An industrial client was looking to acquire an existing Styrene Manufacturing Plant in the Midwest. Mostardi Platt performed a desktop due diligence as well as a regulatory compliance evaluation. These evaluations allowed potential liabilities and environmental risks to be identified if the client were to acquire the plant.
Scope of Work
A desktop review of available reports, commercial database reports and online databases were used for evaluation of the plant. To further the evaluation, information was also obtained through Freedom of Information Act (FOIA) requests.
The property was identified as a No Further Remedial Action Planned (NFRAP) site under the Comprehensive Environmental Response, Compensations and Liability Act (CERCLA). Previously, the property was used as a zinc smelter operation from the 1870s to the 1940s. Additionally, the elevation of the property was raised using zinc slag as fill material.
There was no apparent risk of public exposure, as concluded by the state agency, due to the use of the property as an active styrene plant.
Unrelated to the NFRAP status, the property had been impacted by a significant release of styrene to soil and groundwater, which had not been fully investigated. Evidence of mixed waste (radioactive) impacts were found related to historical clock manufacturing offsite, directly up gradient from the property.
In the condition that site closure under CERCLA ever became necessary, the current lessee of the property was obligated to remediate the historical slag beneath the property, demolish all onsite structures, and return the site to its original topography.
Based on the information that was reviewed, Mostardi Platt developed a reasonable best-case versus reasonable worst-case cost evaluation for the identified liabilities. In addition, a worst-case scenario cost evaluation was provided. The reasonable cost estimates ranged from approximately $40 million to $80 million. The worst-case scenario cost estimate was over $150 million.
Due to the environmental risks and cost evaluations, the client made a business decision to not pursue the acquisition.
888 Industrial Drive,
Elmhurst, IL 60126