The Terrifying Reason Why We Haven’t Started Construction On The Merc

When I started out on the journey of The Merc I promised myself that I would check my ego and share all the good and bad of the renovation with you guys. After all, its not all sunshine and rainbows all the time right? Well one of those moments is here (already!?! WTF!?) and as stressful and embarrassing as it is to share I’m baring all.

As I’ve talked about numerous times already, we worked on this thing like crazy before we bought it. We did allllll the tests, and spent alllllll the money so that we knew what we were going into.

All except one. Yep.

Dang it.

This is going there.

But first you need some info that I haven’t shared yet.

We knew going into the purchase of The Merc that the seller had a hard deadline for closing. Everything has to be finished April 1 because his note to the seller (that he bought it from a year prior) was due. When we stared everything in September, April 1st seemed like an eternity away. A target as easy to hit as the broad side of a barn. There was no way that it wasn’t going to happen by then. But then as more testing and more requirements and more people got involved the date kept inching closer. We realized at the beginning of March that there was no way that we would be able to close with the bank before that date. So using a combination of our life savings, equity from the sale of our house, and a little bit of seller financing we bought The Merc outright, without having to worry about the bank financing. This gave us plenty of time to get the construction loan ready to go. When we closed on The Merc I thought the construction loan was just a week or 2 behind.


Ha ha.

This is where it gets complicated. The one test that we didn’t do before we closed with the seller was a Phase 1 Environmental test. A Phase 1 is a test that covers an investigation of the current and past history and uses of the property in question. What was previously on the site? What could past usage have done? Did any usage contaminate the soil or groundwater underlying the site? How about the current operation? Are any petroleum, hazardous materials or chemicals in use at the site, or have they been released to the air, soil or groundwater at or near the site?

Basically is there anything on the site that could cause potential environmental issues.

From 1928-1945 there was a small gas pump outside, so the concern is that the underground storage tank was still there.

I spoke with the city (they widened the road and added the streetscape about 10 years ago) and they said there was no way that the tank was still there. I spoke with the previous owner (like the long time lifelong owner) and he said it wasn’t there, but there is no legal documentation that the tank was removed. Prior to the 1970’s it wasn’t required to disclose that info to the state of Utah, so its not documented if it actually is there or not.

In order to get our construction loan we had to have a Phase 1 test done. Everyone saying that it isn’t there isn’t good enough, it needs to be proven.

So why do we need it? When environmental issues are discovered it is the legal property owner’s responsibility to remediate it. It doesn’t matter when the issue was there, if it hasn’t been dealt with, it is the owners obligation to handle it. So in our case, it doesn’t matter that the tank hasn’t been in use since 1945, or that the ownership of The Merc has changed hands half a dozen times since then, because we are the owners we are liable for it.

The reason that the bank requires the testing is because if there are issues and the property owner stops making their payments, the bank will not file for foreclosure because then they would be liable for the remediation. They would be out the amount of the loan + whatever the cost of remediation would be.

This is a fairly new practice that banks are requiring and I completely understand why.

We had our phase 1 testing done in mid April and it came back inconclusive. The company doing the testing was hoping that the city utility lines would intersect the section of grass where the tank would be if it were there. When the city marked the lines they did not cross that area.


Dang it again.

The Phase 1 also determined that the brick side of the building was used as a service garage for approximately 10 years. During the 40’s there were some pretty volatile chemicals used as degreasers. Over time as they break down their toxicity stays high, so they also wanted to run a sub-slab vapor test on the interior.

I was fine with it and not worried until one night at 3 am I woke up unexpectedly panicked. I did what everyone in that situation does when the wake up with fears at 3 am, I started googling. And like the person that googles info about a hangnail and finds out that they have terminal cancer, I learned that needing to do a phase 2 meant that it would cost millions of dollars and would entail tearing out Santa Clara Dr and replacing all of the dirt within 5 yards of where the tank was, and removing all of the concrete and 9 feet of dirt on the interior thus making the walls crumble into oblivion and the entire property being leveled. So basically millions of dollars for a weird shaped lot of new to me dirt. As fun and thrilling as that sounds, its not quite the look I was going for.

In all reality though I was absolutely terrified, I haven’t thrown up from stress since Court was in his addiction. It was not a fun place to be and it wasn’t until after I spoke with the man that did the phase 1 did I understand that everything was going to be a-ok even if the tests came back positive. I was not going to bankrupt my great grand children.

So this is where we’re at. They collected samples for the Phase 2 today (which is why this post is going live so late!) and I feel like it is hopefully a lesson learned the hard, but not brutal way. I’ll keep you guys posted, and I’ve got a whole post coming up about it, just so when someone googles, hopefully they aren’t going to give themselves a coronary.

So here I am in all of my embarrassed glory. Should we have done the test beforehand? Of course. Would it have changed anything? That’s yet to be determined but I’m feeling pretty good about it. Have you ever dealt with environmental testing? If so how did it turn out?






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Author: Jeff Donaldsons

Good day everyone, I'm a family man who loves hanging out with friends & meeting new people. Family Friends and Coding Yeah!. I also love helping others.