ENVIRONMENTAL PROPERTY ASSESSMENT

Shuswap Land Services offers the services of an experienced environmental science graduate with 18 years of experience dealing with real property issues. All phases of the environmental assessment process, and the valuation of environmentally impaired property can be provided on a fee for service basis.

 There are four phases to the actual environmental assessment reporting (Phase I through Phase IV). A brief summary of these Phases are described below; 

Phase I - Historical Data Review

Phase II - Site Sampling and Analysis

Phase III - Detailed Remedial Planning

Phase IV - Remediation and Assessment 

Shuswap Land Services will undertake to provide a Phase I Site Assessment which will either culminate in a report finding a property to be unimpaired, or a report outlining the extent of potential contamination with recommendations as to the extent of further environmental investigation. Should there be a need to conduct Phase II (site sampling and assessment) and Phase III (Detailed Remedial Planning), Shuswap Land will undertake to conduct sampling and analysis through third party contractors. Once sampling and analysis has been undertaken then a detailed remedial plan can be initiated. Only when a detailed remedial plan has been put forward, complete with cost estimates, can the ‘impaired property value’ be addressed.

The Phase I Environmental Site Assessment includes;

a review of all available historical information pertaining to the geological, hydrological, land use and ownership status of the subject property,

an aerial photographic study and a reconnaissance tour to examine current environmental conditions

site and building inspections (reconnaissance visit) consisting of an inspection of the inside of the building, as well as a tour of the outside grounds and adjacent properties (observing general compliance to present environmental regulations.

examine any evidence of past or current pollution or unsafe practices.

presentation of findings in a narrative report format.

1. Is the property located in an area with a history of environmental problems?

2. Is the property located on or close to any ecologically sensitive area? (i.e.: wetlands, flood plain, endangered species area, etc.).

3. Do the buildings discharge effluent directly to surface waters ? (streams, creeks, rivers, lakes)

4. Does the property have the storm sewers to handle drainage or does it rely upon surface runoff?

5. Have soil samples ever been taken from this property and analyzed for hazardous chemicals?

6. Have ground water wells been recently analyzed for contamination?

7. Are there any environmental conditions present, not previously mentioned, that need to be evaluated for any potential environment risk?

 

The overall objective of the Phase I assessment is to provide the client with an understanding of the past, current and possible future environmental status and any associated concerns related to the subject property. The Phase I assessment reporting provides the necessary information and recommendations to proceed to the Phase II level (sampling and analysis) if required.

Once the nature of the contamination is understood, it must be understood how it is perceived or evaluated by the relevant publics. This would include, at a minimum, the regulatory authorities and the participants in the market where the value of the subject property is determined. This makes it clear that it is not "actual" contamination but the perception of the contamination by the market that is of concern. Three major areas of response must then be investigated; 1) to what extent has the contamination affected the financeability of the property?, 2) how may the contamination be remediated, and 3) for which of the risks associated with the property may the indemnification be obtained (issues of timing, costs and liability are inherent in each of these investigations). Once answers to the above noted questions are ascertained, it would be possible to estimate utility and marketability of the property - A) is it leasable and at what rates, B) can it be marketed in its "as is" condition. Considerations of utility and marketability will, in turn, allow an assessment of the property’s value-in-use and value-in-exchange (market value).

Many valuation models for contaminated sites have been developed that essentially reflect the general proposition that value reflects an anticipated future stream of benefits discounted at a return necessary to attract investors to that opportunity. In the case of contaminated property the future benefit stream is depressed and the required rate of return increases. These effects occur over time, and the pattern they establish has to be accounted for in establishing the value of, or damages to, the impaired property.

The valuation of a contaminated property is a complex process that requires understanding of all Direct Costs (net income, lost income, remediation costs, and indemnification costs) and Stigma (all of the risk, hazard and uncertainty-related consequences of contamination - which increase the cost of attracting capital to a contaminated, or previously contaminated property).

JOHN D HARPER   AACI, PAg, SR/WA, CES   - personal profile