18 Feb The Need for Speed: Hastening Project Closure
As an environmental consultant in a highly regulated industry, ESA’s scientific studies must be conducted in full compliance with a regulatory process which can, at times, be lengthy. But there are proactive strategies that YOU, the client, can apply to help expedite project closure.
Make Time Irrelevant
This applies to people who intend to sell their industrial and commercial properties. As discussed in a prior e-newsletter, identify if environmental issues exist and address them before you list the property for sale. It is a fact that properties with no environmental issues sell faster and for higher prices than those with environmental impacts.
Be Responsive
When ESA issues proposals and change orders, sign them upon receipt. Many clients do this. And some do not. Some clients take weeks, months, and, in some cases, years to return a signed, executed copy. While there may be good reasons for the delay, often the delay is a matter of avoidance. And, to be candid, that’s okay, too. But if you want to hasten your project, return submittals as expeditiously as possible.
Don’t Hang Your Hat on Prior Regulatory Approvals
People commonly assume that their property is in good shape because they previously received regulatory sign-off on an environmental project. These people are often dismayed to learn that old approvals may no longer be valid. This, too, was addressed at length in a prior e-newsletter.
Here is the simple truth: closure approvals are good on the date they are issued. There are a series of reasons why this may be so:
- The cleanup standards may have changed
- The environmental regulations may have changed
- The closure may have been for a specific area of concern and not site-wide
- Activities subsequent to receipt of the closure approval may have created new impacts.
Let’s assume that a seller received a Response Action Outcome (RAO) on February 1, 2018. This approval was not only issued by a Licensed Site Remediation Professional (LSRP), but it was a site-wide RAO in full compliance with the very latest regulations and standards. Can a buyer rely upon this? The answer is maybe. You and your environmental consultant need to know and understand what activities may have occurred in the months following issuance of that RAO. In many circumstances, nothing has occurred that would invalidate that RAO. But prudence dictates that you know for sure. Why? Because once the buyer closes, they become the Responsible Party. So, if there is an environmental issue that needs to be addressed, it becomes their obligation to remedy.
Choose a Remedial Approach that Combines Speed with Innovation
When remediation is needed, almost invariably it is quicker and less expensive to excavate and dispose of impacted soil. And this becomes complicated when other factors exist. For example, what if the groundwater is also impacted? What then? What if some of the soil impacts extend beneath a building? And what if all or some of the soil disposal can be avoided? ESA uses innovative strategies to address these complications. Examples include a special form of groundwater removal, shoring of structures to permit soil removal from beneath the structure, and compliance averaging of analytical data and the use of Thiessen Polygons to obviate soil disposal. The sooner these alternatives are identified and discussed, the sooner the site can be remediated.
A Special Note for Opportunity Zone Investors and Developers
Opportunity Zone investors and developers must meet three mandatory time deadlines if they choose to buy a property in an Opportunity Zone (OZ).
- Following the sale of an asset, an investor has 180 days to deposit all or some of those funds into a Qualified Opportunity Fund (QOF).
- The QOF then has 180 days to deploy at least 90% of those funds.
- If the QOF buys a property, the fund manager has 31 months to “substantially improve” the property, beginning after the date of acquisition. This means that building(s) must be improved by more than 100% of their value.
Thus, environmental compliance must be completed in a timely fashion as well. In order to do that, it is imperative that Opportunity Zone investors and developers understand and comply with the suggestions described above. Failure to remediate within 31 months could invalidate your Opportunity Zone benefits.
Miscellaneous Ideas to Hasten Your Project
Sometimes when performing due diligence, we know there will be some form of subsequent investigation required. It could be sampling, or it could be a geophysical investigation. Under this circumstance, the investigations can be done the same day as the initial site visit. Doing so will not only save money, but it can save time as well – often a month or more.
Sometimes higher initial laboratory costs can save time and money. For example, the NJDEP requires that soils that exceed impact-to-ground water screening levels be subject to a second analytical test. That second test usually must be conducted within 14 days, meaning that the first test must be completed faster than the standard laboratory turnaround time. This incurs a laboratory surcharge. However, the increased initial cost saves time and money because a second mobilization of field equipment and personnel would be avoided.
Divulge everything you know about your site. Some clients withhold information regarding their property’s history. The due diligence process is thorough and is designed to find hidden issues. Thus, clients who are forthright and generous with what they know invariably see their projects completed in less time and at lower cost.
Some people prefer to find an LSRP with little or no backlog. This could be a serious mistake. Experience counts. The best LSRPs have a backlog. Does this mean that you should never use a relatively inexperienced LSRP? No, of course not. But you must trust your consultant to make such decisions on your behalf. Therefore, ESA recommends that you start your project early and remain patient while we bring your project to closure in the most expeditious way possible.