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01/27/1998 15:12 5124841903 GARY MCLEAN INC PAGE 02 12251 Tech Raid, SHyer Spring.. Maryland ~0904 (301) 622-1900 Environmental Factors To Consider With Plant Locations What Concerns Are 1here Parties involved i~ the ,selling .or purchasing of commercial real estate must conduct environmental as- sessments In today 9 business chmate. Over the last year, we have received an increa~in~ number of caUs from in.dlv~duaI9 who have been unable to buy or sell a drycleaning plant because of SOli or groundwater contammatIon. Because of strong environmental laws and the raising of the public's awareness, many financIal institu~ tions are requiring environmental audits such as soil and water testing. Some states are al80 requiring en. vironmental audits which specify that contaminated soil or water, if found, must be cleaned up before a sale can take place. This bulletin will help potential buyers aod sellers of drydeaning plants look at some of the key NEnvironmental Pactors" in picking a plant location. Federal and State Laws Related to Contaminated Propercy The 1980 Comprehensive Environmental Response Compensation, and Uability Act (CERCLA), better known as Superfund, states that individual companies can be made individually or coHectively responsi. ble for environmental cleanups of waste. While there are many environmentaJ laws that cover notifica- tion requirements for spills, accidental release, etc., nowhere is the issue of cleanup and liability stated a!i clearly as it is in the Superfund law. The first state in the country to have a state propercy transfer law detailing environmental cleanup re- sponsibilities was New Jersey, whose law became effective on December 31. 1983. Since then, Connecti. cut, Pennsylvania, Minnesota, and West Virginia have enacted similar laws and several others are await- ing passage. Additionally:, several states now require sellers to notify prospective buyers about current or past presence of oJ'l-site hazardous waste materials (including petrofeum); and/or require supporting docu- mentation stating that no ha~dous waste discharges have occurred on the site. Financial Institutions: Worried About Loans on Contaminated Property What about Anancial institutions, investors, and other 6nancially.interested parties? In todays business climate, they are particularly concerned about potential environmental problems with real estate. Firtan. dally-interested parties usually have a great deal at stake and they want to protect tl1eir investment; they do not want a buyer to beUy up in the wake of environmental problems. Most importantly, however, is that if a property has reverted to a bank or lender through foreclosure or other means, and contamination is discovered, BPA can require the bank or lender to pay for all cleanup costs.. and this has been occurring! IFI knows of a number of cases where banks are now insisting on soil analyses of plant locations as a condition of lending money or of refinancing! A bill recently introduced by Senator Jake Garn (R-UT) would amend Superfund to protect innocent lenders and federal banking agencies from liability for cleaning up contaminated property. As the Ameri- can Bankers Association stated. "Instead of exposIng themselves to lawsuits, many lenders wl1l simply avoid making litigation-prone loans to a long list of enterprises" ---and drydeaning was amOJ'lg the indus- tries mentioned as "litigation-prone." Factors Affecting Existing or New Plant Locations In addItion to factors related to laws or other "outside" influences On plant propertr' there are a number of facors related to plant locations that plant owners have a greater degree of contro over-and should be aware of. Soil T estJng Soil tests should be done for the presence of perchloroethylene (perc) and/or other solvents prior to pur. chase. Por example, if a person buys a store in a strip shopping center and two years later perc is found in ...._--'- t-o t-r ..... ~ C r:- r- m tJ Z ~ ~ 2: z . ..... I' (; c C l > ..... C ~ --< ---. r- tr: c: ~ u: t'"""' > ~ ..,.: < tI: z o . 0"