Document b56y9Rg2Dv9gg8q7eo5pDYero

pace a WEDNESDAY. MARCH IS. !7 THE WALL STREET JOURNAL. 1997 Otv Jaws Camper;, Ire. At Ri{kt Reserved. New York Builders See Woes In New Asbestos Cleanup Law By torn CvtxTxa n0*nm'lMaulnoilMw EW YORX CITY'S new lav eovenng asbestos in rwldenail Nira commercial buildings becomes effective next week-on Apnl Pool's Day. The date seems appropriate to some building owners who retard the law as a cruel lone. Start ing April 1. no apartment or commercial spact-be it a pirn parlor or the tradlnt door of a securities firm-can set a building permit (or alterations unless it has been inspected for aspestos utd. t( as bestos u found, an abatement plan is approved. Confusion is certain to be a byproduct "Things won't grind to a halt u New York, but there will be a period ot painful adjust ment" says John Welch, president ol the Safe Buildings Alliance, a Washington. D.C.. group of ex-makers of asbestos products. Oame! SIlomer. a partner of the New York law firm SItomer t Odesser. sees more-dire conse quences: "The enure real estate market is go ing to be frozen, a lot of deals will be lost." Logistics is pan of the problem. New York must license asbestos investigators and cemfy contractors' employees. Then there is the matter of disposal of the asbestos fire proofing. insulation ana finishes removed from buildings. The one nearby landfill capable of properly dealing with asbestos can take only four truckloads of the material a day. Consequently, contrac tors say they will be disposing of it as far away as Maine and the Midwest. HE COSTS OP REMOVAL art Mgh-an estimated SHI to S30 Ta square foot, depending on where the asbestos is situated: asbestos on nesting pipes is much easier to remove than as bestos fireproofing oo a building frame. Some people worry that the cost of renovations of some older office buildings may be uneconomical u a result. Meanwhile, some owners report Instances in which leasing broken representing non-asbestos buildings are calling tenants in asbestos buildings and reminding them that employcn could be lia ble for employees' asbestos-related health problems if they remain In the building. Some say it is hard to overstate the issue's Importance. John McMahan, a San Francisco real estate adviser to pension funds, calls asbestos "the biggest single problem facing U.S, real rotate today." Michael Cordery. who beads investment sain for Edward S. Gordon Co., altar York real route broker, uys that even when the asbestos has been removed, "there will be a differential in rents be tween those buildiags that had asbestos and those that never did." Already, asbestos has hurt leasing in some of New York's most prominent buildings. For instance, brokers say some prospective tenants passed up space in the Fan Am building unul Metropolitan Life Insurance Co., the owner, began removing the material. NTIL NOW. many owners haven't been sure what to do. At Uthe World Trade Center, the north lower has asbestos fire proofing on the first 40 stones. The owner, the Ron Author ity of New York and New Jersey, delayed tnsulllng tire sprinklers until It decided what to do about the asbestos, u now ts seeking 1U first bids for asbestos removal on two floors. Buyers of asbestos buildings also art demanding that sellers indemnify them .igiinst future asbestos claims by employees, according 10 Mr. Sitomer. And contractors have encountered problems getting perform ance bonds, because bonding companies fear insurers wul eanetl policies in the midst of s job. In part, the confuswo stems from the fact that the federal gov ernmem han't set any standards for the presence of asbestos la of fices and other buildings. Not everyone a focusing on the negatives of the ssbestos prob lem. investors such is TLshmaa Speyer Properties, a New York builder, and lenders such as General Electric Credit Corp., a subtKlary of Genets! Electric Co., see opportunities. Jerry Speyer, a man aging partner of Tlshmaa Speyer, aims to buy tome asbestos build ings cheap because of the hysteria surrounding the problem. Like wise. GE Credit will make mortgiget on certain buildings, provided the ssbestos is practical to remove and the borrower agrees to sock away cash in s fund for eventual removal "The nsk is managea ble." says John Deterdlng. vice president and general manager of GE Credit's commercial-mortgage operation. OR CONTRACTORS, asbestos removal Is elearty an oppor Ftunity. provided they have liability insurance, licensed workers and a safe disposal stta. LVI Group Inc.. a New York constn>wo company that specializes in interiors, bought a New Jersey company Uiat did asbestos removals. Salvatore Ziua. president of LVI. uys. "We feel It s a window of opportu nity. We had been looking for Just such a high-growth area. There are only about 40 to SO big contractors qualified to do asbestos re moval- One important factor LVI is stressing to building owners is that if has "gone to mat lengths'' to acquire ngtat.to a governmew-approved landfill for the asbestos. "The landlord ts sail the owner of the asbestos, even after ra bees dumped," Mr. am uys. "We track tbe material atvtnl bandred miles to a landtui where we now the chances of its ever get ting so the Environmental Protection Agency's Superfuad ttst of hasaroaus waste suta are mlnunal" New York tu t the only market wbero owners face the prob lem: tt's merely among the first. Mr. Welch of the Safe Buildings Alliance uys: "New York City ts a paradigm of what's happening. Cities and states are taking the leadership role and moving more thoughtfully than the federal EPA." PLAINTIFF'S EXHIBIT RMC-140 TX TINER RMC0003431 otue o illiiinigi a miuuice 655 Fifteenth Street, N.W. Suite 1200 - Washington, DC 20005 (202) 879-5120 ^*.?. }i:zg TX TINER RMC0003440