The number one factor plaguing real estate transactions at contaminated sites is cost uncertainty. This concern often reaches the point that remediation cost estimates delay or prevent transactions, even when they would be “financial noise” in other circumstances.
It’s almost a universal truth that the only thing we know for sure about cost estimates is that they’re wrong. Everyone has their favorite horror story about dramatic cost overruns, and we know several. The reasons range from incorrect investigations, through low ball competitive bids, to the legitimate difficulty in subsurface characterization of historical contaminant releases. Reasons aside, the risk to “expert” consultants from financial errors is minimal, as costs are simply passed on to their clients. Is it reasonable for businessmen carry all the risk?
Dr. Harm Gross, the owner of Next Environmental Inc., challenged the appropriateness of this several years ago when his firm began fixing the cost of each step of contaminated site investigations. This resulted in a ten-fold explosion in demand for investigations. Over the past several years his Team extended the concept to various types of remediation projects whereby one payment was all that was needed to apply for a Certificate of Compliance. Now, for the first time, remediation cost certainty means the cost of environmental compliance is only a line item on a spreadsheet.