New Build on former Iron Foundry. What Questions do I ask?
Mindy JensenPro Member
BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votesOK, not me but a friend is buying a new build that is being built on a former Iron Foundry site.
My environmental engineer friend said to ask for the Closure Report and get a copy of the Clean Closure Letter.
Any other advice?
You (or better yet, have your environmental engineer friend) review the Phase 1 (and phase 2 if there is one) Environmental Site Assessment of the property. The phase 1 will identify known and possible environmental concerns given site history, database record searches, site inspection, interviews, etc. Depending upon the results of the Phase 1 ESA, a Phase 2 may been completed. A Phase 2 is more targeted and invasive, and includes actual collection and laboratory analysis of soil and/or other potentially contaminated media.
My experience with foundry sites is that you'll almost certainly have heavy metal impacts and sometimes other contamination associated with heavy industry (cleaner/solvent spills, etc.) But it is also possible that these issues have already been remediated prior to the new building being constructed. Thus your engineer suggested that you seek out a copy of the No Further Action required paperwork. Always keep in mind, of course, that such a letter applies only to what contamination was known about. There can always be areas of other contamination lurking somewhere on site.
Also check to see if there are any deed/property restrictions associated with the site. Sometimes you are allowed to leave contamination in place if its reasonable that it won't be disturbed - but they put deed restrictions in place to ensure that it does in fact remain undisturbed.
Check state and epa databases, deed restrictions
You (or better yet, have your environmental engineer friend) review the Phase 1 (and phase 2 if there is one) Environmental Site Assessment of the property. The phase 1 will identify known and possible environmental concerns given site history, database record searches, site inspection, interviews, etc. Depending upon the results of the Phase 1 ESA, a Phase 2 may been completed. A Phase 2 is more targeted and invasive, and includes actual collection and laboratory analysis of soil and/or other potentially contaminated media.
My experience with foundry sites is that you'll almost certainly have heavy metal impacts and sometimes other contamination associated with heavy industry (cleaner/solvent spills, etc.) But it is also possible that these issues have already been remediated prior to the new building being constructed. Thus your engineer suggested that you seek out a copy of the No Further Action required paperwork. Always keep in mind, of course, that such a letter applies only to what contamination was known about. There can always be areas of other contamination lurking somewhere on site.
Also check to see if there are any deed/property restrictions associated with the site. Sometimes you are allowed to leave contamination in place if its reasonable that it won't be disturbed - but they put deed restrictions in place to ensure that it does in fact remain undisturbed.
You (or better yet, have your environmental engineer friend) review the Phase 1 (and phase 2 if there is one) Environmental Site Assessment of the property. The phase 1 will identify known and possible environmental concerns given site history, database record searches, site inspection, interviews, etc. Depending upon the results of the Phase 1 ESA, a Phase 2 may been completed. A Phase 2 is more targeted and invasive, and includes actual collection and laboratory analysis of soil and/or other potentially contaminated media.
My experience with foundry sites is that you'll almost certainly have heavy metal impacts and sometimes other contamination associated with heavy industry (cleaner/solvent spills, etc.) But it is also possible that these issues have already been remediated prior to the new building being constructed. Thus your engineer suggested that you seek out a copy of the No Further Action required paperwork. Always keep in mind, of course, that such a letter applies only to what contamination was known about. There can always be areas of other contamination lurking somewhere on site.
Also check to see if there are any deed/property restrictions associated with the site. Sometimes you are allowed to leave contamination in place if its reasonable that it won't be disturbed - but they put deed restrictions in place to ensure that it does in fact remain undisturbed.
Bob is spot on and unless your friend has extensive experience with environmental remediation he shouldn't touch it with a 10 ft pole (for plenty of reasons, not the least of which is that the bank is going to require all of the info listed above and it can get quite expensive).
Phase I alone is going to run at least a few thousand bucks and he has to get one in order to be a bona fide prospective purchaser under CERCLA.
EDIT: Guess I should add a caveat that it sounds like the friend is just buying from someone who already developed the site. Presumably that person already did all of this, but you know what they say about assuming things. And, for what it's worth, I'd never have my family live on a site that was almost assuredly contaminated (at least at one point). No way, no how. Not worth it.
These guys know what they're talking about. Your friend should not be in this without a very experienced partner with deep pockets.
Check to see if capital is available for this project. I know many banks will be very warry about lending on property in this case if it is not for continued used. Just an example there was a rather sizeable commercial development that was done on an old landfil and a few years after the project finished the buildings started to sink and there was methane seeping out of the ground making everyone sick. The bank ended up having to eat tens of millions of dollars on the deal.
Hello Mindi! I agree with your friend to get all legal mumbo jumbo about its legality and what you must do to correct it and any known or unknown and known pollution and what you'll have to do to cure it. Ask about any positive comments or negative ones from governmental employees or consultants. I would also talk the most experienced local building inspector about anything that they will expect getting all inspections approvals including a final.
I would ask the seller if there are any negatives on that site or unusual comments or if you should expect negativity or governmental letters on that site. There can be some new ones on your problems so all contracts should allow you to walk away without a penalty.
