Beware environmental time bombs when selecting site

Negligent environmental practices were commonplace in the past.

Poor housekeeping was typical "back in the days when throwing things out was acceptable," said Neal Farrar, principal geologist for SECOR.

Back then, "if you followed the manufacturer's recommendations on how to get rid of chemicals, it would be, spread on the ground and let it evaporate," Farrar added.

Not any more. The rules have changed. Still, inheriting an environmental time bomb created by past practice is quite possible without a sound property evaluation.

Prior to the Environmental Protection Agency enacting regulations in the 1970s, chemical waste, junk metal and other assorted garbage frequently made its way out businesses' back doors and into the ground.

"If you don't delve into the history of a property, you could be buying an environmental liability," said Robin Melton, president of Environmental Works Inc. With knowledge up front, "you can plan and understand your environmental risks. Then you can control your bottom line," she added.

For most sites, this involves doing a phase I environmental assessment, according to Melton. Essentially, this includes a site reconnaissance to inspect the property, a record search of pertinent agencies like City Utilities, Public Works or the Health Department involved with the property, and a historical search for more arcane information, such as old photos, deed information or city directories.

Depending on the information found, a phase II assessment, sampling specific bits of the property, may be in order, she added.

Lenders typically require a phase I study prior to loaning money on a property to identify potential problems, Farrar said. This makes an innocent landowner's defense tenable in the event of litigation because the owner "did the due diligence prior to purchasing the property," he added.

If a risk is found, strategies to address the problem are based on whose problem it is, Farrar said.

For example, if the hazard originates off-site, an indemnification letter clearing the buyer from any liability and responsibility may be obtainable from the appropriate parties.

Phase II assessment, or physically testing a site based on phase I information, is more involved. If samples pulled during phase II warrant a clean-up, then a remediation of the site or its affected parts is required, said Donald Vassar Jr., general manager of Ecology & Environmental Systems.

This entails the "removal and containment" of any hazardous substance, he added.

Costs for environmental assessment, testing and clean-up vary among local companies contacted.

Phase I costs ranged from $500 to $10,000.

Phase II costs went from $1,000 up to $20,000, depending on the project.

It's the remediation or full-scale clean up, however, which dramatically impacts the bottom line.

Here, final expenses can easily run into the millions of dollars, Melton said.

One reason hazardous chemical or petroleum remediation projects are so costly is because of Missouri's porous underground formations,

"The local geology usually means it's not going to stay on your property and you're going to affect someone else," said Neal Calton, vice president of engineering for Sunbelt Environmental Services.

Environmental toxins are most damaging when they reach the groundwater.

"It takes a small quantity of chemicals to spoil millions of gallons of water," Farrar said.

This could lead to enormous sums for clean up, he added.

Melton emphasizes the advantages of property awareness when a business is considering a piece of real estate.

"Risks can be managed," she said. "As long as you can define what the environmental liability is and the environmental risks within a reasonable margin, then people can plan and make decisions."

She added, "you need to know what you're getting into. A lot of time knowing those things up front can help you negotiate a purchase price."