Cleanup of contaminated groundwater is particularly troublesome as there have been virtually no success stories despite cleanup attempts throughout the United States. The bottom line Attempts to define the extent of contamination and estimate the cleanup costs can be very expensive and can often exceed the value of a property. Faced with these sorts of potential cleanup costs, and with the strict liability under environmental laws, prospective property owners are generally unwilling to risk purchasing a contaminated property. For these same reasons lenders are generally unwilling to risk financing a contaminated property. Financing the Cleanup of Contaminated Industrial Lands, April 1995, report as an outline for its discussions.
Private insurance is a tool which has potential.
Currently, the usefulness of private insurance is limited by insurance companies requiring property to be thoroughly investigated and, for some policies, cleaned up before they will write insurance. The investigation and clean-up costs will discourage most parties and particularly smaller businesses. Exhibit 3, New Ways to Survive Lethal EPA Changes, Donna Herrmann, excerpt from The Sedgwick White Papers Series, April 1994, pp. This would spread the risks for lending in the Corridor. The pool would have a designated loan officer and credit committee having a high level of expertise on commercial financing and environmental concerns and specifically familiar with issues facing Duwamish development.