Using real property for commercial purposes is relatively common. Sometimes, developers acquire previously residential or agricultural property to establish business facilities. Other times, the land may already have commercial zoning but may have seen limited development thus far.
When a company has plans to erect offices or manufacturing facilities, approval from the local government is usually necessary. Additionally, the project, as well as business operations, must comply with all relevant environmental regulations. The business must ensure it does not take on any unexpected environmental obligations. Conducting an environmental risk assessment is often a key component of developing a commercial real estate parcel or redeveloping an existing facility to suit new purposes.
Why environmental risk assessments matter
Executives and entrepreneurs excited about business opportunities may not consider the secondary consequences of their plans. For example, they may locate a parcel that seems perfect for a new factory. As they begin planning for the expansion of their operations, they could overlook how previous water or soil contamination might affect their company’s use of the land.
In some cases, prior business operations could have contaminated soil or local groundwater sources. People might eventually blame the current business for that contamination. Alternatively, the company may need to invest substantially to remediate existing environmental risk factors.
Professional environmental risk assessments help identify risk factors that could impact the value of the land and how a company utilizes the parcel. It may be possible to address any concerns uncovered before developing the parcel.
Other times, businesses may recognize that the costs involved in appropriate development could prevent the company from operating profitably. The existence of a nearby landfill could cause issues. So could prior dumping at the location, especially informal dumping by local residents or businesses. In some cases, it may be possible to ask the party selling the parcel to share responsibility for cleanup efforts and expenses, especially if there are hazardous materials present.
Acquiring an environmental risk assessment, reviewing the results and adjusting development plans with a skilled legal team accordingly can be helpful when it comes to managing this complex process. Business leaders with appropriate support can minimize their exposure and risk when establishing new facilities, renovating existing facilities or preparing to develop vacant land.
