I spent an eventful evening with the city council of a large municipality to present technical issues related to a brownfield plan.  The proposed redevelopment would bring a large number of jobs (over 1,000 initially) to an older urban area with one of the nations highest unemployment rates.  Unfortunately we were placed on the agenda after a public comment period where any resident or non-resident would state their opinion on just about anything.   One person spoke about everyone just getting along, another about the police not responding, and two separate people talked about the failure of the Obama administration and the banking system collapse.  The underlying theme of most of the participants was the need to bring more jobs which is totally understandable.  This concern was raised by at least a dozen residents.  After 2 ½ hours, we finally had our chance to present our plan.  The residents and one non resident than questioned the redevelopment plans and became cynical about the company.  They stated that the city should be careful about what they are offering and what the company is committed to do and that they should watch the company very closely every step of the way.  What a way to welcome those jobs so desperately needed.  I guess you just cannot win.  The city was not offering any tax incentive, rebate or credit in any form.  The city conversly would benefit from increased property tax revenue.  The council simply needed to approve a local plan so that the State could offer the credit.  In the end it was all approved and the concerned citizens approached me stating their support of the project and all was good.  There is never a dull moment dealing with politics.  I made it home for dinner by 9:30 p.m.

With all the griping, whining, kicking and moaning about Phase I ESA pricing, I began to think “what would you expect COSTCO to sell Phase I ESA services for ?” 

I consider COSTCO a retailer of higher end quality products at competitive prices.  They stock one or a couple of each type of unique and high quality products at a reasonable and competitive price.  Does that fit the description of what most Phase I ESA service providers believe they offer ?  What do you believe the price would be ? In a range depending upon geography and property type of $1,800 to $2,100 ? or $1,200 to $1,500.  I believe the latter would be at a Dollar Store. 

Ingredients would be AAI compliant (and for real hitting all the key components) completed by EP (not oversight) with demonstration of quality rated insurance coverage by established companies.  I am glad Phase I ESAs are not a retail commodity bought off the shelf (although not far from it if you let it be) and still refuse to be pressured by price when comparing ripe apples to rotten oranges.

I do and you should too.  One of the on going debates on Commonground and abroad in our industry relates to national licensing.  As noted in Larry Schnapf's blog http://commonground.edrnet.com/posts/55bb28b687 $700 Phase I ESAs, 

AAI regulations, at a minimum, to be considered a qualified environmental professional you have to have the following:

• You have to have a bachelors degree with 5-years of experience or
• Be a PE/PG with 3-years of experience or
• Hold a license, certification, or registration from a state, tribe, US Territory, federal government or Puerto Rico with 3-years of experience or
• Have 10 years of experience with no degree and
• Remain current in your field through continuing education or other relevant activities

The last bullet is the one the fires me up on this issue.  PE/PG is one requirement to meet EP with three other less regulated/policed options.  Although the PE/PG can get you to qualify as an EP the quickest out of school, it is the only one that requires continuing education based upon the prerequisite criteria.  The licensing bodies for these (PE/PG) designations can be more rigid where as the other options are an honor system with no real set hours for continuing education or a governing body.  We need national licensing for EPs or amend AAI to tighten up the technicalrequirements and continuing education criteria.  The PE/PGs are not perfect either.  I am licensed in three states and only one requires continuing education.

It is just another day in paradise being a qualified environmental professional.

I wanted to inform the community of the USDA Rural Development Business and Industry Guaranteed Loan Program and Rural Energy for Americaa Program.

This program offers loans up to $25,000,000 in designated rural areas.  This is defined as areas with a population of less than 50,000 people or less.  You can see if your property falls into rural using this link:

 http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

You would be surprised what might be considered rural and what this program covers.  Machinery and Equipment, Commercial Real Estate and Buildings, Retirement Homes, Grocery Stores, Gas Stations, etc.   Did I say gas stations ?  Environmental Policy is every bit as strict as SBA or more but they will do them. 

Great terms and there are even grants that can offer 25% of energy audit expenses and 25% of energy improvement expenses.

Spread the word or direct your customers to this program.

I wanted to share a meeting my business partner had today that did not go well at all.

He and our Director of Energy and Sustainability Division were meeting with a banker at a long term customer larger bank.  They introduced themselves and before they could sit down the banker was telling them that they had a tough road ahead in this particular market with a lot of competition and that my firm's prices have been too high on Phase I ESAs in the past and that is why they (the bank) aren't using my firm.  We asked what type of prices that he was seeing for Phase I ESAs and he said between $1,200 to $1,500.  We politely told him that those were well below market rates and that we would not go that low.

We quickly changed the subject to avoid a quickly disintegrating meeting and began to describe the energy services.  We discussed the services and how major banks may be requesting these services in the near future as part of Green Building Due Diligence on buildings.  The banker stated that there is no way that his customers would "buy those services" and how is there is no risk in not conducting this type of assessment and there is no reason the bank would require this.  We "defended" our business for awhile but eventually gave up.

THE GOOD NEWS......This is the first meeting we have had where this new line of business had not been well received.

Well of course it is good news once it improves.  I just read a USA today poll conducted by Robert Half of 1,400 CFOs on what they will buy once the economy improves.  Of interest to commercial real estate and EPs was 14% planned a new location or other real estate.  6% were planning mergers/acquisitions.  I continue to pull the fragments of good news out of the media to fuel optimism. 

Yes you read that correctly.  What ever you may read or hear in your market place, I am always pleased to report real world small business experience.  Our corporate Headquarters five year balloon is due next month.  We were talking to our primary commercial real estate bank, who is a large top 5 national player and were concerned about how the appraisal would come in and were not thrilled with the proposed terms 5/10 vs. a more favorable 5/15 to keep our payment lower (that means a 15 year amortization vs 10 year.  Don't feel bad it takes a while to learn banker nomenclature).  Since we work with so many banks we inquired about the terms with two other banks.  One a regional ($13 billion in assets) and one larger community bank ($3 billion in assets).  They both eagerly offered there input and inquired about an opportunity to present a proposal.  With in two weeks we had three commitments that were very competitive.

I was amazed to see this competition in commercial real estate lending.  It made me feel good with all the competitive bidding I have been losing in the last year and a half.

In the end the big bank came back with great terms (5/15 and a great interest rate).  We will refi in a couple of weeks.  Details to consider, this is a smaller loan ($500,000 to $1,000,000) and it is in Michigan.  Another interesting thing about bad old Michigan is that we have only had three of the countless FDIC bank takeovers in the last 18 months.