Diligent Phase I Environmental Site Assessments (ESAs) to identify and quantify potential environmental risks — plus plans to maintain, or restore property value — are typically required of lenders and buyers in transactions involving impacted properties.
Let’s take a look at both of these imperatives: maintaining and restoring property value. Because once a property’s environmental risks are defined, there are some essential strategies that can be employed to manage those risks.
First up: maintaining value.
Investigating a property’s past and present environmental quality provides a good baseline to measure future conditions against—and sound environmental management plans can reduce the potential for future releases of contaminants.
For example, SPCC (Spill Prevention and Control and Countermeasure) plans, and similar tools, are designed to prevent pollution by carefully detailing practices for the storage, handling and disposal of contaminants. Containment and spill response are other critical elements of such plans.
The Florida Department of Environmental Protection (FDEP) has used this approach in regulating petroleum and dry cleaner sites. Cleanup programs were established to provide financial assistance for eligible facilities with existing problems (note that not all sites are eligible). Florida Administrative Codes require secondary containment measures for on-site contaminants, as well as full compliance with waste management principles. Financial responsibility must also be demonstrated.
These rules and programs have offered a solution to existing property concerns, as well as a method to prevent future concerns. They can help maintain a property’s value by keeping environmental conditions from deteriorating, and by safely containing potential contaminants.
Next blog: restoring the value of impacted properties.