Building for sale

[Gregor 4,846]

There is a large building for sale just west of town. My son rented the building for a short time to fix the slide out on his 32" pull behind. It has large overhead doors on each end. You could easily drive a 40' Winnebago in from each end and park them there for the winter. It has an office area, a small kitchenette area, and a full bath. This place has been on my mind for a long time. 60K The downside is, it use to be a fertilizer plant. The ground itself scares me. No telling what it might be contaminated with. If the EPA should come along some day and say "You have a problem", it cold get real expensive, real fast. The last time I was in it, there were dozens of mopeds, motorcycles, trikes, of all makes and models. All tore down to some extent. Some a little, some a lot. The guy that owns it, has had it for at least 10 years, so maybe I am worried about nothing. How does a person protect himself from any future EPA problems like this?

[Achto 27,571]

14 minutes ago, Gregor said:

How does a person protect himself from any future EPA problems like this?

 

Have the owner pull some soil samples and have them tested before you buy it. This would be the only way to know for sure that there is nothing in the ground.

 

Or - If no body has said anything to him in the last 10yrs, I don't think it would be an issue.

 

60k is a good price for a building that size. I messed around too long & missed out on a huge building practically in my back yard that went for 50k. Smack my self in the head every time I look out my back window at it. 

[Pullstart 62,870]

Just imagine, if a cleanup is needed, there’s reason for a hoe machine and a loader machine, a dumper machine and various other landscape attachments!

[ri702bill 8,320]

I have little practical experience with this area, only local stories here related to closed gas stations and salvage yards. A couple of items to consider...

Are there drinking water wells in the area within a mile radius? If so, do they have a "clean" certificate for usage?

Are there any wetlands nearby - rivers, streams, etc.?

If problems arise with either of these and can be traced back to this site - your losing battle begins.

 

We had an ENTIRE neighborhood here in RI back in the 1980's whose drinking water wells were contaminated with ever increasing amounts of gasoline - there was a Mobil station off the highway about 3/4 mile from there - only one within a 5 mile radius. The Station owner had to pay to have 2 underground tanks pressure tested - they both passed fine. The problem got worse - seems the original owner did a little "midnight excavation" and installed a large steel tank behind the building in the ground - failed the pressure test miserably. End result - Mobil paid for all cost to dig up all the tanks and demolish the station. The State declared ALL the wells unusable and all the houses were condemned. A SuperFund Site was declared - all the home owners were forced to vacate and take the "generous ??" buyout offer and go. ALL the houses were demolished, wells capped, 6 feet of soil removed, incinerated and replaced with new fill - now just an overgrown field....

Bill

Edited December 9, 2021 by ri702bill

[ri702bill 8,320]

Part II - the Salvage Yard. Back in the 1980's my Father-in-law ran a repair Garage here in town and had a good friend that owned a property with 2 cinder block buildings  - one a 4 bay garage and office, the other a 3 bay Body Shop, 2 houses - one move in condition, the other a knock down, along with about 100 or so junk cars in their Salvage Yard Business. The owner wanted to retire and we were offered to buy the entire shebang turnkey at a very attractive price - I had just bought my house a year earlier and had no equity in to speak of and my Mother in law flat out refused to "live in a Junk Yard". We passed on the deal - another family bought it and ran it for years. He wanted to retire and the Town was interested in buying it to raze it all and put in a highrise facility for the elderly. No way - all those years of hundreds of cars dripping all the fluids into the ground contaminated everything - HE would be responsible for all the cleanup prior to the sale. He is since deceased, his family continues to run the facility - one they can probably never sell ........

[squonk 41,111]

And, the area around the building may be fine now, but how about 5 or 10 years from now? I would think any bank that would give a mortgage on this property would insist on the area tested before approval of said mortgage.

[Handy Don 12,225]

5 minutes ago, squonk said:

And, the area around the building may be fine now, but how about 5 or 10 years from now? I would think any bank that would give a mortgage on this property would insist on the area tested before approval of said mortgage.

If a reputable bank will mortgage it, I'd have some confidence.

[Gregor 4,846]

10 minutes ago, Handy Don said:

If a reputable bank will mortgage it, I'd have some confidence.

Actually, I was planning on financing it, but maybe it would best. If everything goes completely south on me, maybe I could simply walk away. Or maybe not.

[WHX?? 48,815]

If there were a problem I would think the price would drop dramatically. If I were to buy it I would have it checked out first. I don't think any kind of insurance would cover it if there were an issue but wouldn't cost anything to check that route.  

[Handy Don 12,225]

6 minutes ago, Gregor said:

Actually, I was planning on financing it, but maybe it would best. If everything goes completely south on me, maybe I could simply walk away. Or maybe not.

Time to create a shell company to own it!

[SylvanLakeWH 25,557]

In Michigan, you would do a Baseline Environmental Assessment (BEA). This assesses the condition of the property at time of purchase. It also allows future differentiation of existing vs. new contamination. That way there are protections for new owners.

 

You also would do a Phase 1 environmental survey. This evaluates the history and probable contamination issues. Based on that, a Phase 2 may then be necessary. These are all done by environmental engineering firms.

 

Search these terms and you will get a bunch of stuff to consider… not sure of state to state differences…

Edited December 9, 2021 by SylvanLakeWH

[Gregor 4,846]

In Illinois we have Title Companies, and Title insurance. I'm not sure if this problem would fall under that or not. Something to check on.

[wh500special 2,183]

1 hour ago, Gregor said:

. How does a person protect himself from any future EPA problems like this?

 

You can't.

 

Part of the CERCLA (Superfund) law is that anybody who has or ever had any ownership of the property can be held liable for contamination whether they had anything to do with the contamination or not.  So if the site is dirty and you own it, it could be your problem.  Even if you can prove the contamination isn't from you, that doesn't necessarily get you off the hook.

 

This seems unfair, but it's held up in court.  The obvious intent is to make sure any and all owners do the right thing.

 

You can have the site tested.  Don't go for a low bidder on this.  Have a couple of environmental engineering firms give you a bid.  If you or the seller hire one they'll drill a bunch of cores all around the property and look for things.  It will be expensive.  They usually have to have some idea what they are looking for or they'll do a shotgun approach and test for everything which is expensive.

 

Test the groundwater under the site.  Look for buried treasure in the form of waste piles or underground tanks.

 

We just went through this at work a couple of years ago.  We have a big building on a 13-acre site that used to be operated by a giant paper-making company.  A crew spent many days here sinking core drills and wells all over the place looking for trouble.  They located an underground tank we didn't know we had.  We were fortunate to find nothing embarrassing or illegal on the grounds and the ownership breathed a huge sigh of relief.

 

Chances are, unless the fertilizer people were scumbags the site will be clean enough to be within regulations.  I can't think of anything fertilizer-related that is especially pernicious and agriculture related activities in general are held to very lax standards compared to every other industry.

 

Get a lawyer to give you sound advice.  Do not listen to real estate agents, buddies, or guys on the internet (ahem...). 

 

Steve

 

 

[SylvanLakeWH 25,557]

9 minutes ago, Gregor said:

In Illinois we have Title Companies, and Title insurance. I'm not sure if this problem would fall under that or not. Something to check on.

Those are for insuring clean title - not environmental contamination etc… You can have a clean title, fully insured, on a contaminated property…

 

I would never buy a commercial building without a BEA and Phase 1(2)…

 

Check with the City / township. They will have records that are public regarding past uses, past code enforcement problems, known contamination etc… Check zoning too, so you know what limits are in place on use of the property…

 

Perhaps use a realtor as a buyers representative. They are obligated to disclose known issues…

 

caveat emptor

 

Good luck!

 

[squonk 41,111]

When they were building our new ER, The contractors dug up an old fuel tank in the existing parking lot. Still had some diesel in it. The site was and apple orchard/nursery up until the 50's Luckily a farmer wanted the fuel out of it so he drained it and the excavator flattened the tank and threw it into a roll off. Lesson is you never know what's there! 

[Gregor 4,846]

1 minute ago, SylvanLakeWH said:

caveat emptor

This just might be a bad idea all the way around. Testing the surrounding soil/water could be very expensive. Even then I'm not sure I am guaranteed of no problems. Forming a corporation to own the property, to protect my personal property, is no easy task either. Maybe I should keep looking.

[Pullstart 62,870]

I recall in my early 20’s some friends of the family purchased their “forever” land with plans to build.  Ended up the farm land used to be owned by a pickle factory and they found it was mainly used as a dump.  There were so many spots full of glass jars and whathaveyou fluids, the property was condemned and they were stuck with it.

[Achto 27,571]

1 hour ago, Gregor said:

In Illinois we have Title Companies, and Title insurance.

 

These companies are there to do the research and insure that there are no other open claims to the property.

[Lee1977 6,659]

Not knowing what products they sold besides fertilizer I would not take the chance. Is there any metal in the building, columns, roof structure. Fertilizer and metal don't get along with each other.

[wh500special 2,183]

As an added anecdote to this exchange...

 

Back when I lived in South Bend, I worked for a manufacturing company in a town about 20 miles south of there.  They had been in business since the 1950's and had experienced enough growth that they had outgrown their initial building.

 

In the mid 1990's they were looking to expand significantly.  Some of the processes took up quite a bit of space, so finding a big, open building was a must.  Since they provided component parts to many OEM industrial and agricultural equipment manufacturers they had to keep a lot of inventory in stock to make sure these customers were able to provide fast response to breakdowns in the field, production changes, etc.  So they also needed decent warehousing space for finished product.  The input raw materials for the manufacturing processes were big and bulky and it was economically smart to buy as much as possible in truckload quantities to get price breaks.  So, they needed a lot of storage space for that too.

 

They looked around quite a bit and really didn't find any great options.  But there was this one plant on the south side of South Bend that seemed to check all the boxes.  It was big.  It had a lot of open spans.  It had a lot of loading docks.  It was already divided up for manufacturing and warehousing.  It had lots of power.  Great location.

 

Really, an ideal place. And the price was apparently a pretty decent deal.  South Bend was certainly past its economic boom by that time and there really weren't many manufacturing outfits looking to move into the area.  What was there was either already dead, gone, or was limping along. 

 

The last box to check was to have the site assessed for environmental problems...and it wasn't good.  Nothing insurmountable, but cleanup is always expensive and there's always the risk of discovering that the initial findings were just the tip of the iceberg.  It appeared that the prior owner had lost a few things into the ground over the years.  Really not a surprise since things were different in the 1960's than they were in modern times.  What was acceptable practice then just doesn't fly these days. and with CERCLA in play, it pays to be careful and minimize risks and liabilities..

 

So, they moved on and ended up building a new building to really suit the manufacturing needs.  Worked out well.

 

Another buyer came along for the other site and transformed it into their operations.  I imagine that the seller and they probably came to some agreements on what to do with the environmental issues.  The outfit that occupies the building now is by all accounts and reputation a world-class operation.  Just like the former occupant: Wheel Horse Products inc.

 

Steve

Edited December 9, 2021 by wh500special

[Tractorhead 9,064]

I have a question even if it maybe sounds dumb,
but can such issue not be insured?
maybe at a Envoiremental insurance or an separate risk insurance?
Shure it depends on the ammount to charge, but if you have a RV there and i.eg. Oilpan breaks or similar.

 

 

... just a thought
 

 

[bc.gold 3,403]

I  recently posted in a forum  thread where you add your suspect soil sample into saturated salt water, hydrocarbons separate from the soil if any are present they'll float.

 

[Tractorhead 9,064]

2 minutes ago, bc.gold said:

I  recently posted in a forum  thread where you add your suspect soil sample into saturated salt water, hydrocarbons separate from the soil if any are present they'll float.

 

Sounds interesting.

 

[bc.gold 3,403]

Fertilizer plant you say, well any place weeds and grass doesn't grow I would expect nitrate contamination.

 

Check with the land registry to see if EPA has registered a environmental infraction against the property, if so was any action taken to remediate the soil.

 

Take soil samples add distilled water, shake vigorously let the fines settle out them test the water with nitrate testing strips.

 

Edited December 9, 2021 by bc.gold

[wh500special 2,183]

It's possible to devise ways to do some tests on your own, but there are standards that are followed to make statistical determinations and interpretations of how much of something might be present, how mobile it is, and where it's heading.  Certainly if you do a personal test and find something it would be a positive way to decide not to buy the place, but if you don't find anything it isn't really conclusive evidence that there isn't a problem.

 

I would expect the bulk of fertilizers would be inorganic material in the form of various salts.  Mixed in could be some interesting organic chemicals if they contained any pesticides or herbicides.  Those things might have some solubility in water or be in concentrations that you won't have an appreciable separation on the surface.  So the salt test probably won't be applicable here.

 

The nitrate tests would certainly work.

 

As for insurance for something like this, I've not heard of it but it probably doesn't exist.  Environmental fees and settlements can be huge sums of money and I doubt insurance companies would want to take the gamble.  The clients that would be interested in buying such insurance would also be those who have the greatest probability of needing to cash in a policy, so it's probably not a great business case.

 

Then again, people get paid to put videos of themselves playing video games online, so nothing should surprise us.

 

Steve