With more and more infill sites being developed, environmental due diligence on potential development sites has become the norm, partly due to the insistence of lenders and municipalities.
"When business people dig into a would-be acquisition's books to make sure nothing's amiss with the numbers, it's known as due diligence. Increasingly, developers are having to undertake a similar procedure to assess the environmental status of property they want to purchase.
The procedure's formal name is Environmental Site Assessment (ESA). This three-phase process begins with a historical review of a property's past uses (ESA1), which usually costs about $2,000. Phase two (ESA2) involves drilling core samples and performing laboratory tests on soil and groundwater; fees range from less than $5,000 to upward of $20,000. Phase three (ESA3), the remediation, or cleanup, can cost anywhere from thousands to millions of dollars.
Although banks were the first to push for ESAs, municipalities are now increasingly likely to require them. Recent legislative changes have made municipalities directly liable for environmental issues related to property."
FULL STORY: Caveat developer: What lies beneath?
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