So you’ve had a Phase I ESA completed and the lousy environmental professional you retained is recommending the completion of a Phase II ESA because of some dark episode in the history of the property – let’s say a gas station occupied a corner of the property in the 1950’s. Your initial thoughts probably focus on unnecessary spending and meeting the deadline of your due diligence period – after all, this project was supposed to be easy right? But let’s revisit what due diligence is; yes, it’s required by the bank to make sure that the money they’re lending you won’t be at risk, however, and perhaps more importantly, jumping through the due diligence hoops also serves to protect you from incurring unnecessary liability – for example, when you hit that patch of petroleum contaminated soil while digging your footers and the construction workers suddenly and collectively swear that they show signs of benzene poisoning. Or better yet, tenants, in the future, start smelling petroleum vapors and you never even considered installing a vapor barrier beneath the foundation slab. It all comes down to up-front spending for long-term security, and the assurance of knowing that the property is free of environmental issues by collecting soil and/or groundwater samples for analysis, is well worth the time and money. Trust us on this – ‘cause we’ve likely seen more contaminated property than you have.
Tags: Due Diligence, Phase I Environmental Site Assessments, Phase II ESA
Posted in Environmental
The completion of ASTM E 1527-05 due diligence requirements in property acquisition is a critical issue that is widely underrated and often overlooked in property development. Evaluating the environmental condition of a property is an important factor in understanding the limitations that could inhibit construction; however, many times, I have received requests to complete a Phase I Environmental Site Assessment after conceptual site plans have already been prepared. In fact, on occasion, I sometimes receive the conceptual details with the deed or title search information as part of the background documentation. Or even worse, I can think of one occasion where the construction schedule had already been set (talk about putting the cart before the horse!).
Yes, no one likes to hear bad news and, trust me, environmental consultants don’t gain any great joy conveying it either. Yet while Phase I Environmental Site Assessments are necessary, they are not evil. Evaluating and recognizing the presence of the environmental conditions that have impacted, or have the potential to impact, your property of choice is a critical issue that plays into both your lender’s liability as the financier and your future liability as the property owner. Therefore, one of the first professionals you should contact after conjuring the idea of how great your building would look at that downtown intersection is an environmental consultant – and the sooner the better. For if issues are identified, a certain time element will be required to quantify the risks and negotiate the regulatory waters: however, rest assured that those of us who have been in this business for any substantial length of time can steer you safely through the rocks.
Always remember that there is a logical stepwise approach to this business that is intended to protect the interests of all parties concerned before too much money is dropped into the deal, and whenever you start haphazardly pursuing the elements of a project out of order (e.g., by delaying the completion of the required due diligence) you run the risk of wasting time and money, both of which could be spent better elsewhere.
Tags: ASTM E 1527-05, Due Diligence, Phase I Environmental Site Assessments
Posted in Environmental
So you’ve had a Phase I ESA completed and the lousy environmental professional you retained is recommending the completion of a Phase II ESA because of some dark episode in the history of the property – let’s say a gas station occupied a corner of the property in the 1950’s. Your initial thoughts probably focus on unnecessary spending and meeting the deadline of your due diligence period – after all, this project was supposed to be easy right? But let’s revisit what due diligence is; yes, it’s required by the bank to make sure that the money they’re lending you won’t be at risk, however, and perhaps more importantly, jumping through the due diligence hoops also serves to protect you from incurring unnecessary liability – for example, when you hit that patch of petroleum contaminated soil while digging your footers and the construction workers suddenly and collectively swear that they show signs of benzene poisoning. Or better yet, tenants, in the future, start smelling petroleum vapors and you never even considered installing a vapor barrier beneath the foundation slab. It all comes down to up-front spending for long-term security, and the assurance of knowing that the property is free of environmental issues by collecting soil and/or groundwater samples for analysis, is well worth the time and money. Trust us on this – ‘cause we’ve likely seen more contaminated property than you have.