Research and Development Property Transfer
Location: Menlo Park, California
Context: Real Estate Transaction
A commercial/light industrial property houses laboratory operations for two Fortune 100 technology firms. The 1.5-acre parcel, in a prime Silicon Valley location, offers 48,000 square feet of leasable space, but prior tenant activities caused contamination, resulting in remediation costs exceeding $1 million. The property sale was delayed for years, at great expense, because of litigations to resolve cost allocation liability.
The contamination was due to spent laboratory products being poured down the facility’s waste drains, which eventually leaked from the underground clarifier. The leaking clarifier contributed to soil and groundwater contamination in the upper, non-potable, water-bearing zones both on-and-off the property and downgradient of the property. A highly protected, deeper drinking-water aquifer, located in proximity to the site, was not affected, but necessitated the involvement of multiple local, regional, and state regulatory jurisdictions.
TerraSure Development, LLC provided a Guaranteed Fixed-Price Remediation (GFPR) contract for the property, which broke the litigation stalemate between the landlord and former tenants. Our firm rapidly worked toward site closure by addressing comments from the local oversight agency, the San Mateo County Health Department. A multidisciplinary team conducted additional indoor air sampling; a human health risk assessment; groundwater remediation; and several rounds of groundwater monitoring, to support closure through monitored natural attenuation.
Our firm’s GFPR contract offered protection from escalating cleanup cost liability. In addition, the GFPR agreement included a premium allocation toward Pollution Legal Liability insurance coverage, which provided full liability protection from unforeseen contamination, third-party injury and property claims, and regulatory re-openers. The previous owner sold the property, and subsequently transferred our firm’s guarantee to the new owner.