Environmental Concerns at Industrial Property


To determine whether to purchase a property in an area of historical industrial use, investors relied on Farallon to research potential sources of contamination.

A 5-acre undeveloped lot in an industrial area of Salt Lake City was offered for purchase and development as an industrial park.  Prior to acquiring the property, Farallon’s client needed to know whether potential environmental concerns were associated with the property, and turned to Farallon to perform environmental due diligence investigation work.  Visual inspection of the property did not reveal evidence of hazardous materials.  However, during its historical research, Farallon identified the former use of an adjacent property for munitions manufacturing and storage, with a known release of hazardous materials.  After reviewing Farallon’s research and conclusions for the property, the client elected not to proceed with the purchase.

“Effective due diligence requires research skills as well as good observation skills,” emphasizes Principal Regulatory Specialist Tina Huff.  “In this case, historical research was a key aspect of the assessment.”

Farallon’s search of historical databases identified tank-like features and a large pile of material on the property in aerial photographs taken within the past 10 years.  Topographic maps from the 1950s through the 1990s depicted several structures labeled “chemical tanks” on an adjacent property.  Farallon identified this adjacent property as a historical munitions plant that had extended onto the property being considered for purchase. 

Historical reports obtained by Farallon related that silver and cadmium were detected in soil samples collected at the property in the mid-1990s.  Because buyers are legally responsible for remediation of hazardous substances even if the contamination was caused by a previous owner, the client elected not to purchase the property. 

Based on the thoroughness and accuracy of Farallon’s environmental assessment and reporting, the client has trusted Farallon to conduct environmental due diligence and business risk evaluations at more than 30 existing and proposed facilities nationwide.