The Cost-Benefit Group, LLC News

On March 12th a jury awarded about $150 million in compensatory damages to 91 households in Jacksonville Maryland due to a gasoline leak that occurred at a nearby Exxon Mobil Corp. gas station.

For emotional distress most adult plaintiffs in the suit received $500,000 in non-economic damages, plus $50,000 in non-economic damages for their children for emotional distress resulting in a total award of about $71 million. ExxonMobil was also held responsible for lifetime medical monitoring, which is expected to cost nearly$14.5 million.

Each family also received the full appraised value of their home resulting in total property damages of more than $61 million. The Maryland Daily Record reported “The fact that plaintiffs were, for the most part, compensated for the full value of their homes, some of them worth as much as $1.3 million, was surprising and cathartic to many homeowners.”

On December 30th and 31st 2008 Ken Acks CEO of the Cost-Benefit Group testified before the jury regarding the diminution in property values resulting from the underground gasoline storage tank leak. Jacksonville is an affluent community about 20 miles north of the City of Baltimore. The tank spilled about 26,000 gallons of gas over 37 days until it was discovered on February 16, 2006. Jury selection began October 1st 2008, and the trial started on October 14th. Several environmental and health experts, and most plaintiffs testified before Mr. Acks.

Mr. Acks directed the valuation estimates for 91 properties. As part of the process Richard Kern, SRA, a local appraiser, estimated property value as uncontaminated at the time of the spill, The average property value was determined to be about $690,000. Mr. Acks then used a variety of techniques to estimate expected diminution levels, based upon contamination probabilities provided by Whitman Associates and other environmental consultants, an extensive search of academic literature, surveys, interviews, investigations of real estate activity in the area, and other research..

Mr. Acks had been deposed over four days by attorneys for the defendant, ExxonMobil, in the year prior to the spill. Robert Weltchek a name partner at Snyder, Weltchek & Snyder, the attorneys for the plaintiffs, directed questions to Mr. Acks on December 30th. He then faced cross examination from attorneys for the defendant, and a redirect by Mr. Weltchek.

Mr. Acks has been assessing the economic impacts of environmental factors, conducting financial analyses, valuing real property, providing litigation support, and producing cost-benefit analyses for more than 30 years. He has estimated property damages from nuclear power plants, oil spills, dry cleaners and numerous toxic chemicals. In conjunction with the NASA-Goddard, Columbia University he produced a cost-benefit analysis of green roofs in New York City and presented a Cost-Benefit Analysis of a Green Brownfield Redevelopment Project at the Society for Benefit-Cost Analysis in June 2008.

On March 3rd 2009 Kenneth Acks, CEO of the Cost Benefit Group LLC, spoke before the Regional Meeting of the Auditing Roundtable in New York City. The title of the talk was “The Economic Impact of Environmental Liabilities on Real Estate Values” The presentation reviewed the issues surrounding the valuation of contaminated properties, basic valuation methods and procedures, and included a summary of empirical results. It also presented a positive spin on the issue by discussing how greening buildings can increase values.

The conference was entitled “Valuing Environmentally Toxic Assets”. The program of the conference follows:

I. Welcome – Howard Apsan/Jerry Atlas (9 AM – 9:15 AM)
II. Introduction – Jeffrey Teitel, EHS Consultant (9:15 – 9:30 AM)
A. "Toxic Assets" – Financial community borrows a term from the EHS world
B. Greater role for the EHS Auditor – Discovering and Valuing Impaired Assets
III. How and Why The Financial Crisis Has Changed the Role of the EHS Auditor: The Legal Perspective - Holly Cannon, Principal, Beveridge & Diamond PC (9:30 – 10:30 AM)
Coffee Break (10:30 – 10:45 AM)
IV. Discovering and Valuing Environmental Liabilities - Muriel Robinette , CEO, New England EnviroStrategies Inc. (10:45 – 11:45 AM)
Lunch (11:45 AM - 1:00 PM)
V. Economic Impact of Environmental Liabilities on Real Estate Values – Kenneth Acks, CEO, Cost-Benefit Group, LLC (1:00 – 2:00 PM)
Auditing Roundtable Announcement – Jerry Atlas, Consolidated Edison
VI. Environmental Considerations Impact Banking Industry – Eric Rothenberg, Partner, O'Melveny & Meyers LLP (2:15 – 3:15 PM)
Q & A (3:15 – 4:00 PM)
ADJOURNMENT

The presentation was prepared using OpenOffice's www.openoffice.org "Presentation" Software and converted into a "PowerPoint"

The Auditing Roundtable is a Professional Organization for Environmental Health and Safety (EHS) Auditors. For more information on the Auditing Roundtable go to:
http://www.auditing-roundtable.org
For more information on The Cost-Benefit Group, LLC go to:
http://www.costbenefitgroup.com

Link: http://www.envirovaluation.org

According to AWSTATS, in 2008 Environmental Valuation & Cost-Benefit News, located at http://www.envirovaluation.org edited and published by Kenneth Acks, CEO of the Cost-Benefit Group, welcomed an average of 20,742 unique visitors per month. During the year these visitors paid a total of 660,956 visits and viewed 3,064,462 pages; and 115,039 spent at least 5 minutes on the site. The Hit Count was 5,305,351.

The site has achieved top, top five or top fifteen Google Search status for such keywords as cost-benefit, environmental economics, cost-benefit analysis, and cost-benefit green buildings/brownfields/green roofs/environment/environmental, ...

Among those linking to the site and its affiliated web portal www.costbenefitanalysis.org have been

The U.S. Environmental Protection Agency (EPA) National Center for Environmental Economics http://yosemite.epa.gov/ee/epa/eed.nsf/webpages/Publications.html and http://yosemite.epa.gov/ee/epalib/eelinks.nsf/e3539284c59a3f548525675a006180b6/59a36469b7f7ac39852568f3006f2acb!OpenDocument;

The United National Development Program - Economics Toolkit http://www.undp.org/gef/05/documents/ld/Economics_toolkit_2edition.pdf;

The U.S. EPA’s Guidebook of Financial Tools http://www.epa.gov/efinpage/publications/GFT2008.pdf; Sustainable Development Online via EnviroWindows - the European Environment Agency Platform for Knowledge Sharing and Development, http://sd-online.ewindows.eu.org/Tools/URL_94/index_html?prettyprint=1;

The Association of Environmental and Resource Economists http://www.aere.org/resources/research.html; Resources For the Future http://rfflibrary.wordpress.com/;

The National Association of Business Economists http://www.nabe.com/publib/links/maclink.htm; the Australian Association of Resource and Environmental Economics http://www.aares.info/links;

The Society for Risk Analysis http://sra.org/resources_nonprofit.php;

The Kyoto University Graduate School of Economics http://www.econ.kyoto-u.ac.jp/~ueta/link.html;

--The Indian Institute of Sciences;
--Wikipedia-Cost-benefit analysis;
--The American Economics Association’s Resources for Economists on the Internet;
--New Jersey Future;
--Environmental Economics Blog - Whitehead and Haab;
--Inomics;
--The Environmental Health & Safety (EH&S) Management Systems / ISO 14000 Center;
--Wikipedia-Contingent valuation;
--A Contract with the Earth;
-University of Cal. at Santa Barbara Economic & Environmental Sciences Electronic Resources

For more hyperlinks go to http://www.cost-benefit.com/LinksLinkers.htm