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WOJTOWICZ: It pays to know environmental requirements

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Jean Wojtowicz

Q: Something caught me by surprise when I was buying a piece of business property: I was required to pay for an environmental audit that turned up residual contamination from a long-ago business on the site. My company in no way will contaminate the land, but I can’t open until the property is deemed acceptable. Is this right? And what are my options?

A: Unexpected problems add to the headaches of opening or relocating a business, and we hear a lot about the hang-ups of required, but annoying, environmental investigations.

However, an evaluation is necessary whenever a lender is financing real estate to make sure the property is environmentally clean and will not cause more damage to the environment in the future.

There are plenty of stories about private and public projects that have little or no impact on the environment—such as florist shops or libraries—being delayed or stopped by old environmental contamination.

You might ask the reasons environmental regulations exist and apply to you. After all, your business is not one with the obvious potential environmental impact of, say, a dry cleaner or service station. But lenders, including the Small Business Administration, must guard against being responsible for remediation costs in the future. Decades-old pollution can cause problems years after the offending business is gone from the site.

Environmental regulations are fairly explicit. Most commercial lenders and the SBA have a set of requirements the borrower/business owner must meet. If you are financing property, meet with your lender. Then, locate a licensed and insured environmental investigator to lead you through the process.

It may not seem fair for you, as the current owner of a commercial location, to be saddled with remediation costs from 30 or 40 years ago. But the outcome of a successful investigation and remediation will be worth your respect and your attention.

___

Wojtowicz is president of Cambridge Capital Management Corp.

 

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  1. With Pence running the ship good luck with a new government building on the site. He does everything on the cheap except unnecessary roads line a new beltway( like we need that). Things like state of the art office buildings and light rail will never be seen as an asset to these types. They don't get that these are the things that help a city prosper.

  2. Does the $100,000,000,000 include salaries for members of Congress?

  3. "But that doesn't change how the piece plays to most of the people who will see it." If it stands out so little during the day as you seem to suggest maybe most of the people who actually see it will be those present when it is dark enough to experience its full effects.

  4. That's the mentality of most retail marketers. In this case Leo was asked to build the brand. HHG then had a bad sales quarter and rather than stay the course, now want to go back to the schlock that Zimmerman provides (at a considerable cut in price.) And while HHG salesmen are, by far, the pushiest salesmen I have ever experienced, I believe they are NOT paid on commission. But that doesn't mean they aren't trained to be aggressive.

  5. The reason HHG's sales team hits you from the moment you walk through the door is the same reason car salesmen do the same thing: Commission. HHG's folks are paid by commission they and need to hit sales targets or get cut, while BB does not. The sales figures are aggressive, so turnover rate is high. Electronics are the largest commission earners along with non-needed warranties, service plans etc, known in the industry as 'cheese'. The wholesale base price is listed on the cryptic price tag in the string of numbers near the bar code. Know how to decipher it and you get things at cost, with little to no commission to the sales persons. Whether or not this is fair, is more of a moral question than a financial one.

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