Commercial Real Estate Transactions  

Recent trends in federal, state, and local law dictate that if a purchaser of real property fails to detect hazardous materials including petroleum hydrocarbons on the site before or during escrow, the cleanup can become the new owner’s responsibility.   A pre-transaction environmental assessment of the site assures owners, developers, commercial real estate professionals, government redevelopment agencies, and lending institutions that all due diligence activities related to environmental concerns have been executed in accordance with the most stringent industry standards.  Targhee’s objective is to provide our clients with the environmental information necessary to make an informed decision regarding a real property transaction and its on-going management. 

The purpose of a Phase I Environmental Site Assessment is to meet one of the requirements that will qualify a buyer for the innocent landowner defense under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).  The term “recognized environmental condition”  is used to establish a standard of good commercial and customary practice for conducting an environmental site assessment.  In its most common usage, “recognized environmental condition” means the presence or likely presence of any hazardous substance or petroleum product on a property under conditions that indicate an existing release, a past release or a material threat of a release into structures on the property or into the soil, groundwater or surface water of the property.  The term includes hazardous substances or petroleum products even under conditions in compliance with law.

Normally, the Phase I Environmental Site Assessment process can be completed within 15 working days.  In its report, Targhee focuses on factual information relevant to the property transaction and includes its professional opinion and conclusions.  Phase I Environmental Site Assessments are conducted by California Environmental Protection Agency Class I Registered Environmental Assessors. 

A confidential report provides each client with an accurate, thorough environmental profile of the subject property.  Upon request, Targhee can also address liability control strategies, investigate business environmental risks that may be associated with the property, and carry out a more detailed Phase II Environmental Site Investigation.  Each report is reviewed and approved by an experienced environmental attorney prior to its release to a client.  No one, unless authorized by our client, has access to the information provided.

If the results of the Phase I Environmental Site Assessment indicate strong evidence of contamination,  a client may ask us to propose a site-specific, effective, economical, and scientifically valid approach to examine the property further.  The goal at this point is to ascertain whether an environmental liability truly exists and, if present, what the potential economic costs associated with that liability are.  Targhee generally does not recommend groundwater sampling during the initial Phase II Environmental Site Investigation.  Contaminated groundwater flowing under a property is not necessarily the responsibility of the property owner.  Once the analytical results of the investigation are received, Targhee prepares a report detailing the approach used in conducting the investigation, the results of the soil analysis and conclusions.  This information is presented in a clear, concise manner easily understood by clients.

Business Environmental Risk Analysis bridges the gap between the Phase I Environmental Site Assessment and the Initial Study conducted under the California Environmental Quality Act (CEQA) or the National Environmental Protection Act (NEPA).  A Phase I Environmental Site Assessment can be expanded to include topics such as the presence of asbestos-containing materials, radon, lead-based paint, wetlands, regulatory compliance, cultural and historic resources, industrial hygiene, health and safety, ecological resources that may be impacted by development, and other risks that may have a material environmental or environmentally-driven impact on the business associated with the current or planned use of a parcel of commercial real estate.

Targhee is  frequently called upon to comment on property rehabilitation strategies and, where appropriate, present alternative and more cost-effective mechanisms for removal of chemical contaminants.  Clients range from prospective purchasers of small retail strips to national corporations with operations located throughout the United States.  If our client acquires a Brownfield, we often serve as oversight consultants during the remediation to ensure that our client’s interests are properly represented throughout the cleanup process.