This document summarizes the benefits of comprehensive environmental due diligence presented by Geo-Technology Associates, Inc. It discusses how incomprehensive due diligence can lead to inaccurate appraisals, unknown risks, failed deals, unhappy clients/lenders, lost revenue, and lost opportunities. It then presents two case studies highlighting how comprehensive due diligence helped mitigate risks and costs through additional assessments, regulatory coordination, and remedial actions.

1. Benefits of Comprehensive
Environmental Due Diligence
February 10, 2009
Presented by Geo-Technology Associates, Inc.
Geotechnical and Environmental Consultants

2. Your Host
Geo-Technology Associates, Inc.
Environmental and Geotechnical Consultants
 Founded in 1985
 11 offices in New Jersey, Pennsylvania,
Delaware, Maryland, Virginia, and North
Carolina
 150 employees
 Clients include commercial and residential
developers, builders, banks, government
agencies, and telecom
 Over 500 Phase I ESAs performed in 2008

3. Focus of Presentation
 The real estate market has changed
 Greater scrutiny of property transactions
 Greater need for accurate appraisals
 All real estate appreciates in value –
right?
 Benefits of comprehensive due
diligence
 Client first approach
 Overall cost savings
 Risk mitigation
 Client/lender satisfaction

4. Focus of Presentation
 Incomprehensive environmental due
diligence gives you the following:
 Inaccurate appraisals
 Unknown risk
 Failed deals
 Unhappy clients/lenders or both
 Lost revenue
 Lost opportunities

5. Detective Work
Case Study

6. Case Study
“Detective Work”
 Historical Uses
 Residential Block
 1981 Strip Mall
Constructed

7. Case Study
“Detective Work”
 Two Previous Phase I
ESAs
 “The Harbor Wash Tub”
 Drop off dry cleaning
only

8. Case Study
“Detective Work”
 Schematics for
Suprema Dry Cleaning
Machine

9. Case Study
“Detective Work”
 Well placed floor drain
 Standard exhaust
system

10. Case Study – Conclusions
“Detective Work”
 Deal is stalled
 Client needs additional time to evaluate
the REC – extension denied (for now)
 Owner has the following:
 Unknown risk
 Failed deal (for now)
 Owner is an unhappy client
 Potential lost revenue
 Potential lost opportunity

11. How Clean Do You
Want It?
Case Study

12. Case Study
“How Clean Do You Want It?”
 Based on the Phase I ESA findings, Phase II
recommendations are made to either:
1) Confirm the existence of a potential REC or
2) Evaluate the extent of contamination when a REC
is uncovered
 Also need to account for:
 Site conditions
 Client/lender risk tolerance
 Appropriate regulations

13. Case Study
“How Clean Do You Want It?”
 Client retained a firm to perform a Phase I ESA
 The firm was recommended by the lender
 Initiated a Phase II ESA due to stained soil and
other RECs

14. Case Study
“How Clean Do You Want It?”
 Phase II ESA indicated extremely high soil
concentrations
 Future use is a contractor yard

15. Case Study
“How Clean Do You Want It?”
 The firm also recommended entering
Maryland’s Voluntary Cleanup Program

16. Case Study
“How Clean Do You Want It?”
Examples of RECs

17. Case Study
“How Clean Do You Want It?”
Examples of RECs

18. Case Study
“How Clean Do You Want It?”
Examples of RECs

19. Case Study
“How Clean Do You Want It?”
Examples of RECs

20. Case Study
“How Clean Do You Want It?”
Examples of RECs

21. Case Study
“How Clean Do You Want It?”
 Client wants a second opinion
 Meeting with the lender and Client. The
following concerns are identified:
 How widespread is the on-site contamination?
 Is there off-site migration?
 Does the property need to be entered in the VCP?
 What are the cleanup costs?

22. Case Study
“How Clean Do You Want It?”
 GTA Scope of Work
 Phase II ESA included:
 Test pitting to evaluate vertical depth of petroleum impacted
soils – on-site contamination
 Soil borings converted to temporary groundwater monitoring
wells – off-site contamination
 Phase II ESA Results
 Petroleum contamination was surficial
 No groundwater encountered - contiguous clay layer
 Solid waste was placed on concrete slab

23. Case Study – Conclusions
“How Clean Do You Want It?”
 Generation of Opinion of Probable Cost
 Container and drum removal
 Petroleum impacted soil removal and disposal
 Sorting and removal of solid waste
 Lender financed the property using it as
collateral
 Client has a contaminate baseline study to
compare to future tenants

24. Case Study
“How Clean Do You
Want It?”

25. Case Study
“How Clean Do You
Want It?”

26. Case Study
“How Clean Do You
Want It?”

27. Focus of Presentation
 Incomprehensive environmental due
diligence gives you the following:
 Inaccurate appraisals
 Unknown risk
 Failed deals
 Unhappy clients/lenders or both
 Lost revenue
 Lost opportunities

28. Deep Harbour
Case Study

29. Case Study
“Cleaner Contamination?”
 Historical Uses
 Fertilizer Plant

30. Case Study
“Cleaner Contamination?”
 Historical Uses
 Fertilizer Plant
 Bulk Fuel Storage

31. Case Study
“Cleaner Contamination?”
 Historical Uses
 Fertilizer Plant
 Bulk Fuel Storage
 Auto Repair/Junkyard

32. Case Study
“Cleaner Contamination?”
 Historical Uses
 Fertilizer Plant
 Bulk Fuel Storage
 Auto Repair/Junkyard
 Adjacent Properties
 Bulk Fuel Storage
 Dry Cleaning Factory

33. Case Study
“Cleaner Contamination?”

34. Case Study
“Cleaner Contamination?”
 1926

35. Case Study
“Cleaner Contamination?”
1950’s

36. Case Study
“Cleaner Contamination?”
1950’s

37. Case Study
“Cleaner Contamination?”

38. Case Study
“Cleaner Contamination?”
 Historical ESA’s identified “minor contamination”
 Legal advice – no Voluntary Cleanup Program (VCP)
 Client acquires the property
 Full construction begins

39. Case Study
“Cleaner Contamination?”
 “Major” contamination found
 Changed legal counsel, retained GTA (Phase I and II
ESAs), and entered the VCP
 Eventually, eight USTs, hundreds of linear feet of product
piping, and over 6,000 tons of impacted soil were removed
 Now a “Responsible Person” (no public funds available)
 Perception issues
 Potential reduction in sale price of residential units
 Delay charges from GC due to contamination

40. Maryland’s VCP
Submit Proposed RAP
Response Action
Public Participation Process and Plan (RAP) Process
RAP Review (75 day review)
RAP Modifications
Revised RAP Received
(30 day review)
RAP Approved
RAP Implementation and Completion
Certificate of Completion (COC)

41. Case Study
“Cleaner Contamination?”
 Worked with
regulators to:
 Address contamination

42. Case Study
“Cleaner Contamination?”
 Worked with regulators
to:
 Address contamination
 Address public perception
 Identify off-site issues
impacting the site

43. Case Study
“Cleaner Contamination?”

44. Vapor Intrusion
ASTM Standard E2600-08

45. Case Study
“Cleaner Contamination?”
 Worked with regulators
to:
 Address contamination
 Address public perception
 Identify off-site issues
impacting the site
 Implement a Remedial
Action Plan

46. Case Study
“Cleaner Contamination?”
 Worked with regulators
to:
 Address contamination
 Address public perception
 Identify off-site issues
impacting the site
 Implement a Remedial
Action Plan
 Received Closure Letter

47. Case Study – Conclusions
“Cleaner Contamination?”
 Damages in excess of $2 Million dollars
 WHY?
 No current Phase I ESA prior to purchase
 Poor legal counsel – not familiar with the VCP
 Remediation
 Groundwater treatment system
 Remediated vapor issues in Buildings Q & R
 Removal of impacted soil and USTs

48. Thank you!
Any questions?