Asbestos questions revisited

Real Estate Weekly, Sept 8, 1993 by Lois Weiss

The asbestos inspection disaster in New York City schools and the delay of school openings is prompting owners to take another look at their own procedures for identifying asbestos and managing it.

"The assumptions that people are making about the Board of Ed situation is that the same situation is probably pervasive in all buildings," observed Peter L. DiCapua president of the Building Owners and Managers Association and senior vice president of Atco Properties & Management. "That is just not true."

Jack Freund, acting president of the Rent Stabilization Association, agreed: "There is a lot of overblown hysteria and when the asbestos settles it will be not quite as serious as they are making it out to be."

Studies done by the American Medical Association and the Health Effects Institute show that asbestos in good condition does not pose a health risk, explained Real Estate Board of New York Vice President Marolyn Davenport. "Owners have been making sure that the asbestos in their buildings remains in good condition," she said.

The real estate owners are removing asbestos not because it is a health issue, explained DiCapua, but because it is a market issue.

"The tenants don't want to hear that there is asbestos in the space and the attorneys are turning it into a lease issue," he added.

Because of a tide of similar lawsuits stemming from the valuation of the formerly asbestos-riddled One New York Plaza, the Department of Finance is about to issue guidelines as to how it will treat asbestos in assessed valuation.

Davenport said there has been a lot of asbestos removed from office space over the last eight years. "The marketplace has been kind of a regulator," she said. "Banks look into this, tenants look into this. There has been a tremendous awareness of the problem, so its been well managed for some time."

William Loch, director of training for Warren & Panzer Engineers and an instructor of asbestos courses for the New York University School of Continuing Education, observed that the low occupancy rate in the city has been driving much of the asbestos work. The work is performed as space is emptied and prior to the new tenant taking possession. "It's easier to rent if its asbestos free," he said.

Law Associates, a nationwide employee-owned corporation, is currently advising the School Construction Authority.

Bob Bache, Law Associates' marketing manager noted, "A lot environmental activities are transaction driven."

Attorney C. Jaye Berger, author of a book titled Hazardous Substances In Buildings: Liability, Litigation and Abatement, said: "A really smart owner will have an environmental consultant come in and do an assessment to ensure that everything is in a proper order, and do a report as to whether the asbestos is friable or intact." These reports should be kept on file, she added.

If there is a problem, such as with friable asbestos, Berger noted, the owner should hire the appropriate people to take care of it. "Circulate memos throughout the building saying what you've done," she added.

While you are relying on third-party consultants to monitor the situation, Davenport said, "people aren't going to take that liability [of the work being performed incorrectly]."

Firms like Warren & Penzer, Law Associates and Kaselaan & D'Angelo, consulting environmental engineers, are typical of the larger, more well-known firms that conduct inspections, help develop operations and management plans, write bid qualifications, evaluate the contractors' bids and abatement plan, and finally monitor the jobs.

"We also design the procedures and specifications to protect the owner's interest rather than simply pay a contractor to take the material out without any control by the owners," said Kaselaan & D'Angelo's President John Henningson.

Henningson said they monitor the air before, during and after the abatement so the work has not resulted in fibers being scattered through the building.

"That is the concern," he noted, "that the material has escaped the enclosure area."

Because of concerns about friable asbestos and the liability involved, the marketplace has demanded it be handled with care, Davenport noted. "There is pressure from all directions to handle it properly and private owners are not going to run the risk of disturbing asbestos improperly during a renovation."

Insurance companies and lenders are taking second and third looks at the work, as well. "Their inspectors are coming in and following up, asking for the reports and sometimes doing their own," noted DiCapua. "There are multi levels of interest and inspections in the buildings."

Years ago, when awareness of the issue peaked because lawsuits were filed against manufacturers, DiCapua remembered, the issue "got out of control" legislatively. "It was a debacle," DiCapua recalled, "and given the hysteria, the real estate industry has been doing a good job."

File for Remodeling

and Demolition

If buildings are being renovated or demolished then there are statutes governing the work. "But if no work is planned, there is nothing requiring the inspection," said Loch.