1031-00004 · Hudson Yards West Mortgage LLC · Diligence

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MEMORANDUM

ATTORNEY-CLIENT PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT

TO: Douglas Fairchild; Angela Fontaine; Grace Nakamura

FROM: Rafael Dominguez

DATE: March 25, 2025

RE: Environmental Review — Phase I Environmental Site Assessment, 450 West 34th Street, New York, NY 10001 (C&H Matter No. 1031-00004)

CC: Lydia Okafor (MTDC — General Counsel); Connor McBride (MTDC — Project Director)

I. PURPOSE

This memorandum summarizes the findings, conclusions, and recommendations contained in the Phase I Environmental Site Assessment ("Phase I ESA") prepared by Apex Environmental Consultants, Inc. ("Apex Environmental"), Project No. AEC-NY-25-0337, dated March 20, 2025, for the project site located at 450 West 34th Street, New York, NY 10001 (Block 729, Lots 1, 5, 12, and 15), Manhattan, New York (the "Property" or "Project Site"). The Phase I ESA encompasses all four tax lots constituting the assembled development parcel within the Hudson Yards area on the west side of Midtown Manhattan.

The Phase I ESA was commissioned in connection with the proposed $675,000,000 senior mortgage and mezzanine financing (collectively, the "Financing") for the Hudson Yards West mixed-use development (the "Project") being undertaken by Metropolitan Transit Development Corp. ("MTDC"). The senior mortgage loan in the amount of $500,000,000 is to be provided by Ironclad National Bank, N.A. ("Ironclad"), and the mezzanine loan in the amount of $175,000,000 is to be provided by Granite Peak Capital Partners, LLC ("Granite Peak"). The borrower entities will be special purpose entities controlled by MTDC, as further described in the loan documentation.

This memorandum is intended solely for internal use by the deal team at Calderwood & Harkness LLP ("C&H") and by our client, MTDC. It does not constitute a legal opinion on environmental liability, nor does it serve as a substitute for independent review of the Phase I ESA itself. All members of the deal team and the client are encouraged to review the full Phase I ESA, which has been uploaded to the Calderwood & Harkness document management system at Matter 1031-00004, Document ID 00458237.

The Phase I ESA was prepared in accordance with ASTM International Standard E1527-21 (Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process), which is the current industry standard for conducting Phase I ESAs in the United States, and the United States Environmental Protection Agency's ("EPA") All Appropriate Inquiries ("AAI") rule, codified at 40 C.F.R. Part 312. Compliance with the ASTM E1527-21 standard and the AAI rule is a prerequisite for establishing certain defenses to liability under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended ("CERCLA"), 42 U.S.C. §§ 9601 et seq., including the bona fide prospective purchaser defense and the innocent landowner defense, as discussed in greater detail in Section VII.A of this memorandum.

II. EXECUTIVE SUMMARY

The Phase I ESA, prepared under the direction of Dr. Lena Kaur, P.E., Project Manager at Apex Environmental, identified the following environmental conditions at or affecting the Property:

• Recognized Environmental Conditions ("RECs"): Three (3) RECs were identified, relating to (i) potential petroleum hydrocarbon and heavy metals contamination associated with historical rail yard operations on the Property, (ii) evidence of former underground storage tanks ("USTs") on or immediately adjacent to the Property with incomplete documentation of removal and closure, and (iii) a potential vapor intrusion pathway from subsurface contamination, including chlorinated solvents potentially migrating from historical dry cleaning and degreasing operations on nearby parcels.

• Controlled Recognized Environmental Conditions ("CRECs"): One (1) CREC was identified, relating to the New York City Office of Environmental Remediation ("NYC OER") E-Designation (hazardous materials) imposed on the Property in connection with the ULURP approval, which requires implementation of institutional and engineering controls as part of any future development.

• Historical Recognized Environmental Conditions ("HRECs"): One (1) HREC was identified, relating to a prior petroleum spill on Lot 5 that was reported to the New York State Department of Environmental Conservation ("NYSDEC") in 2003, subsequently remediated, and closed by NYSDEC with a no-further-action determination in 2008.

Apex Environmental's overall risk characterization classifies the Property as presenting a moderate environmental risk profile, consistent with properties in the Hudson Yards area that have a legacy of rail yard, transportation infrastructure, and industrial use. Apex Environmental noted that the identified RECs are not atypical for sites in this portion of western Manhattan, where over a century of rail operations, fuel storage, and ancillary industrial activities have left a well-documented legacy of subsurface impacts.

Notably, certain conditions identified as RECs will require additional investigation through a Phase II Environmental Site Assessment ("Phase II ESA") involving subsurface sampling and analysis. Additionally, the CREC related to the E-Designation will necessitate ongoing monitoring, regulatory coordination, and compliance with institutional and engineering controls throughout the development and operational life of the Project.

Based on our review of the Phase I ESA, it is our assessment that the identified conditions are manageable for purposes of the Financing and should not preclude closing, provided that the action items set forth in Section VIII of this memorandum are timely implemented. The environmental profile of the Property is consistent with our experience representing lenders and developers in connection with other large-scale projects in the Hudson Yards district and the broader Far West Side area.

III. SCOPE OF THE PHASE I ESA

A. ASTM E1527-21 Compliance

Apex Environmental confirms on the face of the Phase I ESA that the report was prepared in full compliance with ASTM Standard E1527-21, the current edition of the standard practice for Phase I Environmental Site Assessments, which became effective on February 1, 2022. The Phase I ESA also confirms compliance with the EPA's AAI rule (40 C.F.R. Part 312), which cross-references the ASTM E1527-21 standard as a means of satisfying the all appropriate inquiries obligation under CERCLA.

In addition to the baseline ASTM E1527-21 scope, the Phase I ESA includes the following supplemental scope items, which were requested by MTDC and C&H in consultation with the lenders' environmental counsel:

(a) An expanded environmental database search radius for petroleum bulk storage and chemical bulk storage facilities, extending the search area to one-half mile beyond the ASTM-prescribed minimum search distances, to capture the density of listed facilities in the surrounding Hudson Yards and Hell's Kitchen neighborhoods;

(b) A preliminary qualitative assessment of the potential vapor intrusion pathway, including review of available subsurface data from adjacent properties and publicly available groundwater monitoring data from the NYSDEC Environmental Site Remediation Database;

(c) A review of NYC OER E-Designation records and associated environmental review documentation generated during the ULURP process for the Project; and

(d) A limited review of available information regarding per- and polyfluoroalkyl substances ("PFAS") in connection with historical uses of the Property and surrounding area, although Apex Environmental noted that PFAS assessment is not within the scope of ASTM E1527-21 and the PFAS review was conducted as a non-scope consideration at the client's request.

No deviations from the ASTM E1527-21 standard scope were noted or authorized.

B. Site Description and Current Use

The Property comprises approximately 82,400 square feet (approximately 1.89 acres) of land area encompassing Tax Block 729, Lots 1, 5, 12, and 15 in the Borough of Manhattan, County and State of New York. The Property is bounded generally by West 34th Street to the north, Eleventh Avenue to the east, West 33rd Street to the south, and Twelfth Avenue (Route 9A / Joe DiMaggio Highway) to the west. The Property is situated in the Hudson Yards Special District, within the broader Far West Side neighborhood of Manhattan.

As of the date of Apex Environmental's site reconnaissance, the Property is partially improved and partially vacant. Lot 1 (approximately 32,000 square feet) contains a single-story, steel-frame warehouse structure of approximately 28,500 square feet, constructed circa 1948, which is currently vacant and secured. Lot 5 (approximately 18,200 square feet) is an unimproved, paved surface lot currently used on an interim basis as construction staging for an adjacent development. Lot 12 (approximately 16,800 square feet) contains a two-story masonry building of approximately 12,600 square feet, constructed circa 1935, formerly used as a vehicle maintenance and repair facility, which is currently vacant. Lot 15 (approximately 15,400 square feet) is an unimproved, gravel-surfaced lot that is fenced and vacant. Surface conditions across the Property include asphalt paving, concrete slabs, gravel fill, and areas of exposed soil, with evidence of demolition debris in certain areas of Lots 5 and 15.

The Property is held by MTDC pursuant to a 99-year ground lease (the "Ground Lease") from the New York City Economic Development Corporation ("NYCEDC"), as fee owner, to MTDC, as ground lessee, dated June 1, 2020 and recorded in the Office of the City Register of the City of New York on June 15, 2020 as CRFN 2020000198762. The Ground Lease encumbers all four tax lots and permits the development of a mixed-use tower on the assembled parcel.

The proposed development consists of a 62-story, approximately 1,450,000 gross-square-foot mixed-use tower (the "Hudson Yards West Tower" or the "Project"), which will include approximately 780 residential units (including affordable housing units), approximately 180,000 square feet of Class A commercial office space, approximately 45,000 square feet of ground-floor and second-floor retail space, a 175-room hotel occupying floors 55 through 62, and below-grade parking for approximately 285 vehicles. The projected substantial completion date for the Project is December 15, 2027, with the first Temporary Certificate of Occupancy ("TCO") projected for March 15, 2028.

C. Methodology. Apex Environmental's scope of work, as documented in the Phase I ESA, comprised the following components:

Site Reconnaissance and Inspection. Apex Environmental conducted a site reconnaissance and physical inspection of the Property on March 10 and March 11, 2025. The reconnaissance was performed by Dr. Lena Kaur, P.E. and Mr. Marcus Reilly, Environmental Scientist. The inspection included a walk-through of accessible portions of all four lots, observation of surface conditions, identification of potential environmental concerns (e.g., staining, stressed vegetation, distressed pavement, evidence of storage tanks or drums, odors), and photographic documentation. The interiors of the existing structures on Lots 1 and 12 were accessed and inspected, to the extent accessible. Apex Environmental noted that certain areas of the warehouse on Lot 1 were inaccessible due to structural deterioration and safety concerns, as discussed further in Section III.D below.

Review of Historical Sources. Apex Environmental reviewed historical sources to establish the chain of land use at the Property and surrounding area. The historical sources reviewed include:

(i) Trelwick Fire Insurance Maps for the period 1894 through 2017 (ten editions reviewed);

(ii) Historical aerial photographs from 1924, 1951, 1966, 1976, 1984, 1994, 2006, 2012, and 2020;

(iii) City directory listings (R.L. Polk and Trow's) for the period 1920 through 1995;

(iv) New York City Department of Buildings ("NYC DOB") records, including building permits, certificates of occupancy, and alteration applications;

(v) New York City Department of Finance property records; and

(vi) Historical topographic maps (USGS 7.5-minute quadrangles) for the period 1891 through 2016.

Federal, State, and Local Environmental Database Searches. Apex Environmental retained Penrose Solutions ("EDR") to conduct a standard ASTM E1527-21 environmental database search (EDR Report No. 7412589.2s, dated March 6, 2025). The databases searched include, but are not limited to:

(i) EPA National Priorities List ("NPL") — one-mile radius;

(ii) EPA CERCLIS/SEMS (Superfund Enterprise Management System) — one-half-mile radius;

(iii) EPA RCRA Treatment, Storage, and Disposal Facilities ("TSD") — one-mile radius;

(iv) EPA RCRA Large Quantity Generators ("LQG") and Small Quantity Generators ("SQG") — Property and adjoining properties, respectively, plus quarter-mile radius;

(v) EPA Emergency Response Notification System ("ERNS") — Property only;

(vi) Federal Institutional Controls / Engineering Controls registries — one-half-mile radius;

(vii) NYSDEC Spills Database — Property and one-quarter-mile radius;

(viii) NYSDEC Petroleum Bulk Storage ("PBS") and Chemical Bulk Storage ("Ridgeway Enterprises") databases — Property and one-quarter-mile radius (expanded to one-half-mile at client request);

(ix) NYSDEC Environmental Remediation Database (State Superfund, Brownfield Cleanup Program, Voluntary Cleanup Program, Environmental Restoration Program) — one-mile radius;

(x) NYC OER E-Designation records — Property and adjoining properties;

(xi) NYC Department of Environmental Protection ("DEP") records — Property; and

(xii) Additional state and federal databases as required by ASTM E1527-21, including state and tribal landfill and solid waste databases, state underground storage tank and leaking underground storage tank databases, and the Voluntary Cleanup Program database.

In addition to the standard EDR radius search, Apex Environmental conducted an expanded search within a one-half-mile radius for PBS and Ridgeway Enterprises facilities, as noted above, to account for the high density of regulated facilities in the surrounding area.

Interviews. Apex Environmental conducted interviews with the following individuals to gather information about current and historical conditions at the Property:

(i) Connor McBride, Project Director, MTDC (current lessee and developer);

(ii) Sandra Whitfield, Asset Manager, NYCEDC (fee owner);

(iii) George Katsaros, former tenant of the vehicle maintenance facility on Lot 12 (operated at the Property from approximately 1988 through 2015);

(iv) Captain Anthony Delvecchio (Ret.), FDNY, who provided information regarding historical fire incidents at or near the Property; and

(v) A representative of NYSDEC Region 2 (via telephone), who confirmed the status of certain spill records and remediation activities in the area.

Apex Environmental reported that it made multiple attempts to contact additional former occupants and operators identified through city directory research, but was unable to reach several individuals, as noted in the data gaps discussion below.

Review of Prior Environmental Reports. Apex Environmental reviewed four prior environmental reports on file for the Property or portions thereof, as provided by MTDC and NYCEDC:

(i) Phase I Environmental Site Assessment, Lot 5, Block 729, prepared by Brownfield Sciences, LLC, dated April 12, 2003;

(ii) Phase II Environmental Site Assessment (Limited Subsurface Investigation), Lot 5, Block 729, prepared by Brownfield Sciences, LLC, dated September 8, 2003;

(iii) Spill Closure Report, Lot 5, Block 729 (NYSDEC Spill No. 0305217), prepared by Brownfield Sciences, LLC, dated February 22, 2008; and

(iv) Phase I Environmental Site Assessment, Block 729 (Lots 1, 5, 12, 15), prepared by EarthStar Environmental Services, Inc., dated November 15, 2019, commissioned by NYCEDC in connection with the ground lease transaction.

Evaluation of Adjoining and Nearby Properties. As part of the standard scope of work, Apex Environmental evaluated adjoining and nearby properties within ASTM E1527-21 search distances for potential environmental concerns that could affect the Property. This evaluation is further discussed in Sections IV.B and V below.

D. Limitations and Data Gaps

The Phase I ESA identifies the following data gaps and limitations:

(i) Inaccessible Areas — Lot 1 Warehouse: Approximately 4,200 square feet (approximately 15%) of the ground-floor interior of the warehouse structure on Lot 1 was inaccessible during the site reconnaissance due to structural deterioration, collapsed roofing sections, and associated safety hazards. Apex Environmental was unable to visually inspect this area for evidence of environmental concerns such as floor drains, staining, or storage of hazardous materials. Apex Environmental assessed this data gap as potentially significant, given the historical use of the warehouse for storage of petroleum products and lubricants associated with rail operations, and recommended that the inaccessible area be inspected following structural stabilization or demolition.

(ii) Unavailable Historical Records: City directory listings for the period prior to 1920 were not available for review. While Trelwick maps and aerial photographs provide coverage for the period prior to 1920, the absence of directory listings limits the ability to identify specific tenants or operators at the Property during that period.

(iii) Lack of Response — Former Operators: Apex Environmental was unable to contact two former operators identified through city directory research — Consolidated Rail Maintenance Corp. (operator at Lot 1, approximately 1955–1978) and West Side Fuel & Supply Co. (operator at Lot 15, approximately 1940–1962). Efforts to locate current contact information for representatives of these entities were unsuccessful. Apex Environmental assessed this data gap as not significant to the overall conclusions, given that the historical uses of these entities are reasonably well-documented through other sources.

(iv) Restricted Access — Lot 5 Staging Area: At the time of the site reconnaissance, Lot 5 was in active use as a construction staging area for an adjacent development project. Access to portions of the lot was restricted by the staging operations, and certain surface areas were obscured by stored construction materials and equipment. Apex Environmental was able to observe the perimeter and approximately 60% of the lot surface. Apex Environmental assessed this data gap as not significant, given the availability of the prior Phase I and Phase II ESA reports for Lot 5 and the documented spill closure.

(v) Regulatory File Review Delays: At the time of the Phase I ESA's completion, a Freedom of Information Law ("FOIL") request submitted to NYSDEC Region 2 for additional spill records pertaining to properties within one-quarter mile of the Property had not yet been fulfilled. Apex Environmental noted that the EDR database search and telephone inquiry with NYSDEC provided sufficient information to support the Phase I ESA conclusions, and that the outstanding FOIL response, when received, should be reviewed as a supplemental update.

Apex Environmental concluded that, with the exception of the inaccessible area within the Lot 1 warehouse (which is identified as a factor contributing to REC No. 1), none of the identified data gaps are of a nature or magnitude that would materially affect the reliability of the Phase I ESA's overall conclusions or the identification of RECs, CRECs, and HRECs.

IV. SITE HISTORY AND LAND USE

A. Historical Uses of the Property

Based on the historical sources reviewed by Apex Environmental, the following chronological summary of land use at the Property has been established:

Pre-1890s: The Property and surrounding area were part of the tidal wetlands and filled land along the western shoreline of Manhattan. Historical topographic maps indicate that portions of the site were filled with imported material, likely including construction and demolition debris, cinders, ash, and potentially other urban fill materials, during the late 19th century as part of the westward expansion of Manhattan's landmass in connection with the development of rail infrastructure.

1890s – 1930s: Trelwick Fire Insurance Maps from 1894, 1905, and 1915 depict the Property and surrounding blocks as part of the extensive New York Central Railroad rail yard complex, which served freight and passenger operations associated with the nearby Pennsylvania Station (opened 1910) and the broader network of rail lines along Manhattan's west side. The maps indicate the presence of rail sidings, loading platforms, maintenance structures, and fuel storage facilities across the Property. The 1915 Trelwick map specifically identifies a "fuel oil storage" notation on what is now Lot 15, and a "locomotive repair and servicing" notation on what is now Lot 1. The 1922 Trelwick map depicts similar rail-related uses, with the addition of a small warehouse structure on Lot 1 (predecessor to the current warehouse, which was rebuilt circa 1948).

1930s – 1960s: Trelwick maps from 1935, 1950, and 1961 show a gradual transition from active rail yard operations to a mix of rail-related storage, warehousing, and light industrial uses. The two-story masonry building on Lot 12 first appears on the 1935 Trelwick map, identified as an "auto repair" facility. City directory entries confirm that various vehicle maintenance and repair operations, as well as fuel distributors and building material suppliers, occupied portions of the Property during this period. The 1950 Trelwick map indicates the presence of two underground storage tanks on Lot 15, associated with the fuel supply operation. Aerial photographs from 1951 and 1966 confirm the presence of rail tracks, the warehouse and masonry building, and surface storage of drums and equipment on Lots 5 and 15.

1960s – 1990s: The decline of freight rail operations in Manhattan during this period led to the cessation of most rail-related activities on the Property. City directory entries and NYC DOB records indicate that the warehouse on Lot 1 was used for general storage and light manufacturing (textile cutting and garment storage) from approximately 1965 through 1992. The vehicle maintenance facility on Lot 12 continued to operate under various tenants, including George Katsaros's auto body and repair shop from approximately 1988 through 2015. Lot 5 was used intermittently as a surface parking lot and storage yard. Lot 15 appears to have been largely vacant from the mid-1960s onward, with the fuel storage tanks reportedly removed at an unspecified date (discussed further in Section VI.A.2). Aerial photographs from 1976, 1984, and 1994 confirm these uses and show progressive deterioration of improvements on the Property.

2000s – Present: The 2003 Brownfield Sciences Phase I and Phase II ESAs document conditions on Lot 5 at the time of a petroleum spill investigation (discussed in Section VI.C). The 2019 EarthStar Phase I ESA, commissioned by NYCEDC in anticipation of the ground lease, provides a comprehensive baseline of conditions across all four lots as of late 2019. Since the execution of the Ground Lease on June 1, 2020, MTDC has held the leasehold interest in the Property and has been engaged in pre-development activities, including design, entitlement, and financing. No significant construction or remediation activities have been undertaken on the Property to date. Lot 5 has been licensed to an adjacent developer for temporary construction staging since approximately 2022.

B. Historical Uses of Adjoining Properties

Apex Environmental's evaluation of adjoining and nearby properties within the ASTM E1527-21 search distances identified the following environmental-relevant historical uses:

Adjacent Rail Infrastructure: The Property is immediately adjacent to the Metropolitan Transportation Authority / Long Island Rail Road ("MTA/LIRR") West Side Yard, which occupies the blocks to the south and east of the Property. The West Side Yard has been in continuous operation as a rail storage and maintenance facility since the early 20th century and is a well-documented source of subsurface petroleum hydrocarbon and metals contamination. The ongoing Hudson Yards platform and development project (which is being constructed over the eastern portion of the West Side Yard) has been subject to extensive environmental investigation and remediation under the oversight of NYC OER and NYSDEC. Groundwater flow in the area is generally to the west-southwest, toward the Hudson River, which positions the Property cross-gradient to slightly downgradient from portions of the West Side Yard.

Former Gasoline Service Station — 485 Eleventh Avenue: Apex Environmental identified a former gasoline service station located at 485 Eleventh Avenue, approximately 200 feet east-northeast of the Property, which operated from approximately 1955 through 2001 and is listed in the NYSDEC PBS database (Facility No. 2-603487) and the NYSDEC Spills database (Spill No. 9907823, status: closed). The former station was the subject of a petroleum spill cleanup that was closed by NYSDEC in 2006, though residual petroleum contamination may remain in subsurface soils in the vicinity.

Former Dry Cleaning Operations — 446-448 West 33rd Street: Apex Environmental identified a former dry cleaning establishment (Superior Cleaners, Inc.) that operated at 446-448 West 33rd Street, approximately 150 feet south-southeast of the Property, from approximately 1962 through 1998. The use of chlorinated solvents (perchloroethylene, or "PCE") in dry cleaning operations is a well-known source of soil and groundwater contamination. This facility does not appear on any NYSDEC remediation database, suggesting that no formal investigation or cleanup has been conducted. Apex Environmental identified this facility as a potential contributing source to the vapor intrusion pathway identified as REC No. 3.

Auto Repair and Body Shops — West 33rd Street and West 34th Street: Several auto repair and body shop operations have historically operated on properties within one-quarter mile of the Property. These operations are potential sources of petroleum hydrocarbon, solvent, and heavy metals contamination, though none were identified as presenting a direct threat to the Property based on distance and inferred groundwater flow direction.

Other Database Listings: A total of forty-seven (47) facilities within the ASTM-prescribed and expanded search radii were identified on one or more environmental databases. Apex Environmental reviewed each listing and determined that, with the exceptions noted above, none of the identified facilities are expected to have materially impacted the Property based on distance, inferred groundwater flow direction, nature of the listing, and regulatory status.

V. ENVIRONMENTAL DATABASE FINDINGS

A. Federal Database Listings

The Property itself does not appear on any federal environmental database, including the EPA NPL, CERCLIS/SEMS, RCRA TSD, RCRA LQG, RCRA SQG, or ERNS databases.

The following federal database listings within the ASTM-prescribed search radii were identified as warranting discussion:

(i) Caemmerer West Side Yard (EPA ID: NYD986948415). This facility, located at the MTA/LIRR West Side Yard approximately 350 feet south-southeast of the Property, is listed on the RCRA SQG database and the CERCLIS/SEMS archive as a site that was assessed but determined not to require listing on the NPL. The CERCLIS/SEMS archive listing reflects a preliminary assessment conducted by EPA Region 2 in 1993, which resulted in a "no further remedial action planned" ("NFRAP") determination. The RCRA SQG listing reflects the generation of waste oils and solvents in connection with rail maintenance activities. Apex Environmental assessed this listing as a low-to-moderate concern with respect to the Property, noting that the West Side Yard is a well-characterized source of subsurface impacts and that the Property's position relative to inferred groundwater flow mitigates the potential for direct impact.

(ii) Hudson River Park PCB Site (EPA ID: NYN000206424). This site, located approximately 0.7 miles southwest of the Property along the Hudson River waterfront, is listed on the EPA NPL as a result of polychlorinated biphenyl ("PCB") contamination in sediments and soils. Apex Environmental assessed this listing as having no impact on the Property due to distance and the nature of the contamination (sediment-based, confined to the waterfront area).

No other federal database listings within the search radii were identified as presenting a potential concern for the Property.

B. New York State and Local Database Listings

The following state and local database listings are relevant to the Property:

(i) NYSDEC Spills Database — Lot 5 (Spill No. 0305217). Lot 5 is listed in the NYSDEC Spills database in connection with a petroleum spill reported on May 7, 2003. The spill involved the release of an estimated 300 gallons of No. 2 fuel oil from a subsurface source (suspected former UST or fuel line) discovered during excavation activities. The spill was investigated and remediated by Brownfield Sciences, LLC, and NYSDEC issued a spill closure letter (no further action) on March 14, 2008. This listing is the basis for HREC No. 1, as discussed in Section VI.C below. The spill closure status is confirmed as "closed" in the NYSDEC database.

(ii) NYSDEC PBS Database — Lot 15 (Facility No. 2-614892). Lot 15 is listed in the NYSDEC Petroleum Bulk Storage database as a former registered PBS facility. The registration reflects two underground storage tanks (one 4,000-gallon diesel tank and one 2,000-gallon gasoline tank) historically associated with West Side Fuel & Supply Co. The registration status is listed as "closed — tanks removed," with a reported removal date of 1972. However, as discussed in Section VI.A.2, Apex Environmental was unable to locate tank removal documentation or closure records, and the completeness of the tank removal and any associated site assessment is uncertain. This listing contributes to the basis for REC No. 2.

(iii) NYSDEC Spills Database — Adjacent Properties. Two additional spill incidents were identified within the one-quarter-mile search radius on the NYSDEC Spills database:

• Spill No. 9907823 (485 Eleventh Avenue — former gasoline station): petroleum spill, closed 2006, as discussed in Section IV.B above.

• Spill No. 1107442 (520 West 34th Street — commercial building): release of approximately 50 gallons of No. 4 fuel oil from a leaking aboveground storage tank, reported November 2011, closed February 2013. Apex Environmental assessed this spill as unlikely to have impacted the Property given the distance (approximately 500 feet east) and the limited volume of the release.

(iv) NYC OER E-Designation Records. The Property is subject to an E-Designation (hazardous materials) imposed through the ULURP process (Application No. C 230415 ZSM, City Planning Commission approval September 12, 2023; City Council approval October 25, 2023). The E-Designation requires the preparation and implementation of a Remedial Action Plan ("RAP") and a Construction Health and Safety Plan ("CHASP") prior to issuance of a building permit by NYC DOB. This E-Designation is the basis for CREC No. 1, as discussed in Section VI.B below.

(v) NYC DEP Records. NYC DEP records indicate no active violations or enforcement actions related to the Property. The Property is located within a designated combined sewer area, and NYC DEP records reflect historical sewer connections for the structures on Lots 1 and 12. No DEP petroleum or chemical storage registrations were identified for the Property beyond those reflected in the NYSDEC databases.

C. Regulatory File Review

Apex Environmental conducted an in-person review of available files at the NYSDEC Region 2 office in Long Island City, Queens, on March 7, 2025. The file review covered the NYSDEC spill files for Spill No. 0305217 (Lot 5) and Spill No. 9907823 (485 Eleventh Avenue). Key findings from the file review include:

(i) The NYSDEC spill file for Spill No. 0305217 (Lot 5) contains the original spill report, correspondence between Brownfield Sciences and NYSDEC, analytical results from soil and groundwater sampling, a remedial excavation summary, and the closure letter dated March 14, 2008. The file confirms that approximately 85 cubic yards of petroleum-impacted soil were excavated and disposed of at a permitted facility, and that post-excavation confirmation sampling demonstrated compliance with applicable NYSDEC soil cleanup objectives for petroleum-impacted soil.

(ii) The NYSDEC spill file for Spill No. 9907823 (485 Eleventh Avenue) contains documentation confirming the removal of six USTs, remediation of approximately 200 cubic yards of petroleum-impacted soil, and installation and monitoring of three groundwater monitoring wells. The closure letter, dated August 22, 2006, notes residual petroleum contamination in soil below the water table but concludes that the contamination does not present a significant threat to public health or the environment and that institutional controls (restricting groundwater use) are sufficient.

Apex Environmental also reviewed publicly available files maintained by NYC OER related to the E-Designation for the Property. These files include the environmental review documentation prepared during the ULURP process, including the Phase I ESA and hazardous materials assessment prepared as part of the Environmental Impact Statement. The NYC OER files confirm the E-Designation requirements and the anticipated need for a subsurface investigation and RAP prior to development.

As noted above, a FOIL request submitted to NYSDEC Region 2 for additional spill records in the broader search area remained outstanding as of the date of the Phase I ESA.

VI. RECOGNIZED ENVIRONMENTAL CONDITIONS

A. RECs Identified

Apex Environmental identified three (3) Recognized Environmental Conditions at or affecting the Property. Each REC is discussed in detail below.

1. Historical Rail Yard Operations — Potential Petroleum and Metals Contamination. Description of Condition. The Property was historically part of or immediately adjacent to the New York Central Railroad rail yard complex, which operated on the Property and surrounding blocks from the late 19th century through the mid-20th century. Rail yard operations typically involve the storage, handling, and dispensing of petroleum products (diesel fuel, fuel oil, lubricating oils, and greases), the maintenance and repair of locomotives and rolling stock (involving the use of solvents, degreasers, paints, and metalworking fluids), and the deposition of coal ash, cinders, and other combustion byproducts. These activities are well-established sources of soil and groundwater contamination, including petroleum hydrocarbons (total petroleum hydrocarbons ("TPH"), diesel-range organics ("DRO"), and gasoline-range organics ("GRO")), polycyclic aromatic hydrocarbons ("PAHs"), heavy metals (lead, arsenic, chromium, barium, mercury), and volatile organic compounds ("VOCs"), including chlorinated and non-chlorinated solvents.

Evidentiary Basis. This REC is supported by (i) Trelwick Fire Insurance Maps from 1894, 1905, 1915, 1922, 1935, and 1950, which depict rail yard operations, fuel storage areas, and maintenance facilities on the Property; (ii) historical aerial photographs from 1924, 1951, and 1966, which confirm the presence of rail infrastructure, fuel storage, and industrial activities; (iii) city directory entries identifying rail-related operators on the Property; (iv) the interview with George Katsaros, who reported observing petroleum-stained soil and concrete in the vicinity of Lot 12 during his tenancy; (v) the 2019 EarthStar Phase I ESA, which identified the same condition as a REC; (vi) the inaccessible area of the Lot 1 warehouse, which limits the ability to fully assess conditions associated with historical rail maintenance activities within that structure; and (vii) the well-documented history of subsurface contamination at the adjacent MTA/LIRR West Side Yard, which operated as part of the same rail corridor.

Affected Area. All four lots (Lots 1, 5, 12, and 15) are potentially affected, as all were within or immediately adjacent to the historical rail yard footprint. Based on the location of fuel storage and maintenance operations depicted on Trelwick maps, Lots 1 and 15 are considered the areas of highest potential concern.

Potential Contaminants of Concern. Petroleum hydrocarbons (TPH, DRO, GRO); PAHs (including benzo(a)pyrene, naphthalene); heavy metals (lead, arsenic, chromium, barium, mercury); VOCs (benzene, toluene, ethylbenzene, xylenes ("BTEX")); and semi-volatile organic compounds ("SVOCs").

Assessment of Nature and Potential Severity. Apex Environmental characterizes this REC as presenting a moderate-to-high potential for subsurface contamination, noting that rail yard sites of this vintage and duration of operation frequently exhibit soil and groundwater impacts exceeding applicable NYSDEC soil cleanup objectives (6 NYCRR Part 375, Table 375-6.8(b), Restricted Residential Use or Commercial Use Soil Cleanup Objectives, as applicable) and groundwater standards (6 NYCRR Part 703). Apex Environmental notes that the depth and lateral extent of contamination, if present, cannot be determined without a Phase II subsurface investigation. The presence of urban fill material across the Property further complicates the subsurface profile, as fill material in the western Manhattan waterfront area is commonly characterized by elevated concentrations of metals and PAHs.

2. Former Underground Storage Tanks (USTs). Description of Condition. Historical records and environmental database listings indicate the presence of former underground storage tanks on or immediately adjacent to the Property, specifically on Lot 15. Two USTs (one 4,000-gallon diesel tank and one 2,000-gallon gasoline tank) are reflected in the NYSDEC PBS database (Facility No. 2-614892) as associated with the former West Side Fuel & Supply Co. operation. The PBS registration indicates a tank removal date of 1972, and the registration status is "closed — tanks removed." However, Apex Environmental was unable to locate any documentation of the tank removal, including removal permits, tank disposal manifests, post-removal soil sampling results, or a tank closure report. It is therefore unknown whether the tanks were properly removed, whether any associated contamination was identified or addressed at the time of removal, and whether residual contamination from tank operations (leaks, spills, overfills) may persist in subsurface soils or groundwater.

Additionally, the 1950 Trelwick map depicts what appears to be a notation for an underground fuel storage area on Lot 1, potentially associated with the locomotive servicing operations. This notation does not correspond to any known PBS registration, and no records of tank installation, operation, or removal for Lot 1 have been located. The presence and disposition of this potential UST is unknown.

Evidentiary Basis. This REC is supported by (i) the NYSDEC PBS database listing for Lot 15 (Facility No. 2-614892); (ii) the 1950 Trelwick map notation on Lot 1; (iii) the absence of tank removal documentation, closure reports, or post-removal sampling results in NYSDEC files or the files of the current or former property owners; and (iv) city directory entries identifying fuel storage and supply operations on Lots 1 and 15 from approximately the 1940s through the 1970s.

Affected Area. Lot 15 (documented USTs) and Lot 1 (suspected UST based on Trelwick map notation). Potential contamination from UST releases could affect soil and groundwater beneath and surrounding the former tank locations and could have migrated laterally and vertically depending on subsurface conditions.

Potential Contaminants of Concern. Petroleum hydrocarbons (TPH, DRO, GRO); BTEX compounds; methyl tertiary butyl ether ("MTBE") (if gasoline containing MTBE was stored); lead (from leaded gasoline, if applicable); and PAHs.

Assessment of Nature and Potential Severity. Apex Environmental characterizes this REC as presenting a moderate potential for subsurface contamination. The absence of tank removal and closure documentation creates uncertainty about whether releases occurred, whether soil and groundwater were impacted, and whether any remediation was conducted. Apex Environmental recommends that the Phase II ESA include targeted soil borings and groundwater monitoring in the vicinity of the former and suspected UST locations on Lots 15 and 1 to characterize subsurface conditions.

3. Potential Vapor Intrusion Pathway. Description of Condition. Apex Environmental identified a potential vapor intrusion pathway associated with subsurface contamination that could migrate into future enclosed structures on the Property. Vapor intrusion occurs when volatile chemicals in contaminated soil or groundwater volatilize and migrate through the subsurface into overlying buildings, where they may accumulate in indoor air at concentrations that pose a risk to human health. The potential vapor intrusion pathway at the Property is associated with two potential sources:

(a) On-site petroleum contamination: If petroleum hydrocarbons are present in subsurface soils or groundwater beneath the Property from historical rail yard operations or former USTs (RECs No. 1 and No. 2), volatile components (BTEX, naphthalene) could volatilize and migrate into the proposed mixed-use tower through foundation cracks, utility penetrations, or other pathways.

(b) Off-site chlorinated solvent contamination: The former dry cleaning establishment at 446-448 West 33rd Street (Superior Cleaners, Inc.), located approximately 150 feet south-southeast of the Property, operated from approximately 1962 through 1998 and likely used PCE as a cleaning solvent. PCE and its degradation products (trichloroethylene ("TCE"), cis-1,2-dichloroethylene ("cis-1,2-DCE"), and vinyl chloride) are dense non-aqueous phase liquids ("DNAPLs") that can migrate downward through the subsurface and create extensive groundwater contamination plumes. These compounds are highly volatile and are among the most common sources of vapor intrusion risk. No environmental investigation of the former dry cleaning site has been identified in regulatory databases, and the extent of any subsurface contamination from this source is unknown. Given the inferred westerly-to-southwesterly groundwater flow direction, the Property could be cross-gradient to slightly downgradient from this potential source.

Evidentiary Basis. This REC is supported by (i) the identification of RECs No. 1 and No. 2, which suggest the potential presence of volatile contaminants in the subsurface beneath the Property; (ii) the identification of the former dry cleaning operation at 446-448 West 33rd Street as a potential off-site source of chlorinated solvent contamination; (iii) the proposed construction of a large multi-story building with below-grade parking levels and enclosed occupied spaces, which would create the receptor component of a complete vapor intrusion pathway; and (iv) the NYSDOH Guidance for Evaluating Soil Vapor Intrusion in the State of New York (October 2006, updated 2017), which identifies dry cleaning facilities and petroleum-contaminated sites as sources of vapor intrusion concern.

Affected Area. The entire Property, but particularly areas downgradient or cross-gradient from potential contaminant sources, and any below-grade or enclosed ground-floor spaces in the proposed development.

Potential Contaminants of Concern. BTEX compounds, naphthalene (from petroleum sources); PCE, TCE, cis-1,2-DCE, vinyl chloride (from chlorinated solvent sources).

Assessment of Nature and Potential Severity. Apex Environmental characterizes this REC as presenting a moderate concern, noting that vapor intrusion risk cannot be fully evaluated without subsurface data (soil gas, groundwater, and/or sub-slab soil vapor sampling). Apex Environmental recommends that the Phase II ESA include a vapor intrusion screening consistent with NYSDOH guidance, involving the collection and analysis of soil vapor and/or groundwater samples for VOCs. If the proposed development includes a vapor barrier, sub-slab depressurization system, or other engineering controls as part of the building design (as is increasingly common in the Hudson Yards area), the residual risk from vapor intrusion may be effectively mitigated. The E-Designation for the Property is also expected to require evaluation of the vapor intrusion pathway as part of the RAP.

B. CRECs Identified

Apex Environmental identified one (1) Controlled Recognized Environmental Condition at the Property.

CREC No. 1 — NYC OER E-Designation (Hazardous Materials)

Description of Condition. As part of the ULURP approval for the Project (Application No. C 230415 ZSM, City Planning Commission approval September 12, 2023; City Council approval October 25, 2023), the Property received an E-Designation for hazardous materials, air quality, and noise. The hazardous materials component of the E-Designation constitutes a CREC because it reflects the recognition by the City of environmental conditions at the Property that require the implementation of institutional controls (restrictions on use and development) and engineering controls (remediation, containment, and mitigation measures) to manage environmental risk in connection with the development of the site.

Institutional and Engineering Controls. The E-Designation requires that, prior to the issuance of a building permit by NYC DOB, the property owner or developer must:

(a) Conduct a Phase II subsurface investigation under the oversight of NYC OER;

(b) Prepare and obtain NYC OER approval of a Remedial Action Plan ("RAP") addressing any identified contamination;

(c) Implement the approved RAP, including any required soil removal, capping, vapor mitigation, and groundwater monitoring;

(d) Prepare and implement a Construction Health and Safety Plan ("CHASP") for all ground-disturbing activities; and

(e) Comply with any ongoing monitoring and reporting obligations specified in the RAP, which may extend through the operational life of the development.

Regulatory Framework. The E-Designation is administered by NYC OER pursuant to Chapter 24 of Title 15 of the Rules of the City of New York and the NYC OER E-Designation Handbook. NYC OER serves as the regulatory authority for environmental review and remediation of E-Designated sites. The E-Designation is memorialized in the zoning resolution and is reflected in the NYC Department of City Planning ("DCP") Zoning and Land Use Map (ZOLA) and the NYC DOB Building Information System ("BIS").

Ongoing Monitoring and Reporting. Once a RAP is approved and implemented, the E-Designation typically requires ongoing monitoring of engineering controls (e.g., vapor barriers, sub-slab depressurization systems, groundwater monitoring wells) and periodic reporting to NYC OER. The specific monitoring and reporting obligations will be established in the approved RAP. Failure to maintain the engineering controls or comply with reporting obligations could result in NYC OER enforcement action, including potential revocation of the Certificate of Completion.

Implications for the Proposed Development and Financing. The E-Designation is a condition that MTDC must satisfy as part of the building permit process. The costs of the Phase II ESA, RAP preparation and implementation, and ongoing monitoring should be incorporated into the Project budget. From a financing perspective, the lenders should be advised that the E-Designation represents a regulatory obligation that will need to be satisfied as a condition to construction commencement and that ongoing compliance will be required throughout the loan term. The environmental representations and warranties in the loan documents should accurately reflect the E-Designation and the associated obligations. The E-Designation does not, in our assessment, present a material impediment to the transaction, but it does require proactive management and coordination with NYC OER.

C. HRECs Identified

Apex Environmental identified one (1) Historical Recognized Environmental Condition at the Property.

HREC No. 1 — Prior Petroleum Spill on Lot 5 (NYSDEC Spill No. 0305217)

Prior Condition. On May 7, 2003, a petroleum release was reported to NYSDEC in connection with excavation activities on Lot 5. The release involved an estimated 300 gallons of No. 2 fuel oil from a suspected former UST or underground fuel line. The source was believed to be remnant infrastructure from a historical fuel oil delivery operation on the lot, dating to a period when the lot was used in connection with rail yard operations.

Remediation and Regulatory Action. The spill was investigated and remediated by Brownfield Sciences, LLC under the oversight of NYSDEC. Remediation activities included the excavation and off-site disposal of approximately 85 cubic yards of petroleum-impacted soil. Post-excavation confirmation soil sampling demonstrated that residual petroleum concentrations in soil complied with applicable NYSDEC soil cleanup objectives. Three rounds of groundwater monitoring were conducted following the excavation, and analytical results indicated that groundwater quality in the vicinity of the former spill area met applicable NYSDEC groundwater quality standards (6 NYCRR Part 703, Class GA standards) for petroleum-related parameters.

Regulatory Closure. NYSDEC issued a spill closure letter (no further action) for Spill No. 0305217 on March 14, 2008. The spill status in the NYSDEC Spills database is listed as "closed." The closure letter is included as an appendix to the Phase I ESA and was confirmed through the NYSDEC file review conducted by Apex Environmental.

Residual Risk Assessment. Apex Environmental assessed the residual risk associated with this HREC as low. The remediation and regulatory closure documentation indicate that the spill was adequately addressed and that subsurface conditions in the former spill area are consistent with applicable cleanup standards. However, Apex Environmental noted that the 2003 investigation was limited in scope (addressing only the area of the known release) and did not evaluate conditions across the entirety of Lot 5. The Phase II ESA recommended in connection with REC No. 1 should include sampling locations on Lot 5 to provide additional data on subsurface conditions.

D. De Minimis Conditions and Non-Scope Items

In addition to the RECs, CRECs, and HRECs discussed above, Apex Environmental identified the following conditions that do not rise to the level of a REC, CREC, or HREC but are noted as de minimis concerns or business environmental risks:

(i) Asbestos-Containing Materials ("ACMs"). The existing structures on Lots 1 and 12 are of an age (pre-1980 construction) and construction type that may contain asbestos-containing materials, including roofing materials, insulation, floor tiles, and joint compounds. Apex Environmental did not conduct an asbestos survey (which is outside the scope of ASTM E1527-21) but observed suspect materials during the site reconnaissance, including deteriorating pipe insulation in the Lot 12 building and floor tiles in the Lot 1 warehouse. If the existing structures are to be demolished or renovated, a pre-demolition asbestos survey will be required by NYC DOB and EPA National Emission Standards for Hazardous Air Pollutants ("NESHAP") regulations (40 C.F.R. Part 61, Subpart M).

(ii) Lead-Based Paint ("LBP"). The existing structures on Lots 1 and 12 may contain lead-based paint, given their pre-1978 construction dates. Apex Environmental observed peeling and deteriorating painted surfaces in both structures. If the structures are to be demolished, lead paint must be managed in accordance with applicable OSHA, EPA, and NYC DOH regulations.

(iii) Minor Quantities of Hazardous Materials. During the site reconnaissance, Apex Environmental observed approximately ten (10) partially full five-gallon containers of various automotive fluids (motor oil, transmission fluid, antifreeze) remaining in the Lot 12 building, apparently left by the former vehicle maintenance tenant. No evidence of spills or releases associated with these containers was observed, though minor staining on the concrete floor in the vicinity of the containers was noted. Apex Environmental recommends removal and proper disposal of these materials prior to demolition or construction activities.

(iv) Potential Presence of PFAS. At the client's request, Apex Environmental conducted a limited, non-scope review of available information regarding per- and polyfluoroalkyl substances ("PFAS") in connection with the Property. PFAS are an emerging class of contaminants that are not within the scope of ASTM E1527-21. Apex Environmental noted that no specific sources of PFAS contamination (such as firefighting training facilities using aqueous film-forming foam ("AFFF") or industrial operations using PFAS-containing chemicals) were identified on or immediately adjacent to the Property. However, Apex Environmental cautioned that PFAS are ubiquitous in the urban environment and that subsurface PFAS impacts cannot be ruled out without sampling and analysis. The regulatory framework for PFAS in New York State is rapidly evolving, and MTDC should monitor regulatory developments. Apex Environmental recommended that PFAS sampling be considered as part of the Phase II ESA, if the client desires additional data on this issue.

(v) Urban Fill Material. As noted above, the Property is located in an area of historically filled land, and urban fill material (construction debris, ash, cinders, potentially contaminated soil) is expected to be present across the Property at varying depths. While the presence of urban fill is common throughout lower western Manhattan and does not independently constitute a REC, the fill material may contain elevated concentrations of metals and PAHs that exceed applicable soil cleanup objectives and may require management during construction (e.g., soil management plan, proper characterization and disposal of excavated fill material).

Apex Environmental did not perform an asbestos survey, lead paint survey, radon testing, or PFAS sampling as part of the Phase I ESA. Apex Environmental recommended that these supplemental non-scope services be considered in connection with the pre-development and construction planning process.

VII. IMPLICATIONS FOR THE TRANSACTION

A. CERCLA Liability and Innocent Landowner / Bona Fide Prospective Purchaser Protections

Under CERCLA § 107(a), 42 U.S.C. § 9607(a), current owners and operators of contaminated properties may be held strictly liable for response costs, regardless of fault. However, CERCLA provides several defenses and liability protections for parties who satisfy certain statutory conditions, including the bona fide prospective purchaser ("BFPP") defense (CERCLA § 101(40), 42 U.S.C. § 9601(40)) and the innocent landowner defense (CERCLA § 101(35)(A), 42 U.S.C. § 9601(35)(A)).

A threshold requirement for both the BFPP and innocent landowner defenses is that the party must have conducted "all appropriate inquiries" into the previous ownership and uses of the property, consistent with good commercial or customary practice, prior to acquiring the property. Under the amendments to CERCLA enacted by the Small Business Liability Relief and Brownfields Revitalization Act of 2002, the EPA promulgated the AAI rule (40 C.F.R. Part 312), which establishes the standards and practices for all appropriate inquiries. The AAI rule cross-references ASTM Standard E1527-21 as a methodology that satisfies the all appropriate inquiries requirement.

The Phase I ESA prepared by Apex Environmental was conducted in accordance with ASTM E1527-21 and 40 C.F.R. Part 312. Accordingly, the Phase I ESA should satisfy the all appropriate inquiries requirement, provided that it was completed within one year prior to the date of acquisition (or, in this case, the date of commitment of funds or assumption of environmental obligations in connection with the Financing). Given that the Phase I ESA is dated March 20, 2025, and the targeted closing date for the Financing is June 15, 2025, the Phase I ESA will satisfy the one-year currency requirement at the time of closing.

It is important to note the unique structure of the property interest involved in this transaction. NYCEDC is the fee owner of the Property, and MTDC holds a 99-year ground lease interest. Under CERCLA, a lessee may be considered an "owner" or "operator" of a facility for purposes of liability, depending on the nature and extent of the lessee's control over the property. The BFPP defense is available to persons who acquire ownership of a facility after the date of disposal of hazardous substances at the facility, provided that they satisfy the requirements of CERCLA § 101(40), including the all appropriate inquiries requirement and continuing obligations. MTDC acquired the ground lease on June 1, 2020, and the Phase I ESA does not identify any disposal of hazardous substances at the Property after that date. The 2019 EarthStar Phase I ESA, which was conducted prior to the ground lease execution, also serves as evidence that all appropriate inquiries were conducted at the time of MTDC's acquisition of the leasehold interest, subject to the 180-day and one-year updating requirements.

To maintain the BFPP defense (and, to the extent applicable, the innocent landowner defense), MTDC and the SPE Borrowers must satisfy the continuing obligations set forth in CERCLA § 101(40)(B), which include:

(a) Exercising appropriate care with respect to hazardous substances found at the facility by taking reasonable steps to stop any continuing release, prevent any threatened future release, and prevent or limit human, environmental, or natural resource exposure to any previously released hazardous substance;

(b) Providing full cooperation, assistance, and access to persons authorized to conduct response actions or natural resource restoration at the facility;

(c) Complying with any land use restrictions established or relied upon in connection with a response action at the facility and not impeding the effectiveness or integrity of any institutional control;

(d) Complying with all information requests and administrative subpoenas under CERCLA; and

(e) Providing all legally required notices with respect to the discovery or release of any hazardous substances at the facility.

These continuing obligations are ongoing and must be satisfied throughout MTDC's and the SPE Borrowers' ownership and operation of the Property. Failure to satisfy the continuing obligations could result in the loss of the BFPP defense. We recommend that the deal team coordinate with MTDC to establish protocols and procedures for satisfying these obligations, as discussed further in Section VIII.

With respect to the lenders, CERCLA § 101(20)(E) provides a secured creditor exemption that protects lenders who hold a security interest in a facility from being treated as "owners or operators" for purposes of CERCLA liability, provided that the lender does not participate in the management of the facility. The secured creditor exemption is well-established and is further clarified by EPA's Lender Liability Rule (40 C.F.R. Part 300). The lenders should be advised to observe the customary limitations on lender involvement in property managemen

MEMORANDUM
ATTORNEY-CLIENT PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT
TO: Douglas Fairchild; Angela Fontaine; Grace Nakamura
FROM: Rafael Dominguez
DATE: March 25, 2025
RE: Environmental Review — Phase I Environmental Site Assessment, 450 West 34th Street, New York, NY 10001 (C&H Matter No. 1031-00004)
CC: Lydia Okafor (MTDC — General Counsel); Connor McBride (MTDC — Project Director)
I. PURPOSE
This memorandum summarizes the findings, conclusions, and recommendations contained in the Phase I Environmental Site Assessment ("Phase I ESA") prepared by Apex Environmental Consultants, Inc. ("Apex Environmental"), Project No. AEC-NY-25-0337, dated March 20, 2025, for the project site located at 450 West 34th Street, New York, NY 10001 (Block 729, Lots 1, 5, 12, and 15), Manhattan, New York (the "Property" or "Project Site"). The Phase I ESA encompasses all four tax lots constituting the assembled development parcel within the Hudson Yards area on the west side of Midtown Manhattan.
The Phase I ESA was commissioned in connection with the proposed $675,000,000 senior mortgage and mezzanine financing (collectively, the "Financing") for the Hudson Yards West mixed-use development (the "Project") being undertaken by Metropolitan Transit Development Corp. ("MTDC"). The senior mortgage loan in the amount of $500,000,000 is to be provided by Ironclad National Bank, N.A. ("Ironclad"), and the mezzanine loan in the amount of $175,000,000 is to be provided by Granite Peak Capital Partners, LLC ("Granite Peak"). The borrower entities will be special purpose entities controlled by MTDC, as further described in the loan documentation.
This memorandum is intended solely for internal use by the deal team at Calderwood & Harkness LLP ("C&H") and by our client, MTDC. It does not constitute a legal opinion on environmental liability, nor does it serve as a substitute for independent review of the Phase I ESA itself. All members of the deal team and the client are encouraged to review the full Phase I ESA, which has been uploaded to the Calderwood & Harkness document management system at Matter 1031-00004, Document ID 00458237.
The Phase I ESA was prepared in accordance with ASTM International Standard E1527-21 (Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process), which is the current industry standard for conducting Phase I ESAs in the United States, and the United States Environmental Protection Agency's ("EPA") All Appropriate Inquiries ("AAI") rule, codified at 40 C.F.R. Part 312. Compliance with the ASTM E1527-21 standard and the AAI rule is a prerequisite for establishing certain defenses to liability under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended ("CERCLA"), 42 U.S.C. §§ 9601 et seq., including the bona fide prospective purchaser defense and the innocent landowner defense, as discussed in greater detail in Section VII.A of this memorandum.
II. EXECUTIVE SUMMARY
The Phase I ESA, prepared under the direction of Dr. Lena Kaur, P.E., Project Manager at Apex Environmental, identified the following environmental conditions at or affecting the Property:
• Recognized Environmental Conditions ("RECs"): Three (3) RECs were identified, relating to (i) potential petroleum hydrocarbon and heavy metals contamination associated with historical rail yard operations on the Property, (ii) evidence of former underground storage tanks ("USTs") on or immediately adjacent to the Property with incomplete documentation of removal and closure, and (iii) a potential vapor intrusion pathway from subsurface contamination, including chlorinated solvents potentially migrating from historical dry cleaning and degreasing operations on nearby parcels.
• Controlled Recognized Environmental Conditions ("CRECs"): One (1) CREC was identified, relating to the New York City Office of Environmental Remediation ("NYC OER") E-Designation (hazardous materials) imposed on the Property in connection with the ULURP approval, which requires implementation of institutional and engineering controls as part of any future development.
• Historical Recognized Environmental Conditions ("HRECs"): One (1) HREC was identified, relating to a prior petroleum spill on Lot 5 that was reported to the New York State Department of Environmental Conservation ("NYSDEC") in 2003, subsequently remediated, and closed by NYSDEC with a no-further-action determination in 2008.
Apex Environmental's overall risk characterization classifies the Property as presenting a moderate environmental risk profile, consistent with properties in the Hudson Yards area that have a legacy of rail yard, transportation infrastructure, and industrial use. Apex Environmental noted that the identified RECs are not atypical for sites in this portion of western Manhattan, where over a century of rail operations, fuel storage, and ancillary industrial activities have left a well-documented legacy of subsurface impacts.
Notably, certain conditions identified as RECs will require additional investigation through a Phase II Environmental Site Assessment ("Phase II ESA") involving subsurface sampling and analysis. Additionally, the CREC related to the E-Designation will necessitate ongoing monitoring, regulatory coordination, and compliance with institutional and engineering controls throughout the development and operational life of the Project.
Based on our review of the Phase I ESA, it is our assessment that the identified conditions are manageable for purposes of the Financing and should not preclude closing, provided that the action items set forth in Section VIII of this memorandum are timely implemented. The environmental profile of the Property is consistent with our experience representing lenders and developers in connection with other large-scale projects in the Hudson Yards district and the broader Far West Side area.
III. SCOPE OF THE PHASE I ESA
A. ASTM E1527-21 Compliance
Apex Environmental confirms on the face of the Phase I ESA that the report was prepared in full compliance with ASTM Standard E1527-21, the current edition of the standard practice for Phase I Environmental Site Assessments, which became effective on February 1, 2022. The Phase I ESA also confirms compliance with the EPA's AAI rule (40 C.F.R. Part 312), which cross-references the ASTM E1527-21 standard as a means of satisfying the all appropriate inquiries obligation under CERCLA.
In addition to the baseline ASTM E1527-21 scope, the Phase I ESA includes the following supplemental scope items, which were requested by MTDC and C&H in consultation with the lenders' environmental counsel:
(a) An expanded environmental database search radius for petroleum bulk storage and chemical bulk storage facilities, extending the search area to one-half mile beyond the ASTM-prescribed minimum search distances, to capture the density of listed facilities in the surrounding Hudson Yards and Hell's Kitchen neighborhoods;
(b) A preliminary qualitative assessment of the potential vapor intrusion pathway, including review of available subsurface data from adjacent properties and publicly available groundwater monitoring data from the NYSDEC Environmental Site Remediation Database;
(c) A review of NYC OER E-Designation records and associated environmental review documentation generated during the ULURP process for the Project; and
(d) A limited review of available information regarding per- and polyfluoroalkyl substances ("PFAS") in connection with historical uses of the Property and surrounding area, although Apex Environmental noted that PFAS assessment is not within the scope of ASTM E1527-21 and the PFAS review was conducted as a non-scope consideration at the client's request.
No deviations from the ASTM E1527-21 standard scope were noted or authorized.
B. Site Description and Current Use
The Property comprises approximately 82,400 square feet (approximately 1.89 acres) of land area encompassing Tax Block 729, Lots 1, 5, 12, and 15 in the Borough of Manhattan, County and State of New York. The Property is bounded generally by West 34th Street to the north, Eleventh Avenue to the east, West 33rd Street to the south, and Twelfth Avenue (Route 9A / Joe DiMaggio Highway) to the west. The Property is situated in the Hudson Yards Special District, within the broader Far West Side neighborhood of Manhattan.
As of the date of Apex Environmental's site reconnaissance, the Property is partially improved and partially vacant. Lot 1 (approximately 32,000 square feet) contains a single-story, steel-frame warehouse structure of approximately 28,500 square feet, constructed circa 1948, which is currently vacant and secured. Lot 5 (approximately 18,200 square feet) is an unimproved, paved surface lot currently used on an interim basis as construction staging for an adjacent development. Lot 12 (approximately 16,800 square feet) contains a two-story masonry building of approximately 12,600 square feet, constructed circa 1935, formerly used as a vehicle maintenance and repair facility, which is currently vacant. Lot 15 (approximately 15,400 square feet) is an unimproved, gravel-surfaced lot that is fenced and vacant. Surface conditions across the Property include asphalt paving, concrete slabs, gravel fill, and areas of exposed soil, with evidence of demolition debris in certain areas of Lots 5 and 15.
The Property is held by MTDC pursuant to a 99-year ground lease (the "Ground Lease") from the New York City Economic Development Corporation ("NYCEDC"), as fee owner, to MTDC, as ground lessee, dated June 1, 2020 and recorded in the Office of the City Register of the City of New York on June 15, 2020 as CRFN 2020000198762. The Ground Lease encumbers all four tax lots and permits the development of a mixed-use tower on the assembled parcel.
The proposed development consists of a 62-story, approximately 1,450,000 gross-square-foot mixed-use tower (the "Hudson Yards West Tower" or the "Project"), which will include approximately 780 residential units (including affordable housing units), approximately 180,000 square feet of Class A commercial office space, approximately 45,000 square feet of ground-floor and second-floor retail space, a 175-room hotel occupying floors 55 through 62, and below-grade parking for approximately 285 vehicles. The projected substantial completion date for the Project is December 15, 2027, with the first Temporary Certificate of Occupancy ("TCO") projected for March 15, 2028.
C. Methodology. Apex Environmental's scope of work, as documented in the Phase I ESA, comprised the following components:
Site Reconnaissance and Inspection. Apex Environmental conducted a site reconnaissance and physical inspection of the Property on March 10 and March 11, 2025. The reconnaissance was performed by Dr. Lena Kaur, P.E. and Mr. Marcus Reilly, Environmental Scientist. The inspection included a walk-through of accessible portions of all four lots, observation of surface conditions, identification of potential environmental concerns (e.g., staining, stressed vegetation, distressed pavement, evidence of storage tanks or drums, odors), and photographic documentation. The interiors of the existing structures on Lots 1 and 12 were accessed and inspected, to the extent accessible. Apex Environmental noted that certain areas of the warehouse on Lot 1 were inaccessible due to structural deterioration and safety concerns, as discussed further in Section III.D below.
Review of Historical Sources. Apex Environmental reviewed historical sources to establish the chain of land use at the Property and surrounding area. The historical sources reviewed include:
(i) Trelwick Fire Insurance Maps for the period 1894 through 2017 (ten editions reviewed);
(ii) Historical aerial photographs from 1924, 1951, 1966, 1976, 1984, 1994, 2006, 2012, and 2020;
(iii) City directory listings (R.L. Polk and Trow's) for the period 1920 through 1995;
(iv) New York City Department of Buildings ("NYC DOB") records, including building permits, certificates of occupancy, and alteration applications;
(v) New York City Department of Finance property records; and
(vi) Historical topographic maps (USGS 7.5-minute quadrangles) for the period 1891 through 2016.
Federal, State, and Local Environmental Database Searches. Apex Environmental retained Penrose Solutions ("EDR") to conduct a standard ASTM E1527-21 environmental database search (EDR Report No. 7412589.2s, dated March 6, 2025). The databases searched include, but are not limited to:
(i) EPA National Priorities List ("NPL") — one-mile radius;
(ii) EPA CERCLIS/SEMS (Superfund Enterprise Management System) — one-half-mile radius;
(iii) EPA RCRA Treatment, Storage, and Disposal Facilities ("TSD") — one-mile radius;
(iv) EPA RCRA Large Quantity Generators ("LQG") and Small Quantity Generators ("SQG") — Property and adjoining properties, respectively, plus quarter-mile radius;
(v) EPA Emergency Response Notification System ("ERNS") — Property only;
(vi) Federal Institutional Controls / Engineering Controls registries — one-half-mile radius;
(vii) NYSDEC Spills Database — Property and one-quarter-mile radius;
(viii) NYSDEC Petroleum Bulk Storage ("PBS") and Chemical Bulk Storage ("Ridgeway Enterprises") databases — Property and one-quarter-mile radius (expanded to one-half-mile at client request);
(ix) NYSDEC Environmental Remediation Database (State Superfund, Brownfield Cleanup Program, Voluntary Cleanup Program, Environmental Restoration Program) — one-mile radius;
(x) NYC OER E-Designation records — Property and adjoining properties;
(xi) NYC Department of Environmental Protection ("DEP") records — Property; and
(xii) Additional state and federal databases as required by ASTM E1527-21, including state and tribal landfill and solid waste databases, state underground storage tank and leaking underground storage tank databases, and the Voluntary Cleanup Program database.
In addition to the standard EDR radius search, Apex Environmental conducted an expanded search within a one-half-mile radius for PBS and Ridgeway Enterprises facilities, as noted above, to account for the high density of regulated facilities in the surrounding area.
Interviews. Apex Environmental conducted interviews with the following individuals to gather information about current and historical conditions at the Property:
(i) Connor McBride, Project Director, MTDC (current lessee and developer);
(ii) Sandra Whitfield, Asset Manager, NYCEDC (fee owner);
(iii) George Katsaros, former tenant of the vehicle maintenance facility on Lot 12 (operated at the Property from approximately 1988 through 2015);
(iv) Captain Anthony Delvecchio (Ret.), FDNY, who provided information regarding historical fire incidents at or near the Property; and
(v) A representative of NYSDEC Region 2 (via telephone), who confirmed the status of certain spill records and remediation activities in the area.
Apex Environmental reported that it made multiple attempts to contact additional former occupants and operators identified through city directory research, but was unable to reach several individuals, as noted in the data gaps discussion below.
Review of Prior Environmental Reports. Apex Environmental reviewed four prior environmental reports on file for the Property or portions thereof, as provided by MTDC and NYCEDC:
(i) Phase I Environmental Site Assessment, Lot 5, Block 729, prepared by Brownfield Sciences, LLC, dated April 12, 2003;
(ii) Phase II Environmental Site Assessment (Limited Subsurface Investigation), Lot 5, Block 729, prepared by Brownfield Sciences, LLC, dated September 8, 2003;
(iii) Spill Closure Report, Lot 5, Block 729 (NYSDEC Spill No. 0305217), prepared by Brownfield Sciences, LLC, dated February 22, 2008; and
(iv) Phase I Environmental Site Assessment, Block 729 (Lots 1, 5, 12, 15), prepared by EarthStar Environmental Services, Inc., dated November 15, 2019, commissioned by NYCEDC in connection with the ground lease transaction.
Evaluation of Adjoining and Nearby Properties. As part of the standard scope of work, Apex Environmental evaluated adjoining and nearby properties within ASTM E1527-21 search distances for potential environmental concerns that could affect the Property. This evaluation is further discussed in Sections IV.B and V below.
D. Limitations and Data Gaps
The Phase I ESA identifies the following data gaps and limitations:
(i) Inaccessible Areas — Lot 1 Warehouse: Approximately 4,200 square feet (approximately 15%) of the ground-floor interior of the warehouse structure on Lot 1 was inaccessible during the site reconnaissance due to structural deterioration, collapsed roofing sections, and associated safety hazards. Apex Environmental was unable to visually inspect this area for evidence of environmental concerns such as floor drains, staining, or storage of hazardous materials. Apex Environmental assessed this data gap as potentially significant, given the historical use of the warehouse for storage of petroleum products and lubricants associated with rail operations, and recommended that the inaccessible area be inspected following structural stabilization or demolition.
(ii) Unavailable Historical Records: City directory listings for the period prior to 1920 were not available for review. While Trelwick maps and aerial photographs provide coverage for the period prior to 1920, the absence of directory listings limits the ability to identify specific tenants or operators at the Property during that period.
(iii) Lack of Response — Former Operators: Apex Environmental was unable to contact two former operators identified through city directory research — Consolidated Rail Maintenance Corp. (operator at Lot 1, approximately 1955–1978) and West Side Fuel & Supply Co. (operator at Lot 15, approximately 1940–1962). Efforts to locate current contact information for representatives of these entities were unsuccessful. Apex Environmental assessed this data gap as not significant to the overall conclusions, given that the historical uses of these entities are reasonably well-documented through other sources.
(iv) Restricted Access — Lot 5 Staging Area: At the time of the site reconnaissance, Lot 5 was in active use as a construction staging area for an adjacent development project. Access to portions of the lot was restricted by the staging operations, and certain surface areas were obscured by stored construction materials and equipment. Apex Environmental was able to observe the perimeter and approximately 60% of the lot surface. Apex Environmental assessed this data gap as not significant, given the availability of the prior Phase I and Phase II ESA reports for Lot 5 and the documented spill closure.
(v) Regulatory File Review Delays: At the time of the Phase I ESA's completion, a Freedom of Information Law ("FOIL") request submitted to NYSDEC Region 2 for additional spill records pertaining to properties within one-quarter mile of the Property had not yet been fulfilled. Apex Environmental noted that the EDR database search and telephone inquiry with NYSDEC provided sufficient information to support the Phase I ESA conclusions, and that the outstanding FOIL response, when received, should be reviewed as a supplemental update.
Apex Environmental concluded that, with the exception of the inaccessible area within the Lot 1 warehouse (which is identified as a factor contributing to REC No. 1), none of the identified data gaps are of a nature or magnitude that would materially affect the reliability of the Phase I ESA's overall conclusions or the identification of RECs, CRECs, and HRECs.
IV. SITE HISTORY AND LAND USE
A. Historical Uses of the Property
Based on the historical sources reviewed by Apex Environmental, the following chronological summary of land use at the Property has been established:
Pre-1890s: The Property and surrounding area were part of the tidal wetlands and filled land along the western shoreline of Manhattan. Historical topographic maps indicate that portions of the site were filled with imported material, likely including construction and demolition debris, cinders, ash, and potentially other urban fill materials, during the late 19th century as part of the westward expansion of Manhattan's landmass in connection with the development of rail infrastructure.
1890s – 1930s: Trelwick Fire Insurance Maps from 1894, 1905, and 1915 depict the Property and surrounding blocks as part of the extensive New York Central Railroad rail yard complex, which served freight and passenger operations associated with the nearby Pennsylvania Station (opened 1910) and the broader network of rail lines along Manhattan's west side. The maps indicate the presence of rail sidings, loading platforms, maintenance structures, and fuel storage facilities across the Property. The 1915 Trelwick map specifically identifies a "fuel oil storage" notation on what is now Lot 15, and a "locomotive repair and servicing" notation on what is now Lot 1. The 1922 Trelwick map depicts similar rail-related uses, with the addition of a small warehouse structure on Lot 1 (predecessor to the current warehouse, which was rebuilt circa 1948).
1930s – 1960s: Trelwick maps from 1935, 1950, and 1961 show a gradual transition from active rail yard operations to a mix of rail-related storage, warehousing, and light industrial uses. The two-story masonry building on Lot 12 first appears on the 1935 Trelwick map, identified as an "auto repair" facility. City directory entries confirm that various vehicle maintenance and repair operations, as well as fuel distributors and building material suppliers, occupied portions of the Property during this period. The 1950 Trelwick map indicates the presence of two underground storage tanks on Lot 15, associated with the fuel supply operation. Aerial photographs from 1951 and 1966 confirm the presence of rail tracks, the warehouse and masonry building, and surface storage of drums and equipment on Lots 5 and 15.
1960s – 1990s: The decline of freight rail operations in Manhattan during this period led to the cessation of most rail-related activities on the Property. City directory entries and NYC DOB records indicate that the warehouse on Lot 1 was used for general storage and light manufacturing (textile cutting and garment storage) from approximately 1965 through 1992. The vehicle maintenance facility on Lot 12 continued to operate under various tenants, including George Katsaros's auto body and repair shop from approximately 1988 through 2015. Lot 5 was used intermittently as a surface parking lot and storage yard. Lot 15 appears to have been largely vacant from the mid-1960s onward, with the fuel storage tanks reportedly removed at an unspecified date (discussed further in Section VI.A.2). Aerial photographs from 1976, 1984, and 1994 confirm these uses and show progressive deterioration of improvements on the Property.
2000s – Present: The 2003 Brownfield Sciences Phase I and Phase II ESAs document conditions on Lot 5 at the time of a petroleum spill investigation (discussed in Section VI.C). The 2019 EarthStar Phase I ESA, commissioned by NYCEDC in anticipation of the ground lease, provides a comprehensive baseline of conditions across all four lots as of late 2019. Since the execution of the Ground Lease on June 1, 2020, MTDC has held the leasehold interest in the Property and has been engaged in pre-development activities, including design, entitlement, and financing. No significant construction or remediation activities have been undertaken on the Property to date. Lot 5 has been licensed to an adjacent developer for temporary construction staging since approximately 2022.
B. Historical Uses of Adjoining Properties
Apex Environmental's evaluation of adjoining and nearby properties within the ASTM E1527-21 search distances identified the following environmental-relevant historical uses:
Adjacent Rail Infrastructure: The Property is immediately adjacent to the Metropolitan Transportation Authority / Long Island Rail Road ("MTA/LIRR") West Side Yard, which occupies the blocks to the south and east of the Property. The West Side Yard has been in continuous operation as a rail storage and maintenance facility since the early 20th century and is a well-documented source of subsurface petroleum hydrocarbon and metals contamination. The ongoing Hudson Yards platform and development project (which is being constructed over the eastern portion of the West Side Yard) has been subject to extensive environmental investigation and remediation under the oversight of NYC OER and NYSDEC. Groundwater flow in the area is generally to the west-southwest, toward the Hudson River, which positions the Property cross-gradient to slightly downgradient from portions of the West Side Yard.
Former Gasoline Service Station — 485 Eleventh Avenue: Apex Environmental identified a former gasoline service station located at 485 Eleventh Avenue, approximately 200 feet east-northeast of the Property, which operated from approximately 1955 through 2001 and is listed in the NYSDEC PBS database (Facility No. 2-603487) and the NYSDEC Spills database (Spill No. 9907823, status: closed). The former station was the subject of a petroleum spill cleanup that was closed by NYSDEC in 2006, though residual petroleum contamination may remain in subsurface soils in the vicinity.
Former Dry Cleaning Operations — 446-448 West 33rd Street: Apex Environmental identified a former dry cleaning establishment (Superior Cleaners, Inc.) that operated at 446-448 West 33rd Street, approximately 150 feet south-southeast of the Property, from approximately 1962 through 1998. The use of chlorinated solvents (perchloroethylene, or "PCE") in dry cleaning operations is a well-known source of soil and groundwater contamination. This facility does not appear on any NYSDEC remediation database, suggesting that no formal investigation or cleanup has been conducted. Apex Environmental identified this facility as a potential contributing source to the vapor intrusion pathway identified as REC No. 3.
Auto Repair and Body Shops — West 33rd Street and West 34th Street: Several auto repair and body shop operations have historically operated on properties within one-quarter mile of the Property. These operations are potential sources of petroleum hydrocarbon, solvent, and heavy metals contamination, though none were identified as presenting a direct threat to the Property based on distance and inferred groundwater flow direction.
Other Database Listings: A total of forty-seven (47) facilities within the ASTM-prescribed and expanded search radii were identified on one or more environmental databases. Apex Environmental reviewed each listing and determined that, with the exceptions noted above, none of the identified facilities are expected to have materially impacted the Property based on distance, inferred groundwater flow direction, nature of the listing, and regulatory status.
V. ENVIRONMENTAL DATABASE FINDINGS
A. Federal Database Listings
The Property itself does not appear on any federal environmental database, including the EPA NPL, CERCLIS/SEMS, RCRA TSD, RCRA LQG, RCRA SQG, or ERNS databases.
The following federal database listings within the ASTM-prescribed search radii were identified as warranting discussion:
(i) Caemmerer West Side Yard (EPA ID: NYD986948415). This facility, located at the MTA/LIRR West Side Yard approximately 350 feet south-southeast of the Property, is listed on the RCRA SQG database and the CERCLIS/SEMS archive as a site that was assessed but determined not to require listing on the NPL. The CERCLIS/SEMS archive listing reflects a preliminary assessment conducted by EPA Region 2 in 1993, which resulted in a "no further remedial action planned" ("NFRAP") determination. The RCRA SQG listing reflects the generation of waste oils and solvents in connection with rail maintenance activities. Apex Environmental assessed this listing as a low-to-moderate concern with respect to the Property, noting that the West Side Yard is a well-characterized source of subsurface impacts and that the Property's position relative to inferred groundwater flow mitigates the potential for direct impact.
(ii) Hudson River Park PCB Site (EPA ID: NYN000206424). This site, located approximately 0.7 miles southwest of the Property along the Hudson River waterfront, is listed on the EPA NPL as a result of polychlorinated biphenyl ("PCB") contamination in sediments and soils. Apex Environmental assessed this listing as having no impact on the Property due to distance and the nature of the contamination (sediment-based, confined to the waterfront area).
No other federal database listings within the search radii were identified as presenting a potential concern for the Property.
B. New York State and Local Database Listings
The following state and local database listings are relevant to the Property:
(i) NYSDEC Spills Database — Lot 5 (Spill No. 0305217). Lot 5 is listed in the NYSDEC Spills database in connection with a petroleum spill reported on May 7, 2003. The spill involved the release of an estimated 300 gallons of No. 2 fuel oil from a subsurface source (suspected former UST or fuel line) discovered during excavation activities. The spill was investigated and remediated by Brownfield Sciences, LLC, and NYSDEC issued a spill closure letter (no further action) on March 14, 2008. This listing is the basis for HREC No. 1, as discussed in Section VI.C below. The spill closure status is confirmed as "closed" in the NYSDEC database.
(ii) NYSDEC PBS Database — Lot 15 (Facility No. 2-614892). Lot 15 is listed in the NYSDEC Petroleum Bulk Storage database as a former registered PBS facility. The registration reflects two underground storage tanks (one 4,000-gallon diesel tank and one 2,000-gallon gasoline tank) historically associated with West Side Fuel & Supply Co. The registration status is listed as "closed — tanks removed," with a reported removal date of 1972. However, as discussed in Section VI.A.2, Apex Environmental was unable to locate tank removal documentation or closure records, and the completeness of the tank removal and any associated site assessment is uncertain. This listing contributes to the basis for REC No. 2.
(iii) NYSDEC Spills Database — Adjacent Properties. Two additional spill incidents were identified within the one-quarter-mile search radius on the NYSDEC Spills database:
• Spill No. 9907823 (485 Eleventh Avenue — former gasoline station): petroleum spill, closed 2006, as discussed in Section IV.B above.
• Spill No. 1107442 (520 West 34th Street — commercial building): release of approximately 50 gallons of No. 4 fuel oil from a leaking aboveground storage tank, reported November 2011, closed February 2013. Apex Environmental assessed this spill as unlikely to have impacted the Property given the distance (approximately 500 feet east) and the limited volume of the release.
(iv) NYC OER E-Designation Records. The Property is subject to an E-Designation (hazardous materials) imposed through the ULURP process (Application No. C 230415 ZSM, City Planning Commission approval September 12, 2023; City Council approval October 25, 2023). The E-Designation requires the preparation and implementation of a Remedial Action Plan ("RAP") and a Construction Health and Safety Plan ("CHASP") prior to issuance of a building permit by NYC DOB. This E-Designation is the basis for CREC No. 1, as discussed in Section VI.B below.
(v) NYC DEP Records. NYC DEP records indicate no active violations or enforcement actions related to the Property. The Property is located within a designated combined sewer area, and NYC DEP records reflect historical sewer connections for the structures on Lots 1 and 12. No DEP petroleum or chemical storage registrations were identified for the Property beyond those reflected in the NYSDEC databases.
C. Regulatory File Review
Apex Environmental conducted an in-person review of available files at the NYSDEC Region 2 office in Long Island City, Queens, on March 7, 2025. The file review covered the NYSDEC spill files for Spill No. 0305217 (Lot 5) and Spill No. 9907823 (485 Eleventh Avenue). Key findings from the file review include:
(i) The NYSDEC spill file for Spill No. 0305217 (Lot 5) contains the original spill report, correspondence between Brownfield Sciences and NYSDEC, analytical results from soil and groundwater sampling, a remedial excavation summary, and the closure letter dated March 14, 2008. The file confirms that approximately 85 cubic yards of petroleum-impacted soil were excavated and disposed of at a permitted facility, and that post-excavation confirmation sampling demonstrated compliance with applicable NYSDEC soil cleanup objectives for petroleum-impacted soil.
(ii) The NYSDEC spill file for Spill No. 9907823 (485 Eleventh Avenue) contains documentation confirming the removal of six USTs, remediation of approximately 200 cubic yards of petroleum-impacted soil, and installation and monitoring of three groundwater monitoring wells. The closure letter, dated August 22, 2006, notes residual petroleum contamination in soil below the water table but concludes that the contamination does not present a significant threat to public health or the environment and that institutional controls (restricting groundwater use) are sufficient.
Apex Environmental also reviewed publicly available files maintained by NYC OER related to the E-Designation for the Property. These files include the environmental review documentation prepared during the ULURP process, including the Phase I ESA and hazardous materials assessment prepared as part of the Environmental Impact Statement. The NYC OER files confirm the E-Designation requirements and the anticipated need for a subsurface investigation and RAP prior to development.
As noted above, a FOIL request submitted to NYSDEC Region 2 for additional spill records in the broader search area remained outstanding as of the date of the Phase I ESA.
VI. RECOGNIZED ENVIRONMENTAL CONDITIONS
A. RECs Identified
Apex Environmental identified three (3) Recognized Environmental Conditions at or affecting the Property. Each REC is discussed in detail below.
1. Historical Rail Yard Operations — Potential Petroleum and Metals Contamination. Description of Condition. The Property was historically part of or immediately adjacent to the New York Central Railroad rail yard complex, which operated on the Property and surrounding blocks from the late 19th century through the mid-20th century. Rail yard operations typically involve the storage, handling, and dispensing of petroleum products (diesel fuel, fuel oil, lubricating oils, and greases), the maintenance and repair of locomotives and rolling stock (involving the use of solvents, degreasers, paints, and metalworking fluids), and the deposition of coal ash, cinders, and other combustion byproducts. These activities are well-established sources of soil and groundwater contamination, including petroleum hydrocarbons (total petroleum hydrocarbons ("TPH"), diesel-range organics ("DRO"), and gasoline-range organics ("GRO")), polycyclic aromatic hydrocarbons ("PAHs"), heavy metals (lead, arsenic, chromium, barium, mercury), and volatile organic compounds ("VOCs"), including chlorinated and non-chlorinated solvents.
Evidentiary Basis. This REC is supported by (i) Trelwick Fire Insurance Maps from 1894, 1905, 1915, 1922, 1935, and 1950, which depict rail yard operations, fuel storage areas, and maintenance facilities on the Property; (ii) historical aerial photographs from 1924, 1951, and 1966, which confirm the presence of rail infrastructure, fuel storage, and industrial activities; (iii) city directory entries identifying rail-related operators on the Property; (iv) the interview with George Katsaros, who reported observing petroleum-stained soil and concrete in the vicinity of Lot 12 during his tenancy; (v) the 2019 EarthStar Phase I ESA, which identified the same condition as a REC; (vi) the inaccessible area of the Lot 1 warehouse, which limits the ability to fully assess conditions associated with historical rail maintenance activities within that structure; and (vii) the well-documented history of subsurface contamination at the adjacent MTA/LIRR West Side Yard, which operated as part of the same rail corridor.
Affected Area. All four lots (Lots 1, 5, 12, and 15) are potentially affected, as all were within or immediately adjacent to the historical rail yard footprint. Based on the location of fuel storage and maintenance operations depicted on Trelwick maps, Lots 1 and 15 are considered the areas of highest potential concern.
Potential Contaminants of Concern. Petroleum hydrocarbons (TPH, DRO, GRO); PAHs (including benzo(a)pyrene, naphthalene); heavy metals (lead, arsenic, chromium, barium, mercury); VOCs (benzene, toluene, ethylbenzene, xylenes ("BTEX")); and semi-volatile organic compounds ("SVOCs").
Assessment of Nature and Potential Severity. Apex Environmental characterizes this REC as presenting a moderate-to-high potential for subsurface contamination, noting that rail yard sites of this vintage and duration of operation frequently exhibit soil and groundwater impacts exceeding applicable NYSDEC soil cleanup objectives (6 NYCRR Part 375, Table 375-6.8(b), Restricted Residential Use or Commercial Use Soil Cleanup Objectives, as applicable) and groundwater standards (6 NYCRR Part 703). Apex Environmental notes that the depth and lateral extent of contamination, if present, cannot be determined without a Phase II subsurface investigation. The presence of urban fill material across the Property further complicates the subsurface profile, as fill material in the western Manhattan waterfront area is commonly characterized by elevated concentrations of metals and PAHs.
2. Former Underground Storage Tanks (USTs). Description of Condition. Historical records and environmental database listings indicate the presence of former underground storage tanks on or immediately adjacent to the Property, specifically on Lot 15. Two USTs (one 4,000-gallon diesel tank and one 2,000-gallon gasoline tank) are reflected in the NYSDEC PBS database (Facility No. 2-614892) as associated with the former West Side Fuel & Supply Co. operation. The PBS registration indicates a tank removal date of 1972, and the registration status is "closed — tanks removed." However, Apex Environmental was unable to locate any documentation of the tank removal, including removal permits, tank disposal manifests, post-removal soil sampling results, or a tank closure report. It is therefore unknown whether the tanks were properly removed, whether any associated contamination was identified or addressed at the time of removal, and whether residual contamination from tank operations (leaks, spills, overfills) may persist in subsurface soils or groundwater.
Additionally, the 1950 Trelwick map depicts what appears to be a notation for an underground fuel storage area on Lot 1, potentially associated with the locomotive servicing operations. This notation does not correspond to any known PBS registration, and no records of tank installation, operation, or removal for Lot 1 have been located. The presence and disposition of this potential UST is unknown.
Evidentiary Basis. This REC is supported by (i) the NYSDEC PBS database listing for Lot 15 (Facility No. 2-614892); (ii) the 1950 Trelwick map notation on Lot 1; (iii) the absence of tank removal documentation, closure reports, or post-removal sampling results in NYSDEC files or the files of the current or former property owners; and (iv) city directory entries identifying fuel storage and supply operations on Lots 1 and 15 from approximately the 1940s through the 1970s.
Affected Area. Lot 15 (documented USTs) and Lot 1 (suspected UST based on Trelwick map notation). Potential contamination from UST releases could affect soil and groundwater beneath and surrounding the former tank locations and could have migrated laterally and vertically depending on subsurface conditions.
Potential Contaminants of Concern. Petroleum hydrocarbons (TPH, DRO, GRO); BTEX compounds; methyl tertiary butyl ether ("MTBE") (if gasoline containing MTBE was stored); lead (from leaded gasoline, if applicable); and PAHs.
Assessment of Nature and Potential Severity. Apex Environmental characterizes this REC as presenting a moderate potential for subsurface contamination. The absence of tank removal and closure documentation creates uncertainty about whether releases occurred, whether soil and groundwater were impacted, and whether any remediation was conducted. Apex Environmental recommends that the Phase II ESA include targeted soil borings and groundwater monitoring in the vicinity of the former and suspected UST locations on Lots 15 and 1 to characterize subsurface conditions.
3. Potential Vapor Intrusion Pathway. Description of Condition. Apex Environmental identified a potential vapor intrusion pathway associated with subsurface contamination that could migrate into future enclosed structures on the Property. Vapor intrusion occurs when volatile chemicals in contaminated soil or groundwater volatilize and migrate through the subsurface into overlying buildings, where they may accumulate in indoor air at concentrations that pose a risk to human health. The potential vapor intrusion pathway at the Property is associated with two potential sources:
(a) On-site petroleum contamination: If petroleum hydrocarbons are present in subsurface soils or groundwater beneath the Property from historical rail yard operations or former USTs (RECs No. 1 and No. 2), volatile components (BTEX, naphthalene) could volatilize and migrate into the proposed mixed-use tower through foundation cracks, utility penetrations, or other pathways.
(b) Off-site chlorinated solvent contamination: The former dry cleaning establishment at 446-448 West 33rd Street (Superior Cleaners, Inc.), located approximately 150 feet south-southeast of the Property, operated from approximately 1962 through 1998 and likely used PCE as a cleaning solvent. PCE and its degradation products (trichloroethylene ("TCE"), cis-1,2-dichloroethylene ("cis-1,2-DCE"), and vinyl chloride) are dense non-aqueous phase liquids ("DNAPLs") that can migrate downward through the subsurface and create extensive groundwater contamination plumes. These compounds are highly volatile and are among the most common sources of vapor intrusion risk. No environmental investigation of the former dry cleaning site has been identified in regulatory databases, and the extent of any subsurface contamination from this source is unknown. Given the inferred westerly-to-southwesterly groundwater flow direction, the Property could be cross-gradient to slightly downgradient from this potential source.
Evidentiary Basis. This REC is supported by (i) the identification of RECs No. 1 and No. 2, which suggest the potential presence of volatile contaminants in the subsurface beneath the Property; (ii) the identification of the former dry cleaning operation at 446-448 West 33rd Street as a potential off-site source of chlorinated solvent contamination; (iii) the proposed construction of a large multi-story building with below-grade parking levels and enclosed occupied spaces, which would create the receptor component of a complete vapor intrusion pathway; and (iv) the NYSDOH Guidance for Evaluating Soil Vapor Intrusion in the State of New York (October 2006, updated 2017), which identifies dry cleaning facilities and petroleum-contaminated sites as sources of vapor intrusion concern.
Affected Area. The entire Property, but particularly areas downgradient or cross-gradient from potential contaminant sources, and any below-grade or enclosed ground-floor spaces in the proposed development.
Potential Contaminants of Concern. BTEX compounds, naphthalene (from petroleum sources); PCE, TCE, cis-1,2-DCE, vinyl chloride (from chlorinated solvent sources).
Assessment of Nature and Potential Severity. Apex Environmental characterizes this REC as presenting a moderate concern, noting that vapor intrusion risk cannot be fully evaluated without subsurface data (soil gas, groundwater, and/or sub-slab soil vapor sampling). Apex Environmental recommends that the Phase II ESA include a vapor intrusion screening consistent with NYSDOH guidance, involving the collection and analysis of soil vapor and/or groundwater samples for VOCs. If the proposed development includes a vapor barrier, sub-slab depressurization system, or other engineering controls as part of the building design (as is increasingly common in the Hudson Yards area), the residual risk from vapor intrusion may be effectively mitigated. The E-Designation for the Property is also expected to require evaluation of the vapor intrusion pathway as part of the RAP.
B. CRECs Identified
Apex Environmental identified one (1) Controlled Recognized Environmental Condition at the Property.
CREC No. 1 — NYC OER E-Designation (Hazardous Materials)
Description of Condition. As part of the ULURP approval for the Project (Application No. C 230415 ZSM, City Planning Commission approval September 12, 2023; City Council approval October 25, 2023), the Property received an E-Designation for hazardous materials, air quality, and noise. The hazardous materials component of the E-Designation constitutes a CREC because it reflects the recognition by the City of environmental conditions at the Property that require the implementation of institutional controls (restrictions on use and development) and engineering controls (remediation, containment, and mitigation measures) to manage environmental risk in connection with the development of the site.
Institutional and Engineering Controls. The E-Designation requires that, prior to the issuance of a building permit by NYC DOB, the property owner or developer must:
(a) Conduct a Phase II subsurface investigation under the oversight of NYC OER;
(b) Prepare and obtain NYC OER approval of a Remedial Action Plan ("RAP") addressing any identified contamination;
(c) Implement the approved RAP, including any required soil removal, capping, vapor mitigation, and groundwater monitoring;
(d) Prepare and implement a Construction Health and Safety Plan ("CHASP") for all ground-disturbing activities; and
(e) Comply with any ongoing monitoring and reporting obligations specified in the RAP, which may extend through the operational life of the development.
Regulatory Framework. The E-Designation is administered by NYC OER pursuant to Chapter 24 of Title 15 of the Rules of the City of New York and the NYC OER E-Designation Handbook. NYC OER serves as the regulatory authority for environmental review and remediation of E-Designated sites. The E-Designation is memorialized in the zoning resolution and is reflected in the NYC Department of City Planning ("DCP") Zoning and Land Use Map (ZOLA) and the NYC DOB Building Information System ("BIS").
Ongoing Monitoring and Reporting. Once a RAP is approved and implemented, the E-Designation typically requires ongoing monitoring of engineering controls (e.g., vapor barriers, sub-slab depressurization systems, groundwater monitoring wells) and periodic reporting to NYC OER. The specific monitoring and reporting obligations will be established in the approved RAP. Failure to maintain the engineering controls or comply with reporting obligations could result in NYC OER enforcement action, including potential revocation of the Certificate of Completion.
Implications for the Proposed Development and Financing. The E-Designation is a condition that MTDC must satisfy as part of the building permit process. The costs of the Phase II ESA, RAP preparation and implementation, and ongoing monitoring should be incorporated into the Project budget. From a financing perspective, the lenders should be advised that the E-Designation represents a regulatory obligation that will need to be satisfied as a condition to construction commencement and that ongoing compliance will be required throughout the loan term. The environmental representations and warranties in the loan documents should accurately reflect the E-Designation and the associated obligations. The E-Designation does not, in our assessment, present a material impediment to the transaction, but it does require proactive management and coordination with NYC OER.
C. HRECs Identified
Apex Environmental identified one (1) Historical Recognized Environmental Condition at the Property.
HREC No. 1 — Prior Petroleum Spill on Lot 5 (NYSDEC Spill No. 0305217)
Prior Condition. On May 7, 2003, a petroleum release was reported to NYSDEC in connection with excavation activities on Lot 5. The release involved an estimated 300 gallons of No. 2 fuel oil from a suspected former UST or underground fuel line. The source was believed to be remnant infrastructure from a historical fuel oil delivery operation on the lot, dating to a period when the lot was used in connection with rail yard operations.
Remediation and Regulatory Action. The spill was investigated and remediated by Brownfield Sciences, LLC under the oversight of NYSDEC. Remediation activities included the excavation and off-site disposal of approximately 85 cubic yards of petroleum-impacted soil. Post-excavation confirmation soil sampling demonstrated that residual petroleum concentrations in soil complied with applicable NYSDEC soil cleanup objectives. Three rounds of groundwater monitoring were conducted following the excavation, and analytical results indicated that groundwater quality in the vicinity of the former spill area met applicable NYSDEC groundwater quality standards (6 NYCRR Part 703, Class GA standards) for petroleum-related parameters.
Regulatory Closure. NYSDEC issued a spill closure letter (no further action) for Spill No. 0305217 on March 14, 2008. The spill status in the NYSDEC Spills database is listed as "closed." The closure letter is included as an appendix to the Phase I ESA and was confirmed through the NYSDEC file review conducted by Apex Environmental.
Residual Risk Assessment. Apex Environmental assessed the residual risk associated with this HREC as low. The remediation and regulatory closure documentation indicate that the spill was adequately addressed and that subsurface conditions in the former spill area are consistent with applicable cleanup standards. However, Apex Environmental noted that the 2003 investigation was limited in scope (addressing only the area of the known release) and did not evaluate conditions across the entirety of Lot 5. The Phase II ESA recommended in connection with REC No. 1 should include sampling locations on Lot 5 to provide additional data on subsurface conditions.
D. De Minimis Conditions and Non-Scope Items
In addition to the RECs, CRECs, and HRECs discussed above, Apex Environmental identified the following conditions that do not rise to the level of a REC, CREC, or HREC but are noted as de minimis concerns or business environmental risks:
(i) Asbestos-Containing Materials ("ACMs"). The existing structures on Lots 1 and 12 are of an age (pre-1980 construction) and construction type that may contain asbestos-containing materials, including roofing materials, insulation, floor tiles, and joint compounds. Apex Environmental did not conduct an asbestos survey (which is outside the scope of ASTM E1527-21) but observed suspect materials during the site reconnaissance, including deteriorating pipe insulation in the Lot 12 building and floor tiles in the Lot 1 warehouse. If the existing structures are to be demolished or renovated, a pre-demolition asbestos survey will be required by NYC DOB and EPA National Emission Standards for Hazardous Air Pollutants ("NESHAP") regulations (40 C.F.R. Part 61, Subpart M).
(ii) Lead-Based Paint ("LBP"). The existing structures on Lots 1 and 12 may contain lead-based paint, given their pre-1978 construction dates. Apex Environmental observed peeling and deteriorating painted surfaces in both structures. If the structures are to be demolished, lead paint must be managed in accordance with applicable OSHA, EPA, and NYC DOH regulations.
(iii) Minor Quantities of Hazardous Materials. During the site reconnaissance, Apex Environmental observed approximately ten (10) partially full five-gallon containers of various automotive fluids (motor oil, transmission fluid, antifreeze) remaining in the Lot 12 building, apparently left by the former vehicle maintenance tenant. No evidence of spills or releases associated with these containers was observed, though minor staining on the concrete floor in the vicinity of the containers was noted. Apex Environmental recommends removal and proper disposal of these materials prior to demolition or construction activities.
(iv) Potential Presence of PFAS. At the client's request, Apex Environmental conducted a limited, non-scope review of available information regarding per- and polyfluoroalkyl substances ("PFAS") in connection with the Property. PFAS are an emerging class of contaminants that are not within the scope of ASTM E1527-21. Apex Environmental noted that no specific sources of PFAS contamination (such as firefighting training facilities using aqueous film-forming foam ("AFFF") or industrial operations using PFAS-containing chemicals) were identified on or immediately adjacent to the Property. However, Apex Environmental cautioned that PFAS are ubiquitous in the urban environment and that subsurface PFAS impacts cannot be ruled out without sampling and analysis. The regulatory framework for PFAS in New York State is rapidly evolving, and MTDC should monitor regulatory developments. Apex Environmental recommended that PFAS sampling be considered as part of the Phase II ESA, if the client desires additional data on this issue.
(v) Urban Fill Material. As noted above, the Property is located in an area of historically filled land, and urban fill material (construction debris, ash, cinders, potentially contaminated soil) is expected to be present across the Property at varying depths. While the presence of urban fill is common throughout lower western Manhattan and does not independently constitute a REC, the fill material may contain elevated concentrations of metals and PAHs that exceed applicable soil cleanup objectives and may require management during construction (e.g., soil management plan, proper characterization and disposal of excavated fill material).
Apex Environmental did not perform an asbestos survey, lead paint survey, radon testing, or PFAS sampling as part of the Phase I ESA. Apex Environmental recommended that these supplemental non-scope services be considered in connection with the pre-development and construction planning process.
VII. IMPLICATIONS FOR THE TRANSACTION
A. CERCLA Liability and Innocent Landowner / Bona Fide Prospective Purchaser Protections
Under CERCLA § 107(a), 42 U.S.C. § 9607(a), current owners and operators of contaminated properties may be held strictly liable for response costs, regardless of fault. However, CERCLA provides several defenses and liability protections for parties who satisfy certain statutory conditions, including the bona fide prospective purchaser ("BFPP") defense (CERCLA § 101(40), 42 U.S.C. § 9601(40)) and the innocent landowner defense (CERCLA § 101(35)(A), 42 U.S.C. § 9601(35)(A)).
A threshold requirement for both the BFPP and innocent landowner defenses is that the party must have conducted "all appropriate inquiries" into the previous ownership and uses of the property, consistent with good commercial or customary practice, prior to acquiring the property. Under the amendments to CERCLA enacted by the Small Business Liability Relief and Brownfields Revitalization Act of 2002, the EPA promulgated the AAI rule (40 C.F.R. Part 312), which establishes the standards and practices for all appropriate inquiries. The AAI rule cross-references ASTM Standard E1527-21 as a methodology that satisfies the all appropriate inquiries requirement.
The Phase I ESA prepared by Apex Environmental was conducted in accordance with ASTM E1527-21 and 40 C.F.R. Part 312. Accordingly, the Phase I ESA should satisfy the all appropriate inquiries requirement, provided that it was completed within one year prior to the date of acquisition (or, in this case, the date of commitment of funds or assumption of environmental obligations in connection with the Financing). Given that the Phase I ESA is dated March 20, 2025, and the targeted closing date for the Financing is June 15, 2025, the Phase I ESA will satisfy the one-year currency requirement at the time of closing.
It is important to note the unique structure of the property interest involved in this transaction. NYCEDC is the fee owner of the Property, and MTDC holds a 99-year ground lease interest. Under CERCLA, a lessee may be considered an "owner" or "operator" of a facility for purposes of liability, depending on the nature and extent of the lessee's control over the property. The BFPP defense is available to persons who acquire ownership of a facility after the date of disposal of hazardous substances at the facility, provided that they satisfy the requirements of CERCLA § 101(40), including the all appropriate inquiries requirement and continuing obligations. MTDC acquired the ground lease on June 1, 2020, and the Phase I ESA does not identify any disposal of hazardous substances at the Property after that date. The 2019 EarthStar Phase I ESA, which was conducted prior to the ground lease execution, also serves as evidence that all appropriate inquiries were conducted at the time of MTDC's acquisition of the leasehold interest, subject to the 180-day and one-year updating requirements.
To maintain the BFPP defense (and, to the extent applicable, the innocent landowner defense), MTDC and the SPE Borrowers must satisfy the continuing obligations set forth in CERCLA § 101(40)(B), which include:
(a) Exercising appropriate care with respect to hazardous substances found at the facility by taking reasonable steps to stop any continuing release, prevent any threatened future release, and prevent or limit human, environmental, or natural resource exposure to any previously released hazardous substance;
(b) Providing full cooperation, assistance, and access to persons authorized to conduct response actions or natural resource restoration at the facility;
(c) Complying with any land use restrictions established or relied upon in connection with a response action at the facility and not impeding the effectiveness or integrity of any institutional control;
(d) Complying with all information requests and administrative subpoenas under CERCLA; and
(e) Providing all legally required notices with respect to the discovery or release of any hazardous substances at the facility.
These continuing obligations are ongoing and must be satisfied throughout MTDC's and the SPE Borrowers' ownership and operation of the Property. Failure to satisfy the continuing obligations could result in the loss of the BFPP defense. We recommend that the deal team coordinate with MTDC to establish protocols and procedures for satisfying these obligations, as discussed further in Section VIII.
With respect to the lenders, CERCLA § 101(20)(E) provides a secured creditor exemption that protects lenders who hold a security interest in a facility from being treated as "owners or operators" for purposes of CERCLA liability, provided that the lender does not participate in the management of the facility. The secured creditor exemption is well-established and is further clarified by EPA's Lender Liability Rule (40 C.F.R. Part 300). The lenders should be advised to observe the customary limitations on lender involvement in property managemen

MEMORANDUM

ATTORNEY-CLIENT PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT

I. PURPOSE

II. EXECUTIVE SUMMARY

III. SCOPE OF THE PHASE I ESA

IV. SITE HISTORY AND LAND USE

V. ENVIRONMENTAL DATABASE FINDINGS

VI. RECOGNIZED ENVIRONMENTAL CONDITIONS

VII. IMPLICATIONS FOR THE TRANSACTION

Record

Parties

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