Document 7R5BO1Lz1XMeZZ9axZ4OqDzqV

WRG r\ r> 1834 PLAINTIFF'S:> (igg&EXHBIiM- Construction Products Division TO: FROM: R. J. Bettacchi J. A. Danneker J. S. Uami1 ton P. E. Korenberg R. H. Locke J. M. Spiak R. C. Walsh J. J. Wor thington D. M. Tafaro DATE: July 14, 1986 SUBJECT: Asbes tos Issues Some further publication coverage on the recent decision to ban Loans commercial buildings containing asbestos, made by Aetna Life & CasuaLty, Metropolitan Life and Prudential Insurance. The editorial by ENR provides rational approach to the overall "asbestos hysteria". on a DMT/pec Attachment D. M. Tafaro Ej\r=J News . W\7i. July 10, 1986 Asbestos in buildings scaring lenders away The real estate lending units of three of the nation's larg est insurance companies are closing the door on loans for commercial buildings containing asbestos. Their action and a tightening up bv other lenders inav put even more pressure on own ers to have the carcinogen removed or encapsulated. The ban bv the insurers includes both the purchases of buildings lor their own portfolios and Imancmg lor outside investors. It has been adopted over the past few months bv the Aetna Life & Casualtv Co.. Metro politan Life Insurance Co. and the Prudential Insur ance Co. of America. "It's a market-driven strat egy" because the material "nuns the economics of the buildings." savs James Rich mond Jr.. president of Aetna Realty Investment Inc., Hartford. He explains that his firm will not purchase or finance the purchase of buildings containing asbes tos because "m.iior tenants arc not willing to lease space Asbestos removal may pick up in pnvais buildings. in buildings wnh asbestos." [hose cuirciulv leasing space in such buildings will piobabh rmer potential (irohlems in iheir se mote when their leases expire, he adds. cured properts." said the |udge in I S Choosy tenants. Richmond poults e Mnninuri Bank a'ni lnut t o out that tenants "base a choice ol l here is some llexibilnv m Aetna's where to rent because ol a glut ol new lending ban. hnwcsei. when small olhee space in mans cities. II mam ten amounts ol asbestos .ue insohed, such ants lease, foiedosure is a possihihts as in a boiler or instrument room Rich and Aetna and other lenders aie atraid mond savs Ins compuns will commit to a that thes inav be lell holding an unmar loan as long as the material is removed ketable building and a big asbcsto\ ie- In die lime the deal is closed It is a moval job ' i midition ol i losing." he adds Some courts base also iclttsed in in Metropolitan's ie.d estate disision sulate coininerci.il lendeis hum environ (l.iims dial it, loo. looks at usbexins "on mental hazards on loreclosed piopeits a i ase-hs -i a sc basis hut ' al die cm- In one Marsluiul case. Ini example, a tent lime. Meliopolu.m is nm pimidmg ledeial disirin tniiil held a lunk liable Imancmg lor buildings th.il inulam ,w- loi cleanup ol mxi< w.isies on a Ion- be-los. s.os a sj m ijsesw nm.m is ho dr- closed piopeits "I ui.iik i.il insulin ions i lines 11ii llid u'liunnil It . a sen ue m a position in imcsiigaie and do sensiuse issue, imu-s .moiiier olhiial \l I'ludenual Realis C.hhi|>. Ness.uk. N | . there arc no exceptions m die lending ban "Were no longer doing u." suss a s|Mikcxman. lie e\|)lauis dial the compjnv is concerned ationi die at- feet ol asbestos on public health and properts values, cspecialls in light o'j changing government regulations on what constitutes acceptable levels ol ex posure. According to the spokesman. Prudential stopped buvmg buildings containing asbestos "quite a few vears ago" and. until recently, had been pro viding financing with a requirement that purchasers remove the material. No slack. At least one commercial bank savs the insurers' tough stand on asbestos is partly due to their volume ol business. "Hicy have more business than thev know what to do with," savs Llovd Ludwig Jr., senior vice president of the real estate division of National Westminster Hank USA. New York Cuv Although Westminster will Imamc the purchase of buildings containing some asbestos, prospective owners must present an engineering report and ob tain adequate insurance coveting re moval. In addition, the bank will seek guarantees bv the principals and hold a portion of the loan money to ensure that the asbestos is removed and dis posed of properly. "If the building has asbestos ceilings throughout, we would probably hold ofT on it," savs Ludwig. One real estate expert claims that the lending crunch is the result of media- induced asbestos "hvsteria" thai reached a peak six or eight months ago She believes it mav be .subsiding ns peo ple learn that they can satelv manage h in place, "[here was a reluctance |to lend| on the pari ol cvervone and nei- voiisness." savs Deborah Heck, vice president lor legislation at the Real l\s- tate Hoard of New York. "What we have now is a more calm perception of asbes tos as a m.itenal . . . and lenders will look lor responsible purchasers wlm thev know will treat it with respect." One association that represents some large asbestos removal firms condemn' anv blanket loan restrictions involving asbestos, even though it inav ire.in mine business lor members "11 il is ,i blanket mle. it is ridiculous." claims |o< M. Baker |r.. president ol die \ssniu- mm ol the Wall and Ceiling Indnsine' liiieinaiion.il Baker recommends .i tasc-bv -< .isr appioach because ashesm- tan he nlleii lell m jilate salelv li\ 11 linnni (, kn:an 10 ERR /July 10 196 10008105 -* cj. '* B\R Editorials Affirmative action clarified In spue of Reagan administration noises to the contrary. it appears that race and sex-based affirmative-action plans v% ill be a fixture of American life for some time to come (see p. 52). Tins is the wav it should be--at least for a while, and with some controls. No one likes being discriminated against, be it a white male caught up in a rcverse-discnminaiion plan labeled affirmauve action, or a black worker who never reallv knows why he didn't land a particular job. The latter situation is the Haw at the heart of the Reagan administration's propos al that race-based alhrmauve-acuon plans be available onlv to those individuals who can prove that ihev were the victims. Discrimination has been so pervasive and elusive that obtaining such proof is akin to nailing Jello to a wall. On the other hand, it is wrong for government to tram ple the rights of citizens to correct a supposed wrong. Unfortunately, die Supreme Court's eight opinions on die matter do not give much clear guidance on what die path should be. Affirmative-action programs should be reserved for wrongdoers, by implication or by evidence. Part of the equal opportunity assessment is--and should be--the num bers game. Aldiough diat sets a vicious trap that frequently leads government overseen astray, thoughtful administra tion on their part could make affirmative action much more palatable. For example, a construction companv that has a work force composed of 98% women and minorities should not be grilled bv G-men because it falls short in onlv one craft. On the other hand, a good-sized contractor that never had a minority worker should be roasted. By managing aliinnative-action plans like anv other busi ness program, government and the courts will achieve the desired employment objectives and yet preserve basic indi vidual rights of all citizens. Computer innovation... Concrete consultant James Shilstone is using computers to wipe out the long-accepted excuse that variations m lutural materials--sand, stone, etc.--make scientific concrete mix design and quality control impossible. Shilstone is market ing two microcomputer-based programs, developed for use bv designers and contractors as well as at batch plants. Tliev allow fine-tuning of mixes bv calculating the com bined effects of the spechc ingredients in a plant at a given time. Thai provides better consistency and puinpahiliu. It can also foster more efficient use of mix materials. Shilstone laments that the concrete lield "is not suscepti ble to change." But he keeps trvinq to loster a mote prolessional approach to concrete production. l,isi ve.u. lie introduced a low-cost program lor portable computers to help technicians in the held make better concrete mix deci sions IKNR -1/11/85 p 27). His latest piograins are iigiu scars advanced in sophistication but soil relatively loss m cost. His first customeis tegister unqualified enthusiasm lot the sohware (see p. 2U). Shilstone keeps knocking at the doors ol concrete pn>ducers with better tools. It's up to them to let him m anil change with the times. ... an institution to broadcast it The annual A/E/C Svstcms computer show is a growing and valuable institution in a field that is still in its infanev. Attendees complained of canned demonstrations, senson overload and tired feet dunng the week-long show, but thev still regard it as the place to come and see all that is available to them in the wav of hardware, software and peripheral equipment lor computer-aided design and engi neering lENR 7/3 p. 14). This v car's show in Chicago had a host of notable first time exhibitors. There were 13 concurrent conferences on such sublets as computer-assisted construction manage ment. reprographics, intelligent buildings and facility man agement. And if that wasn't enough, registrants could also attend a concurrent computer-aided manufacturing show. The show is a perfect place for browsing, for dabbling on this svstem or that, for comparison shopping and for meet ing and talking to others about thetr experiences. It's a real education lor both the well informed and the uninitiated. Keeping asbestos in perspective The ban bv some lenders on loans lor the purchase of buildings containing asbestos points out the need lor more education regarding die management of asbestos as a build ing material and a Itulc less hvstena (see p. 10). Asbestos iv a known carcinogen and all proper precautions should be taken to avoid unnecessary exposure to the material. Quite corrccth. its davs as a building product in new buildings are over. In older siniuures. however, asbestos silently pciforms some ol its jolis^ superbly while posing no_lhreat lo Iuiiiiaii occupant s _u 1 _t11e _tu 111d111 g. We support lenders who examine buildings on a casc-bvcasc basts, favoring responsible owners who will respect luzaidons niaien.il and line letulied removal communis when net ess.in. I hose same owners would be Irozen out ol die m.ukei if funds dned lip lor such purchases, creating die growing spetier ol np-and-skip removal, hven worse is die poieniial lor mass abandonment ol nnni.iikciable build ings alter unscrupulous owueis have squeezed evenduug dies tan out ol llieni. as in die die South Uionx In sm.li tasi-s. evenone loses. ENR/July W. 1986 10008106