Committee may provide the indication via the telephone or mail. Cashflow Overview: Fig. 10 shows an overview of cash flows associated with the present invention. As shown, each Brownfieids project 120 may include two sources of cash flows. In particular, both the remediation phase 1010 (i.e., the clean-up) of the Brownfieids project 120 and the development/redevelopment (e.g., the actual construction project) may each generate a cash flow for the special puφose vehicle 110. According to the example embodiment of the present invention, each special purpose vehicle 1 10 is required under the terms of, for example, the Brownfieids Value Contract with the Brownfieids fund 100, to pay to the Brownfieids fund 100 a certain share of the special puφose vehicles's (future) cash flow. Thus, a cash flow to the Brownfieids fund 100 is generated once the special puφose vehicle's cash flow is realized. Moreover, according to the example embodiment, each investor 105 is entitled, under the terms of, for example, an Investor Investment Contract, to a certain portion of the cash flow received by the Brownfieids fund 100. Cashflow Administration: Fig. 11 is a flowchart illustrating the administration of cashflows in accordance with the present invention. The administration may be performed using the computer based system shown in Fig. 1. Initially, data related to each BVC are received and stored at, for example, in a data base at the central site (step 1 1 10). The data may include an identification of the special puφose vehicle, ownership distribution requirements, cash flow requirements, equity contributions and performance requirements. Additionally, data related to each investor and investment contract may be received and stored in the data base at the central site (step 1120). For example, an identification and address of each investor, as well as an indication of each investors total investment, terms of the investment and/or any investment agreements. Next, as a Brownfieids project progresses, each special piupose vehicle transmits to the central site an indication of the special puφose vehicle's actual cash flow in connection with the Brownfieids project (step 1 130). This indication may be transmitted electronically, or may be, for example, hand delivered, delivered by mail or deposited into a bank lockbox system and subsequently entered into a database at the central site. A determination is then made as to whether each of the Brownfieids projects has met its performance requirements (step 1140). This determination can be made, for example, by comparing the performance requirements of each Brownfieids project to the actual cash flow from the special purpose vehicle associated therewith. The total cash flow to the Brownfieids fund can then be determined (step 1 150) by, for example, summing the actual cash flow from each special piupose vehicle. Additionally, the portion of the total fund cash flow to which each investor is entitled can be determined as a function of the data stored in connection with the Investor Investment Contracts (step 1 160). Finally, reports can be generated at the central site for distribution to the investors (step 1160), showing, for example, the performance of the Brownfieids fund, and possibly each Brownfieids project and/or special puφose vehicle. Additionally, each investor may be paid (either electronically or otherwise) a respective share of the total cash flow (i.e., a return on investment) in accordance with the terms of the Investor's Investment Contract.

Claims: What Is Claimed Is: 1. A method for investing in Brownfieids, comprising: establishing a Brownfieids fund, the Brownfieids fund providing investment capital on a non-recourse basis for Brownfieids projects and remaining passive with respect to the Brownfieids projects; receiving investor capital from investors; approving an entity for the investment capital on the non-recourse basis for a respective one of the Brownfieids projects according to predetermined criteria, the entity having an ownership interest in a Brownfieids associated with the one of the Brownfieids projects; and providing the investment capital on the non-recourse basis to the approved entity using at least some of the investor capital from the investors. 2. The method according to claim 1 , wherein the entity is a special puφose vehicle. 3. The method according to claim 1, wherein the providing step includes providing a Brownfieids Value Contract to the entity, the investment capital being provided to the approved entity in accordance with terms of the Brownfieids Value Contract. 4. The method according to claim 1, further comprising: wherein the providing step includes exchanging by the approved entity an interest in future cashflows from the respective one of the Brownfieids project for the investment capital from the Brownfieids fund. 5. The method according to claim 3, wherein the establishing step includes establishing the Brownfieids fund so that the Brownfieids fund is long-term in duration relative to durations of the Brownfieids Value Contract. 6. The method according to claim 1 , wherein the establishing step includes establishing the Brownfieids fund so that a size of the Brownfieids fund is large relative to respective sizes of each capital investment made by the Brownfieids fund. 7. The method according to claim 1 , wherein the providing step includes providing the investment capital to entities only after a investment level is above a predetermined minimum. 8. The method according to claim 1, further comprising: providing a return on investment to each one of the investors as a function of an amount of respective capital provided by the one of investors. 9. The method according to claim 8, wherein the step of providing the return on investment includes providing the return on investment as a function of cashflow from the Brownfieids projects. 10. The method according to claim 1, wherein the receiving capital step includes receiving the investments electronically. 1 1. The method according to claim 1 , wherein the receiving capital step includes receiving the investments via mail. 12. The method according to claim 1, wherein the establishing step includes receiving investments from investors for use in providing the non-recourse capital investments, each of the investors being passive relative to all of the Brownfieids projects. 13. The method according to claim 1, further comprising: storing information related to each of the Brownfieids projects; and storing information related to the borrower. 14. The method according to claim 1, wherein the Brownfieids project is at least one of: i) a development project, ii) a redevelopment project, and iii) an environmental remediation project, and wherein the Brownfieids fund does not take an ownership interest in a Brownfieids associated with the Brownfieids project. 15. A Brownfieids investment vehicle, comprising: a Brownfieids fund providing investment capital to at least one approved entity on a non-recourse basis for at least one project involving at least one Brownfieids without taking an ownership interest in the at least one Brownfieids, the Brownfieids fund remaining passive with respect to the at least one project, receiving investor capital from at least one investor and providing a return on investment to the at least one investor. 16. The Brownfieids investment vehicle according to claim 15, wherein the at least one approved entity includes a plurality of approved entities. 17. The Brownfieids investment vehicle according to claim 15, wherein the at least one project includes a plurality of projects. 18. The Brownfieids investment vehicle according to claim 15, wherein the at least one Brownfieids includes a plurality of Brownfieids. 19. The Brownfieids investment vehicle according to claim 15, wherein the at least one Brownfieids includes a plurality of investors. 20. The Brownfieids investment vehicle according to claim 15, further comprising: at least one Brownfieids Value Contract setting forth terms and conditions of the provision of the investment capital by the Brownfieids fund to the at least one approved entity, the Brownfieids fund providing the investment capital to the at least one approved entity in accordance with the at least one Brownfieids Value Contract. 21. The Brownfieids investment vehicle according to claim 15, wherein the at least one project includes at least one of: i) a development project, ii) a redevelopment project, and iii) an environmental remediation project. 22. The Brownfieids investment vehicle according to claim 20, wherein the at least one Brownfieids Value Contract describes an exchange of an interest in future cashflows flowing from the at least one Brownfieids project for the investment capital by the at least one approved entity. 23. The Brownfieids investment vehicle according to claim 20, further comprising: a storage medium storing an indication of at least some of the terms and conditions of the Brownfieids Value Contract. 24. A method for managing a Brownfieids fund, comprising: storing in a computer system information relating to a Brownfieids fund; accepting investor capital from at least one investor; storing information in the computer system relating to the at least one investor, the stored information including investor identification information, investment amounts, and terms of investments; storing information in the computer system concerning an entity and a project involving a Brownfieids, the entity having an ownership interest in the Brownfieids; approving the entity and the Brownfieids project according to predetermined criteria using the information stored in the computer system concerning the entity and the Brownfieids project; and providing investment capital by the Brownfieids fund to the approved entity for the approved Brownfieids project on a non-recourse basis without taking any ownership interest in the approved Brownfieids project. 25. The method according to claim 24, wherein the providing the investment capital step includes exchanging by the approved entity an interest in future cashflows from the Brownfieids project for the investment capital. 26. The method according to claim 24, wherein the providing step includes providing a Brownfieids Value Contract to the approved entity, and further comprising the step of: storing the terms of the Brownfieids Value Contract in the computer system 27. The method according to claim 25, further comprising: receiving by the Brownfieids fund a portion of cashflows from the Brownfieids project to generate at least a portion of a fund cashflow; and determining a portion of the fund cashflow to which each of the at least one investor is entitled as a function of the terms of investment stored in the computer system. 28. A method of investing in Brownfieids, comprising: providing investor capital by an investor to a Brownfieids fund in accordance with predetermined terms of investment, the Brownfieids fund providing investment capital on a non-recourse basis for Brownfieids projects and remaining passive with respect to the Brownfieids projects, the Brownfieids fund approving an entity for the investment capital on the non-recourse basis for a respective one of the Brownfieids projects according to predetermined criteria, the entity having an ownership interest in a Brownfieids associated with the one of the Brownfieids projects, the investment capital being provided on the non-recourse basis to the approved entity using at least some of the investor capital from the investor without taking any ownership interest in a Brownfieids property associated with the one of the Brownfieids projects; and receiving by the investor a return on investment, the return on investment being determined as a function of the predetermined terms of investment. 29. The method according to claim 28, wherein the approved entity exchanges an interest in future cashflows from the one of the Brownfieids projects for the investment capital, and wherein the return on investment is determined as a function of actual cashflows generated by the one of the Brownfieids projects to the Brownfieids fund.

Inventors: HOFFMAN CHERYL, HOFFMAN, CHERYL
Applicants: HOFFMAN CHERYL, HOFFMAN, CHERYL
Application year: 2000
Main classification: G06F17
IPC codes: G06Q40