Environmental Due Diligence Case Study #2

Environmental due dilligence is something we GOS strongly encourages for our fueling facility clients. Below is a client case study that testifies to the importance of Environmental Site Assessments.

The Site
A property in an Atlanta suburb was utilized as a family owned and operated retail fueling facility and repair shop from 1949 until it closed in 1975. The property was subsequently redeveloped into a fast food restaurant and operated as a successful franchise for twenty years. When the property owner passed away, the estate put the property on the market to be sold. A client eagerly purchased the property without conducting any environmental due diligence, calculating that he would easily recover his investment within a few years and reap substantial profits in the years to come from an established tenant. 

The Response
After ten years of leasing to the fast food franchisee, the lease was up for renewal at the same time the property owner was approached by a national drug store chain about selling the property. The drug store company conducted environmental assessment activities and found not only that the soil and groundwater beneath the property showed petroleum contamination, the former USTs had never been removed, and the USTs were located partially beneath the fast food restaurant building.

The Result
The presence of environmental contamination on the property killed the sale to the drug store company, and under USTMP rules this contamination was required to be reported to the USTMP. The USTMP determined that the property owner is 100% liable for the costs of all corrective action activities at the site with no reimbursement from the Georgia Underground Storage Tank Trust Fund. Additionally, the fast-food tenant refused to renew the lease on the property because it violated the fast-food company’s national franchisee guidelines to operate a store on a contaminated property.