Environmental Answers

The Small Business Administration has recently updated the SOP 50 10 5 (C) standards as of 10/01/2011; making them now the SOP 50 10 5 (D) standards. Below are the major changes that have been implemented for environmental due diligence:

Multi-Unit Building

Initial action for a property located in a multi-unit building will be determined by the loan size for the property. Should the loan amount be less than or equal to $150,000 then the environmental investigation may begin by using an environmental questionnaire. Environmental questionnaires are basic questionnaires that identify the potential environmental risks of the property and they do not have to be reviewed by an environmental professional unless they are shown to have a possible risk associated with the property. Should the loan exceed $150,000 then an environmental questionnaire and a Records Search with Risk Assessment report must be conducted.

Order an RSRA:www.phasei.com

Indemnitor cannot be the borrower or operating company on a contaminated site

Should the subject property be identified as contaminated or has had remediation occur, then the borrower or the operating company cannot be the indemnitor for the subject property. An analysis from the CDC must still be done on the indemnitor to assure that they have enough assets for them to honor the indemnification agreement. This prevents malpractice between lenders and the environmental companies performing the remediation.

Special use facilities – Lead Risk Assessments for properties built prior to 1980

Residential care facilities that are occupied by children must now undergo a lead risk assessment and lead water testing if the facility was built prior to 1980. This requirement is still required for nursery schools, daycare, and childcare facilities. Residential care facilities built prior to 1980, which do not house children, no longer have to conduct a lead risk assessment or lead water testing. It is important to remember that a lead risk assessment does not involve XRF machine testing. A simple dust wipe sample and visual inspection by a certified lead inspector is what is required along with the lead water sampling.

Equipment Testing
When performing an environmental investigation, an environmental professional must also include whether or not the gas station is determined to be compliant with all state requirements for tank and equipment testing, should any requirements be in place. Until this is complete, then the loan cannot be disbursed. Should any of the equipment be defective or leaking ,then it must be replaced.

Further changes have been done to the SOP standards. For the new SOP standards please click on the following link which will open a PDF file: Click Here

In the spirit of Thanksgiving, PHASE ONE INC. is thankful for your allowing us to do  business with you. Whether it has been the e-TSA, SBA Records Search with Risk Assessment, Phase I Environmental Assessment, or any of our other quality reports and services, we hope that we have met or exceeded your standards. We would also like to thank you for the referrals to your clients and colleagues and for supporting our blogs.

We hope you have a great Thanksgiving weekend and receive some well deserved rest. We look forward  to continue working with you!

Sincerely,

PHASE ONE INC. Staff

                The Scotsman Guide is a popular magazine that writes about the current real estate market. Its mission “is to be the leading media provider of key resources and tools for the mortgage origination industry.”  They actively search and publish educational articles that help mortgage professionals online and in print. They provide wonderful and interesting articles that help those who read it succeed in their real estate endeavors, whether it’s commercial or residential.

                In their July edition Phase One In was chosen to write an article on the environmental due diligence process and a revolutionary program called the “Step Wise” program. This article’s tile is “Follow the Wise Steps of Due Diligence” and was written by Mr. Eric Kieselbach, President of Phase One Inc. He writes about this new program and how those involved in the commercial property transaction can benefit from this new program no matter what the loan type or amount is. 

                The article is now available online and we highly encourage everyone to read it because it will not only answer many questions, but it will also expose you to new information that may have been unknown. We invite you to review the article and to comment or ask questions. As a convenience we have provided the link to the July issue of the Scotsman Guide. Enjoy!

http://www.sg-comdigital.com/comdigital/201107ce#pg27

Free Environmental Risk Summary Report
by admin – May 24th, 2011
In honor of our involvement with an IPhone App we are offering our Environmental Risk Summary Report!

We are offering the report only today to anyone who would like to try our revolutionizing report. We are the only company to ever offer this type of report.

The following is a description of the report:

ENVIRONMENTAL RISK SUMMARY REPORT

The Environmental Risk Summary Report is a quick environmental risk assessment tool. It is a one-page report providing the environmental risk for your specific property location and the surrounding properties in the area. This report displays a map with your site location and the surrounding site locations within a ¼ mile radius that have been identified on environmental databases. The map has colored triangles representing the level of environmental risk associated with the specific locations.

The key for the Triangles:

Red: This location has a current known environmental contamination.

Yellow: This location has been listed by a governmental agency/historical records; it does not always represent an environmental risk and/or concern.

Green: This location may have an active environmental permit or has had contamination and/or handled hazardous materials on-site in the past.

Your property location

The report provides the results of searching through thousands of records in order to locate and map any listings for your property location site or any nearby properties in the surrounding area. These records are contained in numerous lists and databases of various regulatory agencies nationwide. Upon ordering this report, it will be sent to you electronically via e-mail–a quick and efficient way to receive the information you need!

Upon receiving your one-page Environmental Risk Summary Report, if the results indicate your property or nearby property has a RED or YELLOW TRIANGLE, you may want to consider ordering a LenderCheck Report or a Records Search with Risk Assessment Report.

Uses: Environmental Risk Assessment Screening Tool for collateral property for loan

Pros: Quick, Easy to interpret, Cost Effective

Cons: No Details

According to the latest Allen Matkins**/ UCLA Anderson Forecast Commercial Real Estate Survey, there is sign of an optimistic turning point for the California Commercial Real Estate Industry for the year 2013. 

This recent  survey was conducted in November and December of 2010.   This survey did provide confidence that there is a turning point for this industry in 2013.  An earlier survey in June of 2010, indicated that there would be a turning point in the California Real Estate Industry in 2012.  The result of the recent November/December 2010 survey is the possibility of a turning point in 2013.

In addition, according to the Allen Matkins/UCLA Anderson Forecast Industrial Space Survey for industrial space, there is similar optimism throughout California.  Based on this survey, the Bay Area will have increased growth in the technology sector.  The Los Angeles and Orange County areas, as well as the Inland Empire will also have increased growth, but not as significant as the Bay Area.

One of the reasons for this optimistic viewpoint is that commercial real estate does not follow the economy directly. The effect of an economic downfall or rise in the commercial real estate industry occurs later than the economy.  As the economy begins to rise again, the commercial real estate industry will try to maintain speed. The Senior economist for the UCLA Anderson Forecast, Jerry Nickelsburg, indicated “After eighteen months of pessimism about office and industrial markets we have now seen six months of optimism.”  Historic economic patterns also provide  further evidence that this turning point may occur by 2013.

This optimistic viewpoint is very beneficial to a market where the delinquency rates for loans have been increasing. As companies continue to grow once again with their new found wisdom, they will make better decisions.

**The Allen Matkins Leck Gamble Mallory & Natsis LLP law firm was founded in 1997. This is a law firm is based in California and serves many of its counties and performs work in many different practices (i.e. environmental, intellectual property, taxation, and many more).  The UCLA Anderson Forecast is often used and cited for the economic outlooks in California.

http://www.bizjournals.com/sanjose/news/2011/02/03/forecast-sees-commercial-real-estate.html

As the year 2011 is starting to gain its momentum back the Federal Government is looking forward to contributing more to the small businesses in hopes of moving the economy forward. Mr. Ben Bernanke said Thursday of last week to The Wall Street Journal that the economy should expand at a healthy pace of between 3% and 4% this year, but that still won’t be enough to cut a high unemployment rate.  While the government has been attempting to help small businesses grow earlier this year by helping them achieve their financial needs, they will continue offering new ways to help not only the small business owners but the banks that are initially distributing the funds.

The government is aware that the risk of some of the loans that are presented to banks are too high of a risk for the bank to take on and so it has become apparent to the United States government that they have to aid the banks in mitigating some of the risk by taking on some of the risk themselves. It is important for the borrowers to still keep in mind that even though the government is making a conscious effort to help them meet their financial needs for starting and maintaining their business that they will still need experience and plans on how their business will grow in order to qualify for the government’s help.

A large amount of companies that we have in the United States are small businesses yet they only make up a very small amount of the income that will help the economy.  The main goal of the federal government this year will be to concentrate on smaller businesses given that the larger businesses have already seen their loses from the recession be recovered in a significant way, while smaller companies have yet to fully recover.

Recently there was an extension on the Small Business Jobs Act deadline.  This extension was done in hopes to stimulate the economy even further by helping small businesses attain finance the initial costs of starting the business. The deadline was moved from December 1st to March 4, 2011. People who read the news immediately rushed to receive the benefits that the stimulus was offer in, which included an increase in the guarantee rate and reduced fees for the application.

As the first week of the new year ends it has been declared on January 5, 2011 by the SBA website that the funds for this program have been exceeded. This is due to the high volume of loans that were being processed. Those who were not able to receive this funding were entered into the Small Business Jobs Act Queue. Those in the queue will have to wait until the funds are once again made available. They must first be preapproved and then once approved they will move into the queue with a 75% to 85% guaranty rate and incurred guarantee fees.

Lately, several of our clients have asked about the Small Business Administration’s recent changes related to the environmental requirements in the SBA’s SOP 50 10 (5). As a result, we wanted to present an overview of these new requirements. Continue reading »

With the launch of our new blog, our goal is to provide ERS Customers with industry information and education related to environmental regulations, policies and requirements.