Kelly Macsymic wrote a column last week that provided a synopsis of recent amendments to Saskatchewan’s Environmental Management and Protection Act, 2010 and how they affect commercial real estate sales.
What I’m writing about here isn’t new and hasn’t effectively changed with the new-look act.
A recent example from my neighbourhood
A small gas bar located at a local retail strip mall was demolished this fall. I observed as they commenced “the dig.”
It became obvious as the size of the hole kept expanding they were doing more than just pulling out underground petroleum holding tanks. The remediation process to remove hydrocarbons from soil due to leaking tanks can sometimes be a lengthy one.
The contaminated soil needs to be transported to a site approved by the province’s environment ministry. It’s necessary to dig away a portion of the soil and complete a chemical test of the remaining site to determine if any hydrocarbons remain. This process is repeated several times until all of the contaminated soil has been removed.
By the time they were finished, the hole was 30 feet deep. When a hole is about three storeys below grade and you see a groundwater barrier being installed immediately adjacent to the public roadway, you know contamination extends into that road.
I’m told that in Saskatoon the groundwater typically flows in the direction of the Saskatchewan River. In this case that would mean it’s highly probable the hydrocarbons extend into the road and on to a single-family residential lot located directly across the street from this old gas station.
A couple of examples from past experience
I sold a motel located on a main arterial street in Saskatoon about 15 years ago. A Phase II assessment revealed contaminated soil at the front of the site.
Again, we encountered a situation where the contamination didn’t stop at the property line but extended under the roadway. There are many examples of contaminated roadways in this city.
Here’s another interesting one. It was discovered that an old fuel tank that supplied a back-up generator had been buried under an 11-storey apartment block.
When we discovered that tank had leaked and left the soil under the apartment contaminated, I was sure my sale was dead.
A financial institution won’t lend money unless the environment ministry has stated the site meets its standards. Because at that time there was no technology available to remediate the affected area, the ministry approved the site.
My client was able to secure financing and complete the sale.
Why the double standard?
Why is it necessary for a commercial property owner to remediate its site but the City of Saskatoon is required to do nothing? The single-family homeowners of the property mentioned above may never know they’re living on contaminated soil.
There’s no requirement to obtain an environmental assessment when purchasing one- or two-unit dwellings.
A potential long-term solution
Bioremediation involves the use of either naturally occurring or deliberately introduced microorganisms or other forms of life to consume and break down environmental pollutants in order to clean up a polluted site.
I’ve found a credible local engineering firm that’s experienced in this newer science and am working with it on two different properties to determine its effectiveness.
I understand the huge disruption that would be caused if cities were required to remediate public property. The bioremediation injection process is far less intrusive and far less expensive than the old “dig and dump” method.
If you own contaminated property that’s currently not saleable, give me a call. There may be a feasible solution available to you that will recover that lost equity.