Tracy and Tommy Dobczyk break down how to profit from a 34-acre former steel foundry with $1.5 million in toxic soil liability. Their strategy: survey off the clean back portion, sell it to a developer for a 200,000-sq-ft industrial project, and bury the remediation cost in the construction contract.
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It was a steel foundry that used to do steel, like making steel. So they have toxic soil and they were given a Phase 1 report. They did 3 out of 4 suggested remedies and remediation and failed to finish the 4th one. And so now they're stuck. They have to spend $1.5 million to finish Phase Step 4, Phase 2. And if they don't finish Phase Step 2, Phase Step 4, Phase 2, then they can't sell the property.
So is this all part of the— they had different like Phase 1, 2, 3, and 4. Inspections on the property before they bought it, or did they already buy it and now they're running into this issue?
The current owners bought the property during Phase 2 cleanup and then never changed it.
Okay, bummer, bummer, bummer. Don't ever do that, people.
Right, they just ignored it. They're like, oh, no big deal. Guess what? It's a big deal.
Environmental impact studies and inspections have got to be done if you know the history of it.
I'm here. Ready for this, Tracy? You'll love it. What we're going to do is we're going to go out and we're going to draw a line across the back of the property and we're going to divide the property. It's 34 acres. I'm going to go to the extent of the last check line where they checked it for soil, and I'm going to put the survey line right there, the property line right there, and turn the vacant land in the back that's clean into the property that we buy. And then he has to give us the big building with the other acres for $10 cash. Yeah. What if—
what's going to happen to the land that needs remediated?
Well, we'll end up having to tie that into the remediation contract when we do the construction on the vacant land property, because I sold the vacant land property to a developer to build 200,000 square foot of industrial. And so when we do that, we're going to tie into that, tag into that $1.5 million to clean up the other lot.
Good. Sounds like a good remediation.
It's the only way to do it. Yeah. And so we'll talk to the sellers about that hopefully today. And then if they, if they say, nah, we're not interested, I said, well, okay.
