Environmental Due Diligence

After a well received Christmas break we are back into project work with a strong order book in 2017, and property transaction support work appears to be an increasing work stream for us with confidence in the region appearing strong since Brexit.

We have just completed Environmental Due Diligence for two large commercial/industrial sites located in the North East of England, one in County Durham, the other in South Tyneside.

Our work is supporting the sale of one of the sites to market; we have prepared a Phase 1 Environmental Liability report for the site that is to be included within the sales pack being prepared by the land agent.  The work included a full historical appraisal of the site going back to “greenfield” conditions, an appraisal the sites environmental setting and its regulatory status, a review of its Environmental Permit status, and an initial environmental audit of all land with the sites ownership boundary and its manufacturing facility.  Following this we have prepared a Phase 1 Environmental Liability report that will provide potential purchasers with an appraisal of the site with regards to potential environmental liabilities and any headline constraints.

The other site is currently being purchased by our client for continued commercial/industrial use; again we have prepared a Phase 1 Environmental Liability report to support acquisition, inclusive of a site walkover survey.  As part of this work potential UXO risk was also evaluated due to the sites location close to Tyne Dock.  Our work provided initial information to our clients legal team to support the acquisition process and to allow them to better quantify any purchase risks with regards to any on site historical risks from contamination.

Both projects are confidential at this stage, so we cannot provide any more specific information with regards to issues on either site, we will provide an update as the work nears completion.

Environmental Due Diligence for property transactions is an essential component of the acquisition, or, divestiture process, and is one that is surprisingly frequently overlooked.

If you are thinking of purchasing land or existing property to increase your portfolio, or, to develop your business, or are thinking of selling and need information to support your sale, please do not hesitate to get in touch for a friendly (and free!) chat around your specific requirements.

North East Contaminated Land Forum

DBS recently attended the North East Contaminated Land Forum meeting, the topic for this meeting was asbestos in soils.  Paul Nathaniel discussed the recent CIRIA publication (CIRIA C733) “Asbestos in Soil and Made Ground: A Guide to Understanding and Managing Risks”, and there were also presentations from DETS chemical testing laboratory of Consett on asbestos and asbestos containing materials (ACMs), and SIRIUS who discussed a remediation project they worked on where asbestos was the main contaminant of concern.

The NECLF hosts four meetings a year at the Environment Agencies offices in Newcastle upon Tyne, and is attended by a mix of academics, regulators, industry, consultants and anyone else who has an interest in land development.

The latest meeting helped to re-enforce the risks to human health from asbestos in soils, with DETS presenting the startling fact that 70% of samples that go through its lab from brownfield sites test positive for asbestos.

This suggests that any person working to disturb soils on a site that has not yet been characterised, really should assume asbestos is present and take preventative measures to prevent exposure to fibres.  Until testing proves otherwise, a Health & Safety Plan prepared for intrusive works should include for the potential for exposure to ACM.

The main type of asbestos that we find on our sites is chrysotile (commonly referred to as white asbestos), but it is also not uncommon to come across amosite (brown asbestos) and crocidolite (blue asbestos).  The latter two are considered the most hazardous to human health due to their fibre shape which can penetrate and lodge in the lungs, leading to mesothelioma.

New Planning Practice Guidance Announced for England

The Government has announced the new planning practice guidance for England under a raft of announcements on planning policy.

Planning minister Nick Boles has announced cancellation of existing guidance and its replacement by the practice guidance which was the subject of consultation last autumn.  He also announced new arrangements for change of use in a variety of areas.

“Planning should not be the exclusive preserve of lawyers, developers or town hall officials,” he said.

It includes guidance on 41 areas including land affected by contamination, land stability, use of conditions, viability, housing and economic development needs and land availability, flood risk, EIA and town centres.
Mr Boles said changes to allow more flexible change of use for empty and underused buildings would support brownfield regeneration while having regard to potential flood risk.

The Government is, therefore, proceeding with allowing change of use of shops, financial and professional services to residential, but national parks AONBs, conservation areas and world heritage sites will be exempt.
Local authorities will be able to argue loss of a particular shop will have an impact on local services if they wish to refuse conversions.  Farm buildings up to 450m² may also now be converted to up to three houses and up to 500m² to schools or nurseries.

Contaminated Land and Environmental Due Diligence

DBS is currently assisting two industrial clients in their due diligence process for the purchase of new sites for their operations.

It is heartening to be involved with new regeneration and the picking up of the property market, following the events of recent years and the recession.  It is also good to see industrial operations expanding with the job creation that brings.

Contaminated land / environmental Due Diligence is an essential process to follow during any land transaction, but even more so when former industrial land is to be acquired, due to the potential high risks of acquiring sites with a liability present in the form of land and / or water contamination.

Very often sites are acquired with the intention of subsequently applying for planning consent for a change of use for the site.  The due diligence process for site acquisition, if done correctly, can also be used to provide the information required to obtain planning consent for a change of use, and it makes financial sense to obtain all of the information required to satisfy the acquisition risks, and the subsequent planning requirements in one go.

At DBS we support clients through this process, and we aim to provide clients with a very commercial service in that we de-risk sites fully, focusing on key constraints, in order to help clients save costs whilst also allowing them to fully understand risk and achieve planning, should site acquisition proceed.

All environmental due diligence assessments should commence with a thorough desk based review of the sites regulatory, historical and environmental setting, and an initial Conceptual Model of the site understanding established.  By getting a very tight Conceptual Model established at the desk based stage, it allows the subsequent stages of risk management / mitigation to be focused, to target actual risks so that an intrusive investigation can be designed economically in order to obtain actual information on site conditions, and ultimately prevent exposure to long terms acquisition risks.

Once the contaminated land evaluation process has completed, it is important that the work also gives meaningful information for clients so that they can understand risk.  DBS’ Due Diligence reports contain Liability Statements that clients understand, we cover Statutory Liability (if the site is acquired could it be subsequently be determined as contaminated land by the LPA under Part 2A of the Environmental Protection Act 1990), Third Party Liability (is there a potential for the site to impact negatively off site), and we also provide a statement on Constraints to Development (if purchased, are there features on site that could prevent or prove costly for the site to be changed for its proposed new use).

De-risking sites commercially is a very skilled process, we only use highly experienced and chartered professionals for our due diligence work, and we have an enviable track record in helping clients to acquire sites projects and achieve planning, helping their projects to succeed.

We can also assist industrial clients with site divestiture, we can provide the information to give them confidence that they are not leaving behind contaminated land, human health risk or environmental risks that could come back to haunt them in years time.  The work we do also provides reports that can help with the sale of the site, to give investors confidence and to help minimise their acquisition costs.

We look forward to the contaminated land and due diligence portfolio of work we undertake increasing as we move away from recession in the UK.

Contaminated Land Capital Grants Programme Support Withdrawn by DEFRA

DEFRA have announced that the Contaminated Land Capital Grants Programme is closing.

This programme helps the Environment Agency and local authorities in England cover the capital costs of investigating and cleaning up contaminated land under Part 2A of the Environmental Protection Act 1990. Defra funds the work and previously managed the programme with technical input from the EA.

On 09 December 2013, Lord de Mauley, Parliamentary Under Secretary at Defra, announced the programme is closing at the end of the 2013/14 financial year. For a 3-year period from 1 April 2014 Defra  anticipate that up to £0.5m could still be made accessible annually (subject to capital funding being available within Defra) for absolute emergency cases and to meet the requirements of on-going remediation projects where these are considered to be the highest priority. Funding will stop entirely from 1 April 2017.

Defra have written to all local authorities in England explaining this decision.

This is a dissapointing development arising through more budgetary cuts from central government and leaves Local Authorities in a difficult position when assessing and prioritising health risks from potentially contaminated land within their Borough.  The outcome of this will almost certainly ensure that contaminated sites will now only be taken forward for assessment and remediation through the planning system where land is being re-used and has value, and the mechanism for remediation will be through the National Planning Policy Framework, rather then Part 2A.

A sign of the times but  nevertheless still disappointing.

 

CL:AIRE Definition of Waste:Development Industry Code of Practice

CL:AIRE has published figure demonstrating that since 2009, 813 Definition of Waste:Development Agency Code of Practice (DoWCoP) declarations have been received by the Environment Agency (EA).

The Code of Practice (COP) aims to reduce the regulatory burden on redevelopment sites by providing a framework for managing materials for re-use, without requiring wastes management permitting or exemptions to be in place.  The outcome of this is more sustainable site development, and less material going to landfill as waste.

The COP covers material generated on a site that is to be re-used.  For example, managing cut and fill materials from an earthworks balance, the direct transfer of material from a donor site to a receiving site, e.g where subsoil and clay is being excavated to achieve development levels and is no longer required for its site of origin, so it is transferred to another site where there is a material shortfall for earthworks/bunds etc, and for cluster projects where a treatment centre is established and receives wastes from various sites for treatment and then re-use.

The main document supporting this process is the Materials Management Plan (MMP).  This is established by a relevant party such as a contractor or consultant involved on the redevelopment project, and the MMP is then signed off by a Qualified Person, who then completes the documentation to register the scheme with the EA.

The MMP identifies the routes by which material will be sourced and re-used, and it provides all relevant info such as specifications for the works, drawings and cross sections.  It must document volumes to be produced/re-used, and it must be clear that the process is re-using materials where there is a predefined need, rather than being a vehicle for losing material to avoid paying landfill tax/fee’s.

Upon completion of the works, a Validation report is prepared which documents how the work has been completed in accordance with the aims of the MMP, and the final volumes used on site.

CL:AIRE estimates that upwards of 18 million m3 of material has already been diverted from landfill using this framework.

If you have a redevelopment scheme that could benefit from this approach, and would like to find out more information, you can contact us here at DBS, or, you can find more information on the CL:AIRE website – http://www.claire.co.uk/index.php?option=com_content&view=article&id=210&Itemid=82

DBS can provide Qualified Person services for project audit, EA declarations and the preparation of Validation Reports.

 

Small Redevelopment Schemes Can Also Be Challenging !!

DBS are currently working for a private developer on a new residential project in Gateshead, Tyne and Wear.  The project gives an example as to the diversity of schemes that DBS are currently working on with regards to size and scale.  This project involves the redevelopment of an existing residential garden for a further two residential properties.

Whilst this type of scheme is at the smaller end of the projects that we normally get involved with (in comparison to other sites that we are currently working on that are being redeveloped for hundreds of residential units plus), the actual process of characterising a site for a change of use for planning is the same process, regardless of the size of the site, and obtaining information to support foundation design is generally the same, regardless of the size of the development.

Smaller projects can provide challenging obstacles as much as larger schemes, mainly due to the confined nature of the site and the requirement for any remediation required to mitigate build abnormals to be very cost effective, as the profit from the scheme is proportional to size.

On this project, which appeared very straightforward initially, significant Made Ground was found to be present on site arising form a former mineral railway.  Railway lines used to border the site dating from the birth of the Industrial Revolution and the original expansion of the Coal Fields, but were removed decades ago.  Any visitor to the site now would not imagine that Made Ground was present, as there is no trace of the former industry.

The Phase 2 intrusive investigation of the site undertaken by DBS identified Made Ground present comprising ash, coal and clinker.  This is typical of former mineral railway land.  Ash from steam locomotives was often used for track ballast and/or was spread on the surrounding ground.  This material is often elevated with heavy metals, and polycyclic aromatic hydrocarbons (PAHs), a product of combustion.  The material can also can have combustion potential itself due to the presence of coal fragments.

We are currently awaiting site chemistry data from the testing laboratory in order to undertake the risk assessment for the site, but, based off our initial work it is likely that contamination will be present (as discussed above) and that a cost effective remedial solution will need to be developed for the site.  The remedial solution is likely to involve pathway modification comprising property footprints to form a cap to Made Ground, with localised source removal or capping in garden areas.  The aim of the scheme will be to leave as much Made Ground on site as possible, whilst mitigating development risks, to ensure that our client does suffer from onerous off site disposal costs.

We will be negotiating with the regulators on our clients behalf to take forward a safe, sensible and sustainable remedial scheme, to enable conditions imposed on the development for contaminated land to be discharged by the LPA and the site to be redeveloped cost effectively.