FEATURE ARTICLE, JUNE 2009

Q&A On Topic: Environmental Engineering
Tim O’Neil with ESE Partners discusses his company, its interest in brownfields and how the environmental engineering business is changing in today’s market.
Interview by Lindsey Walker Marcec

TREB: Tell me a little bit about your company’s history.

O’Neil: ESE, founded in 2002 under a different name, began as a consulting firm that offered environmental engineering, safety engineering and asset optimization consulting. The organization grew to more than 130 employees with offices located in Houston, Perth, Aberdeen, and the Hague. In 2007, all foreign interests were sold and the environmental engineering practice split from the safety engineering group and became ESE Partners. ESE’s brand promise is “Making Brownfields Green” and the company’s primary focus is brownfields initiatives. Our purpose is to recognize and deliver opportunities to stakeholders while at the same time improving the community’s quality of life and economic basis through the reclamation of environmentally blighted properties. However, ESE is a full-service environmental science and engineering firm conducting all aspects of environmental consulting with the exception of air. Our main areas of business include brownfields compliance, due diligence, environmental construction, investigations and corrective action, NEPA documentation, remediation, and wetlands and ecology.

TREB: Your company specializes in brownfields initiatives. What is it about this field that attracted you? Why is it important or relevant in today’s market?

O’Neil: Brownfields initiatives and redevelopment projects are especially rewarding because their result is the transformation of unused, unsightly and typically contaminated property into an alternative beneficial end use. These types of projects benefit the developer/investor, the local governments and the community. Brownfields are important in today’s real estate market because in many large municipalities and cities, inner-city real estate for new development is limited. Additionally, the economics of brownfields projects can be quite favorable to investors, developers and community stakeholders.

TREB: What is one project in Texas that stands out as your favorite example of recycling “unusable” land and turning it into a viable development?

O’Neil: My personal favorite is the Webster Power Plant. This property is an approximately 700-acre tract of land that once housed a decommissioned natural gas-fired power plant that was built in the 1950s. The property is located in Webster, Texas, minutes from Clear Lake and NASA. ESE provided environmental engineering and project management services to the investors/developers, which included asbestos abatement and demolition of all facility structures and regulatory closure of all environmental impacts associated with the former power plant. Construction of the master-planned development was initiated in 2007 and is ongoing. Upon completion, the development will include retail shops, restaurants, condominiums, single-family homes, a marina with access to Clear Lake, and a town center with upscale retail shops. Innovative approaches utilized for the project include substantially funding the asbestos abatement and demolition costs with revenue generated form steel salvage, recycling of more than 70 percent of the material generated during demolition and remediation activities.

TREB: Currently, what sort of services are most in demand from your real estate clients in Texas? Why?

O’Neil: Currently, we are predominantly seeing requests for Phase I ESAs and industrial facility investigations and audits. It appears that under the current market conditions, a large portion of the active projects are associated with refinancing, foreclosures, and acquisitions/mergers.

TREB: How is the economic downturn affecting your business?

O’Neil: We have definitely seen the market slow in the past number of months. Many of our clients are taking the cautious wait-and-see approach to the economy. However, through our working relationships with a number of banks and capital investment firms, it is clear that funding is still available and people are looking for deals to make.

TREB: How has the environmental science and engineering business changed in Texas during the past few years? How do you foresee it changing in the future?

O’Neil: Trends in the environmental business, as well as with the regulatory agencies, has moved toward a risk-based approach to address contamination rather than the former approach of complete removal. In many circumstances, contamination left in place and properly managed can be as protective of human health and the environment as removal of the contaminant. Additionally, this approach can save time and money associated with assessment, investigation and remediation. In the future, I anticipate the continued evolution of risk-based strategies such as the Municipal Setting Designation recently adopted by the City of Houston. Furthermore, I anticipate that the  redevelopment of currently un-utilized or under-utilized properties with environmental liabilities will become more frequent.

— Tim O’Neil is vice president of Houston-based ESE Partners.

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