Certain land or property sites could come with contaminated soil deeming them what is referred to as a Brownfield Site. Here’s how to determine whether you’re dealing with one of these sites and if there is any potential for future use or development.

What if you’re looking at a property that could be a potential brownfield site. So, brownfield sites are former industrial commercial properties that have or may have contaminated soils. So, what are these former sites? Potentially former concrete plants, industrial facilities, warehouses that use chemicals.

The two main culprits that you’ll probably come across in real estate are gas stations and then laundry mats. So, gas stations, the tanks below the ground sometimes will deteriorate seeping gas into the soil and contaminating the soil. And then laundry mats, all of the chemicals and soap sometimes can contaminate a site.

But, something to look out for as well, it’s not just the site that that laundromat or gas station or concrete plant was on, it could be neighboring parcels as well. We were looking at purchasing a property in Elgin right off of Highway 290 and it was right next to a gas station. So, I’ve mentioned this in previous videos, but you always want to conduct a phase one when you’re buying any commercial property. Even if you’re buying raw land in rural areas, you may want to conduct a phase one as well. You can also look at historical Google Map photos or Google Earth photos and those go back to 1982, I believe, So, you can see if there were any holding tanks or pump jacks or refineries, etc. But, at the very least, you want to conduct a phase one. This is going to cost you anywhere from four to six thousand dollars and take about four to six weeks. So, what will happen is an engineer, a professional engineer, will conduct that phase one and look at historical records to see if there are potential contaminants in the soil.

Now, if they come back and say, “hey, we do believe that there are potential contaminants in the soil,” you have to move to a phase two. A phase two is going to cost you significantly more and it’s going to take more time. But, they actually take bore samples of the soil and then send them off to a laboratory to be tested.

What happens if those tests come back positive? Well, then you have to go to phase three which is mitigation and planning. Now, if you’re looking at a brownfield site, you know, think old cities right, they have a lot of industrial buildings that used to be around Chicago, New York, for example. A lot of people are repurposing these buildings, turning them into potential housing or repurposing them for other uses. Now, these sites are contaminated, so it comes with a lot of risk as well. But, you want to work very closely with the local authorities, as well as, licensed engineers to really create a mitigation process. You can plan on this being very costly and timely.

You know a common joke, but it’s completely true, is that it usually costs far more than you budget and takes far longer than what you budget, But, it can be a great opportunity because, you know, in any investment, thinking like a contrarian sometimes it sometimes gets you a higher profit. A lot of people will avoid these sites because it does come with a lot of risk. But, if you think like a contrarian and you take the necessary steps in place you can turn a brownfield into a beautiful real estate development and repurpose it. Of course, always consult with experts and, again, I highly recommend that you create a large contingency in your budget and also a contingency for time.

Feel free to reach out to us with questions or other topics you’d like to see covered.

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