Buying a Contaminated Site
The Seller was not about to reduce their price, even if their site was contaminated!
Problem
The site was in a great location, 7 years left on a lease with a long term tenant and positive cash flow. The listing was several months old and a couple of Buyers had fallen out of feasibility due to environmental contamination.
There was a No Further Action (NFA) letter from 15 years prior and the environmental consultant was confident the site would require additional remediation that remained in the ROW and under the building.
An interested Buyer put the property under contract and quickly needed to solve the gap in value created by the cost of remediating the pollution.
The Seller refused to lower the asking price.
Solution
The Buyer engaged Restorical to begin our Task 1 research. The archaeologists began working in earnest and delivered a preliminary trigger analysis prior to tying up the property and identifying viable insurance before the end of feasibility.
Restorical presented a comprehensive strategy to obtain insurance coverage and worked with the Buyer and legal counsel to educate the Seller. With all parties comfortable, an assignment of claims was agreed upon and placed into the Purchase and Sale Agreement.
The Buyer was able to successfully close on the property with an assignment of claims to fund the needed remediation.
Impact
The Buyer was able to acquire this contaminated property without reducing the Sellers value. Simultaneously, the Buyer secured the historical insurance policies to fund any future remediation.
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