Environmental Site Assessments
Environmental Site Assessments
There are various risks involved with starting your own business. One that can be costly is dealing with hazardous waste contamination discovered on property you have recently acquired. Performing an environmental site assessment prior to acquiring a property can minimize that risk. You should have site assessment report in advance when considering a commercial or industrial property purchase.
To that end, Phase I and Phase II Environmental Site Assessments (ESAs) have been developed to evaluate environmental issues at any site previously used for commercial purposes. Standards for the Phase I and Phase II ESAs have been established by the American Society for Testing and Materials (ASTM) to address the “All‐Appropriate‐Inquiry” (AAI) aspect to the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). CERCLA contains national policy and procedures for containing or removing hazardous substances that have been released.
Phase I Environmental Site Assessment (ESA)
The Phase I ESA involves a review of records, a site inspection, and interviews with owners, occupants, neighbors and local government officials. While sampling and laboratory analysis are not always included in this phase, they should still be conducted by an environmental professional trained in the appropriate standards. The review of government records and interviews may take a lot of time. To ensure a quality assessment, allow sufficient time for the process. Contamination can result from activities that took place on the site. Contamination could also come from activities at a nearby property. The records and interviews will be the best sources to provide this information. Public records are available regarding the locations of properties that have been classified as contaminated by federal or state regulations. Depending on their proximity to your site, contamination could have made its way to your site.
Phase II Environmental Site Assessment (ESA)
Phase II Environmental Site Assessment reports are sometimes required when a Recognized Environmental Condition (REC) is found during the Phase I Environmental Assessment process. Phase II Environmental Assessments consist of collecting soil samples to screen for chemical or metal contamination. This sampling is conducted by drill rig, hydraulic push, hand auger or backhoe, depending on site specific conditions. Phase II Environmental reports can also include sampling of groundwater and surface water. This testing is recommended when there is a significant potential for the existence of an environmental liability that can affect the value of a property. Environmental liabilities are costs associated with regulatory-mandated cleanup, disposal of regulated-waste and civil liability. Civil liability occurs when the contamination has migrated offsite or tenants sue over exposure to hazardous materials.
Phase II Environmental Reports
AAI conducts Phase II report at sites where there is known or significantly-potential soil and/or groundwater contamination. Phase II report is typically limited in nature and are usually the result of a Recognized Environmental Condition being found in a Phase I report during a real estate transaction, or prior to an owner listing a property for sale. The Phase II report is only an initial screen of soil and/or groundwater, in order to determine if there is contamination.
Once contamination is found to be significant and/or to exceed federal, state or local cleanup or human-health risk standards, a further site characterization is required, in order to help establish the vertical and lateral extent of a contamination plume. In these situations, agency consultation is required in order to pursue closure from an oversight agency. A “no further action” letter is pursued for a site, in order to make the property “sellable.” In some cases, among sophisticated buyers, a liability transfer is negotiated and executed contractually.
Vapor Intrusion Assessment (VIA)
The e2e Quality Consultant conducts a Vapor Intrusion Assessment (VIA) according to ASTM Standard E2600-08 Standard Practice for Assessment of Vapor Intrusion into Structures on Property Involved in Real Estate Transactions. Due to potential vapor intrusion from soil and/or groundwater contamination, AAI screens the subsurface to determine if there is significant potential for vapor intrusion into a structure to identify alternatives for further investigation, to determine if the exposure pathway is complete, and if so, whether it poses or may pose an unacceptable risk to human health (that is, whether a Vapor Intrusion Condition or VIC exists). This practice directs the user and environmental professional to existing federal or state vapor intrusion policy, regulation and guidance. This indoor air quality issue can be a serious liability and may result from onsite or offsite volatile organic compound contamination. In addition, this may create a toxic tort liability and may affect your business operations, if left undiscovered and is not mitigated properly.
Phase II Environmental Needed
This is a normal question but there is not a simple answer. The ASTM standard describes a recognized environmental condition as the presence or likely presence of any hazardous substances or petroleum products on a property under conditions that indicate an existing release, a past release, or a material threat of a release of any hazardous substances or petroleum products into structures on the property or into the ground, ground water, or surface water of the property. The term includes hazardous substances or petroleum products even under conditions in compliance with laws.
In general, previous uses that can typically create the need for a Phase II Environmental Study include: gas stations, dry cleaners, machine shops, manufacturing, hazardous waste storage, etc. Further analysis into the specific site details during the Phase I Environmental process will determine, if any of these previous uses have created a significant potential for a release or if a known release has occurred. Expertise in soil and groundwater contamination is required in order to make good judgments in regards to these matters. This work should be conducted by a Professional Geologist or Professional Engineer with specific experience in this field.
Many lenders will automatically require a Phase II Environmental investigation for a property that has had any of these environmentally-sensitive uses. These studies can range from Limited Phase II Environmental Assessments to full Phase II Environmental Studies that include installation of groundwater monitoring wells with extensive testing. As part of the due diligence process for real estate transactions, a more limited study should be conducted as a screen initially to determine if there is a severe problem. If this is the case, further site characterization may be required or this can help the buyer decide if he wants to go forward with the transaction.
Phase II Environmental Site Assessment Cost
The cost for a Phase II Environmental Assessment ranges depending on the site specific details. The site specifics include: type of lab analyses required, drilling method needed, access to the subsurface, overhead constraints, groundwater testing required, etc. The cost of our Phase II Environmental investigations have ranged from as low as $2,000 to $200,000. Typical due diligence type phase two studies are in the $5,000 to $20,000 range. In order for us to provide an accurate price quote, we will look at the specific site and develop a strategy to minimize costs and maximize information in order to make accurate conclusions regarding the presence of a significant problem.
Each Phase I or II ESA should be performed by a trained and experienced environmental professional. The environmental professional should follow the ASTM and AAI Standards. This professional may be aware of other state, local or federal regulations, beyond CERCLA, that have other site assessment requirements.