Exit Strategy PlanningExit Strategy Planning is a tailor-made service that can provide a way out for independents that are trapped in sites that they cannot sell.
Exit Strategy Planning
Exit Strategy Planning is a tailor-made service that can provide a way out for independents that are trapped in sites that they cannot sell.
- A family owned service station where the current owners want to retire or get out of the business and the next generation is not interested in taking over.
- A no-longer viable rural location.
- A site in a declining area.
- A site cut off by a new traffic improvement scheme.
- Overwhelming competition from a supermarket.
The result is that people who have worked hard all their lives are left with a site that they cannot sell on as a going concern. They either have to solid fill their tanks to make them safe – a costly option – or turn to developers, in the hope that they will buy the site and build a new development.
Unfortunately they often find that interest from builders is low or that they offer a very low price, mainly because anyone who purchases a former fuel site for development has to assume that they will have to carry out considerable and expensive remedial work; ie making underground storage tanks safe, excavating them and possibly cleaning up leaks and discarded oil that can have built up over decades.
Specialist ESP Company
The answer to this problem comes in the form of Exit Strategy Planning (ESP), a new consortium of specialist companies, all of which are experts in their fields.
Rather than buying the site for a fraction of its true worth, ESP’s aim is to work with the retiring retailer to maximise their return on the site they have worked so hard to build up. Under the right circumstances, the site itself can even provide a large contribution to any initial capital outlay.
There are two primary organisations which constitute ESP. They are DP Fuel Tank Services (DP FTS) and Legacy Development Initiatives.
DP FTS is a well known company in the fuel and forecourt industry, specialising in safe tank cleaning and excavation, demolition and environmentally sound ground remediation. Legacy Development Initiatives handles all planning, architectural and building issues and deals with the financial side.
Once an agreement has been reached with the site owner, the two organisations begin doing the things they specialise in.
DP FTS’s first action is to conduct a desktop survey, using all available plans and records to put together as comprehensive a picture of the site as possible, above and below ground. This is followed by a survey of the site itself, using CAT scanners and some exploratory excavation.
At this stage, DP FTS brings in expert environmental consultants to locate any contamination and map its extent.
Most older service stations are presumed to have some contamination from a time when environmental legislation was not as strict. This can be fuel that has leaked from above or below-ground tanks or lubricants and other fluids from workshops. All of this has to be cleaned up before any development can take place.
Using a combination of a range of drilling, probing and sampling techniques, and advanced laboratory and on-site analysis, the environmental consultants build up a complete three-dimensional picture of any contamination.
Once this has been done, the tanks can be emptied, reclaiming as much product as possible, to help finance the project.
Following this, the buildings can be demolished, the tanks and lines excavated and any pollution dealt with.
In parallel with this process, Legacy Development Initiatives will be exploring the planning and design possibilities for the site, by researching the needs of the area and talking to the planning authority to build up a picture of the market potential of the site.
At this stage planning permission is applied for and all the preparatory work by Legacy and DP FTS begins. This includes obtaining all the necessary permissions and licences to demolish any buildings and clean up the land to make it safe.
Legacy will also consider all the financial aspects of the project. This entails: helping the former retailer find initial finance, ensuring that the owner benefits from all applicable grants and tax breaks, managing the project’s finances and ensuring the retailer obtains the best return from investing the profit.
All costs and fees are agreed with the site owner in advance of the whole project or at agreed stages or milestones, as far as possible. The site owner is always kept fully involved and informed.
There is, of course, no real way of guaranteeing the extent of any pollution on the site that may need full remediation, but the ESP methodology aims to minimise this uncertainty as far as possible before the digging starts.
The normal route for the site owner would be to take the profit by selling the cleaned up site, with planning permission to a developer. A site that is certifiably clean and has planning consent is obviously much more valuable to a developer than land where he has to take a gamble on these two issues.
However ESP’s aim is to maximise the return for the site owner. This means deciding when, in the development process, is the most advantageous stage at which to take the profit. This will depend on a number of issues such as state of the economy, cost of finance and the retailer’s own priorities and resources – one of which we have mentioned earlier being stock value. So, it could be that ESP arranges the sale at an earlier stage or progresses the development further with the site owner and ourselves.