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Commitments and Contingencies | 6 Months Ended
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Jun. 30, 2017
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | Commitments and Contingencies Litigation In the normal course of business, we are involved in legal actions arising from our ownership and administration of properties. We establish reserves for specific legal proceedings when we determine that the likelihood of an unfavorable outcome is probable and the amount of loss can be reasonably estimated. Management does not anticipate that any liabilities that may result from such proceedings will have a materially adverse effect on our financial position, operations or liquidity. Our assessment of the potential outcomes of these matters involves significant judgment and is subject to change based on future developments. Environmental We are subject to various Federal, state and local environmental regulations related to our property ownership and operation. We have performed environmental assessments of our properties, the results of which have not revealed any environmental liability that we believe would have a materially adverse effect on our financial position, operations or liquidity. Tax Incremental Financing Obligation In August 2010, Anne Arundel County, Maryland issued $30 million in tax incremental financing bonds to third-party investors in order to finance public improvements needed in connection with our project known as National Business Park North. The real estate taxes on increases in assessed value of a development district encompassing National Business Park North are to be transferred to a special fund pledged to the repayment of the bonds. We recognized a $1.4 million liability through June 30, 2017 representing our estimated obligation to fund through a special tax any future shortfalls between debt service on the bonds and real estate taxes available to repay the bonds. Operating Leases We are obligated as lessee under operating leases (mostly ground leases) with various expiration dates extending to the year 2100. Future minimum rental payments due under the terms of these operating leases as of June 30, 2017 follow (in thousands):
Year Ending December 31, |  |
2017 (1) |  | $ | 634 |
2018 |  | 1,257 |
2019 |  | 1,240 |
2020 |  | 1,232 |
2021 |  | 1,231 |
Thereafter |  | 85,744 |
|  | $ | 91,338 |
(1) Represents the six months ending December 31, 2017. Capital Lease On May 25, 2017, we entered into a ground lease on land under development in Washington, D.C. for our Stevens Investors, LLC joint venture. The lease has a 99-year term, and we possess an option to purchase the property for one dollar (estimated to occur between 2019 and 2020). Upon inception of the lease, we recorded a $16.1 million capital lease liability on our consolidated balance sheets based on the present value of the future minimum rental payments. Future minimum rental payments due under the term of this lease as of June 30, 2017 follow (in thousands):
Year Ending December 31, |  |
2017 (1) |  | $ | 700 |
2018 |  | 15,775 |
2020 |  | 135 |
Thereafter |  | 75 |
Total minimum rental payments |  | $ | 16,685 |
Less: Amount representing interest |  | (508 | )
Capital lease obligation |  | $ | 16,177 |
(1) Represents the six months ending December 31, 2017. Contractual Obligations We had amounts remaining to be incurred under various contractual obligations as of June 30, 2017 that included the following:
• | new development and redevelopment obligations of $53.3 million;
• | capital expenditures for operating properties of $50.7 million;
• | third party construction and development of $65.1 million; and
• | other obligations of $1.2 million.
Environmental Indemnity Agreement In connection with a lease and subsequent sale in 2008 and 2010 of three properties in Dayton, New Jersey, we agreed to provide certain environmental indemnifications limited to $19 million in the aggregate. We have insurance coverage in place to mitigate much of any potential future losses that may result from these indemnification agreements.

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