There are numerous occasions throughout New Jersey (and other states or countries for that matter) where the placement of an engineering control is selected as a remedial measure. Typically, this is agreed to by an owner of the property as part of a remedial action, and can come in many forms including (but not limited to) caps, slurry walls, pavement, vapor barriers, and building slabs. Even a chain link fence can be considered a viable engineering control, provided access to the “restricted area” is eliminated or reduced.
As expected, the cost to implement a specific measure is contingent upon the type of contaminant, size of the affected area, and the long-term or end-use of the property. Capital costs can be quite steep for some complicated applications, but most estimators are quite adept at identifying them up front (and are careful to add a hefty contingency…just in case). However, there are times when even the most skilled estimator gets hung up on the details of the remedy AND overlooks the long-term Operating & Maintenance (O&M) costs associated with the project. These costs, combined with regulatory fees could end up exceeding the actual costs of the remedy, especially for those that are on the smaller scale.
Here’s a brief example:
Commercial Site (Contaminant of Concern: Historic Fill)
Installation of Engineering Control (25,000 SF of Asphalt Pavement, Clean Fill, etc.): $150-$200,000
Environmental Consultant Oversight, Project Management, Deed Notice, Reporting, Etc.: $40-60,000
Long-Term O&M & Permitting
Environmental Consultant Inspections, Project Management, Annual Repairs, Reporting, Etc.: $300-400,000
Remedial Action Permit fees (NJ), Financial Assurance (FA), Etc.: $75-$150,000
All things considered, the primary reason for the significant “long-term” cost is essentially that the remedy must be maintained for the life of the engineering control or for a 30-year duration. Now, would it have made more economical sense to simply remove and/or treat the affect area rather than continually paying those fees…year…after year…after year? Possibly. For larger properties with much more significant environmental liabilities, long-term costs may be insignificant compared to the anticipated ROI. In either scenario, it is incumbent upon all practitioners (e.g. environmental professionals, engineers, property owners, developers, etc.) to capture all remedial costs early in the process…even the “lifetime” costs associated with a restricted use remedy. **It’s also extremely beneficial for professionals in the real estate industry to have a generalized knowledge of the potential costs in their selected location and area of expertise.
Stay tuned for future posts on this topic in the upcoming weeks…as there are plenty of lessons and unique observations to be shared, which could ultimately make our jobs easier and each of us a little wiser as we move to revitalize those properties in the need of the most help.
We hope that you find these posts informative, and relatively useful, and your feedback is always welcome. For further information, or for assistance on your next project, please don't hesitate to contact us at tfrancis@cardinallsrp.com, or www.cardinalLSRP.com.