Environmental Inspection Scam - GRS Group

[cincycarwash]

Hi All,

I am in the process of doing a very simple refinance on my washes, and the bank wants an environmental inspection done on each wash. No big deal, we use JBS soap, so nothing to hide.

Long story short, we have the inspection, and everything goes great. The guy talked football the whole time, took a few pictures, didn't take any samples, and left. Nothing to worry about.

Well, I just got news that GRS (the environmental inspection company) slapped us with a claim that we may have contaminated soil, and now want a Phase 2 inspection, which is going to cost us $27,000.

So, you're probably thinking they found something. NOPE. Not they didn't find one thing.

They even admitted that we aren't any harmful chemicals! HOWEVER, now they want to be sure that no previous owner has used any, so they're demanding a $27,000 phase 2 inspection just to see. And even if they don't find anything, which they likely won't, I'm still out $27k.

And then they pile on that I can't get the refi without this.

I can't help but to think they are extorting small business owners, leaving them no choice but to do it, pushing fear on them. Again - they admitted that they found no harmful chemicals or reasons to believe they might have been used, they just up and decided that they want a Phase 2 inspection to be sure...

Has anyone else dealt with the GRS Group, or experienced anything similar? Feeling taken advantage of and stuck.

Please help!

 

[cbchevy4x4]

No help here, but you gotta save a whole lot of interest to recoup that 27k. If it saves double that might be worth it, otherwise id look elsewhere to see about a refinanance even if its a little higher rate than whatever this GRS group has given you. Id find a local bank and try to deal with them, if youve owned the washes 3 years or so and showing verifiable cash flow they will probably be very likely to deal with you.

 

[kentadel]

Maybe a silly question, but what does GRS stand for? Global Recycled Standard? If so, that shouldn't even factor into your type of business.

 

[cincycarwash]

No help here, but you gotta save a whole lot of interest to recoup that 27k. If it saves double that might be worth it, otherwise id look elsewhere to see about a refinanance even if its a little higher rate than whatever this GRS group has given you. Id find a local bank and try to deal with them, if youve owned the washes 3 years or so and showing verifiable cash flow they will probably be very likely to deal with you.

Sorry to clarify - GRS Group is the environmental inspection company. They’re national, so I figured maybe someone else has run into this.

And the bank I am using is a small local bank, but I am going to try others.

I totally agree. Not even worth it anymore. Ugh!

 

[OurTown]

They probably found during their research that there used to be something like a dry cleaner or metal plating company on the property or next door and they need to verify the dirt is clean. Will the bank accept another phase 1 (or phase 2) from another environmental company that might cost less?

 

[eckert16]

Get a different 1) environmental company or 2) go to a different bank.

 

[cbchevy4x4]

Sorry to clarify - GRS Group is the environmental inspection company. They’re national, so I figured maybe someone else has run into this.

And the bank I am using is a small local bank, but I am going to try others.

I totally agree. Not even worth it anymore. Ugh!

Ahhh...makes sense. Is the 27k for all the properties on a phase 2 or just however many that is "high risk"

 

[Keno]

Careful with phase 2 studies, if anything is found, they are required to report, and you maybe required to fix at that point. It's a a once you know it has to be fixed situation, don't know and it can lay as is.

 

[Earl Weiss]

1. Get a copy of the Phase one to see if there is any basis for needing a phase two; and 2. Get a new lender and if they want a phase 1, if the one you just got doesn't show any potential issues - tell them you just had one done and use it for the new lender.

 

[OurTown]

Okay. I read your original post again. If they didn't find anything in their research or have any issues with your site then why are they asking for a phase 2? If your lender read the report and sees no issues but still demands the phase 2 then I guess it's time for a new lender.

 

[Axxlrod]

Outrageous fishing expedition.

If the current banker can't read the ph1 report that says no issues found and still wants a ph2, then find a new bank.

I've refied my washes several times. The bank always wants a report on what materials you use, and they want a ph1. Never been asked for a ph2.

 

[Cwajciec]

Not totally related but I ran into a similar situation selling a house. Got a termite inspection and they found nothing. But they did find termites in the dirt by the road 100yrds away (where they live) so they demanded a trench and rod procedure around the house for $15k. I told them in no uncertain terms I was ever going to pay for that, and I was going to find other termite companies until one would give me the all clear. In the end I “bought” an all clear certificate for $500. Shady as hell but that is some businesspeople.

 

[jaudas]

This is somewhat new from last year. The EPA last year made a ruling around the amount of PFAS (polyfluoroalkyl substances) that can be in drinking water.
Many car wash chemicals contained PFAS until around 2010, so now many if not most companies that run a Phase 1 test are going to suggest a Phase 2 if the wash was built and run prior to 2010.
A few ideas are check with other environmental companies around another Phase 1 and see what they might write up before they come out and do the "test". You would have to go to another bank, as the original cannot unsee the first Phase 1 results.
Check with other environmental companies to get different bids on a Phase 2 test, I had 4 bids ranging from $11k-18k, with the national company being the highest.
Unfortunately, I think this may be a very common issue for car washes built before 2010, unless the EPA changes their ruling.
I just had the boring done last Friday, it takes about 2 weeks to get results, feel free to message me if you have any other questions, I can try to help.