Through strategic planning and phased implementation, BEC was able to achieve critical pre-sale objectives that helped turn a potential break-even sale of environmentally encumbered property to a net real estate sale of over $8.0 million.
During a potential buyer’s due diligence in 2010, the client, a family trust, was notified that the subsurface soil was impacted by PCBs, pesticides, and volatile organic compounds (VOCs) due to the past presence of a pesticide manufacturing plant. Based on the potential buyer’s initial investigation, the projected costs associated with the cleanup activities were projected to potentially be in excess of the total asset value. Subsequently, the site fell out of escrow.
In consultation with outside counsel, the client hired BEC to: 1) Develop a strategic plan to limit overall client financial impacts, while allowing for the liquidation of the real estate asset as quickly as possible; 2) Complete the site investigation and manage the regulatory oversight program; 3) Implement necessary remediation activities to allow for the sale of the property; and 4) Implement post-sale remedial program as necessary.
BEC’s due diligence efforts resulted in acquiring an environmental insurance policy, which included coverage for any future agency-directed groundwater remediation and future third party claims. Following this, BEC managed the regulatory process and helped the client to secure oversight agreements with the City of Vernon (site-wide) and the EPA (PCBs impacts). BEC then developed a Remedial Action Plan and negotiated a cleanup program that involved removing impacted soil in the upper 4.0 feet to carcinogenic risk levels. Soil beneath 4.0 feet did not need to be removed and the entire Site was to be deed restricted for-commercial/industrial use. A separate component of the RAP involved the implementation of a soil vapor program to reduce VOCs and limit potential indoor air impacts. In addition to the RAP, a risk-based PCB cleanup program was negotiated with the EPA which required the re-moval of PCBs that exceeded 100 mg/kg and the installation of an engineered asphaltic cap.
The soil excavation work and engineered cap installation was completed in 2015. The vapor extraction system was also installed and initiated in 2015. Report completion for the shallow soil removals and agency closure of shallow soil is still pending. However, based on the completion of this work and the results obtained, the client was able to sell the Site for a purchase price of approximately $10 million in November 2015. Total environmental costs to date are approximately $1.5 million and the vapor extraction activities are scheduled to continue throughout 2016.
