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Posts Tagged ‘commercial real estate’

Just what is meant by the term “Eco-friendly” and “Sustainability”?  We’ve all heard of them and in fact, have probably all seen them or even used them at one time or another.  However, what do they really mean?  Keep reading to find out.

Eco-friendly:

The term “eco-friendly” literally means earth-friendly or not harmful to the environment. This term most commonly refers to products that contribute to green living or practices that help conserve resources like water and energy. Eco-friendly products also prevent contributions to air, water and land pollution.

Making a truly eco-friendly product keeps both environmental and human safety in mind. At a minimum, the product is non-toxic. Other eco-friendly attributes include the use of sustainably grown or raised ingredients, produced in ways that do not deplete the ecosystem. Organic ingredients or materials are grown without toxic pesticides or herbicides. Products with “made from recycled materials” contain glass, wood, metal or plastic reclaimed from waste products and made into something new. Biodegradable products break down through natural decomposition, which is less taxing on landfills and the ecosystem as a whole.

Sustainability:

Sustainability is based on a simple principle: Everything that we need for our survival and well-being depends, either directly or indirectly, on our natural environment. Sustainability creates and maintains the conditions under which humans and nature can exist in productive harmony, that permit fulfilling the social, economic and other requirements of present and future generations.

Sustainability is important to making sure that we have and will continue to have, the water, materials, and resources to protect human health and our environment.

All definitions of sustainable development require that we see the world as a system—a system that connects space; and a system that connects time. world in hands

When you think of the world as a system over space, you grow to understand that air pollution from North America affects air quality in Asia, and that pesticides sprayed in Argentina could harm fish stocks off the coast of Australia.

And when you think of the world as a system over time, you start to realize that the decisions our grandparents made about how to farm the land continue to affect agricultural practice today; and the economic policies we endorse today will have an impact on urban poverty when our children are adults.

Kind of gives you goose bumps when you consider it doesn’t it?  And I hope it makes you more aware of how we hold the fate of the world in our hands.

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In this last part of the sinkhole series I will provide you with engineering methods for detecting sinkholes, temporal events that can trigger a sinkhole, and WHAT TO DO IF YOU HAVE A SINKHOLE FORM ON YOUR PROPERTY.

Engineering Methods for Detecting Sinkholes:

Soil borings or other direct testing – Borings can be reduced by “reconnaissance scannings” using the following methods:

  • Electromagnetics (EM) and DC Resistivity: detect variations in subsurface electrical properties related to anomalously thick or wet soils (electrical conductivity highs similar to our use of moisture meters in homes), or voids in the electrically conductive clay soil mantle (electrical conductivity lows)
  •  Spontaneous Potential (SP): detects naturally-occurring minute electrical currents or potentials commonly associated with concentrated vertical water infiltration (Streaming potentials)
  •  Micro-gravity: detects minute variation in gravity (subsurface voids create missing mass and lower gravity)
  •  Seismic Refraction: profiles the top-of-rock which may display conical depressions of a type associated with subsidence sinks or deep gouges or cutters which represent sinkhole-prone lineaments.
  •  Ground-penetrating radar

Temporal Sinkhole Triggers

  • Following a period of heavy or prolonged rain (washing-in supporting soils)
  • Following a period of drought (lowering the water tables, leaving cavities)
  • Following a period of housing development (adding pressure on supporting soils)
  • Over pumping existing water supply wells, or drilling of additional wells in an area (lowering the aquifer)
  • Diverting surface water from a large area and concentrating it in a single point
  • Artificially creating ponds of surface water

So now you think you might have a sinkhole or what do you do if a sinkhole develops on your property?

  • Notify your local Water Management District
  • Fence or rope the hole off
  • Keep children away!
  • Protect the area from garbage and waste
  • Contact your homeowners insurance company

Well, that concludes the three part series on sinkholes.  I hope that it has been informative, and as always, remember KNOWLEDGE IS POWER!

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I know – the time between my blogs is way too long and inexcusable.  I can expect to build up a consistent following when I don’t post very often!  My only excuse is that my blog is informational and educational not a commentary on what is happening in my life.  So I apologize to the following that I have that it has been so long again!

This blog is a continuation of the topic of mitigation.  In my last blog I discussed options for mitigating for wetland impacts.  For this one I will outline the types of compensation commonly used to offset impacts to threatened and endangered wildlife species.  My November 2009 blog discussed threatened and endangered species and outlined the types of activities that typically constitute impacts. 

Threatened and Endangered Species and Mitigation

The trick with protected species is to avoid “taking” them.

The determination of whether an impact has occurred to protected species is relatively more straightforward than that for wetlands – if you take down a tree containing a bald eagle nest you have impacted that eagle or if you bulldoze over the top of a gopher tortoise burrow you have impacted that tortoise.  If a site development proposes activities that may “incidentally” impact threatened and endangered species as a result of otherwise lawful activities permits allowing those impacts may be issued by regulatory agencies.  If permits are issued they typically come with the provision that compensation must be completed to offset those impacts.

Compensation Alternatives

In general there are three techniques that can be used to mitigate for impacts to protected species.   They are:  On-site preservation/buffers, Off-site purchase of land, and relocation.

On-site preservation/buffers:  On-site Preservation is mostly used for species that are sedentary and that need large tracts of very specific types of plant communities such as Florida Scrub Jays.  If there are scrub jays on a property, it might be necessary to set aside the entire portion of the property that is inhabited by scrub jays that is then maintained in its natural state and periodically managed to make sure that the conditions stay suitable for that species.

An on-site buffer might be used if you have a species that can be particularly sensitive to human disturbance such as bald eagles.  For example if there is a bald eagle nest on the property, buffers restricting development of up to 1500 feet from the nest could be required. 

Often on-site preservation is a component of buffers (as with the land in the 1500 foot buffer around a bald eagle nest) but buffers can be required beyond the boundaries of actual inhabited boundaries, such as with a gopher tortoise.

Off-site purchase of land:  This method would include the purchase of land away from the development site that either already provides habitat and resident protected species similar to that on the development site or that could be enhanced or restored through management to create suitable habitat for species that are proposed for impact.

Relocation: This is the removal of a species from the development tract and transporting it to an appropriate recipient site away from the development.  This can include a portion of the property that is not slated for development or land off-site that has been set aside as a conservation area.  Most people are familiar with the concept of relocating gopher tortoises off a property being developed.  This currently is the mitigation method being pushed by the state.  A number of approved relocation tracts have been established and the tortoises are excavated from their burrows and transported to one of these recipient sites.  An example of the cost for that could be $800 to $1000/tortoise to the owner of the recipient site and another $300 to the state to be used for land management in addition to the cost of the permit itself.

Real Estate and Threatened and Endangered Species

As with wetlands, there is no size limit on a property that can be occupied by protected species and; therefore, be subject to permitting and possibly the need to complete mitigation.  

How much actual land is buildable (not inhabited by protected species), whether you can obtain a permit to impact occupied habitat to open up more land for development, and the cost of mitigation may all contribute to the value that can be put on the land if you are a Seller.   Just like with wetlands, the Seller has the choice of addressing some or all of these issues prior to the sale of the property or of leaving it up to the buyer to deal with.  If the Seller does some of the work sometimes they can recoup at least a portion of the money laid out for those activities within the sales price.

Remember “Buyer Beware”?  That applies here again.  Buyers need to be sure to build plenty of due diligence time into the contract for purchase so that they can determine if the site is occupied by any threatened or endangered species and to coordinate with regulatory agencies to determine if developing the property is even feasible and; consequently, what mitigation might be required. 

Knowing that additional monies will have to be laid out for complex permitting and mitigation may allow a buyer to negotiate a better price for the property, leaving them with the funds to complete the development even with the protected species permitting challenges and costs that they may face.  So let’s say you are thinking of buying a piece of property that is occupied by gopher tortoises, you will need to know how much the property is listed for but also how much money might have to be budgeted for environmental studies, permitting, and mitigation such as relocation – all before any other construction costs are considered.  The price offer to the seller might deduct some or all of these projected costs from the asking price of the property.

So as with my other blogs, my advice is hire an environmental consultant to make sure you are aware of environmental issues that you will be dealing with regardless if you are the Seller or the Buyer.  Remember KNOWLEDGE IS POWER!

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In several of my previous blogs (and I apologize for the length of time between my last blog and this one) I mentioned the term “mitigation”.  This term was used in relation to compensation that might be required for impacts to wetlands or protection species that resulted from development.  For this blog I am going to concentrate on Wetland Mitigation.  If you don’t remember the types of activities that constitute impacts to wetlands refer back to my September 2009 blog.  (Please note that most of the following information is specific to Florida rules and regulations since that is where I am located; however, most of these concepts and methodologies are also recognized by the U.S. Army Corps of Engineers and are likely to apply in other states, as well.)

There is an awful lot of information and specialized knowledge that goes along with the determination of what actions will be considered to be impacts, the calculation of the loss of wetland function (impact) if those wetlands are affected by development, and the determination of the type and amount of compensation that will be required to offset those impacts.  It’s way too much to get into in a blog.  So the purpose of this blog, hopefully, is to give you a little more familiarity with the concepts of impact and mitigation and to provide you with a brief outline of mitigation alternatives available if it is determined that proposed land improvements will cause wetland impacts. 

Wetlands and Mitigation

Wetlands are important components of water resources because they often serve as spawning, nursery and feeding habitat for many species of fish and wildlife, and because they often provide important flood storage, nutrient cycling, detrital production, recreational and water quality functions.  Other surface waters such as lakes, ponds, reservoirs, other impoundments, streams, rivers and estuaries also often provide such functions, and in addition may provide flood conveyance, navigation and water supply functions to the public.  Not all wetlands or other surface waters provide all of these functions, nor do they provide them to the same extent. A wide array of biological, physical and chemical factors affect the functioning of any wetland or other surface water community.

The regulatory agencies have decreed that development can not cause a net adverse impact on wetland function such as those described above that is not offset by mitigation.  In other words, there can be “no net loss of wetland function”.  In Florida, the state agencies use a complicated numerical evaluation system called the Uniform Mitigation Assessment Methodology (UMAM) to determine how much wetland function may be lost as a result of development and; therefore, how much mitigation will be required to compensate. 

Wetland mitigation is defined as an action or series of actions taken to offset adverse impacts that would otherwise cause a regulated activity to fail to meet the “no net loss of wetland function” requirement.  The UMAM method used to determine net wetland function lost is used to evaluate the property or activities proposed as mitigation to ensure that what is proposed is sufficient to offset those impacts.

You should know that prior to allowing compensation for wetland impacts; as part of the permitting process, the developer must first prove to the regulatory agencies that they have eliminated/avoided wetland impacts to the maximum extent.  Following that, if impacts will still occur they have to prove that they have reduced/minimized impacts to wetlands.  Only after that step is completed will any remaining impacts be considered for mitigation.  There are multiple ways to mitigate for lost wetland function.

Compensation Alternatives

In general, there are five mitigation methods: Creation, Restoration, Enhancement, Preservation, or Purchase of Credits from a Mitigation Bank.  Mitigation can and most likely will be a combination of one or more of these.

  • Creation: The conversion of other land forms into wetlands or surface waters.
  • Restoration: The converting back to historic conditions of a wetland, surface water, or upland, which currently exists as a land form different from its historic condition.
  • Enhancement: The improvement of the ecological value of wetlands, surface waters, or uplands that have been degraded in comparison to their historic conditions.
  • Preservation: Protection of wetlands, surface waters, or uplands from adverse impacts by placing a conservation easement or other land use restriction over a property or by donation of fee simple interest in the property.
  • Purchase of Credits from a Mitigation Bank: Mitigation banking means the restoration, creation, enhancement and, in exceptional circumstances, preservation of wetlands and/or other aquatic resources within large tracts of land for the express purpose of providing compensatory mitigation in advance of authorized impacts to similar resources.  Once permitted, mitigation banks have a set number of credits they have been allocated (based on improvements they have made on or will make to the land) that developers, for a fee, can have withdrawn as a means of offsetting adverse wetland impacts.

Real Estate and Wetland Mitigation

There is no limit on the size of the property that can have wetlands and; therefore, be subject to permitting and potentially the need for mitigation if wetlands end up being impacted.  Permitting wetland impacts and providing compensation for those impacts can be costly and time consuming and should be considered by the Seller when placing a value on property.  The Seller has the choice of addressing these issues prior to the sale of the property, in which case they may be able to recoup some of the money laid out for those activities or of leaving it up to the buyer to tackle them.

As indicated in earlier blogs,  it is very important for a Buyer of vacant land to remember that it will be their responsibility to know what they are buying.  The Buyer needs to build plenty of due diligence time into the contract for purchase so that they can determine what issues might be present and to coordinate with regulatory agencies to determine if developing the property is even feasible if there will be wetland impacts and; consequently, mitigation.  Knowing that additional monies will have to be laid out for complex permitting and mitigation may allow a buyer to negotiate a better price for the property, leaving them with the funds to complete the development even with the environmental permitting challenges and costs that they may face.

So hire an environmental consultant to make sure you are aware of environmental issues that you will be dealing with regardless if you are the Seller or the Buyer.  Remember KNOWLEDGE IS POWER!

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Normally, we would consider that the removal (or delisting) of a wildlife species, such as the Bald Eagle, from its status as protected would be a good thing for property owners since they will no longer have to worry about developing land inhabited by the species.  WRONG! 

The delisting of  a protected wildlife species can still negatively affect the value of your property!  How can that be? 

In an earlier blog I told you that protected wildlife species fall into one of three categories: Endangered, Threatened, or Species of Special Concern.  Over time as population levels change the state and/or federal government regulatory agencies may decide that a particular species no longer falls into the class to which it was assigned. 

For instance, after significant research into a species’ population level, applicable regulatory agencies may decide that a species has recovered in sufficient number to be down-listed or even delisted (taken off of the list of protected species).  This is an exciting phenomenon because it means that the previously given protection received  has allowed the population levels of that species to recover enough that it no longer needs intervention from those regulatory agencies to maintain its viability.

You should note; however, that not everything is at it seems at first glance.  In some cases, even if a species has been down-listed or delisted in its protected status it still may be protected in other ways.  A perfect example of this is the Bald Eagle.  In June 2007 the bald eagle was removed from the list of Threatened and Endangered species protected under the Federal Endangered Species Act (ESA); it was delisted.  In other words, it was no longer considered to be an endangered species and; therefore, protected under that act.  This might have seemed like a happy occasion initially and was definitely great PR for the U.S. Fish and Wildlife Service (FWS); however, this event may actually have muddied the waters for land owners and developers as it is not widely known that bald eagles are still protected under two other Federal laws (The Migratory Bird  and Treaty Act [1918] and The Bald and Golden Eagle Protection Act [1940]).  

For many years, while protected under ESA, landowners and developers were able to work with regulatory agencies to move forward with development even if there was an active Bald Eagle nest on their property.  This was accomplished through extensive coordination with FWS and by using a permitting process that was implemented under ESA.  It was a process that had been used enough over the years that it typically went fairly smoothly.  Unlike ESA, The Migratory Bird Treaty Act and The Bald and Golden Eagle Protection Act do not have any provisions for permitting that would allow incidental impacts or “take” of bald eagles.  This means that all the previous methodology and the guidelines used to permit development in the vicinity of an active bald eagle nest while the species was protected under ESA no longer applied.  There was no longer an avenue by which to obtain that permit.  So instead of making life easier because bald eagles are no longer considered to be an endangered species, the situation become more complex and landowners and developers are spending more time and money to develop land with resident bald eagles. 

There is hope; however, in April 2009 nearly two years after its delisting under ESA, FWS finalized an Environmental Assessment Proposal to Permit Take Under the Bald and Golden Eagle Protection Act.  Now this “Proposal” on how permitting could take place has to be used to develop actual rules and regulations to put the process into place.  FWS intends to pursue the development of regulations that would authorize, under limited circumstances, the use of permits if “take” of an eagle is anticipated but unavoidable.  However, it could take several more years for that to happen!  In the meantime, development proposed on land occupied by bald eagles is considered on a case-by-case basis by FWS.  FWS appears predominantly to be recommending that landowners and developers follow the  May 2007 “National Bald Eagle Management Guidelines” to figure out what protection needs to be in place.  They are relying on these guidelines being put in place by the owners and developers in order to minimize disturbance to eagles and avoid any “taking” of eagles, their parts, eggs, or nests.  This places a lot of responsibility and risk on a landowner or developer that likely is inexperienced in dealing with these matters. 

So how does this affect you and the value of your property?  

If you are lucky enough to be the owner or buyer of property that is inhabited by a wildlife species that has been down-listed or delisted and that is not protected under any other laws then, of course, the value of your property will increase or at least not decrease! 

If you are involved in the other situation, such as with bald eagles, then there will be an effect on the value of the property in the other direction.  As I discussed in one of my previous blogs on Threatened and Endangered Species, inhabitance on a site by protected wildlife species will effect how much of that property will be considered to be usable (developable); how much time and money it will take to conduct surveys, negotiate mitigation and complete permitting; and how much it will cost to do the mitigation.  (Refer to that blog for specifics on how sellers and buyers can be affected by protected wildlife species residing on their property.)  On properties that meet a situation such as I have outlined in this blog your efforts into developing a property, at a minimum, will be affected as outlined in that blog; however, it is likely that time taken and money spent could be even higher since both environmental consultants and regulatory agencies are still working their way through the process of how to deal with these situations.  In addition, if there is no means by which to turn land inhabited by protected species into usable or partially usable through permitting and mitigation then the value of the property could decrease further.  Consequently, the affect on the salability of the property could be more exaggerated.

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So now we are on to the third part of my mini-series about Environmental Concerns.  This one is about Hazardous Waste or as an old boss used to say the “ooey gooey” stuff.  This one is also the most complicated to discuss.  If you start getting bogged down in all of the definitions and terms while reading this blog, feel free to skip down to the most important part “Hazardous Waste and Real Estate”.

What is hazardous Waste?

As soon as the topic of hazardous waste comes up many people ask if that means a toxic dump site or a Superfund site.  Generally, in fact the majority of the time, the answer to that question is an unequivocal “No”.  A Superfund site is also the common name for the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), a Unites States Federal Law designed to clean up abandoned hazardous waste sites.   The law authorized the Environmental Protection Agency (EPA) to identify parties responsible for contamination of sites and compel the parties to clean up the sites.  Where responsible parties cannot be found, the EPA is authorized to clean up sites itself, using a special trust fund.  These are the REALLY bad sites. 

In our more immediate world, typically hazardous waste would refer to such things as petroleum leaks from underground storage tanks at a gas station; used oil storage, for example in an auto repair store; or by products of dry cleaning establishments.  These fall under the American Society for Testing and Materials (ASTM) definition of Recognized Environmental Conditions (REC).  Specifically, ASTM defines REC as “the presence or likely presence of any hazardous substances or petroleum products on a property under conditions that indicate an existing release, a past release, or a material threat of a release of any hazardous substances or petroleum products into structures on the Property or into the ground, groundwater, or surface water of the Property…The term is not intended to include de minimis conditions that generally do not present a threat to human health or the environmental and that generally would not be the subject of an enforcement action.”  “De minimis conditions can include derelict vehicles that might leak fluids, improperly stored oil-based point cans, old appliances, empty oil or gas containers, etc.”

Who regulates issues relating to Hazardous Waste?

Of course at the Federal level the agency responsible for addressing hazardous waste is the Environmental Protection Agency.  However, at state and more local levels it may vary depending on who the responsibility has been delegated to.  In Florida the applicable agency is the Florida Department of Environmental Protection, who in turn has delegated some of its authority to the various counties.  This delegation predominantly has included addressing issues related to underground storage tanks.

Why is it necessary to be aware of potential Hazardous Waste issues?

Based on Federal and State law, hazardous waste is the responsibility of the owner of the property.  If you own a property that has, for example, an underground storage tank leak you will be required to report the incident to the appropriate agency.  In addition, you will have to have a qualified individual or company evaluate the seriousness of the incident and prepare a report indicating how extensive the incident may have been.  The next step is to apply to an applicable clean-up program.  At that time the appropriate agency will review the reports and score the site as to the seriousness of the incident and where it might fall on the list of sites needed for cleanup.  If there is an issue on the site and the owner does not report it, it is possible that they will be held liable for it and may face serious fines or even jail time. 

Hazardous Waste and Real Estate 

In relation to property, the things to ask yourself, regardless of whether you are the Buyer or the Seller are:

  • Does the property have a past use that would suggest potential hazardous waste issues or is the current use one that could generate hazardous waste (e.g., was it ever a gas station, auto repair shop,  or dry cleaners, etc.)?
  •  Are there any adjacent or nearby properties that have a past or current use that could have affected or still could affect the target property (e.g., did the gas station next door have a leak in the past that got into the groundwater, which had a flow in the direction of the property)?
  • What kind of information is already available regarding potential hazardous waste issues on the property or adjacent/nearby properties?  Have studies been done on the site?
  • Will the presence of hazardous waste issues on the site affect the ability to use the property  for its intended use and are there any issues that could affect the health of staff and customers?
  • What kind of testing should be done to determine if there is hazardous waste on the property or adjacent/nearby properties, how much will it cost, and who will pay for it?  In other words do Phase I and/or Phase II Environmental Site Assessments need to be completed?
  • Does cleanup need to be completed and how much will it cost (Phase III) or is the property already in a program that covers some or all of the cost of clean up (e.g., PLIRP [Petroleum Liability Restoration Insurance Program] or EDI [Early Detection Incentive Program], etc.)?

Be aware that knowing what all of these initials stand for and understanding the different clean-up programs out there is not as important as asking the right questions and hiring a qualified environmental specialist (and a Realtor with an understanding of environmental concerns) to complete studies on the property and to interpret the results for you.  This environmental concern, even in comparison to wetlands and threatened and endangered species, is far more complicated to deal with and requires very specialized knowledge and experience to address.

From a Seller’s perspective, whether or not there is a hazardous waste issue and whether there is a need for testing and/or cleanup will affect the value of the property if you want to sell it.  In addition, in order to cover your liability it will be important to know the history of your property and if a historical hazardous waste issue is already covered under a cleanup program.  If there has been a reported issue in the past and it is covered through some type of clean-up program, typically that coverage will move with the property and any new owners can be reassured that they will be covered for the problem that occurred prior to their ownership. 

From a Buyer’s perspective, it is absolutely necessary, if you think that the property you want to buy has a current or past use that might have caused an environmental concern to occur on the property, to build time into your due diligence to complete the necessary research and determine whether it will affect your proposed use of the property.  If you do not do your due diligence prior to closing on the property and there is an issue found after the sale is complete, you as the new owner become the responsible party.  However, if you hire someone to make “All Appropriate Inquiries” using the federally-mandated ASTM Phase I Environmental Assessment guidelines, and learn of a problem before closing, it will most likely protect you, the potential property owner, from liability for cleanup even if you purchase the property knowing that there is the likelihood of environmental contamination.   This is a great insurance policy, as long as the studies and report are done according to the standard.  As long as all of this occurs prior to closing the current owner is still the responsible party and can be encouraged to address the issue prior to closing.  In addition, if the buyer learns of an issue during their due diligence period they can do the necessary research to ensure that the site is already covered under a cleanup program and can evaluate whether the incident will affect the desired use of the property.  As with other environmental concerns, the presence or potential presence of hazardous waste issues on the property may affect the price you are willing to pay and could be used in negotiations.

As I have repeated in all of my previous posts, remember that commercial real estate is sold as “Buyer Beware”.  It is up to the Buyer to know what they are buying!  Remember, KNOWLEDGE IS POWER!!

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So after my deviation to tell everyone how to be RICH, I am back to telling you about environmental concerns and how they relate to real estate.  A couple of posts ago I talked about the three general categories of Environmental Concerns:  Wetlands, Threatened and Endangered Species, and Hazardous Waste.  I told you a little about wetlands in a previous post.  For this post I am going to concentrate on Threatened and Endangered Species. 

gopher tortoiseWhat are Threatened and Endangered Species?

The phrase “Threatened and Endangered Species” tends to be used synonymously with the phrase “Protected Species”.  Species that are protected comprise both plants and animals; however, wildlife has the biggest effect on real estate and development.  In consideration of the welfare of other species, federal and state governments have devised lists that categorize plants and animals according to their degree of peril.  Although we tend to generalize these species as either threatened or endangered there are actually three categories of protected species.  They are Endangered, Threatened, and Species of Special Concern.

Endangered: A species, subspecies or isolated population which is so rare or depleted in number or so restricted in range of habitat due to any man-made or natural factor that it is in immediate danger of extinction or extirpation from all or a significant portion of its range.

Threatened: A species, subspecies or isolated population which is acutely vulnerable to environmental alteration, declining in number at a rapid rate, or whose range or habitat is decreasing in area at a rapid rate and as consequence is destined or very likely to become endangered in the foreseeable future.

Species of Special Concern: A species or population which warrants special protection, recognition, or consideration because it has an inherent significant vulnerability to habitat modification, environmental alteration, human disturbance, or substantial exploitation which, in the foreseeable future, may result in its becoming threatened.

In Florida, the most commonly known protected species and the ones that we usually have to deal with are Florida scrub jays, gopher tortoises, and bald eagles although there are many more.

scrub jayWho regulates activities associated with Protected Species?

On the Federal level the U.S. Fish and Wildlife Service (FWS), the National Marine Fisheries Service (NMFS), and more indirectly the U. S. Army Corps of Engineers (ACOE).  Many states have also formed state agencies that regulate activities that may affect Threatened and Endangered Species.  In Florida (since that is where I live and work) the applicable agency is the Florida Fish and Wildlife Conservation Commission (FWC).  In addition, often counties and cities have their own regulations governing development that may affect protected species.  Although each of these agencies may have slightly different rules governing Protected Species, the majority have based their rules on the Endangered Species Act (ESA).  The Federal ESA of 1973 was enacted to protect animal and plant species from extinction by preserving the ecosystems in which they survive and by providing programs for their conservation.

Why is it necessary to consider whether a property has any Protected Species inhabiting it?

Since the laws concerning Threatened and Endangered Species are complex, I am going to give you a much simplified explanation.  In general, regulations that have been set forth by the various government agencies were created in order to ensure that species whose numbers and habitats are declining do not actually go extinct.  The ESA prohibits anyone from “Taking”  Threatened and Endangered Species.  To “Take” a species means to “harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct”. 

The ESA allows certain exceptions to prohibited activities.  For example a permit may be issued for the taking of a listed species that is “incidental” to otherwise lawful activities.  Federal, State and local agencies require that surveys be completed prior to the development of a property to determine the presence or absence of Protected Species.  Since the development is otherwise lawful, if Protected Species are determined to be present, the regulatory agencies may require the developer to obtain a permit(s) that will allow him to develop a site inhabited by protected species.  However, conditions of the permit may require him to preserve a portion of the property, relocate the species, and/or mitigate in another way for any impacts expected to occur to the species as a result of the development.  When this happens you may end up dealing with only one but more likely several of the regulatory agencies listed above. 

Protected Species and Real Estatebald eagle

Considerations that are important include:

  • Presence or absence of protected species and, if present, what species are they are where on the property do they occur (are they all in one area or are they spread throughout the property);
  • Does the presence of the species on the property dictate where on the property development can occur (e.g., an eagle nest or Florida Scrub Jay habitat);
  • Can you obtain permits to develop on the property despite the presence of protected species;
  • Can impacts be mitigated and how much will it cost – this could vary greatly depending on whether you just have to leave a buffer around an inhabited area, whether you have to relocate the animal or if you have to buy land offsite to make up for what is being lost;

db real estate sign

From a real estate perspective, how much land may be buildable (not inhabited by protected species), whether you have to obtain permits to impact occupied habitat to open up more land for development, and the cost of mitigation may all contribute to the value that you can put on the land if you are selling it.

For a Buyer, these conditions and costs are good negotiation points to use to reduce a price if you are trying to purchase land that is inhabited by Protected Species.   So lets say you are thinking of buying a piece of property that is occupied by gopher tortoises, you will need to know not only how much the property is listed for but also how much money you might have to budget for environmental studies, permitting, and mitigation – all before you add in the rest of the construction costs.  You will want to offer a price to the seller that deducts some or all of these projected costs from the asking price of the property.

As with my blog on wetlands, from a real estate perspective, many sellers may not want to have too much detail on whether gopher tortoises or scrub jays (for example) occupy their property and may just want to put it up for sale for as much as can, or for what market conditions will support. 

Very, very important to remember is that Commercial Real Estate is sold as “Buyer Beware”; owners do not have any legal responsibility to inform a buyer of issues such as whether gopher tortoises occupy the property.  It is up to the buyer to know what they are buying.  It is imperative to build due diligence time into any contract so you can complete necessary studies and learn what you might have to deal with.  It is common for the buyer to foot the bill for any studies done during their due diligence.  The results of the studies may dictate if the buyer ever closes on the property or if they are going to try to renegotiate the price.  If there is a chance that the value of the land may be greatly affected by the outcome of any studies, many buyers will find it worth it to do preliminary work on the property before even making an offer.  Remember KNOWLEDGE IS POWER!

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