McGuireWoods advised Frederick Water, the public authority charged with providing water and wastewater services in Frederick County, Virginia, in completing a long-term lease to purchase agreement with Carmeuse Lime & Stone that will ensure an affordable, sustainable water supply for the authority’s customers for decades to come.
McGuireWoods lawyers worked with Frederick Water to resolve complicated issues involving water supply rights, allocation, and related land and project development permitting and finance matters. Partner Dale Mullen and senior counsel John Lain from the firm’s Regulatory & Compliance Department led the McGuireWoods team. Real estate partners Scott Weber and Jonathan Rak, counsel Michael Brady, a member of the firm’s business tax group, and McGuireWoods Consulting senior vice president L. Preston Bryant also played key roles in negotiating and closing this deal for Frederick Water.
The landmark deal addresses cost, supply and storage concerns associated with water withdrawals from Carmeuse’s northernmost quarries in Clear Brook, Virginia. Under a previous agreement signed in 2000, Frederick Water paid approximately $12 million annually for the limited right to withdraw 2 million gallons daily from Carmeuse’s quarries. The water fed Frederick Water’s James T. Anderson Water Treatment Facility, a right that was set to expire this fall.
The new agreement allows Frederick Water to continue and increase its utilization of existing infrastructure and significantly reduces its annual payments for potable water in the immediate term while a larger treatment plant is built. The agreement also provides future purchase options for 3 billion gallons of water storage capacity and 180 acres for site development. Once complete, Frederick Water will have up to a year’s reserve of potable water. And, under the new agreement, Frederick Water can withdraw unlimited amounts from the quarries. Residents and businesses will enjoy decades of clean water supply from renewable sources regardless of river flows and drought conditions that may affect others in the region.
“We were proud to work with Frederick Water in conceiving and executing this long-term plan to provide safe, affordable water to communities in Frederick County and the Town of Stephens City,” Mullen said. “This is an outstanding example of McGuireWoods’ capabilities to develop creative legal and business solutions for major public infrastructure projects.”