Auto Dealership Property Transfer
Location: Bridgewater, New Jersey
Context: Real Estate Transaction
Negotiations had stalled between a major automotive-financing company and a realty firm during a redevelopment property transaction. The transaction was postponed when unresolved environmental issues associated with the property were discovered.
Prior environmental due diligence surveys found petroleum hydrocarbons, hydraulic fluid, and cleaning solvents in the soil and groundwater. In addition, there was no regulatory documentation to indicate whether former underground-product storage tanks were properly removed from the property.
TerraSure Development, LLC reviewed the site-specific environmental and regulatory documentation and provided a Guaranteed Fixed-Price Remediation (GFPR) contract for the site, which promises regulatory closure and indemnity for all parties from cost, risk, and liability. The remedial actions performed to address the environmental issues included removing hydraulic lift systems, excavating the impacted soil, extracting groundwater that flowed into the excavations, backfilling the excavations with clean fill, and replacing the concrete floor.
Our firm submitted a report to the state, explaining the adequacy of removing the source area contamination and providing evidence to support the position that no further groundwater remediation was required. The state requested one final confirmation well sampling that resulted in the issuance of site closure. The soil excavation and groundwater monitoring were completed successfully and on schedule.
The real estate loan was secured in a short time frame as a result of our firm’s well-built GFPR approach and strategic use of environmental insurance. As the GFPR contract guarantees, no change orders were issued. Our firm conducted the soil excavation, which allowed the groundwater cleanup goals to be met, and was able to forgo groundwater remediation. The investor benefited through an early site closure and did not have to pay groundwater remediation milestone payments until site closure was granted.