LEARNING CURVE: VENICE AUTO REPAIR : Tanks? No Tanks : An Environmental Lesson the Hard Way

For six years, Carlos Silva and Jose Turcios saved their money to purchase an auto repair shop, but they nearly lost their investment when underground gasoline tanks were discovered on their property. After a two-year dispute with the sellers, they learned how important--and how expensive--environmental problems can be. Silva and Turcios were interviewed by Karen Kaplan.

We both learned to fix cars when we were teenagers--Carlos in Mexico and Jose in El Salvador. We came here to find the American dream since the economy was so bad in Central America. We met in 1988 when we were both working on the street as roving mechanics, but it was difficult to make money. So we decided to save up to get a shop of our own.

We worked 12 hours a day, seven days a week and saved $30,000 in six years. We looked at about a dozen properties, but we liked this place because it had the best facilities, and the location and visibility were good for customers.

In the spring of 1994, we went to a bank to get a loan to pay off a balloon payment due at the end of our first year. The loan officer said we needed to get an environmental report before we could get any money. We had never heard of an environmental report before. We were clueless.

A friend of ours came to look at the place, and he could tell right away that there were oil tanks buried underground by the marks in the asphalt. It turns out this place used to be a gas station. When we told the bank, they said we had to get the tanks removed and the soil cleaned before we could get a loan.

That’s when we knew that doomsday was around the corner. We had a payment of $110,000 due in five months and we needed to get the loan. Now not only was the loan in jeopardy, but we had absolutely no money to start the process of getting these tanks removed because we put all of our savings into the down payment. It was going to cost $3,000 just for a preliminary estimate to figure out how much the removal and cleaning would cost.

We went to the Legal Corps of Los Angeles and got a lawyer. We filed suit against the previous owners, and they responded by starting a foreclosure action against us. We were scared and unable to sleep. But we knew we had to go ahead and continue with our work or we would go under for sure.

We got a trial, and last month the judge ruled that it was a case of fraud because the sellers knew about the tanks but tried to conceal them. The judge said we would not have to pay for the environmental cleanup.

We were on a real emotional roller coaster in the two years from the time the tanks were discovered until the verdict. After the verdict we felt so happy because our whole dream had been fulfilled--to have a business and support our families and feed our children.

We expect it will take one or two months to remove the tanks. We’ll have to close down the shop for at least some of the time, but that will give us a chance to take our first vacations in seven years. This is going to be an inconvenience for our customers and we think we might lose some of our clients. But this is just a small problem compared to what we’ve already been through.

If we had known to ask about environmental problems in the beginning, we would have backed out of this deal totally. But if you don’t find out until it’s too late for that, then you have to get legal advice and really fight it.

*

On why they looked for gasoline tanks ...

“The loan officer said we needed to get an environmental report before we could get any money. We had never heard of an environmental report before.”

On how the ordeal affected them ...

“We were on a real emotional roller coaster in the two years from the time the tanks were discovered until the verdict.”

On what they learned from the ordeal ...

“If we had known to ask about environmental problems in the beginning, we would have backed out of this deal totally. . . . If you find a property with underground tanks or other environmental problems, just stay away.”

AT A GLANCE

Company: Venice Auto Repair

Owners: Carlos Silva and Jose Turcios

Nature of business: Auto repair shop

Location: Los Angeles

Founded: November 1993

Number of employees: Four

Annual Sales: More than $100,000