Old industrial site and redevelopment

by Michael D.
(Providence, RI)

Last Reviewed: May 23, 2024

Visitor Question:Is ownership of an old industrial site a constraint to redevelopment? I've been told that this commercial zoned land I bought once was some kind of old harness shop or something and that I might not be able to use it for commercial. I was thinking I could do something like a fast food restaurant there. Shouldn't my real estate agent have told me it was industrial?

Comment from Tim:
Hey, buddy, it's up to you to check out a property before you buy it. Having the zoning you want doesn't mean that there are no other kinds of liabilities that run with the property. It's just good business to always check into the history of some non-residential land you want to buy. Ask older residents, and check the city or county records.

I've had to do a Phase I environmental assessment before. That's what happens when somebody, like probably your lender, has suspicions about the property. In the Phase I, about all they do is ask neighbors and check the public records to find what previous business licenses, owners, etc. were.

My advice is go ahead and find a company that does these environmental assessments, asking for references from government people if you can get them. It will cost you some money to get the Phase I, but then you will have facts and not speculation. Just think of it as like a building inspection, something you could have done before you bought.

Chances are that the property may be found clean. I think that because often if there's ever been industry on the land, the industrial zoning doesn't go away even if the industry does.

If your property is clean, your problem is solved and you will be able to go ahead. If you find out you have to do a cleanup, you can get brownfields grants. At that point you can decide what to do based on fact not speculation.

Editors' Comment:
If the result of the Phase I environmental assessment is that you have purchased land that has good reason to be classified as brownfields,then you will find other firms in your area that specialize in creating the least expensive way to "remediate," as it's called, the situation.

You may be able to "cap" it, meaning pour concrete over the contaminated soil to encapsulate it, or you might need to scoop out the existing soil to a certain depth and then bring in clean topsoil.

If you need remediation, a state agency probably will supply grants, loans, or tax credits to ease the expense.

That's not to say it's always fun to deal with the bureaucracy that handles environmental cleanup, but if you approach the project with patience, you can do well.

Other developers will shun the project, and if you can make your pro forma work, then we salute you.

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