Guest Column

Mitigate the risk and expense of buying a gas station

September 24, 2012
| By Doug Brown |
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While there is environmental risk associated with gas stations, dry cleaners and other suspect sites, the laws enacted and equipment used at newer gas stations significantly reduce the probability of having a major issue.

Legislation passed in the late 1990s required all gasoline storage tanks to meet strict new guidelines for protection against corrosion, spills and overfills, which forced many to be replaced with double-walled, fiberglass fuel storage tanks with leak-detection sensors.

However, if the gas station has been operating for a lengthy period of time, chances are there will be underground contamination. Even with 15 years of ever-tightening regulatory requirements, there will be spills and releases — it's just a fact.

For these reasons, a Phase I Environmental Site Assessment is the best money you can spend if you are buying a gas station. Why?

Risk management

Michigan’s environmental law, which is more commonly known as “Polluter Pays,” provides an exemption from liability for contamination that was present before you purchase a property, but only if you follow the statutory procedures. The buyer may own any unidentified problem on the site once he or she closes, unless the new owner conducts pre-purchase due diligence, starting with a Phase I ESA.

This also enables the buyer to qualify for the innocent landowner's defense to the federal Comprehensive Environmental Response, Compensation and Liability Act for a property purchase.

A Phase I ESA includes reviews of aerial maps, chain of title, Sanborn maps, underground storage tank maps and a walk-through of the property to look for telltale signs of leakage or spillage.

The Sanborn Maps were originally created for assessing fire insurance liability in urbanized areas in the United States. The maps include detailed information regarding town and building information in approximately 12,000 U.S. towns and cities from 1867 to 2007.

But what you're really buying is the expertise of the firm that will perform the due diligence and its ability to find potential environmental impacts associated with a site. The best firms are relentless and become “detectives” when inspecting the site and know that the most valuable information comes from interviewing neighboring property owners, former employees, sellers and really pressing the municipality on specific details in order to daylight all possible impacts associated with the site to mitigate their client’s risk and expense.

What if it’s contaminated?

If your property has soil or groundwater contamination, either from past use of the property or migration from a neighboring property, you may have responsibilities to avoid making the contamination worse and to protect against exposures to contamination.

This is often as simple as maintaining a parking lot over contaminated soils, connecting to city water or fencing off the back lot. However, it could be as complicated as installing and maintaining engineered controls. The appropriate approach is dependent on the nature of the impacts and the intended future use.

Worth the cost

All too often a buyer will want to skip the Phase I ESA for a gas station site and proceed directly into a soil and/or groundwater investigation known as a Phase II ESA.

“I know it's contaminated; just take some borings” can be a shortsighted, expensive strategy, particularly if there is no available history on the site that will require the environmental consultant to conduct an extensive sampling program.

Be careful, because such a sampling program can drastically drive up lab fees that may not be warranted.

Doug Brown is director of development at ASTI Environmental, which has offices in Brighton and Grand Rapids. He can be reached at (616) 957-5601 or by email to dbrown@asti-env.com

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