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THE CHALLENGES
Brownfield cleanup costs can make or break
a deal in a real estate transaction or redevelopment project. Costs can range from $50,000 to $5,000,000. As the scale of
the project grows, the need to understand and estimate costs grows.
But cost estimating presents unique challenges,
and the lack of a reliable and accurate cost estimate can bog down a project. This is especially true on projects that involve
a mixture of landowners, federal and state regulatory agencies, attorneys, bankers, and grantmakers. All need to answer the
question: is it economically feasible to redevelop a contaminated site?
The challenge is to capture all possible
contingencies. Capturing contingencies has traditionally been a problem with cost estimating because typically a single cost
estimate is prepared with spreadsheet software. Assumptions are listed and a single estimate results. Although several estimates
are sometimes prepared for different scenarios, analyzing cost risks remains difficult.
Landmark understands the importance
of cost estimating and utilizes cutting-edge software that uses risk analysis techniques to help decision-makers manage the
uncertainty inherent in remediation cost estimates.
THE SOLUTION
Landmark works with clients to understand the specific
redevelopment plans to identify uncertainties early in the planning process. We then use these plans in cost modeling scenarios.
With a client-focused and planned land use-driven approach, we develop response action plans that incorporate building design,
property layout, cut and fill and even landscape architecture to better predict remediation costs.
LANDMARK'S EXPERIENCE
Landmark
has prepared cost estimates on projects ranging from the removal of underground storage tanks to the cleanup of former Superfund
sites. The goal of the cost estimate is to minimize financial risks and gain the confidence of all parties involved. We
have prepared cost estimates for:
* Feasibility studies
* Construction
* Probabalistic scenarios
* Alternative
development plans
* Third party review of estimates
* Development and review of construction bids and payment applications
*
Cost risk analysis (see next section).
Landmark’s cost estimating skills have contributed to the cleanup and redevelopment
of properties ranging from a 10-acre former Superfund site on the Mississippi River to a 42-acre former commercial/industrial/
residential property. These projects reflect Landmark’s skill at using cost estimates to bring projects to completion.
PROJECT EXAMPLE
Since most cleanup and redevelopment projects involve – at least – the excavation of contaminated soil,
Landmark uses risk analysis software to estimate soil volume and disposal costs, which can be a costly unknown. The software
allows us to enter a range of values and generate a range of costs.
Although risk analysis software is a useful tool
for identifying and managing project cost risk, the cleanup and regulatory strategy that Landmark and the client creates is
what will ultimately save the client money. In the case shown below, costs are controlled by devising property-specific cleanup
goals to meet the client‘s needs for planned property uses. Cleanup goals were driven by a range of property uses (utility
corridors, storm-water pond, etc.), and by a development plan that minimized unnecessary excavation such as soil under buildings.
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