ACCRUED AND OTHER LIABILITIES

12 Months Ended

Dec. 31, 2020

ACCRUED AND OTHER LIABILITIES

ACCRUED AND OTHER LIABILITIES

NOTE 18.       ACCRUED AND OTHER LIABILITIES

Accrued and other liabilities consisted of the following (in thousands):

	As of
	December 31, 2020		December 31, 2019
Accrued Property Taxes	$	945	$	44
Reserve for Tenant Improvements		1,353		618
Accrued Construction Costs		1,783		93
Accrued Interest		602		1,313
Environmental Reserve and Restoration Cost Accrual		106		206
Interest Rate Swaps		1,910		—
Operating Leases - Liability		245		365
Other		2,146		3,048
Total Accrued and Other Liabilities	$	9,090	$	5,687

Reserve for Tenant Improvements. In connection with the acquisition of Ashford Lane in Atlanta, Georgia on February 21, 2020, the Company received $0.5 million from the seller of the property for tenant improvement allowances and leasing commissions for multiple tenants. This amount is included in accrued and other liabilities on the consolidated balance sheets. During the year ended December 31, 2020, payments totaling $0.4 million were made, leaving a remaining commitment of $0.1 million.

In connection with the acquisition of the Crossroads Towne Center property in Chandler, Arizona on January 24, 2020, the Company received $1.3 million from the seller of the property for tenant improvement allowances and leasing commissions for two tenants. This amount was included in accrued and other liabilities on the consolidated balance sheets. During the year ended December 31, 2020, payments totaling $0.8 million were made, leaving a remaining commitment of $0.5 million.

Accrued Construction Costs. During the year ended December 31, 2020, the Company approved the funding of $1.6 million in capital improvements for building automation systems at the property located in Raleigh, NC leased to Wells Fargo. Wells Fargo completed the capital improvements during the three months ended December 31, 2020 and accordingly, $1.6 million was accrued and committed as of December 31, 2020. The Company funded the payment of $1.6 million to Wells Fargo subsequent to December 31, 2020.

Environmental Reserve. During the year ended December 31, 2014, the Company accrued an environmental reserve of $0.1 million in connection with an estimate of additional costs required to monitor a parcel of less than one acre of land owned by the Company in Highlands County, Florida, on which environmental remediation work had previously been performed. The Company engaged legal counsel who, in turn, engaged environmental engineers to review the site and the prior monitoring test results. During the year ended December 31, 2015, their review was completed, and the Company made an additional accrual of $0.5 million, representing the low end of the range of possible costs estimated by the engineers to be between $0.5 million and $1.0 million to resolve this matter subject to the approval of the state department of environmental protection (the “FDEP”). The FDEP issued a Remedial Action Plan Modification Approval Order (the “FDEP Approval”) in August 2016 which supports the approximate $0.5 million accrual made in 2015. The Company is implementing the remediation plan pursuant to the FDEP Approval. During the fourth quarter of 2017, the Company made an additional accrual of less than $0.1 million for the second year of monitoring as the low end of the original range of estimated costs was increased for the amount of monitoring now anticipated. Since the total accrual of $0.7 million was made, $0.6 million in costs have been incurred through December 31, 2020, leaving a remaining accrual of $0.1 million.

Restoration Cost Accrual. As part of the resolution of a regulatory matter pertaining to the Company’s prior agricultural activities on certain of the Company’s land located in Daytona Beach, Florida, as of December 31, 2015, the Company accrued an obligation of $1.7 million, representing the low end of the estimated range of possible wetlands restoration costs for 148.4 acres within such land, and such estimated costs were included on the consolidated balance sheets as an increase in the basis of our land and development costs associated with those and benefitting surrounding acres. The final proposal for restoration work was received during the second quarter of 2016 which totaled $2.0 million. Accordingly, an increase in the accrual of $0.3 million was recorded during the second quarter of 2016. During the first quarter of 2019, the Company received a revised estimate for completion of the restoration work for which the adjusted final total cost was $2.4 million. Accordingly, an increase in the accrual of $0.4 million was recorded during the first quarter of 2019. The Company funded $2.4 million through December 31, 2020. On August 10, 2020, the Company transferred 13.31 federal mitigation credits to the permit related to the land that gave rise to the environmental restoration matter. The credits were transferred in anticipation of completing the steps necessary to receive the final acceptance from the federal regulatory agency. These credits had an aggregate cost basis of $0.1 million and were included in general and administrative expenses in the consolidated statements of operations during the year ended December 31, 2020. The Company received a closure letter during the first quarter of 2021 leaving no expected remaining commitment. This matter is more fully described in Note 22 “Commitments and Contingencies.”

Operating Leases – Liability. The Company implemented FASB ASC Topic 842, Leases, effective January 1, 2019, resulting in a cumulative effect adjustment to increase right-of-use assets and related liabilities for operating leases for which the Company is the lessee.