Business Facilities - June 2008 - (Page 51)

costs such as those to remove an underground storage tank and any associated contamination may be deducted from the purchase price or be a condition of sale. LEGAL IMPLICATIONS, TIMING Environmental concerns often have legal implications, such as when laws are violated or regulatory contamination limits are exceeded. Also, there may be regulatory requirements regarding how such violations must be addressed. This, in turn, may pose significant civil and criminal liability, as well as financial liability. It is important to understand how and why a law has been violated, or a regulatory limit exceeded, whom the responsible party is, and what is necessary to correct the violations. An environmental consultant can provide insight, but legal counsel experienced in environmental matters should be retained to provide the ultimate direction and guidance regarding such matters. Because due diligence efforts can produce sensitive information that often should be kept confidential, the consultant should be notified which parties, both internally and externally, with whom information can be shared. Legal counsel may advise that due diligence efforts be conducted through their office, as this may offer protection from discovery as an attorney work product. Effective environmental due diligence can take the form of a basic Phase I ESA with a completion time of a few weeks. However, depending on the property, the purpose, and the user’s risk tolerances, it can also include Phase II environmental sampling and analyses, remedial cost estimation, and an environmental compliance audit—steps that take months to complete. It is important to be familiar with the timelines and generalized costs of the various levels of environmental due diligence. Here is an environmental due diligence checklist: • Request an SOQ to identify a consultant with the experience, certifications and expertise to conduct the due diligence. • Discuss with your consultant the intended use of the due diligence and the plans for the property; choose a scope of diligence that addresses all environmental concerns/liabilities. • Confer with an environmental attorney regarding the legal implications of environmental concerns identified during due diligence assessments. • Retain an environmental consultant early in the real estate transaction process. TYPICAL COSTS AND DURATIONS* FOR ENVIRONMENTAL DUE DILIGENCE: Task ASTM Phase I ESA to identify evidence of oil or hazardous materials (OHM) releases and threats of releases to the environment Phase II Limited Subsurface Investigation to confirm the presence or absence of the environmental issue Review of existing environmental documentation to identify the potential for OHM releases and threats of releases to the environment Environmental professional in-depth review of existing documents to identify data gaps, uninsured liabilities, and regulatory compliance Calculation of financial reserves for asset retirement and environmental issues required by the Sarbanes Oxley Act Comprehensive environmental regulation compliance audit Approximate Duration Two to four weeks Approximate Cost $2,000 – $4,000 Three to six weeks Two to six weeks $6,000 – $40,000 $1,000 – $2,500 One to three weeks $1,000 – $10,000 Two to four weeks Two to four weeks $3,000 – $10,000 $3,000 – $10,000 *ALL CITED COSTS AND TIMELINES APPLY STRICTLY TO SINGLE LOCATIONS. SIGNIFICANT ECONOMIES OF SCALE SAVINGS IN TIME AND BUDGET OCCUR WHEN MORE THAN TWO LOCATIONS ARE ASSESSED CONTEMPORANEOUSLY. BUSINESS FACILITIES 51

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Business Facilities - June 2008 Contents First Word Snapshots Metro Spotlight: Austin, TX The Greening of America Winds of Change in the Berkshires Hot Logistics Locales Metro Spotlight: New Mexico Borderplex Hollywood on the Louisiana Bayou Idaho: Gem State's Economy is Glittering Mayor's Reports New Brunswick, Canada's Export Leader Virginia: Where Business and Fun Come Together How Green Is Your Site? Maine's New Maritime Marketing Message Corporate Moves: Alabama Advertiser Index Ask the Expert

Business Facilities - June 2008

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