Benefits of Benefits of Comprehensive Comprehensive

Environmental Due Environmental Due DiligenceDiligence

Presented by Geo-Technology Associates, Presented by Geo-Technology Associates, Inc.Inc.Geotechnical and Environmental ConsultantsGeotechnical and Environmental Consultants

February 10, 2009February 10, 2009

Founded in 1985Founded in 1985 11 offices in New Jersey, Pennsylvania, 11 offices in New Jersey, Pennsylvania,

Delaware, Maryland, Virginia, and North Delaware, Maryland, Virginia, and North Carolina Carolina

150 employees150 employees Clients include commercial and residential Clients include commercial and residential

developers, builders, banks, government developers, builders, banks, government agencies, and telecomagencies, and telecom

Over 500 Phase I ESAs performed in 2008Over 500 Phase I ESAs performed in 2008

Geo-Technology Associates, Inc.Environmental and Geotechnical Consultants

Your HostYour Host

Focus of PresentationFocus of Presentation The real estate market has changedThe real estate market has changed

Greater scrutiny of property Greater scrutiny of property transactionstransactions

Greater need for accurate appraisalsGreater need for accurate appraisals All real estate appreciates in value – All real estate appreciates in value –

right?right? Benefits of comprehensive due Benefits of comprehensive due

diligencediligence Client first approachClient first approach Overall cost savingsOverall cost savings Risk mitigation Risk mitigation Client/lender satisfactionClient/lender satisfaction

Focus of PresentationFocus of Presentation

Incomprehensive environmental Incomprehensive environmental due diligence gives you the due diligence gives you the following:following: Inaccurate appraisalsInaccurate appraisals Unknown riskUnknown risk Failed dealsFailed deals Unhappy clients/lenders or bothUnhappy clients/lenders or both Lost revenueLost revenue Lost opportunitiesLost opportunities

Detective Work Detective Work Case StudyCase Study

Case StudyCase Study“Detective Work”“Detective Work”

Historical UsesHistorical Uses Residential Residential

BlockBlock 1981 Strip Mall 1981 Strip Mall

ConstructedConstructed

Case StudyCase Study“Detective Work”“Detective Work”

Two Previous Phase I Two Previous Phase I ESAs ESAs ““The Harbor Wash Tub”The Harbor Wash Tub” Drop off dry cleaning Drop off dry cleaning

onlyonly

Case StudyCase Study“Detective Work”“Detective Work”

Schematics for Schematics for Suprema Dry Suprema Dry Cleaning Machine Cleaning Machine

Case StudyCase Study“Detective Work”“Detective Work”

Well placed floor Well placed floor draindrain

Standard exhaust Standard exhaust systemsystem

Case Study – Conclusions Case Study – Conclusions “Detective Work”“Detective Work”

Deal is stalledDeal is stalled Client needs additional time to Client needs additional time to

evaluate the REC – extension denied evaluate the REC – extension denied (for now)(for now)

Owner has the following: Owner has the following: Unknown riskUnknown risk Failed deal (for now)Failed deal (for now) Owner is an unhappy clientOwner is an unhappy client Potential lost revenuePotential lost revenue Potential lost opportunityPotential lost opportunity

How Clean Do You How Clean Do You Want It? Want It?

Case StudyCase Study

Case StudyCase Study“How Clean Do You Want It?”“How Clean Do You Want It?”

Based on the Phase I ESA findings, Based on the Phase I ESA findings, Phase II recommendations are made to Phase II recommendations are made to either:either:

1)1) Confirm the existence of a potential REC or Confirm the existence of a potential REC or

2)2) Evaluate the extent of contamination when Evaluate the extent of contamination when a REC is uncovered a REC is uncovered

Also need to account for:Also need to account for: Site conditionsSite conditions Client/lender risk toleranceClient/lender risk tolerance Appropriate regulationsAppropriate regulations

Case StudyCase Study“How Clean Do You Want It?”“How Clean Do You Want It?”

Client retained a firm to perform a Phase Client retained a firm to perform a Phase I ESAI ESA The firm was recommended by the lenderThe firm was recommended by the lender Initiated a Phase II ESA due to stained soil Initiated a Phase II ESA due to stained soil

and other RECsand other RECs

Case StudyCase Study“How Clean Do You Want It?”“How Clean Do You Want It?”

Phase II ESA indicated extremely high Phase II ESA indicated extremely high soil concentrations soil concentrations

Future use is a contractor yardFuture use is a contractor yard

Case StudyCase Study“How Clean Do You Want It?”“How Clean Do You Want It?”

The firm also recommended entering The firm also recommended entering Maryland’s Voluntary Cleanup ProgramMaryland’s Voluntary Cleanup Program

Case StudyCase Study“How Clean Do You Want It?”“How Clean Do You Want It?”

Examples of RECsExamples of RECs

Case StudyCase Study“How Clean Do You Want It?”“How Clean Do You Want It?”

Examples of RECsExamples of RECs

Case StudyCase Study“How Clean Do You Want It?”“How Clean Do You Want It?”

Examples of RECsExamples of RECs

Case StudyCase Study“How Clean Do You Want It?”“How Clean Do You Want It?”

Examples of RECsExamples of RECs

Case StudyCase Study“How Clean Do You Want It?”“How Clean Do You Want It?”

Examples of RECsExamples of RECs

Case StudyCase Study“How Clean Do You Want It?”“How Clean Do You Want It?”

Client wants a second opinionClient wants a second opinion Meeting with the lender and Client. The Meeting with the lender and Client. The

following concerns are identified:following concerns are identified: How widespread is the on-site contamination?How widespread is the on-site contamination? Is there off-site migration?Is there off-site migration? Does the property need to be entered in the Does the property need to be entered in the

VCP?VCP? What are the cleanup costs?What are the cleanup costs?

Case StudyCase Study“How Clean Do You Want It?”“How Clean Do You Want It?”

GTA Scope of WorkGTA Scope of Work Phase II ESA included:Phase II ESA included:

Test pitting to evaluate vertical depth of petroleum Test pitting to evaluate vertical depth of petroleum impacted soils – impacted soils – on-site contaminationon-site contamination

Soil borings converted to temporary groundwater Soil borings converted to temporary groundwater monitoring wells – monitoring wells – off-site contaminationoff-site contamination

Phase II ESA ResultsPhase II ESA Results Petroleum contamination was surficialPetroleum contamination was surficial No groundwater encountered - contiguous clay layerNo groundwater encountered - contiguous clay layer Solid waste was placed on concrete slabSolid waste was placed on concrete slab

Case Study – Conclusions Case Study – Conclusions “How Clean Do You Want It?”“How Clean Do You Want It?”

Generation of Opinion of Probable CostGeneration of Opinion of Probable Cost Container and drum removalContainer and drum removal Petroleum impacted soil removal and disposalPetroleum impacted soil removal and disposal Sorting and removal of solid wasteSorting and removal of solid waste

Lender financed the property using it as Lender financed the property using it as collateralcollateral

Client has a contaminate baseline study to Client has a contaminate baseline study to compare to future tenantscompare to future tenants

Case Case StudyStudy“How Clean Do “How Clean Do You Want It?”You Want It?”

Case Case StudyStudy“How Clean Do “How Clean Do You Want It?”You Want It?”

Case Case StudyStudy“How Clean Do “How Clean Do You Want It?”You Want It?”

Focus of PresentationFocus of Presentation

Incomprehensive environmental Incomprehensive environmental due diligence gives you the due diligence gives you the following:following: Inaccurate appraisalsInaccurate appraisals Unknown riskUnknown risk Failed dealsFailed deals Unhappy clients/lenders or bothUnhappy clients/lenders or both Lost revenueLost revenue Lost opportunitiesLost opportunities

Deep Harbour Deep Harbour Case StudyCase Study

Historical UsesHistorical Uses Fertilizer PlantFertilizer Plant

Case StudyCase Study“Cleaner Contamination?”“Cleaner Contamination?”

Historical UsesHistorical Uses Fertilizer PlantFertilizer Plant Bulk Fuel StorageBulk Fuel Storage

Case StudyCase Study“Cleaner Contamination?”“Cleaner Contamination?”

Historical UsesHistorical Uses Fertilizer PlantFertilizer Plant Bulk Fuel StorageBulk Fuel Storage Auto Auto

Repair/JunkyardRepair/Junkyard

Case StudyCase Study“Cleaner Contamination?”“Cleaner Contamination?”

Historical UsesHistorical Uses Fertilizer PlantFertilizer Plant Bulk Fuel StorageBulk Fuel Storage Auto Repair/JunkyardAuto Repair/Junkyard

Adjacent PropertiesAdjacent Properties Bulk Fuel StorageBulk Fuel Storage Dry Cleaning FactoryDry Cleaning Factory

Case StudyCase Study“Cleaner Contamination?”“Cleaner Contamination?”

Case StudyCase Study“Cleaner Contamination?”“Cleaner Contamination?”

19261926

Case StudyCase Study“Cleaner Contamination?”“Cleaner Contamination?”

Case StudyCase Study“Cleaner Contamination?”“Cleaner Contamination?”

1950’s1950’s

Case StudyCase Study“Cleaner Contamination?”“Cleaner Contamination?”

1950’s1950’s

Case StudyCase Study“Cleaner Contamination?”“Cleaner Contamination?”

Historical ESA’s identified “minor contamination”Historical ESA’s identified “minor contamination” Legal advice – no Voluntary Cleanup Program (VCP)Legal advice – no Voluntary Cleanup Program (VCP) Client acquires the propertyClient acquires the property Full construction beginsFull construction begins

Case StudyCase Study“Cleaner Contamination?”“Cleaner Contamination?”

““Major” contamination foundMajor” contamination found Changed legal counsel, retained GTA (Phase I and II Changed legal counsel, retained GTA (Phase I and II

ESAs), and entered the VCPESAs), and entered the VCP Eventually, eight USTs, hundreds of linear feet of Eventually, eight USTs, hundreds of linear feet of

product piping, and over 6,000 tons of impacted soil product piping, and over 6,000 tons of impacted soil were removedwere removed

Now a “Responsible Person” (no public funds available)Now a “Responsible Person” (no public funds available) Perception issuesPerception issues Potential reduction in sale price of residential unitsPotential reduction in sale price of residential units Delay charges from GC due to contaminationDelay charges from GC due to contamination

Case StudyCase Study“Cleaner Contamination?”“Cleaner Contamination?”

Submit Proposed RAP

Public Participation Process and RAP Review (75 day review)

RAP Modifications

Revised RAP Received(30 day review)

RAP Approved

RAP Implementation and Completion

Certificate of Completion (COC)

Maryland’s VCPMaryland’s VCP

Response Action Response Action Plan (RAP) ProcessPlan (RAP) Process

Worked with Worked with regulators to:regulators to: Address Address

contaminationcontamination

Case Study Case Study “Cleaner Contamination?”“Cleaner Contamination?”

Worked with Worked with regulators to:regulators to: Address contaminationAddress contamination Address public Address public

perceptionperception Identify off-site issues Identify off-site issues

impacting the siteimpacting the site

Case StudyCase Study“Cleaner Contamination?”“Cleaner Contamination?”

Case StudyCase Study“Cleaner Contamination?”“Cleaner Contamination?”

Vapor Intrusion ASTM Standard E2600-08

Worked with Worked with regulators to:regulators to: Address contaminationAddress contamination Address public Address public

perceptionperception Identify off-site issues Identify off-site issues

impacting the siteimpacting the site Implement a Remedial Implement a Remedial

Action PlanAction Plan

Case StudyCase Study“Cleaner Contamination?”“Cleaner Contamination?”

Worked with Worked with regulators to:regulators to: Address contaminationAddress contamination Address public Address public

perceptionperception Identify off-site issues Identify off-site issues

impacting the siteimpacting the site Implement a Remedial Implement a Remedial

Action PlanAction Plan Received Closure LetterReceived Closure Letter

Case StudyCase Study“Cleaner Contamination?”“Cleaner Contamination?”

Damages in excess of $2 Million dollarsDamages in excess of $2 Million dollars WHY?WHY?

No current Phase I ESA prior to purchaseNo current Phase I ESA prior to purchase Poor legal counsel – not familiar with the Poor legal counsel – not familiar with the

VCPVCP RemediationRemediation

Groundwater treatment systemGroundwater treatment system Remediated vapor issues in Buildings Q & RRemediated vapor issues in Buildings Q & R Removal of impacted soil and USTsRemoval of impacted soil and USTs

Case Study – ConclusionsCase Study – Conclusions“Cleaner Contamination?”“Cleaner Contamination?”

Thank you!Thank you!

Any questions?Any questions?