Urban renewal has been a buzzword in Melbourne’s development industry for the last two decades but in recent years the trend of developing former industrial blocks around the inner city has reached fever pitch with land in suburbs like Abbotsford, Box Hill, Collingwood, Footscray and Richmond being snapped up like hotcakes for both residential and commercial development purposes. When they are properly researched, developments like these can be incredibly lucrative investment opportunities offering enormous returns. On the other hand, if a piece of former industrial land is purchased without the proper research and testing, decontamination can cost the developers many millions of dollars before it is certified as safe, or worse still, be completely un-developable.
In Victoria, the occupier is responsible for contamination remediation and damages which means it’s absolutely crucial that you investigate what kinds of costs you might be liable for if the site proves to be contaminated. Some of the common environmental concerns which can be present on a former industrial site include:
- Presence of hazardous substances (lead based paint, radon, mercury, pesticides, solvents, petroleum hydrocarbons etc.)
- Soil contamination
- Groundwater and surface water issues
- Mould, mildew, and ventilation issues in existing structures
Managing the risk of contamination
For developers who are deciding whether or not to acquire an industrial block, an environmental site assessment is absolutely necessary before any purchasing decisions are made. If it isn’t possible to identify the original polluters (as might be the case with sites that have been occupied by different polluters over an extended period of time) then the occupier is liable for not only he remediation costs but also any penalties or damages relating to adjoining properties.
At a minimum, a Phase 1 Environmental Site Assessment should be undertaken to ascertain whether contamination is present. This type of investigation involves looking at site records as well as performing an onsite inspection. If contamination seems likely, then a Phase 2 Environmental Site Investigation needs to be undertaken to investigate the full extent of the contamination. While the Phase 1 Investigation is only a visual inspection, the Phase 2 Investigation is what is known as an ‘intrusive’ investigation where samples of soil, groundwater, and building materials are taken for analysis. This investigation provides definitive evidence of whether or not contamination is present and it is unfortunately only after this that the true cost of decontaminating a site is likely to be revealed.