Ep23: Understanding Environmental Approaches in Property Transactions with Mel Pins

[00:00:00] [SPEAKER_04]: It's easier to deal with something when it's not a big surprise.

[00:00:02] [SPEAKER_04]: It's a lot easier, we understand ahead of time, much like the used car.

[00:00:07] [SPEAKER_04]: I know I'm going to have to put some money into it to fix it up, to use it the way I

[00:00:10] [SPEAKER_04]: want, plan for it ahead of time and we can be here to help guide that.

[00:00:15] [SPEAKER_00]: From cornfields to high rises, office to industrial, houses to hotels and every other

[00:00:20] [SPEAKER_00]: asset class in real estate, we cover the people, the projects and the profit.

[00:00:25] [SPEAKER_00]: Welcome to The Investing in Iowa Show.

[00:00:28] [SPEAKER_00]: This show is for go-doers, action takers and business owners.

[00:00:32] [SPEAKER_00]: It's for people like you who are sick of Uncle Sam taking a huge bite of your apple.

[00:00:37] [SPEAKER_00]: If you're looking to get ahead of what's taking place in Iowa, learn who is doing

[00:00:41] [SPEAKER_00]: what and how you can get in on the action.

[00:00:44] [SPEAKER_00]: You're in the right place.

[00:00:46] [SPEAKER_00]: Posted by Neil Timmins, an Iowa native who has been involved in over $300 million

[00:00:51] [SPEAKER_00]: dollars in real estate, right here in Iowa.

[00:00:54] [SPEAKER_00]: Recording in studio from West Des Moines, here's your host Neil Timmins.

[00:01:00] [SPEAKER_00]: I've got Mel Pins here on this show.

[00:01:02] [SPEAKER_03]: Mel, welcome.

[00:01:03] [SPEAKER_03]: Good afternoon, Neil.

[00:01:04] [SPEAKER_03]: Glad to be with you today.

[00:01:05] [SPEAKER_03]: You're here.

[00:01:06] [SPEAKER_03]: Say for the audience to say who are you, where are you from, what do you do?

[00:01:08] [SPEAKER_04]: Sure.

[00:01:09] [SPEAKER_04]: Well, again, Mel Pins kind of a Des Moines area native, but I'm an urban

[00:01:13] [SPEAKER_04]: planner by degree.

[00:01:14] [SPEAKER_04]: But I have spent all of my 30 plus year career working with environmental

[00:01:18] [SPEAKER_04]: regulations.

[00:01:20] [SPEAKER_04]: The last 20 of that has been at the Iowa Department of Natural Resources.

[00:01:24] [SPEAKER_04]: And at the DNR, I help developers, landowners, buyers, purchasers with

[00:01:30] [SPEAKER_04]: questions I have about environmental liability.

[00:01:33] [SPEAKER_04]: I actually have some assistance that I can provide to local governments

[00:01:37] [SPEAKER_04]: and nonprofits with some grants.

[00:01:39] [SPEAKER_04]: But it's kind of a topic that most people don't like to talk about.

[00:01:43] [SPEAKER_04]: But I certainly love to talk about it if people have questions.

[00:01:46] [SPEAKER_03]: You and I connected here a few months back.

[00:01:49] [SPEAKER_03]: I heard you speak at a breakfast at IKRIA.

[00:01:52] [SPEAKER_03]: Sure.

[00:01:52] [SPEAKER_03]: And as we were rolling out the show, I thought Mel's got to come on because

[00:01:56] [SPEAKER_03]: what you shared there, we're going to certainly get into a whole bunch of it

[00:01:59] [SPEAKER_03]: today is I think of tremendous value to those who buy real estate in Iowa.

[00:02:04] [SPEAKER_03]: Whether you think you have environmental problem or you don't, you

[00:02:08] [SPEAKER_03]: need to have an understanding about what are some of the risks out there?

[00:02:11] [SPEAKER_03]: What are some of the pitfalls and what you should be doing as proper

[00:02:14] [SPEAKER_03]: buyer due diligence.

[00:02:16] [SPEAKER_03]: Mm-hmm.

[00:02:17] [SPEAKER_03]: Through the process.

[00:02:18] [SPEAKER_03]: Sure.

[00:02:18] [SPEAKER_03]: Let's start here.

[00:02:19] [SPEAKER_03]: Is there any sort of environmental due diligence that the state even requires

[00:02:24] [SPEAKER_03]: for a buyer when they will purchase a property?

[00:02:26] [SPEAKER_04]: That's a fundamental question.

[00:02:28] [SPEAKER_04]: It's a good one.

[00:02:29] [SPEAKER_04]: There's a lot of assumptions with that.

[00:02:31] [SPEAKER_04]: Basically, the simple answer is no, you can buy, sell and trade real estate

[00:02:36] [SPEAKER_04]: all day long in the state of Iowa.

[00:02:38] [SPEAKER_04]: The DNR does not require any kind of environmental assessment prior to

[00:02:43] [SPEAKER_04]: property transactions.

[00:02:44] [SPEAKER_04]: The only thing there is in state law is what's called the groundwater hazard

[00:02:48] [SPEAKER_04]: statement and it's been around for decades.

[00:02:51] [SPEAKER_04]: Everybody sees it, sometimes it's been a check the box, move it on.

[00:02:55] [SPEAKER_04]: But the fundamental behind that is in Iowa law, a seller is required to

[00:03:01] [SPEAKER_04]: disclose any known information that they have as their common knowledge

[00:03:06] [SPEAKER_04]: about any weird things that might be present on the site like any old

[00:03:11] [SPEAKER_04]: landfills or dumps, any underground storage tanks, any wells or

[00:03:16] [SPEAKER_04]: cisterns or by golly even a buried body like literally.

[00:03:20] [SPEAKER_04]: Are there any graves on the property?

[00:03:22] [SPEAKER_04]: But it's only to the best of their knowledge.

[00:03:25] [SPEAKER_04]: So if I have a warehouse that's been around 80 years and I'm going

[00:03:28] [SPEAKER_04]: to sell it on the groundwater hazard statement, it used to be you

[00:03:32] [SPEAKER_04]: fill out a form and you said, nope, nope, nope, don't know about

[00:03:35] [SPEAKER_04]: that.

[00:03:35] [SPEAKER_04]: And you turned it over to the seller.

[00:03:37] [SPEAKER_04]: They looked at it for a few seconds and you moved on.

[00:03:39] [SPEAKER_04]: Now there have been some changes to simplify that process.

[00:03:43] [SPEAKER_04]: About three years ago, the Iowa legislature made some changes.

[00:03:47] [SPEAKER_04]: It used to be no matter what the transaction was, whether it was a

[00:03:50] [SPEAKER_04]: house, an empty lot, a garage or an industrial site, the whole

[00:03:54] [SPEAKER_04]: groundwater hazard statement form and document had to be completed

[00:03:58] [SPEAKER_04]: and recorded as part of that deed transfer.

[00:04:01] [SPEAKER_04]: That was a lot of paperwork taken up a lot of space at the

[00:04:04] [SPEAKER_04]: county recorders.

[00:04:05] [SPEAKER_04]: So they changed the state law.

[00:04:07] [SPEAKER_04]: If you're not aware of any of these kind of issues, there's

[00:04:11] [SPEAKER_04]: some boilerplate language that goes into the transfer deed and

[00:04:14] [SPEAKER_04]: just says we're not aware of anything.

[00:04:16] [SPEAKER_04]: And you're done.

[00:04:17] [SPEAKER_04]: If there are issues to disclose, then you do complete the

[00:04:21] [SPEAKER_04]: form and that form is recorded.

[00:04:24] [SPEAKER_04]: But that is the fundamental it in Iowa law for anything related

[00:04:29] [SPEAKER_04]: to environmental disclosure.

[00:04:31] [SPEAKER_04]: That's it.

[00:04:32] [SPEAKER_04]: That's it.

[00:04:33] [SPEAKER_04]: Yeah.

[00:04:33] [SPEAKER_04]: Yeah.

[00:04:34] [SPEAKER_04]: Now there's a big difference between yes, so that nothing else

[00:04:37] [SPEAKER_04]: is really required, but there's certainly a time and a place

[00:04:41] [SPEAKER_04]: where people may want to say, Hey, I want to look a little

[00:04:44] [SPEAKER_04]: closer before I buy this property.

[00:04:46] [SPEAKER_04]: And generally with commercial properties, there's going to be

[00:04:50] [SPEAKER_04]: a lender or an investor or maybe somebody's getting a loan

[00:04:53] [SPEAKER_04]: through the Small Business Administration.

[00:04:55] [SPEAKER_04]: They may have and they do have requirements.

[00:04:58] [SPEAKER_04]: They're like, yes, you will start with what's commonly known

[00:05:02] [SPEAKER_04]: as a phase one environmental site assessment.

[00:05:04] [SPEAKER_04]: And that's also a big misnomer.

[00:05:07] [SPEAKER_04]: People say, well, I did a phase one and I sampled for this

[00:05:10] [SPEAKER_04]: and that.

[00:05:10] [SPEAKER_04]: I'm like, no, you didn't do a phase one then.

[00:05:13] [SPEAKER_04]: A phase one is just the resume of the site's history.

[00:05:16] [SPEAKER_04]: How has it been developed?

[00:05:17] [SPEAKER_04]: Are there any known environmental records on it or nearby it?

[00:05:21] [SPEAKER_04]: Kind of like your medical history report, your FICO score.

[00:05:24] [SPEAKER_04]: But if a phase one would say, well, this used to be a

[00:05:27] [SPEAKER_04]: mercury thermometer factory in the 1950s, just like at the

[00:05:32] [SPEAKER_04]: doctor's office, here is what my history is.

[00:05:35] [SPEAKER_04]: Now we have an idea or you would have an idea what maybe

[00:05:38] [SPEAKER_04]: you should look for.

[00:05:39] [SPEAKER_04]: That's called a phase two and that's subject to the buyer

[00:05:42] [SPEAKER_04]: and the seller negotiating that certain sellers may say,

[00:05:45] [SPEAKER_04]: no, take it as it is.

[00:05:47] [SPEAKER_04]: Other sellers may say, well, if I want to move this in

[00:05:50] [SPEAKER_04]: the marketplace for a decent price, I'm going to have

[00:05:53] [SPEAKER_04]: to let them check this out.

[00:05:55] [SPEAKER_04]: So I would want to sample soil and groundwater for mercury

[00:05:58] [SPEAKER_04]: if I was going to buy the old thermometer fact.

[00:06:01] [SPEAKER_03]: That's right.

[00:06:01] [SPEAKER_03]: Yeah.

[00:06:02] [SPEAKER_03]: So a phase one from the state's perspective, DNR's perspective,

[00:06:05] [SPEAKER_03]: this is all done in the private industry.

[00:06:08] [SPEAKER_03]: Yeah.

[00:06:08] [SPEAKER_03]: DNR is not involved in this there.

[00:06:10] [SPEAKER_03]: You're not issuing phase ones.

[00:06:11] [SPEAKER_03]: It's a private company going and completing a phase one

[00:06:14] [SPEAKER_03]: who's ultimately hired either by the buyer or for the benefit

[00:06:18] [SPEAKER_03]: of the buyer.

[00:06:18] [SPEAKER_03]: Maybe the lender requires that and they're going to hire it done.

[00:06:22] [SPEAKER_04]: Right.

[00:06:22] [SPEAKER_04]: That's a great observation on that too.

[00:06:24] [SPEAKER_04]: Yeah.

[00:06:25] [SPEAKER_04]: The DNR doesn't do phase ones.

[00:06:27] [SPEAKER_04]: We don't review phase ones for more than 30 years.

[00:06:31] [SPEAKER_04]: There's been a national standard on how a phase one is to be

[00:06:34] [SPEAKER_04]: conducted.

[00:06:34] [SPEAKER_04]: There's what's called an ASTM standard, just like you buy

[00:06:37] [SPEAKER_04]: a piece of lumber or a piece of PVC pipe at the home

[00:06:40] [SPEAKER_04]: improvement store ASTM number.

[00:06:42] [SPEAKER_04]: You know how it was built to what quality.

[00:06:44] [SPEAKER_04]: Same thing for conducting a phase one.

[00:06:47] [SPEAKER_04]: It's done to an ASTM standard and an environmental

[00:06:51] [SPEAKER_04]: consulting firm or an environmental engineering firm.

[00:06:54] [SPEAKER_04]: They should know what that ASTM standard is.

[00:06:57] [SPEAKER_04]: If they don't, don't deal with them.

[00:06:59] [SPEAKER_04]: A phase one is not done by just interviewing the owner

[00:07:02] [SPEAKER_04]: about what they know.

[00:07:03] [SPEAKER_04]: It's not done on the back of a notepad.

[00:07:06] [SPEAKER_04]: It's a very defined process because it's supposed to

[00:07:10] [SPEAKER_04]: lead that consultant to do we know of any environmental

[00:07:14] [SPEAKER_04]: conditions that are obvious through records or just

[00:07:17] [SPEAKER_04]: visually observing the site or even based on the

[00:07:20] [SPEAKER_04]: history of the site.

[00:07:21] [SPEAKER_04]: Do we then recommend to confirm or deny it?

[00:07:24] [SPEAKER_04]: And that's what we call a phase two site assessment.

[00:07:27] [SPEAKER_03]: A phase two, you're going to come out, you're taking soil

[00:07:29] [SPEAKER_03]: samples.

[00:07:29] [SPEAKER_03]: What type of either user buyer, they're buying a

[00:07:33] [SPEAKER_03]: particular site.

[00:07:33] [SPEAKER_03]: Sure.

[00:07:34] [SPEAKER_03]: At what point do you typically see that phase

[00:07:36] [SPEAKER_03]: two being done?

[00:07:37] [SPEAKER_03]: I've got some of the things like if you're going

[00:07:39] [SPEAKER_03]: to develop, you want to know what that soil is.

[00:07:42] [SPEAKER_03]: Exactly.

[00:07:42] [SPEAKER_03]: You're going to turn that ground over.

[00:07:44] [SPEAKER_03]: Yes.

[00:07:45] [SPEAKER_03]: If there used to be a gas station there, which

[00:07:47] [SPEAKER_03]: would typically be yielding a phase one, you're

[00:07:50] [SPEAKER_03]: going to want to know.

[00:07:51] [SPEAKER_04]: Right.

[00:07:52] [SPEAKER_04]: Most of the time, yeah, the thing that would trigger

[00:07:54] [SPEAKER_04]: like, yeah, you should probably check this site

[00:07:56] [SPEAKER_04]: out with real sampling.

[00:07:58] [SPEAKER_04]: Certainly if there's all, if the site has already

[00:08:00] [SPEAKER_04]: been developed with any kind of intensive

[00:08:02] [SPEAKER_04]: industrial or commercial activities that either

[00:08:04] [SPEAKER_04]: used or generated hazardous materials.

[00:08:07] [SPEAKER_04]: So easy examples, a gas station site, whether it

[00:08:10] [SPEAKER_04]: was there 10 years ago or is still operating

[00:08:13] [SPEAKER_04]: today.

[00:08:13] [SPEAKER_04]: Dry cleaners for years and decades, the kind

[00:08:16] [SPEAKER_04]: of solvents that were used, they're very

[00:08:18] [SPEAKER_04]: volatile.

[00:08:18] [SPEAKER_04]: In other words, they get out.

[00:08:20] [SPEAKER_04]: They react.

[00:08:21] [SPEAKER_04]: They can also be hazardous to our health if, you

[00:08:23] [SPEAKER_04]: know, there's gross quantities.

[00:08:25] [SPEAKER_04]: So dry cleaning locations, automotive facilities

[00:08:29] [SPEAKER_04]: of any type and certainly manufacturing

[00:08:31] [SPEAKER_04]: industrial that handles that kind of stuff.

[00:08:34] [SPEAKER_04]: Most of the time, let's say if it's a mini

[00:08:36] [SPEAKER_04]: storage unit that's 20 years old and it was

[00:08:38] [SPEAKER_04]: built on a cornfield, the phase one is

[00:08:40] [SPEAKER_04]: probably going to say, hey, there was nothing

[00:08:41] [SPEAKER_04]: here before.

[00:08:42] [SPEAKER_04]: The use is innocuous.

[00:08:44] [SPEAKER_04]: And again, sometimes what's around it is just

[00:08:47] [SPEAKER_04]: as important as the site itself.

[00:08:48] [SPEAKER_04]: Because contamination in groundwater can move

[00:08:51] [SPEAKER_04]: or emanate over to your site.

[00:08:53] [SPEAKER_04]: So you want to hope that such sites are what we

[00:08:56] [SPEAKER_04]: call down gradient from you.

[00:08:57] [SPEAKER_04]: They're down the hill, so things don't roll

[00:09:00] [SPEAKER_04]: uphill.

[00:09:01] [SPEAKER_04]: But those are the kinds of past uses or

[00:09:03] [SPEAKER_04]: industries that are common that would

[00:09:07] [SPEAKER_04]: probably have that consultant recommending

[00:09:09] [SPEAKER_04]: a phase two to confirm or deny contaminants.

[00:09:11] [SPEAKER_04]: Yep.

[00:09:12] [SPEAKER_04]: No, that makes sense.

[00:09:13] [SPEAKER_03]: I'm going to go on a couple other paths.

[00:09:14] [SPEAKER_03]: Maybe one on a ship.

[00:09:15] [SPEAKER_03]: Sure.

[00:09:15] [SPEAKER_03]: So these scenarios, I own a building.

[00:09:18] [SPEAKER_03]: I own a property.

[00:09:20] [SPEAKER_03]: Now all of a sudden it has moved downstream

[00:09:21] [SPEAKER_03]: and I happen to be downstream.

[00:09:23] [SPEAKER_03]: What's my liability?

[00:09:25] [SPEAKER_03]: What's my exposure?

[00:09:25] [SPEAKER_03]: What am I supposed to do?

[00:09:27] [SPEAKER_03]: What happens?

[00:09:28] [SPEAKER_04]: This is the sophomore level of the course.

[00:09:30] [SPEAKER_04]: That's a good question.

[00:09:32] [SPEAKER_04]: So yeah, so if you've got a situation where

[00:09:34] [SPEAKER_04]: you didn't cause a contamination.

[00:09:36] [SPEAKER_04]: So in your example, yeah, it's upgrading.

[00:09:37] [SPEAKER_04]: It was uphill for me, but it's coming down.

[00:09:40] [SPEAKER_04]: So you didn't cause it so you can't be

[00:09:42] [SPEAKER_04]: made to clean it up.

[00:09:43] [SPEAKER_04]: But there's always a big but with these things.

[00:09:46] [SPEAKER_04]: Or I should say, however, however, if you are

[00:09:49] [SPEAKER_04]: aware of the condition, you can't continue to

[00:09:53] [SPEAKER_04]: cause any undue exposures by others.

[00:09:55] [SPEAKER_04]: So we had a situation in, I'll just say a

[00:09:57] [SPEAKER_04]: college town in Iowa where there was an

[00:10:00] [SPEAKER_04]: apartment complex and there had been

[00:10:01] [SPEAKER_04]: an upgrading site and there was some

[00:10:04] [SPEAKER_04]: releases have not way.

[00:10:06] [SPEAKER_04]: So the apartment building, they put in what

[00:10:09] [SPEAKER_04]: we call a vapor mitigation system.

[00:10:11] [SPEAKER_04]: They wanted to make sure any vapors

[00:10:13] [SPEAKER_04]: that came out of the groundwater through

[00:10:14] [SPEAKER_04]: the soil that were getting in the lower

[00:10:15] [SPEAKER_04]: levels that that was vented out much like

[00:10:18] [SPEAKER_04]: a radon vending system.

[00:10:20] [SPEAKER_04]: Not necessarily all that expensive or intrusive,

[00:10:23] [SPEAKER_04]: but because they knew there was an impact,

[00:10:25] [SPEAKER_04]: they didn't want to cause any certainly

[00:10:27] [SPEAKER_04]: even potential health risks to those

[00:10:31] [SPEAKER_04]: renters tenants occupants.

[00:10:33] [SPEAKER_04]: So it's kind of a do care approach

[00:10:36] [SPEAKER_04]: and federal law does recognize that.

[00:10:39] [SPEAKER_04]: But in general, you can't be made to

[00:10:41] [SPEAKER_04]: clean up anything as long as you don't

[00:10:43] [SPEAKER_04]: cause undue exposures or make it worse

[00:10:45] [SPEAKER_04]: through your own activity.

[00:10:46] [SPEAKER_03]: Got it. All right. So new scenario,

[00:10:48] [SPEAKER_03]: buy an old property. It's a gas station.

[00:10:51] [SPEAKER_03]: It clearly has been a gas station.

[00:10:54] [SPEAKER_03]: The convenience store, let's call it

[00:10:55] [SPEAKER_03]: still there. I'm going to turn into a

[00:10:57] [SPEAKER_03]: little trinket shop.

[00:10:58] [SPEAKER_03]: Sure.

[00:10:59] [SPEAKER_03]: What happens? What do I do?

[00:11:00] [SPEAKER_03]: What's my kind of my exposure from that

[00:11:02] [SPEAKER_03]: regard?

[00:11:02] [SPEAKER_04]: Yeah, that's another good scenario.

[00:11:05] [SPEAKER_04]: The first one is knowledge is power.

[00:11:07] [SPEAKER_04]: So with your phase one, if you started

[00:11:09] [SPEAKER_04]: with it, you would have found out, OK,

[00:11:10] [SPEAKER_04]: it was a gas station.

[00:11:12] [SPEAKER_04]: DNR was very involved.

[00:11:14] [SPEAKER_04]: The huge majority of sites we deal

[00:11:16] [SPEAKER_04]: with everybody thinks they like get

[00:11:17] [SPEAKER_04]: cleaned up where they're perfectly clean.

[00:11:20] [SPEAKER_04]: No impact whatsoever.

[00:11:21] [SPEAKER_04]: That's a misnomer.

[00:11:23] [SPEAKER_04]: Sites are cleaned up or risk evaluated

[00:11:26] [SPEAKER_04]: to the point if there's no risk,

[00:11:28] [SPEAKER_04]: then why do further cleanup?

[00:11:30] [SPEAKER_04]: There's not an endless supply of money

[00:11:32] [SPEAKER_04]: and some cleanups would cost more than

[00:11:34] [SPEAKER_04]: the property would ever be worth.

[00:11:36] [SPEAKER_04]: So a lot of gas stations, well,

[00:11:37] [SPEAKER_04]: with the building sitting where it does,

[00:11:39] [SPEAKER_04]: with utilities where they are,

[00:11:42] [SPEAKER_04]: oftentimes the DNR will sign off as no

[00:11:44] [SPEAKER_04]: further action as is.

[00:11:46] [SPEAKER_04]: So if you want to move in and set up a

[00:11:47] [SPEAKER_04]: trinket shop in the same building

[00:11:49] [SPEAKER_04]: and you don't really change anything,

[00:11:51] [SPEAKER_04]: no new exposure, no real risk,

[00:11:54] [SPEAKER_04]: but it's kind of like a used car.

[00:11:56] [SPEAKER_04]: It's not perfect.

[00:11:57] [SPEAKER_04]: It's not brand new.

[00:11:59] [SPEAKER_04]: But if you take care of it properly,

[00:12:01] [SPEAKER_04]: it can still work just fine

[00:12:03] [SPEAKER_04]: and you'll get a good value out

[00:12:06] [SPEAKER_04]: of it probably for a lower price,

[00:12:08] [SPEAKER_04]: just like a used car.

[00:12:09] [SPEAKER_04]: Yeah.

[00:12:10] [SPEAKER_04]: That's the fundamental with that.

[00:12:11] [SPEAKER_04]: But if you wanted to really change

[00:12:13] [SPEAKER_04]: that side around...

[00:12:14] [SPEAKER_03]: Let's go further.

[00:12:14] [SPEAKER_03]: Yeah.

[00:12:15] [SPEAKER_03]: I want to turn this trinket shop into

[00:12:17] [SPEAKER_03]: whatever, you know, a three story

[00:12:19] [SPEAKER_03]: apartment complex.

[00:12:20] [SPEAKER_03]: I'm going to put a few things up.

[00:12:21] [SPEAKER_03]: Yeah.

[00:12:22] [SPEAKER_04]: A little different scenario.

[00:12:23] [SPEAKER_04]: So like we discussed earlier,

[00:12:25] [SPEAKER_04]: if you're going to cause new

[00:12:27] [SPEAKER_04]: exposures or disturbed contaminants,

[00:12:29] [SPEAKER_04]: now you have to think through that one.

[00:12:31] [SPEAKER_04]: So you would want to evaluate

[00:12:33] [SPEAKER_04]: where is the soil contamination?

[00:12:35] [SPEAKER_04]: Where is the groundwater contamination?

[00:12:38] [SPEAKER_04]: So some people with new structures,

[00:12:39] [SPEAKER_04]: they put in what we call a vapor barrier,

[00:12:41] [SPEAKER_04]: pretty much like a big plastic tarp

[00:12:43] [SPEAKER_04]: that's even underneath the foundational cement.

[00:12:46] [SPEAKER_04]: So any vapors that would emanate upwards,

[00:12:48] [SPEAKER_04]: they're vented to the outside of the building

[00:12:50] [SPEAKER_04]: or they have contingency plans

[00:12:52] [SPEAKER_04]: if they dig up contaminated soil,

[00:12:55] [SPEAKER_04]: you can't just throw it in somebody else's backyard.

[00:12:57] [SPEAKER_04]: You're going to have to take it to a proper

[00:12:59] [SPEAKER_04]: landfill for treatment or disposal.

[00:13:02] [SPEAKER_04]: So again, you can plan through these things

[00:13:04] [SPEAKER_04]: and like anything in life,

[00:13:06] [SPEAKER_04]: it's easier to deal with something

[00:13:08] [SPEAKER_04]: when it's not a big surprise.

[00:13:10] [SPEAKER_04]: It's a lot easier.

[00:13:11] [SPEAKER_04]: We understand ahead of time,

[00:13:12] [SPEAKER_04]: much like the used car.

[00:13:14] [SPEAKER_04]: I know I'm going to have to put some money into it

[00:13:16] [SPEAKER_04]: to fix it up, to use it the way I want,

[00:13:18] [SPEAKER_04]: plan for it ahead of time.

[00:13:20] [SPEAKER_04]: And we can be here to help guide that.

[00:13:22] [SPEAKER_04]: That's what the DNR can help you with

[00:13:23] [SPEAKER_04]: is that planning that step by step.

[00:13:26] [SPEAKER_04]: Yeah.

[00:13:26] [SPEAKER_01]: Hi, it's Ava Baukamp,

[00:13:28] [SPEAKER_01]: the investment relations manager

[00:13:29] [SPEAKER_01]: for Neils Firm, legacy impact investors.

[00:13:32] [SPEAKER_01]: I'm inviting you to join us for our next

[00:13:34] [SPEAKER_01]: investor workshop, our monthly legacy briefings.

[00:13:37] [SPEAKER_01]: In these tactical Zoom calls,

[00:13:39] [SPEAKER_01]: we cover topics and case studies

[00:13:40] [SPEAKER_01]: for subjects such as taxes and depreciation,

[00:13:43] [SPEAKER_01]: navigating macroeconomic shifts

[00:13:45] [SPEAKER_01]: and evaluating deals as a passive investor.

[00:13:48] [SPEAKER_01]: At each virtual workshop,

[00:13:50] [SPEAKER_01]: we are joined by an industry guest

[00:13:51] [SPEAKER_01]: who covers their topic in 45 minutes or less.

[00:13:55] [SPEAKER_01]: No fluff, no pitches,

[00:13:57] [SPEAKER_01]: just education and conversation

[00:13:58] [SPEAKER_01]: with an expert each month.

[00:14:00] [SPEAKER_01]: Every workshop ends with live Q&A

[00:14:02] [SPEAKER_01]: from Neil and our guest.

[00:14:04] [SPEAKER_01]: All briefings happen on the last

[00:14:06] [SPEAKER_01]: Tuesday of the month at 3 p.m. Central.

[00:14:08] [SPEAKER_01]: If you can't make it live,

[00:14:10] [SPEAKER_01]: recordings are sent out exclusively

[00:14:11] [SPEAKER_01]: to those who've registered in advance.

[00:14:14] [SPEAKER_01]: To join us on the last Tuesday

[00:14:15] [SPEAKER_01]: of this month, visit legacybriefing.com.

[00:14:19] [SPEAKER_01]: Go to legacybriefing.com to register.

[00:14:22] [SPEAKER_01]: If you're a first time registrant,

[00:14:23] [SPEAKER_01]: I'll send you a free resource at sign up.

[00:14:26] [SPEAKER_01]: Head to legacybriefing.com

[00:14:27] [SPEAKER_01]: and I'll see you soon.

[00:14:28] [SPEAKER_03]: Where do you see people?

[00:14:30] [SPEAKER_03]: Maybe we got a story too.

[00:14:31] [SPEAKER_03]: Where do you see people?

[00:14:31] [SPEAKER_03]: Certainly who get it right,

[00:14:32] [SPEAKER_03]: they follow this process as you're lining up.

[00:14:35] [SPEAKER_03]: The people who get it wrong.

[00:14:36] [SPEAKER_03]: What are some of the stories

[00:14:37] [SPEAKER_03]: that you've seen that you're going on?

[00:14:39] [SPEAKER_03]: If you just follow the path A,

[00:14:41] [SPEAKER_03]: it does lead to path B.

[00:14:43] [SPEAKER_04]: Yep.

[00:14:45] [SPEAKER_04]: So yeah, kind of not necessarily a huge horror story,

[00:14:47] [SPEAKER_04]: but we did have a business guy

[00:14:49] [SPEAKER_04]: and he wanted to buy an old gas station

[00:14:52] [SPEAKER_04]: and demolish it and build a new building.

[00:14:54] [SPEAKER_04]: Great idea.

[00:14:55] [SPEAKER_04]: He looked up the DNR records.

[00:14:57] [SPEAKER_04]: We have a public database of any site we've been involved with.

[00:15:00] [SPEAKER_04]: He saw that the old gas station had what's called

[00:15:02] [SPEAKER_04]: a no further action certificate and NFA.

[00:15:05] [SPEAKER_04]: And for those familiar with those terms,

[00:15:07] [SPEAKER_04]: some people believe in NFA means,

[00:15:10] [SPEAKER_04]: oh, the site's all clean again.

[00:15:11] [SPEAKER_04]: No.

[00:15:12] [SPEAKER_04]: And NFA just means under our risk review,

[00:15:15] [SPEAKER_04]: as is there's no outstanding risk.

[00:15:18] [SPEAKER_04]: So in our example,

[00:15:20] [SPEAKER_04]: by the existing gas station with an NFA,

[00:15:22] [SPEAKER_04]: put a trinket shop,

[00:15:23] [SPEAKER_04]: you're not changing anything, no big deal.

[00:15:25] [SPEAKER_04]: In this case, they decided to just go full bore.

[00:15:28] [SPEAKER_04]: They tore the building down.

[00:15:29] [SPEAKER_04]: They dug a big hole in the middle of the site somewhere else

[00:15:32] [SPEAKER_04]: for a foundation of a three-story building.

[00:15:35] [SPEAKER_04]: Came up with a lot of stinky dirt.

[00:15:37] [SPEAKER_04]: Green, gray colored dirt

[00:15:39] [SPEAKER_04]: smelled like when the gasoline trucks unloading

[00:15:41] [SPEAKER_04]: at your local convenience store don't like a match.

[00:15:45] [SPEAKER_04]: Somebody called the DNR because it stunk.

[00:15:48] [SPEAKER_04]: And so the DNR came out and we said,

[00:15:49] [SPEAKER_04]: hey, you dug up all this contamination.

[00:15:51] [SPEAKER_04]: You got to deal with it now.

[00:15:53] [SPEAKER_04]: And the property owner developer was very upset

[00:15:56] [SPEAKER_04]: because they thought there was an NFA.

[00:15:58] [SPEAKER_04]: They didn't understand what the NFA meant.

[00:16:02] [SPEAKER_04]: The, I guess you could say contingencies

[00:16:03] [SPEAKER_04]: or the situation of the site itself.

[00:16:06] [SPEAKER_04]: They just saw an NFA on a line

[00:16:08] [SPEAKER_04]: and thought they were good as gold.

[00:16:10] [SPEAKER_04]: So it cost them a little bit more money,

[00:16:12] [SPEAKER_04]: I think is like $30,000.

[00:16:14] [SPEAKER_04]: Now that, of course, on the pro forma,

[00:16:17] [SPEAKER_04]: well, that's another cost.

[00:16:19] [SPEAKER_04]: But once they understood how to deal with it,

[00:16:21] [SPEAKER_04]: they dealt with it, continued on with the construction

[00:16:24] [SPEAKER_04]: and they have a great project today.

[00:16:26] [SPEAKER_04]: So that's kind of the horror story side.

[00:16:29] [SPEAKER_04]: But the other side again is with good planning ahead of time.

[00:16:34] [SPEAKER_04]: Some people do have experience with this.

[00:16:36] [SPEAKER_04]: A lot of developers say, hey, this environmental stuff,

[00:16:40] [SPEAKER_04]: it's just part of the process.

[00:16:41] [SPEAKER_04]: It's just like running the business model.

[00:16:44] [SPEAKER_04]: If you're trying to figure out your,

[00:16:45] [SPEAKER_04]: how much can you get per square foot on leasing?

[00:16:48] [SPEAKER_04]: Right. I know nothing about that.

[00:16:49] [SPEAKER_04]: But you already as a broker, realtor, developer,

[00:16:53] [SPEAKER_04]: you're running numbers on things you know

[00:16:56] [SPEAKER_04]: that are risks for you.

[00:16:58] [SPEAKER_04]: And if those risks look okay,

[00:17:00] [SPEAKER_04]: you can work this environmental stuff

[00:17:02] [SPEAKER_04]: and in essence manage or mitigate that risk.

[00:17:06] [SPEAKER_04]: You don't have to run away.

[00:17:07] [SPEAKER_04]: But we usually fear what we don't know.

[00:17:09] [SPEAKER_04]: Correct.

[00:17:10] [SPEAKER_04]: Yeah. So a lot of people that are great professionals

[00:17:12] [SPEAKER_04]: like you and your clients sometimes

[00:17:14] [SPEAKER_04]: they might go, eh, I don't want to mess with that.

[00:17:16] [SPEAKER_04]: Right.

[00:17:16] [SPEAKER_04]: And they leave these sites behind

[00:17:18] [SPEAKER_04]: and I describe those sites as what we call brown fields.

[00:17:22] [SPEAKER_04]: It's just a general descriptor term,

[00:17:24] [SPEAKER_04]: but there are sites where people have left

[00:17:26] [SPEAKER_04]: them sit late and they're vacant,

[00:17:28] [SPEAKER_04]: think dirty, dingy, rusty, tarnished.

[00:17:30] [SPEAKER_04]: That's a brown field.

[00:17:31] [SPEAKER_04]: So it's easier to go out to maybe

[00:17:33] [SPEAKER_04]: an undeveloped suburban farm field

[00:17:35] [SPEAKER_04]: and build new than to work through

[00:17:38] [SPEAKER_04]: these questions step by step to get to your project.

[00:17:42] [SPEAKER_03]: Is there a list?

[00:17:43] [SPEAKER_03]: Have you identified places that are brown fields in?

[00:17:45] [SPEAKER_03]: I'm wondering either on the for profit side

[00:17:49] [SPEAKER_03]: or the not for profit side.

[00:17:50] [SPEAKER_03]: Are there programs out there that help people

[00:17:53] [SPEAKER_03]: navigate these things and get a project

[00:17:54] [SPEAKER_03]: from start to finish as it relates to the environment?

[00:17:56] [SPEAKER_04]: Sure. So kind of on both parts,

[00:17:58] [SPEAKER_04]: people ask us all the time,

[00:18:00] [SPEAKER_04]: do I have a brown field or tell me how many sites are this?

[00:18:04] [SPEAKER_04]: The databases we do have,

[00:18:05] [SPEAKER_04]: the public databases,

[00:18:06] [SPEAKER_04]: any site where we've obtained environmental data,

[00:18:09] [SPEAKER_04]: where we've reviewed contamination reports

[00:18:11] [SPEAKER_04]: or we had to direct people for cleanup

[00:18:13] [SPEAKER_04]: like the site I referenced, the old gas station.

[00:18:16] [SPEAKER_04]: Yes, we have a database of sites.

[00:18:18] [SPEAKER_04]: We call it the contaminated sites database.

[00:18:20] [SPEAKER_04]: Some aren't really all that contaminated,

[00:18:22] [SPEAKER_04]: but they had a review under that authority.

[00:18:25] [SPEAKER_04]: So those are in there.

[00:18:26] [SPEAKER_04]: But the general descriptor,

[00:18:27] [SPEAKER_04]: do I have a brown field or maybe like

[00:18:29] [SPEAKER_04]: the city of Marshalltown or city of Ames?

[00:18:32] [SPEAKER_04]: How many brown fields are there?

[00:18:34] [SPEAKER_04]: That's on the eye of the beholder.

[00:18:35] [SPEAKER_04]: The East Village in Des Moines

[00:18:37] [SPEAKER_04]: could have contaminated sites.

[00:18:38] [SPEAKER_04]: Are they brown fields?

[00:18:39] [SPEAKER_04]: Likely not.

[00:18:41] [SPEAKER_04]: Things are pretty hot in the East Village

[00:18:42] [SPEAKER_04]: and that's in a good way.

[00:18:44] [SPEAKER_04]: Yeah, right.

[00:18:45] [SPEAKER_04]: But if developers do see,

[00:18:47] [SPEAKER_04]: well I've got a site,

[00:18:48] [SPEAKER_04]: it does have a history with DNR.

[00:18:50] [SPEAKER_04]: There are going to be some speed bumps here

[00:18:52] [SPEAKER_04]: and other developers have said,

[00:18:54] [SPEAKER_04]: no forget it.

[00:18:55] [SPEAKER_04]: There are some programs for assistance at the DNR.

[00:18:59] [SPEAKER_04]: If you're a nonprofit developer

[00:19:01] [SPEAKER_04]: and there are some,

[00:19:02] [SPEAKER_04]: there may be city, county based

[00:19:04] [SPEAKER_04]: neighborhood development corporation in Des Moines is one,

[00:19:07] [SPEAKER_04]: they're a nonprofit developer.

[00:19:08] [SPEAKER_04]: We can help them with some grants to do assessments

[00:19:10] [SPEAKER_04]: or some small grants for smaller cleanups.

[00:19:14] [SPEAKER_04]: But larger developers,

[00:19:16] [SPEAKER_04]: there are some tax credits available

[00:19:17] [SPEAKER_04]: through the Iowa Economic Development Authority.

[00:19:20] [SPEAKER_04]: And those are competitive as a lot of tax credits are.

[00:19:25] [SPEAKER_04]: But if you have what I would call a good site,

[00:19:28] [SPEAKER_04]: which means it's been sitting there late and in the weekend.

[00:19:30] [SPEAKER_03]: A good bad site.

[00:19:31] [SPEAKER_04]: Yeah, a good bad site.

[00:19:32] [SPEAKER_04]: Some people want those.

[00:19:34] [SPEAKER_04]: Yep.

[00:19:34] [SPEAKER_04]: The tax credit program IED has can offer anywhere

[00:19:37] [SPEAKER_04]: from a 12 to 24 percent tax credit reimbursement

[00:19:40] [SPEAKER_04]: on your development project,

[00:19:42] [SPEAKER_04]: all costs demolition, renovation,

[00:19:44] [SPEAKER_04]: environmental and even new construction or remodeling

[00:19:47] [SPEAKER_04]: up to the potential for a million and a half dollars

[00:19:51] [SPEAKER_04]: at the top end.

[00:19:52] [SPEAKER_04]: So 12 to 24 percent up to a million and a half.

[00:19:56] [SPEAKER_04]: That's worth talking about because banks will only loan so much.

[00:20:00] [SPEAKER_04]: Banks don't like to loan on demolition or environmental cleanup.

[00:20:03] [SPEAKER_04]: All right.

[00:20:04] [SPEAKER_04]: Yeah, they like to loan on new construction.

[00:20:06] [SPEAKER_04]: Correct.

[00:20:06] [SPEAKER_04]: So that program has been around for almost 20 years.

[00:20:09] [SPEAKER_04]: Again, it's managed at IEDA but we at the DNR,

[00:20:12] [SPEAKER_04]: we are one of the, in essence, entities that helps review

[00:20:16] [SPEAKER_04]: the tax credits and I do that myself representing DNR.

[00:20:20] [SPEAKER_04]: And I'm so happy that we can help invest in a lot of these projects.

[00:20:24] [SPEAKER_04]: We've had projects from Dyersville to Dubuque and Denison

[00:20:28] [SPEAKER_04]: and everywhere in between.

[00:20:29] [SPEAKER_03]: Well, it's tremendous work because there's a lot of projects.

[00:20:32] [SPEAKER_03]: I can imagine a lot of sites that would just never get touched

[00:20:35] [SPEAKER_03]: without some sort of assistance to be able to move

[00:20:38] [SPEAKER_03]: that a little further along.

[00:20:39] [SPEAKER_04]: Yeah, I always say that the dollar assistance is helpful.

[00:20:42] [SPEAKER_04]: But again, knowledge is power.

[00:20:44] [SPEAKER_04]: I've met some developers that the things we've just talked about,

[00:20:48] [SPEAKER_04]: it was stuff they were scared of, frightened of.

[00:20:51] [SPEAKER_04]: Once they figured it out, then with that confidence,

[00:20:54] [SPEAKER_04]: they can make better informed risk evaluations and march this forward.

[00:21:00] [SPEAKER_04]: Good consultants and there is a role for a good environmental attorney.

[00:21:04] [SPEAKER_04]: No sales pitch here for attorneys.

[00:21:06] [SPEAKER_04]: But if you're dealing with certain properties, especially if they do have

[00:21:10] [SPEAKER_04]: a history or they've been involved in larger federal regulatory history,

[00:21:14] [SPEAKER_04]: the feds have what they call the Superfund program.

[00:21:17] [SPEAKER_04]: Sites that not to rub the term in, but the worst of the worst contaminated

[00:21:21] [SPEAKER_04]: sites, if you're thinking about buying a Superfund site,

[00:21:24] [SPEAKER_04]: you could potentially do that, but you're going to want to take your time

[00:21:27] [SPEAKER_04]: and work with a good environmental attorney.

[00:21:30] [SPEAKER_03]: When somebody gets to that level, it's a pass a DNR at that point.

[00:21:34] [SPEAKER_03]: You're into the Fed at that point.

[00:21:36] [SPEAKER_04]: Depending on what the situation is.

[00:21:38] [SPEAKER_04]: Yeah, a site that still has plenty of potential now owned by the city of Des Moines

[00:21:41] [SPEAKER_04]: is what's called Daico right down there behind Meredith's, right?

[00:21:45] [SPEAKER_04]: Brown Fluor Drive at the Raccoon River.

[00:21:47] [SPEAKER_04]: That's had federal oversight for over 45 years now.

[00:21:50] [SPEAKER_04]: But the DNR has worked closely with the EPA,

[00:21:53] [SPEAKER_04]: City of Des Moines to get that site to move forward.

[00:21:56] [SPEAKER_04]: And for those that have seen it in the past, drive by today,

[00:22:00] [SPEAKER_04]: the buildings are now gone.

[00:22:01] [SPEAKER_04]: There's lots of discussion on some pretty nifty plans.

[00:22:05] [SPEAKER_04]: Some of them are concepts.

[00:22:07] [SPEAKER_04]: Some could come to pass, but there are ways just like that used car.

[00:22:11] [SPEAKER_04]: You can fix it.

[00:22:12] [SPEAKER_04]: You can get value out of it and you can move it down the road again.

[00:22:15] [SPEAKER_04]: So I don't want people to be scared of those things.

[00:22:18] [SPEAKER_04]: It's just the step by step approach.

[00:22:20] [SPEAKER_04]: How'd you get into this line of work?

[00:22:23] [SPEAKER_04]: Well, it's kind of funny.

[00:22:24] [SPEAKER_04]: You ask, I'm an urban planner by degree.

[00:22:27] [SPEAKER_04]: While I was in school at Iowa State, you could kind of focus

[00:22:30] [SPEAKER_04]: your planning studies and there was transportation planning

[00:22:34] [SPEAKER_04]: and historic preservation planning, neighborhood planning.

[00:22:37] [SPEAKER_04]: I chose environmental policy as a track and I was all set to go work

[00:22:41] [SPEAKER_04]: at Polk County.

[00:22:42] [SPEAKER_04]: I worked at their planning office all my summers in college.

[00:22:45] [SPEAKER_04]: Unfortunately, there was a hiring freeze.

[00:22:48] [SPEAKER_04]: The spring I was graduating, there was a horse track where some bonds were due

[00:22:52] [SPEAKER_04]: and there were no table games yet.

[00:22:55] [SPEAKER_04]: And obviously today that's a great success.

[00:22:58] [SPEAKER_04]: But the job I was after that I pretty much thought I had a shoe in

[00:23:01] [SPEAKER_04]: for, there was a hiring freeze.

[00:23:03] [SPEAKER_04]: So with my environmental studies, combined with my planning degree,

[00:23:07] [SPEAKER_04]: there was a growing consulting firm in West Des Moines.

[00:23:10] [SPEAKER_04]: There was a lot of underground storage tank work starting about 30 years ago.

[00:23:13] [SPEAKER_04]: So I started working privately, dealt with the DNR a lot.

[00:23:18] [SPEAKER_04]: Had to go down there for meetings a lot.

[00:23:20] [SPEAKER_04]: And after about five years, I had a position and I'm like, hey,

[00:23:23] [SPEAKER_04]: I'd love to not just help businesses but serve the state of Iowa as a whole.

[00:23:27] [SPEAKER_04]: So I've been there now for 28 years.

[00:23:30] [SPEAKER_04]: Yep. He's been fun.

[00:23:31] [SPEAKER_04]: You grew up here in town.

[00:23:32] [SPEAKER_04]: Yeah. In Iowa.

[00:23:33] [SPEAKER_04]: Yeah, I was born in Des Moines, grew up south of town a bit out in the country.

[00:23:36] [SPEAKER_04]: So I always say I can talk urban or rural depending on my audience.

[00:23:40] [SPEAKER_02]: If you're a house flipper, execute the birth strategy

[00:23:44] [SPEAKER_02]: or do double closings and are in need of money.

[00:23:47] [SPEAKER_02]: Little Guy loans is your go-to lender here in the Des Moines area.

[00:23:51] [SPEAKER_02]: Time is money.

[00:23:52] [SPEAKER_02]: Loan approvals in 24 hours.

[00:23:55] [SPEAKER_02]: Closings in five days.

[00:23:57] [SPEAKER_02]: Little Guy loans was founded by Neil Timmons, an investor just like you.

[00:24:01] [SPEAKER_02]: Since he has been in over 10,000 homes in Des Moines, there's never an appraisal.

[00:24:06] [SPEAKER_02]: Houses, multifamily and commercial property loans up to one million.

[00:24:11] [SPEAKER_02]: Check out www.littleguylones.com.

[00:24:15] [SPEAKER_02]: I'm curious what keeps you here?

[00:24:16] [SPEAKER_03]: If you could have done this anywhere, you chose to go to school a year.

[00:24:19] [SPEAKER_03]: You chose a day a year.

[00:24:20] [SPEAKER_03]: Just served the state.

[00:24:22] [SPEAKER_03]: Yep. Why? What drives that?

[00:24:23] [SPEAKER_03]: What's the fuel?

[00:24:24] [SPEAKER_04]: Well, I was born and raised in Iowa and people often say, Iowa,

[00:24:29] [SPEAKER_04]: why do you live there?

[00:24:30] [SPEAKER_04]: And my response is, I guess I was lucky to be born here.

[00:24:34] [SPEAKER_04]: Iowa just was ranked by US News and World Reports as the sixth best state

[00:24:38] [SPEAKER_04]: in the United States to live in.

[00:24:40] [SPEAKER_04]: We don't have mountains.

[00:24:41] [SPEAKER_04]: We don't have a seashore, but we beat out some states that do.

[00:24:44] [SPEAKER_04]: Quality of life is good here.

[00:24:46] [SPEAKER_04]: Affordability, education, lots of things.

[00:24:49] [SPEAKER_04]: But basically my family was here and even working privately.

[00:24:53] [SPEAKER_04]: My company wanted to send me to Texas, but I had established enough

[00:24:58] [SPEAKER_04]: relationships with business people and just my pride in our state.

[00:25:01] [SPEAKER_04]: I'm just kind of a stubborn, proud Midwest.

[00:25:04] [SPEAKER_04]: So yeah, and Des Moines, if anybody has lived here for any length of time,

[00:25:08] [SPEAKER_04]: then I'm just amazed in the growth, certainly of the Des Moines metro area.

[00:25:12] [SPEAKER_04]: I remember when the Ruan building was built, that was a big deal,

[00:25:16] [SPEAKER_04]: especially since it was brown, rusty steel already.

[00:25:18] [SPEAKER_04]: The day it went up on purpose.

[00:25:21] [SPEAKER_04]: But just the changes in the metro, including this was the end of town

[00:25:25] [SPEAKER_04]: where we're sitting at your office.

[00:25:27] [SPEAKER_04]: Correct.

[00:25:28] [SPEAKER_04]: Yes, at one point.

[00:25:29] [SPEAKER_04]: It's amazing.

[00:25:30] [SPEAKER_04]: Yeah.

[00:25:30] [SPEAKER_04]: But my career at DNR, we have a great agency, great dedicated people,

[00:25:34] [SPEAKER_04]: great leadership.

[00:25:35] [SPEAKER_04]: It seems like yesterday that I started there.

[00:25:38] [SPEAKER_04]: So if you like your job, time passes quickly.

[00:25:41] [SPEAKER_03]: There's no doubt about that.

[00:25:42] [SPEAKER_03]: What has been one of the biggest changes since you've started to wear

[00:25:46] [SPEAKER_03]: things sit today?

[00:25:47] [SPEAKER_03]: What have been a couple of the biggest changes that you've seen

[00:25:49] [SPEAKER_03]: in the DNR, in the state, perhaps in the real estate development world?

[00:25:54] [SPEAKER_03]: Maybe some of the interactions.

[00:25:55] [SPEAKER_03]: Sure.

[00:25:55] [SPEAKER_03]: DNR or the perspective.

[00:25:58] [SPEAKER_04]: Boy, those are some good ones.

[00:26:00] [SPEAKER_04]: I could certainly ponder and probably come up with a list, but a couple

[00:26:04] [SPEAKER_04]: of ones that really stick out.

[00:26:06] [SPEAKER_04]: It used to be like 20 years ago, we only thought about groundwater.

[00:26:10] [SPEAKER_04]: Contamination and ground wire, an old gas station that leaks benzene,

[00:26:13] [SPEAKER_04]: key component gasoline, and it gets into a city well and people drink it.

[00:26:17] [SPEAKER_04]: We don't want that.

[00:26:18] [SPEAKER_04]: So a lot of the assessment work and risk evaluation was on groundwater

[00:26:23] [SPEAKER_04]: protection and certainly even today, that's obviously hugely important.

[00:26:28] [SPEAKER_04]: But over time it was realized, oh, it's not just groundwater.

[00:26:31] [SPEAKER_04]: Volatile chemicals in groundwater can vaporize.

[00:26:34] [SPEAKER_04]: They turn into what we call vapor intrusion.

[00:26:37] [SPEAKER_04]: So about 20 years ago, vapor intrusion became something, hmm, you may need

[00:26:40] [SPEAKER_04]: to evaluate that, you may need to mitigate that.

[00:26:43] [SPEAKER_04]: But in the last five years, PFAS or PFAS, one of the forever chemicals,

[00:26:49] [SPEAKER_04]: it was used as a fire suppressant.

[00:26:51] [SPEAKER_04]: It's slick.

[00:26:52] [SPEAKER_04]: It was used in Teflon.

[00:26:53] [SPEAKER_04]: In essence, a great chemical for the use it was intended for.

[00:26:58] [SPEAKER_04]: But it doesn't really go away.

[00:26:59] [SPEAKER_04]: It doesn't break down in the environment and by itself in a small quantity,

[00:27:04] [SPEAKER_04]: probably no worry.

[00:27:06] [SPEAKER_04]: But if it would be in a drinking water supply and a concentration that

[00:27:09] [SPEAKER_04]: somebody could have, let's say what we call a chronic exposure, small amounts

[00:27:14] [SPEAKER_04]: over time can lead to risk.

[00:27:17] [SPEAKER_04]: So PFAS is probably what I would call the emerging contaminant.

[00:27:21] [SPEAKER_04]: And under federal law, you know, the current administration and the EPA,

[00:27:26] [SPEAKER_04]: they are promulgating some standards here.

[00:27:29] [SPEAKER_04]: So PFAS will be one of those contaminants that in a phase two, if it was used

[00:27:35] [SPEAKER_04]: or manufactured nearby, that's going to be one that's looked for.

[00:27:39] [SPEAKER_04]: PFAS, PFAS, polyfluoro.

[00:27:41] [SPEAKER_04]: I can't tell you the rest because I can't remember.

[00:27:44] [SPEAKER_03]: Well, it's just like all things.

[00:27:45] [SPEAKER_03]: There's an evolution.

[00:27:46] [SPEAKER_03]: There's a science that continues to evolve.

[00:27:48] [SPEAKER_03]: You have to learn more as a result policy changes.

[00:27:51] [SPEAKER_03]: Right.

[00:27:52] [SPEAKER_04]: But generally speaking, just I'd say three out of four brownfield sites don't

[00:27:57] [SPEAKER_04]: have any issues at all.

[00:27:59] [SPEAKER_04]: And that last quarter, it's just like kind of eating the elephant.

[00:28:03] [SPEAKER_04]: You just start breaking it down.

[00:28:04] [SPEAKER_04]: I've rarely seen a site that can't be safely redeveloped.

[00:28:08] [SPEAKER_04]: So again, I don't want people to be scared.

[00:28:10] [SPEAKER_04]: I just want them to be informed and kind of walk in with some good background.

[00:28:14] [SPEAKER_04]: We have some fact sheets of DNR and some information we can help

[00:28:18] [SPEAKER_04]: explain everything from that groundwater hazard statement to how phase

[00:28:21] [SPEAKER_04]: one's and phase two's work.

[00:28:24] [SPEAKER_04]: So your customers and subscribers can reach out to us.

[00:28:26] [SPEAKER_04]: We'd be glad to help them.

[00:28:28] [SPEAKER_03]: Mel, are you ready for the final three questions?

[00:28:30] [SPEAKER_04]: Yes.

[00:28:30] [SPEAKER_04]: I hope they're even more fun than these.

[00:28:33] [SPEAKER_03]: We're going to see.

[00:28:35] [SPEAKER_03]: These are always exciting.

[00:28:36] [SPEAKER_03]: If you had one piece of advice to your 20 year old self, what would it be?

[00:28:40] [SPEAKER_04]: Oh my, that's a good one.

[00:28:42] [SPEAKER_04]: It would be the advice that I was given by other older people.

[00:28:46] [SPEAKER_04]: Honesty, hard work and dedication.

[00:28:49] [SPEAKER_04]: You show that at every level of anything you do engaging with everyone.

[00:28:54] [SPEAKER_04]: That's the best way to prepare yourself to be an adult and frankly, to be successful.

[00:28:58] [SPEAKER_03]: Yeah.

[00:28:59] [SPEAKER_03]: Two books that changed your life.

[00:29:01] [SPEAKER_04]: Oh boy, that's an even better one.

[00:29:04] [SPEAKER_04]: I would probably say Stephen Ambrose and his book, Citizen Soldiers,

[00:29:10] [SPEAKER_04]: about the World War II soldiers because and it doesn't matter what era or what time.

[00:29:15] [SPEAKER_04]: Citizen soldiers think about the term difficult times in our nation.

[00:29:20] [SPEAKER_04]: Average citizens stepped up, whether they were drafted or whether they signed up and

[00:29:25] [SPEAKER_04]: volunteered, they went and served.

[00:29:27] [SPEAKER_04]: And the citizen soldiers, they started our nation.

[00:29:30] [SPEAKER_04]: They defended our country or I guess the things we were supposed to be founded

[00:29:35] [SPEAKER_04]: on in Civil War and defended our country in two World Wars, a Cold War and

[00:29:40] [SPEAKER_04]: other things here in the last 30 years.

[00:29:42] [SPEAKER_04]: So that's one book.

[00:29:43] [SPEAKER_04]: And the second book, gosh, I would probably say, boy, that's a tough one to

[00:29:48] [SPEAKER_04]: think through because I just love history so much.

[00:29:51] [SPEAKER_04]: I'd probably say just read the Constitution.

[00:29:55] [SPEAKER_04]: And that's not a red or a blue statement.

[00:29:57] [SPEAKER_04]: Read the Constitution.

[00:29:59] [SPEAKER_04]: People talk about the Constitution on both sides, but most of the time they

[00:30:02] [SPEAKER_04]: don't understand what that amendment is.

[00:30:05] [SPEAKER_04]: For us.

[00:30:06] [SPEAKER_04]: And that's not a DNR statement.

[00:30:09] [SPEAKER_03]: All right.

[00:30:10] [SPEAKER_03]: If you were cast away on an island.

[00:30:12] [SPEAKER_03]: Oh man.

[00:30:12] [SPEAKER_03]: Yeah.

[00:30:13] [SPEAKER_03]: You could only get three pieces of data about your business, what you do day in

[00:30:17] [SPEAKER_03]: and day out, three pieces you can get each and every month to know how your

[00:30:21] [SPEAKER_03]: business is running.

[00:30:22] [SPEAKER_03]: Hmm.

[00:30:23] [SPEAKER_04]: Um, okay.

[00:30:25] [SPEAKER_04]: I'll make it very general.

[00:30:26] [SPEAKER_04]: It can still fit exactly what I do or what you do customer satisfaction.

[00:30:30] [SPEAKER_00]: Okay.

[00:30:31] [SPEAKER_04]: I do have people that call us at DNR the way I help them.

[00:30:33] [SPEAKER_04]: They may not like what I say.

[00:30:36] [SPEAKER_04]: It may not be the answer they're looking for, but how you give them

[00:30:39] [SPEAKER_04]: that information and how you help them.

[00:30:41] [SPEAKER_04]: That's still important.

[00:30:42] [SPEAKER_03]: Yes.

[00:30:42] [SPEAKER_04]: You know, a doctor's bedside manner, no matter what they tell you, still important.

[00:30:46] [SPEAKER_04]: So I'd probably say, yeah, customer feedback and then am I meeting my goals

[00:30:52] [SPEAKER_04]: for either what's my profit margin or in my case, what am I here to do?

[00:30:58] [SPEAKER_04]: What I'm here to do is help get those brownfield sites redeveloped.

[00:31:01] [SPEAKER_04]: So I want my reports back on my metrics is my work making that difference.

[00:31:06] [SPEAKER_04]: And then the third one, what kind of bonus do I get?

[00:31:09] I love it.

[00:31:11] [SPEAKER_03]: I love it.

[00:31:12] [SPEAKER_03]: I've got a lot of questions.

[00:31:14] [SPEAKER_03]: What's one question I did not ask, but I should have asked.

[00:31:18] [SPEAKER_04]: Yeah.

[00:31:18] [SPEAKER_04]: Well, I would probably say this when it comes to environmental data,

[00:31:21] [SPEAKER_04]: I'll just kind of cover my bases on this.

[00:31:23] [SPEAKER_04]: There is a lot of environmental assessment done in the state of Iowa.

[00:31:27] [SPEAKER_04]: I know the DNR doesn't see every one that is done most of the time.

[00:31:32] [SPEAKER_04]: Residual contaminants can be found everywhere, but I do tell people,

[00:31:35] [SPEAKER_04]: you know what?

[00:31:36] [SPEAKER_04]: If you think you found something, there's an obligation

[00:31:38] [SPEAKER_04]: in Iowa law to let us know.

[00:31:41] [SPEAKER_04]: Yeah, if somebody finds contamination where it could be an immediate

[00:31:44] [SPEAKER_04]: or a likely hazardous condition, the Iowa law says you have to notify DNR.

[00:31:49] [SPEAKER_04]: We've had people before that, well, our attorney says

[00:31:54] [SPEAKER_04]: if we don't like the data, we can walk away from the deal.

[00:31:57] [SPEAKER_04]: They can walk away.

[00:31:58] [SPEAKER_04]: Nobody says anything.

[00:32:00] [SPEAKER_04]: Sometimes those what they call non-disclosure agreements,

[00:32:03] [SPEAKER_04]: those really don't apply to state or federal law.

[00:32:05] [SPEAKER_04]: So I always say when in doubt, it's better to report.

[00:32:09] [SPEAKER_04]: And I'll leave you with this another example, but change the names.

[00:32:12] [SPEAKER_04]: I got a call on a Friday afternoon where a potential property developer

[00:32:16] [SPEAKER_04]: said, well, I'm developing some farm ground and I found an old rusty

[00:32:21] [SPEAKER_04]: drum. Is that a big deal?

[00:32:23] [SPEAKER_04]: So is there any green ooze coming out of it?

[00:32:25] [SPEAKER_04]: No.

[00:32:26] [SPEAKER_04]: I said, eh, those lay around on the barbed wire fence sides or the

[00:32:29] [SPEAKER_04]: back 40 all the time.

[00:32:31] [SPEAKER_04]: What if I found two or three?

[00:32:32] [SPEAKER_04]: Well, what's in them?

[00:32:34] [SPEAKER_04]: Well, I don't know.

[00:32:35] [SPEAKER_04]: Well, again, you know, there's just a couple of three sitting around still

[00:32:39] [SPEAKER_04]: maybe no big deal.

[00:32:40] [SPEAKER_04]: Well, what if there's like a dozen buried drums?

[00:32:43] [SPEAKER_04]: I said, well, you know what?

[00:32:44] [SPEAKER_04]: You probably want to call us.

[00:32:46] [SPEAKER_04]: So this was a Friday afternoon and he said, thank you.

[00:32:49] [SPEAKER_04]: They called Tuesday and we found an illegal burial disposal site

[00:32:55] [SPEAKER_04]: of some hazardous waste drums where a housing development was going to go in.

[00:32:59] [SPEAKER_04]: We determined where that waste was originated.

[00:33:02] [SPEAKER_04]: The company that generated the waste had followed everything they were supposed

[00:33:06] [SPEAKER_04]: to the person that illegally dispose of it was no longer around like on the planet.

[00:33:12] [SPEAKER_04]: But the company stepped up and said, hey, let's just get this figured out.

[00:33:16] [SPEAKER_04]: It was solved within two weeks.

[00:33:18] [SPEAKER_04]: So even with something like that, again, it's better to disclose, let us work

[00:33:23] [SPEAKER_04]: with you, let's figure this out together.

[00:33:25] [SPEAKER_04]: We aren't trying to come down like a thousand pound sledgehammer on anyone.

[00:33:29] [SPEAKER_04]: If you're trying to do the right thing, we're going to do the right thing with you.

[00:33:33] [SPEAKER_03]: Mel, for people they want to find you, they want to follow you,

[00:33:35] [SPEAKER_03]: they want to connect with you, work share, what should they do?

[00:33:37] [SPEAKER_04]: Yeah, a couple easy ones.

[00:33:39] [SPEAKER_04]: I'm Jen Axler, so the easiest one is call me.

[00:33:42] [SPEAKER_04]: So Mel pins just like it sounds PIN has DNR at 515-729-4616.

[00:33:49] [SPEAKER_04]: If your podcast allows, I'll have my email address there.

[00:33:52] [SPEAKER_04]: We have a general website DNR type in brownfields.

[00:33:55] [SPEAKER_04]: You can find me and I'm also on LinkedIn with all my contact info.

[00:33:59] [SPEAKER_04]: Links and email address below in the show notes.

[00:34:01] [SPEAKER_03]: Everybody Mel, I appreciate coming.

[00:34:03] [SPEAKER_03]: Thank you very much, Neil.

[00:34:04] [SPEAKER_03]: Glad to be here.

[00:34:05] [SPEAKER_03]: Thanks for listening.

[00:34:06] [SPEAKER_03]: If you're enjoying the show, may I ask a favor of you?

[00:34:09] [SPEAKER_03]: Naturally, subscribe so you never miss an episode.

[00:34:12] [SPEAKER_03]: But would you rate and leave an honest written review on Apple podcasts?

[00:34:16] [SPEAKER_03]: Does a lot force here at the show?

[00:34:18] [SPEAKER_03]: And I appreciate reading your thoughts.

[00:34:20] [SPEAKER_03]: Great guests make for a great show.

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[00:34:30] [SPEAKER_03]: Visit investing in Iowa to fill out an application or recommend a guest.

[00:34:35] [SPEAKER_03]: And if you want to connect with me one-on-one, go legacyimpactinvestors.com.

[00:34:41] [SPEAKER_03]: Click on the invest with us button in the top right corner.

[00:34:44] [SPEAKER_03]: And there you can pick a time for the two of us to get on the calendar and connect.

[00:34:48] [SPEAKER_03]: Until next time, keep investing in Iowa.