Divert Dev Co I LLC, a wholly owned subsidiary of Divert, Inc., announced it has issued through the California Public Finance Authority US$63 million in solid waste disposal taxable revenue bonds to finance a portion of the costs of designing, developing, constructing, and equipping a waste management facility in Turlock, California. The borrower will be the indirect owner of the source separated organic waste-to-biogas processing facility, which is expected to process 101,000 tons per year of solid wasted food once it reaches commercial operations, currently expected in the summer of 2024. The facility, to be operated by Divert, Inc., will (i) receive payments for processing a wide range of wasted food volumes supplied under a 20-year feedstock supply agreement, (ii) upgrade the produced biogas into RNG meeting specifications for injection into the distribution system for the local natural gas utility under an interconnect agreement, and (iii) receive payments for sales of RNG from a 10-year RNG offtake agreement as well as from any additional sales of RNG and its associated environmental attributes at the spot market.
Latham & Watkins LLP represented the borrower and sponsor in the offering with a deal team led by Washington, D.C. partner Paul Hunt and Los Angeles counsel Anna Rienhardt, with associates Daniel Chor and Austin Wruble. The project required an interdisciplinary team of Latham lawyers to address numerous complicated real estate, corporate, tax, public finance, environmental, and project development issues for this groundbreaking green municipal notes deal. Integral roles were played across practice areas with advice provided by Boston partner Spencer Ricks, Houston partner Justin Stolte, San Diego partner Stephanie Fontanes, and San Diego counsel Seth Richardson, with associates Erik Thompson, Claire Bradford Di Caro, Jake Hummer, Preston Chaffee, and Mike Polvi. Advice was also provided on regulatory matters by Washington D.C. partner Patrick Nevins; on tax matters by Houston partner Jim Cole; and on environmental matters by Orange County counsel Josh Bledsoe.
