There are many potential pitfalls to lenders and buyers when purchasing previously used property for redevelopment. These issues range from financing to market conditions to environmental issues that can rise up and completely change the economic proforma of a transactions. This presentation briefly touches on some key concepts to address in these types of transactions.

1. Environmental Issues in Secured
Transactions
Daniel S. Schleck, Esq., P.E., CHMM, C.E.S.
Halleland Habicht, P.A.
33 South Sixth Street #3900
Minneapolis, Minnesota 55402
A Professional Association
(612) 836-5500

2. A Professional Association
OVERVIEW
 Real Estate Issues
 Operations
 Contract Provisions
 Pricing and Alternatives Risk
Management

3. A Professional Association
General Provisions
 Attorney/Client Privilege
 Scope Definition
 Contingencies
 Requirements of Lender

4. Real Property Evaluation
1. Title Issue
2. ASTM Due Diligence
3. Non-ASTM Considerations
4. New Federal Legislation
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5. Title Issues in Environmental Due
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Diligence
Leased vs. Owned
Past Owner uses
Seller’s Business

6. 1527-00 is the Standard for Phase I
Items included in Review:
Property History
Adjoining Property History and Use
Review of Regulatory Databases
On-site Review of Property
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ASTM Due Diligence

7. Non-ASTM Scope Considerations
1. Asbestos Building Materials
2. Lead Based Paint
3. Wetlands
4. Mold
5. Radon
6. Lead in Drinking Water
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8. The Small Business Liability Relief
and Brownfields Revitalization Act
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of 2002
 New Standards for Phase Is
 Clarification of the Innocent
Landowner Defense
 Exempt Bona-fide Purchasers from
Liability
 Definitions of Bona-fide Purchaser

9. What if an Issue Arises?
 Conduct a Phase II Assessment
1. Intrusive Soil and Groundwater
Sampling
2. More Expensive than a Phase I
3. Should have plan for closure prior
to initiation
4. In Minnesota, seek protection of the
MPCA Voluntary Investigation and
Cleanup Program
5. Insurance
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10. Environmental Concerns in Business
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Acquisition
1. Permitting
A. NPDES – Wastewater
B. Air
C. Stormwater
D. Noise
E. Wetlands
2. Permit Transfer
3. State and Federal Reporting

11. A Professional Association
Contract Provisions
1. Asset Only Acquisition
Continuing Business Enterprise
2. Definition Section of Agreement
3. Express Allocation of
Environmental Liability
4. Representation and Warranties

12. Pricing and Alternatives to Risk
Management
1. Price Adjustment
2. Regulatory Protections
3. Environmental Insurance
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13. A Professional Association
Regulatory Protections
1. Voluntary Investigation and Cleanup Program
A.No Association Letter
B.Off-Site Source Determination Letter
C.No Further Action Determination
D.Certificate of Completion
E. Proposed (Voluntary Party Certificate of
Completion)

14. A Professional Association
Environmental Insurance
1. Cost Cap
2. Third Party Liability
3. On-Site and Off-Site Issues
4. Specific Contaminant
5. Change in Law