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Enough Is Enough Environmental Risk Management E R M gToday
September 18, 2015
CBOR Continuing Education
P t d bPresented by:Thomas WackermanPresident/Director of Brownfield RedevelopmentASTI Environmentaltwacker@asti-env.com810.599.5463
Environmental
Presentation toCBOR Continuing Education Course
ASTI Environmental 800-395-ASTISeptember 18, 2015 1
Enough is Enough
Environmental
CBOR Continuing EducationSeptember 18, 2015
IntroductionTom Wackerman, CHMM, CET, EP
President
ASTI Environmental810-225-2800
k i
2015
twacker@asti-env.comwww.asti-env.com
Class SummaryEnvironmental due diligence has changed over the
past several years. Not only are there different regulatory requirements, but options for assessment and documentation are available to fit various end uses. In addition, buyers have become more knowledgeable and are
h l d d l
2015
approaching environmental due diligence as a business risk management decision. This session will explore changes to the regulations, but more importantly will discuss changes to buyer’s expectations and options for appropriate levels of effort.
Class ObjectivesUnderstand how a risk based approach to
environmental due diligence can focus resources and time on the key issues for purchase and operation.
Understand the options for assessment and agency review so that the project scope will
2015
g y p j pmeet the client’s needs.
Understand how redevelopment in blighted urban core areas requires addressing challenging historical environmental impacts, but that solutions are available for obtaining liability protection and achieving the intended use.
OutlineDue Diligence BasicsWhat is Going On?ChangesTrends, the Good, Bad, UglyR d i
2015
RecommendationsSummaryExample ProjectQ&A
Due Diligence Basics
Environmental
CBOR Continuing Education
Presentation toCBOR Continuing Education Course
ASTI Environmental 800-395-ASTISeptember 18, 2015 2
What You Really Need to KnowThree key stepsProcess is iterativeProcess is specific to
development planProvides documentation of due
d l d
Due Diligence
Site Optimization
2015
diligence process to provide protection for “innocent landowner”
Provides assessment for use in determining compliance with closure standards
Site Optimization
Site Development
Buyers Approach - TraditionalAssessment Risk Management Value Creation
Site Selection
Due Diligence
Objectives
Phases
Screening Tools (GDR,Transaction Screen, ECI)
Phase I ESA*Phase II Investigation
Hazardous MaterialsAssessment
ComplianceAssessment
EcologicalAssessment
2015
Planning
Construction
Operation
g
Baseline Environmental Assessment *
Post Closure Plan
Remediation OptionsAnalysis
Due Care Plan* orDDCC
Brownfield Incentives
Remediation, Closureand Restoration
No Further Action Rpt.Certificate of Completion
Operation andMaintenance
OwnerExit Strategy
* Indicates the three key liability protection documents
Hazardous MaterialsClearance Report
Operating Permits, Plans and Programs
Pre-Construction Phases - Buyer
Due
Diligence
Risk
Management
Value
Creation
DocumentationIdentify Issues
Identify Limitations(Physical and
Fi i l)
Funding Sources
roce
ss
2015
Financial)Decrease
UncertaintyControl Costs
Clean-upDue Care
Reduce TimeTo Market
Financial Assistance
Appropriate Investigations
Site Specific Closure/ Long
Term Care
Time v. Benefits
Ob
ject
ive
Key
Issu
esP
r
Sellers Approach - TraditionalAssessment Risk Management Value Creation
Site Management
Conceptual Site Model
Objectives
Phases
Historical Review
Impact Investigation
ComplianceAssessment
2015
Planning
Operation
Report on Nature and Extent of Impacts
Post Closure Plan
Remediation OptionsAnalysis
Work Plan or RAP
Remediation, Closureand Restoration
Certificate of Completion
Operation andMaintenance
OwnerExit Strategy
Operating Permits, Plans and Programs
Pre-Construction Phases - Seller
Due
Diligence
Risk
Management
Value
Creation
Review Owner’s Historical
Operations
Identify Known Impediments to
Sale
As-Is Sale
roce
ss
2015
Operations Sale
Understand Impact on Valuation
Manage Contingent
Liability
Maximize Value
Controlling Knowledge
Limiting Affirmative Obligations
Actual vs. Perceived Costs of
Impacts
Ob
ject
ive
Key
Issu
esP
r
Due DiligenceLiability ProtectionEvaluating Development Options and Costs
Nature and Extent of ContaminationDetermining Due Care Requirements
2015
Appropriate Site Use and MaintenanceIdentifying Compliance Requirements
Underground Storage Tanks, Asbestos, etc.Municipal Environmental Ordinances
Presentation toCBOR Continuing Education Course
ASTI Environmental 800-395-ASTISeptember 18, 2015 3
Due DiligenceBasic Documents
Phase I Environmental Site Assessment• Transaction Screen• Environmental Concerns Inventory • Must be Completed before Purchase
2015
pPhase II InvestigationBaseline Environmental Assessment (BEA)
• Must be Completed within 45 Days of Purchase
Phase I ESA
Site Selection
Functionally ObsoleteOr Blighted?
Basic Due Diligence
No
Yes
Environmental
End Process
Phase II Investigation
Is Property a Facility?
Recognized EnvironmentalConditions?
Go ToSite Optimization
No
No
Yes
Yes
Site OptimizationObtaining Funding and Grants
Tax CreditsInvestigation and Remediation GrantsSpecial Grants
L d/A b t A t
2015
Lead/Asbestos AssessmentsHazardous Substance AssessmentsMold and Indoor Air Quality ManagementPre-Demolition Assessments
Appropriate UseSingle Family Residential vs. Multi-Family
Compound (Soils)Direct Contact
Residentialug/kg
Commercialug/kg
Arsenic 7,600 37,000
2015
A 7,6 37,
Lead 400,000 900,000
Benzo(a)pyrene 2,000 8,000
Part 201 Closure Requirements
Site OptimizationBasic Documents
Construction Readiness ReportRemediation Options AnalysisExit Strategy SummarySit D l t Pl
2015
Site Development Plan Grant Application or Work OrderBrownfield Plan381 Work PlanMBT Credit Application
Review Business PlanAnd Financial Projections
Is Funding AvailableFor This Project?
Can Plan ChangeTo Capture Funding?
Can Current Plan CaptureFunding?
Go ToOperation and Documentation
Site Optimization
Yes
No
Yes
Y
No
Environmental
Is Work Plan Approved?Prepare Applications,
Schedule Funding
YesNo
Go ToSite Development
No
Submit to BRA and/or MDEQ
YesModify?
YesNo
Consider Multiple Funding Sources
Prepare BrownfieldWork Plan
Presentation toCBOR Continuing Education Course
ASTI Environmental 800-395-ASTISeptember 18, 2015 4
Site DevelopmentInstalling Engineered ControlsThreatened and Endangered Species
ManagementWetlands Mitigation and Banking
2015
Greenway Development/Habitat RestorationEcological Storm Water ManagementBio-RemediationLEEDS Buildings
Site DevelopmentBasic Documents
Due Care PlanResponse Activities PlanRemedial Action PlanCl R t
2015
Closure Report• Engineering, Administrative and Institutional Controls
Disposal DocumentationFinal Assessment Report
Control, Demo,
If Facility, InvestigateNature and Extent of Impacts
SiteDevelopment
Obt i F di
Prepare Appropriate BEA(Category N, D, or S)
Prepare Due Care and/orRemediation Plan
If Obsolete or Blighted,Prepare Corrective Action Plan
Environmental
Control, Demo,Renovate, Remediate
Install Infrastructure
Obtain Funding
Obtain Core CommunityFunding
Construction
Obtain Certificate ofCompletion
Utilization of Credits
The ProcessNo. Task 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39
Conduct Due Diligence1 Conduct Phase I ESA2 Prepare Phase II Sampling Plan3 Conduct Phase II Sampling4 Identify Site Development Options5 Evaluate Site Control/Remediation Options6 Prepare BEA and Due Care Plan
Brownfield Tax Credit Program7 Identify Brownfield Funding Options8 Initial Meeting with Agency
Weeks
2015
8 Initial Meeting with Agency9 Prepare Brownfield Plan10 Brownfield Plan Review 11 Public Hearing12 Remedaiton Work Plan13 381 Work Plan Review 14 Prepare MBT Application Part I15 MBT Application Review 16 Prepare MBT Application Part II17 MBT Part II Review
Site Operation18 Install Controls/Conduct Remediation19 Restroation20 Operation and Maintenance
What is Going On?
Environmental
CBOR Continuing Education
Environmental ObjectivesObjectivesLiability ProtectionRisk Management
StrategiesDefensive DocumentationSufficient to Evaluate Impacts from
Historical UseSufficient to Design Protections for
Value Creation
Sufficient to Design Protections for Intended Use
Coordinate Design with Site Impacts, and Provide Gap Financing
Presentation toCBOR Continuing Education Course
ASTI Environmental 800-395-ASTISeptember 18, 2015 5
Environmental ObjectivesObjectivesAgency Approval/ Financial
Approval
StrategiesAdditional Assessment for
Projects Requiring Agency Review and Approval, Feder l F di g rFederal Funding, or Specific Financial Institution Requirements
All Other Projects are VAP
“Environmental” IssuesIssuesDesign
Timing
ConsiderationsStandards Based on Intended UseUse of Screening ToolsPhase I Before Purchase, BEA
within 45 DaysContingencies
Managing Costs
yUncertainty Based on Extent of
Investigation vs. Site HistoryUsing 10%/20%/30%
Eligibility for Incentives and Ability to Capture
Environmental VariablesVariablesMedia Impacted
ConsiderationsNear Surface Soils
Deeper SoilsGroundwaterBuilding Materials
Nature/Extent of Impacts
Intended Future Use
Building MaterialsBased on Type of Chemical at
Specific Location in Specific Media
Based on Design and Site Development Plans
Changes
Environmental
CBOR Continuing Education
Recent ChangesProcess Due Care Plans vs.
Documentation of Due Care Compliance (DDCC)
Extent of Assessment Based Fi i St ton Financing Structure
Federal Funding Requirement for DDCC/Agency Approval for DDCC
Recent ChangesAssessment New ASTM Standards
Emphasis on User ResponseREC Only One OptionConsiderations for Migration
Considerations for Soil V l tiliz ti t I d r AirVolatilization to Indoor Air (SVIIC AND GVIIC)
“New” Impacts for “Old” SitesOff-site ImpactsRequires More Than “Cover
and Control”
Presentation toCBOR Continuing Education Course
ASTI Environmental 800-395-ASTISeptember 18, 2015 6
Soil Volatilization• Applicable to Volatile
Organics (Gasoline, PERC, etc.)
• Screening Criteria• Conceptual Site Model
A I d• Area Impacted• Depth of Impact• Specific Compounds
• Soil Gas Sampling• OSHA Exclusion for
ManufacturingSource: Guidance Document for Vapor Intrusion Pathway, May 2013 DEQ
Up to 100ft
Soil Volatilization• Design Considerations• Presumptive Remedies
• Vapor Barrier and PassiveCollection System
• Sub SlabDepressurization System
• Operation, Maintenance and Monitoring
Trends – The Good, Bad, Ugly
Environmental
CBOR Continuing Education
Recent TrendsProcess
Assessment
Site Screening ToolsPresumptive RemediesOwner Exit StrategiesInsufficient Data on Foreclosures
No Phase I, or Phase II, or BEAAssessment No Phase I, or Phase II, or BEAAssessment Changes Due to
Changes in Funding Requirements
Buyers Approach – Recent TrendsAssessment Risk Management Value Creation
Site Selection
Due Diligence
Objectives
Phases
Screening Tools (“Quick Look”)
Hazardous MaterialsAssessment
2015
Planning
Construction
Operation
Presumptive Remedy
Operation andMaintenance
* Indicates the three key liability protection documents
Hazardous MaterialsClearance Report
Operating Permits, Plans and Programs
Recommendations
Environmental
CBOR Continuing Education
Presentation toCBOR Continuing Education Course
ASTI Environmental 800-395-ASTISeptember 18, 2015 7
RecommendationsProcess Identify Need for Agency Approval
Early Based on Funding Options and Owner Exit Strategy
Match Assessment to Type of Project and Funding
D A f S fDesign Assessment for Specific Objective and Recognize Those Limitations
Focus on Due Care Obligations
Provided by ASTI Environmental. For more information call 1-800-395-ASTI
RecommendationsAssessment Use Screening Tools for Site
SelectionComplete a Phase I (Before
Purchase) – The Cheapest Insurance
Conduct Phase II As Appropriate f Obfor Objectives
Complete a BEA and Due Care Plan if Required
Special Considerations for SVIIC and GVIIC Impacts
RecommendationsScreening Tools Existing Data File Review
Government Database Review
Environmental Record Review (Desktop Review)is
k
ost
Higher Lower
pTransaction ScreenEnvironmental Concerns
InventoryPhase I ESA
R Co
HigherLower
North97 Parcels
South96 Parcels
2015
Ferndale Industrial ParksFinal Assessment Step
All industrial All Industrial
Priority and Probability for RedevelopmentDetermine funding
options for area-wide reinvestment
Features414 Acres59 Parcels9 Landfills
Rochester Hills Landfill Area
2015
Presentation toCBOR Continuing Education Course
ASTI Environmental 800-395-ASTISeptember 18, 2015 8
RecommendationsImplementation Use Presumptive Remedy When
Applicable (more costly but quicker)
Implement and Document Due Care Obligations
RecommendationsProcess Due Diligence Period of >45 Days
More Assessment = Lower Risk = More Time and Cost
Incentive Period of 4-6 MonthsFunding (Grant, Loan, Tax
Increment Financing) is Still I F g) SAvailable for Assessment, Remediation and Construction Costs
More Funding = More Time = More Brian Damage
Summary
Environmental
CBOR Continuing Education
Buyers Approach - RecommendedAssessment Risk Management Value Creation
Site Selection
Due Diligence
Objectives
Phases
Screening Tools (GDR,Transaction Screen, ECI)
Phase I ESA*Focused Phase II
Hazardous MaterialsAssessment
ComplianceAssessment
EcologicalAssessment
2015
Planning
Construction
Operation
Baseline Environmental Assessment *
Presumptive RemedyDue Care Plan*
or DDCCBrownfield Incentives
Remediation, Closureand Restoration
Operation andMaintenance
OwnerExit Strategy
•Indicates the three key liability protection documentsValue engineered items
Bold Indicates Required Item
Hazardous MaterialsClearance Report
Operating Permits, Plans and Programs
The Real WorldRisk Management Must Deal With…
Uncertainty of ConclusionsUndiscovered Impacts
No Liability But Total ResponsibilityTh Th A N P d
2015
Things That Are Not ProtectedPublic/Buyer PerceptionUSEPA Overwrite
Example Project
Environmental
CBOR Continuing Education
Presentation toCBOR Continuing Education Course
ASTI Environmental 800-395-ASTISeptember 18, 2015 9
Not a Targeted Redevelopment Area
Insufficient redevelopment connection with Downtown and Mid
Rivertown Neighborhood
2015
MidtownTraditionally light
industrial and warehousing, redevelopment stopped by proposal to build casinos
Source: Detroit Future City Report
Located between Jefferson Avenue and the River
Rivertown NeighborhoodThe Area
Site
Detroit River
Jefferson Avenue
1957 Photo
Former Park-Davis and Company manufacturing (meal processing) (1953-1972), mostly vacant
First developed in 1895 for
The Site
Rivertown Neighborhood
F p 95residential
Former uses include residential, manufacturing, and retail
Uses on adjacent properties may have impacted the site
2.26 acre site consisting of six parcels and an alley
To existing functionally obsolete buildings
The Site
Rivertown Neighborhood
gseparated by the alley
Four parcels contaminated above residential criteria, and three parcels adjacent and contiguous
Timing and Organization
Second Phase
ThirdPhase
ThirdPurchase
First Purchase
First Purchase
2015
First Phase
First Purchase
Second Purchase
First Purchase
Soils impacted above direct contact criteria with: Benzo(a)pyrene, Fluoranthene, Phenanthrene, Arsenic, Chromium, Lead, Mercury, Selenium, Silver
S il V l tili ti I ti ti
Environmental Issues
Soil Volatilization Investigation required
Underground Storage Tank Vault
Asbestos and Lead Paint mitigation required
Perception vs. Reality
Presentation toCBOR Continuing Education Course
ASTI Environmental 800-395-ASTISeptember 18, 2015 10
Environmental IssuesEntire Site: Soils Impacts for Metals, PNAs, Volatiles
Buildings: Asbestos, LBP, Soil Volatilization
2015
Tank Vault
15% for known itemsUnknown Items are unknown
Unanticipated Elements
Contingency Planning
Environmental Issues
Asbestos containing floorsVapor IntrusionHigh waterLead based paint in
discontinuous areas
DocumentationPhase I and Update -Main ProjectPhase I -Private Parcel and AllyPhase I Update for all ParcelsPhase I - Unit 5 BuildingSHPO Documents (Section 106 App)HUD Environmental Check ListAsbestos Survey
Due Care Plan - All ParcelsDue Care Plan - Unit 5 BuildingResponse Activities Plan – All ParcelsResponse Activities Plan – Unit 5No Further Action ReportSoil Vapor Report (VIA Assessment)Noise Survey
2015
yAsbestos Abatement SpecificationsLBP Assessment/Risk AssessmentPhase II - Main ProjectPhase II - Private Parcel and AllyBEA - Main ProjectBEA - Private Parcel and AllyBEA – Unit 5 Building
yGeophysical InvestigationAsbestos O&M PlanAsbestos Clearance InspectionBrownfield Plan381 Work Plan Reimbursement AgreementMBT Part I and Part II Applications
The Solution – Environmental Entire Site: Engineered Controls
Buildings: Asbestos AbatementLBP Abatement and EncapsulationVapor Seal
2015
Tank Vault Removal and Closure
Presumptive Remedy for New Construction: Vapor Control
The Solution – Site DesignFive part site incentive program
Shared common elements and support equipment in Component 5
2015
The Solution - Organizational
2015
Presentation toCBOR Continuing Education Course
ASTI Environmental 800-395-ASTISeptember 18, 2015 11
Renovation of existing buildings (Phase II includes new construction)
Removal of asbestosEncapsulation of
The Restoration
Encapsulation of remaining lead based paint
Engineered controls and use restrictions for soils impacts.
Phase II construction of new building
Engineered controls and use restrictions for soils impacts.
P ti d f
The Restoration
Presumptive remedy for radon and volatiles
Phase II
Buyers Approach - TraditionalBuyers Approach TraditionalAssessment Risk Management Value Creation
Objectives
Phases
Site Selection Screening Tools (GDR,Transaction Screen, ECI)
Hazardous MaterialsAssessment
EcologicalAssessment
Due Diligence Phase I ESA*Phase II Investigation
Baseline Environmental A t *
OwnerE it St t
ComplianceAssessment
Planning
Construction
Assessment *
Remediation OptionsAnalysis
Due Care Plan* orDDCC
Brownfield Incentives
Exit Strategy
Construction
OperationPost Closure Plan
Remediation, Closureand Restoration
No Further Action Rpt.Certificate of Completion
Hazardous MaterialsClearance Report
Operating Permits, Plans
2015
Post Closure Plan
Operation andMaintenance
* Indicates the three key liability protection documents
and Programs
Sellers Approach - TraditionalSellers Approach TraditionalAssessment Risk Management Value Creation
Objectives
Phases
Site Management Historical Review
ComplianceAssessment
Conceptual Site Model Impact Investigation
Report on Nature and E t t f I t
OwnerE it St t
PlanningExtent of Impacts
Remediation OptionsAnalysis
Work Plan or RAP
Exit Strategy
OperationPost Closure Plan
Remediation, Closureand Restoration
Certificate of Completion
Operating Permits, Plans
2015
Post Closure Plan
Operation andMaintenance
and Programs
Basic Due Diligence
Site Selection
Functionally ObsoleteYes
Phase I ESA
Or Blighted?
No
End ProcessRecognized Environmental
Conditions?
No
Phase II Investigation
Yes
Is Property a Facility?No
EnvironmentalGo To
Site Optimization
Yes
Review Business PlanA d Fi i l P j ti
Site OptimizationAnd Financial Projections
Is Funding AvailableGo To
p
No
For This Project?
Can Plan ChangeCan Current Plan Capture
Operation and Documentation
YesYes
NoCan Plan Change
To Capture Funding?Can Current Plan Capture
Funding?
YesNoConsider Multiple
Funding Sources
Go ToSite Development
Submit to BRA and/or MDEQ
Prepare BrownfieldWork Plan
Is Work Plan Approved?Prepare Applications,
Schedule Funding
NoYesModify?
YesNo
Environmental
If Facility, InvestigateN t d E t t f I t
Site If Obsolete or BlightedNature and Extent of Impacts
Development
Prepare Appropriate BEA(Category N, D, or S)
If Obsolete or Blighted,Prepare Corrective Action Plan
Prepare Due Care and/orRemediation Plan
Control, Demo,Renovate, Remediate
Obtain Funding
Install InfrastructureObtain Core Community
Funding
Construction
Obtain Certificate ofUtilization of Credits
EnvironmentalCompletionUtilization of Credits
The ProcessThe ProcessNo. Task 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39
Conduct Due Diligence
Weeks
Conduct Due Diligence1 Conduct Phase I ESA2 Prepare Phase II Sampling Plan3 Conduct Phase II Sampling4 Identify Site Development Options5 Evaluate Site Control/Remediation Options6 Prepare BEA and Due Care Plan
Brownfield Tax Credit Program7 Identify Brownfield Funding Options8 Initial Meeting with Agency9 Prepare Brownfield Plan10 Brownfield Plan Review 11 Public Hearing11 Public Hearing12 Remedaiton Work Plan13 381 Work Plan Review 14 Prepare MBT Application Part I15 MBT Application Review 16 Prepare MBT Application Part II17 MBT Part II Review
Site Operation18 Install Controls/Conduct Remediation19 Restroation20 Operation and Maintenance
2015
ACRONYM LIST
ACM – Asbestos Containing Material
ACBM - Asbestos Containing Building Material
AHERA – Asbestos Hazard Emergency Response Act
ASTs – Aboveground Storage Tanks
ASTM – American Society for Testing and Materials
BDP – Business Development Program under the MSF
BRA – Brownfield Redevelopment Authority
CO – Consent Order
CFR – Code of Federal Regulations
CNS – Covenant Not to Sue
COC – Chain of Custody
CRD – Commercial Revitalization District
CRP – Community Revitalization Program under the MSF
DDCC – Documentation of Due Care Compliance
DQOs – Data Quality Objectives
DRO – Diesel-Range Organic Compounds
ESA – Environmental Site Assessment
GRO – Gasoline-Range Organic Compounds
HASP – Health and Safety Plan
HUD – U.S. Department of Housing and Urban Development
IRR – Internal Rate of Return
LCSs – Laboratory Control Samples
LUG – Local Unit of Government
MDEQ – Michigan Department of Environmental Quality
MDLs – Method Detection Limits
MSF – Michigan Strategic Fund
MS/MSD – Matrix Spike/Matrix Spike Duplicate
NELAP – National Environmental Laboratory Accreditation Program
NPV – Net Present Value
NVLAP – National Voluntary Laboratory Accreditation Program
O&M – Operation and Maintenance
Op Memo – Operational Memorandum issued by Agency for Clarification of Regulations
OSHA – Occupational Safety and Health Administration
PARCCS – Precision, Accuracy, Representativeness, Completeness, Comparability, and
Sensitivity
PCBs – Polychlorinated Biphenyls
PE – Performance Evaluation
Phase I – Phase I Site Assessment completed before purchase according the ASTM standards
PID – Photoionization Detector
PNA – Polynuclear Aromatics
PPE – Personal Protective Equipment
QA – Quality Assurance
QAPP – Quality Assurance Project Plan
QA/QC – Quality Assurance/Quality Control
REC – Recognized Environmental Condition as defined by ASTM Standards for Phase I Site
Assessments
RBSLs – Risked Based Screening Levels
ROI – Return on Investment
RPD – Relative Percent Difference
RSD – Relative Standard Deviation
SAP – Sampling and Analysis Plan
SOPs – Standard Operating Procedures
SVOCs – Semivolatile Organic Compounds
TIF – Tax Increment Financing
TIR – Tax Increment Revenues
TOC – Total Organic Carbon
TOD – Transportation Oriented Development
TV – Taxable Value
ULI – Urban Land Institute
U.S. EPA – United States Environmental Protection Agency
USTs – Underground Storage Tanks
VAP – Voluntary Action Program
VOCs – Volatile Organic Compounds
Case Studies in Environmental Issues
Fact and Fiction September 10, 2014
For More Information Contact Tom Wackerman, ASTI Environmental twacker@asti-env.com 1-800-395-ASTI
1
Overview of Changes Background The new standard for Phase I Environmental Site Assessments (referred to as E1527-13) was issued by the American Society for Testing and Materials (ASTM) the week of November 4, 2013 and replaces the ASTM E1527-05 standard. The EPA, reversing its earlier decision, accepted the use of this standard on December 30, 2013 for satisfying the "all appropriate inquires" (AAI) requirements (40 CFR Part 312) for landowner liability defenses under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). This is the first update to the ASTM standards in eight years. AAI is a critical element for establishing liability defenses under CERCLA. Without the defense, CERCLA imposes strict liability for purchasers of contaminated property. AAI requires that the landowner make reasonable inquires to determine whether a property has historical contamination. Generally, the ASTM standard establishes the requirements for conducting an AAI inquiry by preparation of a Phase I ESA. Of course, the Phase I ESA is not the exclusive means of establishing the AAI Rule, since other elements, such as continuing obligations for land use restrictions, must be considered, and compliance will depend on the specific circumstances of the subject property. In addition, in Michigan, the requirement of completing a Baseline Environmental Assessment and Due Care Plan for properties with impacts above residential criteria still applies.
Case Studies in Environmental Issues
Fact and Fiction September 10, 2014
For More Information Contact Tom Wackerman, ASTI Environmental twacker@asti-env.com 1-800-395-ASTI
2
For a short period, from its announcement in August until it withdrew its direct final rule on October 29, the EPA intended to permit use of either the ASTM E1527-05 or the E1527-13 standard for AAI. Based on negative comments to the direct final rule, and specifically the concern that two standards would lead to implementation of the older, less costly, standard, the EPA focused instead on the new standard. Since the final ASTM E1527-13 standard was not available during that period (the final standard is consistent with the draft standards released in February 2013), most Phase I ESA continued to be completed with the earlier standard. However, if a Phase I was completed according to the new standard, it would also comply with AAI, since the new standard incorporates the requirements of the previous standard. Now, all new and updated Phase I ESA reports must be completed using the E1527-13 standard.
The Phase I ESA has always been the basic tool for liability protection, but it has also functioned as the first step in determining impediments to site redevelopment. By identifying "recognized environmental conditions", it allows the purchaser to
focus on historical impacts that may interfere with the intended future use of the property. However, it is only one step in balancing liability protection, site assessment and value creation. Summary The new standard is not significantly different from the previous standard, and most reputable consulting companies have been conducting most of these items as part of a complete Phase I ESA. However, three changes are key for
Case Studies in Environmental Issues
Fact and Fiction September 10, 2014
For More Information Contact Tom Wackerman, ASTI Environmental twacker@asti-env.com 1-800-395-ASTI
3
purchasers: 1. Updates and changes to the definitions of recognized environmental
conditions; 2. The addition of requirements to assess the potential for vapor intrusion;
and 3. The inclusion of additional steps in the regulatory file-review process and
mandatory user responsibilities Key Changes The new Phase I ESA continues to provide liability protection and site assessment to property purchases, but now provides more emphasis on prior closures, adjacent land uses and the possibility of impacts from volatilization to indoor air. The most significant changes include:
An emphasis on User responsibilities is now specifically included in the standard. The User (aka purchaser) must provide the results of a search of liens and "activity and use limitations" (AULs) through a review of recorded land title records. The requirements for information regarding sales price, specialized knowledge, and commonly known or reasonably ascertainable records did not significantly change, but were not always provide, and are now mandatory.
Revisions and clarifications to the "recognized environmental conditions" (REC) designations include the terms "in" and "at" a property (formerly only included "on" a property) and also refine the definition based on defining the terms "release" and "environment" as part of the standard. "Release" now has the same meaning as the definition in CERCLA.
An REC is defined as: "The presence or likely presence of any hazardous substances or petroleum products in, on, or at a property: (1) due to release to the environment; (2) under conditions indicative of a release to the environment; or (3) under conditions that pose a material threat of a future release to the environment. De minimis conditions are not recognized environmental conditions."
The new REC definitions may require that suspected historical impacts
receive different, or additional, evaluations. The revised definition of an historic REC (HREC) now requires an evaluation to determine if the HREC
Case Studies in Environmental Issues
Fact and Fiction September 10, 2014
For More Information Contact Tom Wackerman, ASTI Environmental twacker@asti-env.com 1-800-395-ASTI
4
should be considered a REC based on changes in regulations. It also limits the HREC definition to situations where impacts have been controlled to unrestricted residential criteria at the time of the investigation and under current residential closure standards. So a release that was previously investigated and closed may need to be reevaluated to determine if the closure satisfies current closure criteria, and if not, it could be considered a REC.
A new definition, called a controlled recognized environmental condition (CREC), has been added. This definition applies to closures on properties that do not meet unrestricted residential closure criteria and includes restrictions and/or controls in place (engineered, institution and administrative controls). In some circumstances, such as changes in closure criteria, a CREC may be considered a REC.
A CREC is defined as: "The presence or likely presence of any hazardous substances or petroleum products in, on, or at a property: (1) due to release to the environment; (2) under conditions indicative of a release to the environment; or (3) under conditions that pose a material threat of a future release to the environment. De minimis conditions are not recognized environmental conditions."
Migration is defined in the new ASTM standard to include the term vapor.
The new standard requires the inclusion of a vapor migration investigation by conducting a Tier 1 non-invasive screening assessment for potential vapor encroachment conditions (pVECs). This can be completed by implementing the E2600-10 standard to determine if there is a potential for volatile chemicals of concern to reach the property. Sites identified up to ⅓- mile from the Property that may contain contaminants of concern (COCs) are assessed through review of reasonably ascertainable records pertaining to the extent of contamination, area lithology including soil and groundwater conditions, and other factors that may affect migration of vapors. A positive finding will likely be considered a REC.
Vapor migration differs from vapor intrusion in that it refers to migration onto the property itself whereas intrusion refers to migration of vapors into a structure. However, if a vapor migration issue or pVEC is identified, this may ultimately lead to a vapor intrusion assessment, dependent on
Case Studies in Environmental Issues
Fact and Fiction September 10, 2014
For More Information Contact Tom Wackerman, ASTI Environmental twacker@asti-env.com 1-800-395-ASTI
5
proposed use of the property.
Clarifications to regulatory file reviews place an emphasis on review of the subject property and adjoining property database listings. ASTM E1527-13 does not require the review of these listings, but provides that justification for not reviewing these records be made by the EP and that significance of limitations/data gaps associated with lack of a review be clearly identified. Alternative sources can be used if sufficient information is obtained.
Impacts The emphasis on User responsibility places additional requirements on the purchaser. Timely responses to the user questionnaire and additional required information will impact report delivery. More importantly, the User responsibilities are now mandatory. A Phase I ESA may reevaluate a HREC or CREC as a REC based on changes in closure criteria since the closure was completed. This may lead to a requirement for additional investigation. Completion of the vapor migration screening assessment may identify adjacent or local sources that will be listed as a REC and may require additional investigation. In addition, a Phase I ESA updated or created for refinancing may now find additional RECs (previous HRECs, previously de minimis impacts, or uninvestigated sources) based on the vapor migration requirements, specifically in those cases where gas stations or dry cleaners were located on or near the subject property. As a result of the new emphasis on volatiles, additional research has identified other materials that should be evaluated at former dry cleaner locations. These include white gas, naphtha, carbon tetrachloride, kerosene and stoddard solvent. This may result in a need for additional investigation, or for reevaluation of existing site data. With the changes in closure criteria in Michigan (specifically for trichloroethylene and perchloroethylene (PERC)), and the pending additional criteria changes this year, previously closed impacts may now become RECs.
Case Studies in Environmental Issues
Fact and Fiction September 10, 2014
For More Information Contact Tom Wackerman, ASTI Environmental twacker@asti-env.com 1-800-395-ASTI
6
Timing and Cost Completion of the Phase I ESA will still require three to four weeks. Unfortunately, "quick" Phase I ESAs must now note significant data gaps if sufficient time is not provided for agency response and file review. This does not change the requirement that the Phase I ESA must be completed prior to purchase. Costs for the Phase I ESA will probably change somewhat from the typical price, due to the additional file review requirements for the pVEC. Any price increases for a specific property will depend more on historical uses in the area around the subject property than on the size or historical use of the subject property. It is unlikely that the "bargain" pricing of recent years will be able to produce an AIA compliant Phase I ESA under the new standards. Other cost increases, unrelated to the new standard, should also be expected as the economy continues to improve. These include the recent increase in EDR costs. Unfortunately, additional costs for Phase II investigations will be required for some sites. Site with HRECs or CRECs that have become RECs, sites with potential vapor migration issues, or sites were closure was completed under previous criteria may require more extensive soils and/or groundwater investigations.
PHASE I ENVIRONMENTAL SITE ASSESSMENT A S T I E N V I R O N M E N T A L
Client Conner Creek Greenway Association/ Subconsultant to Hamilton Anderson Associates Contact Sam Lovall 313.887.6281 Location Detroit, Wayne County, MI Project Dates 2004 to 2006 Project Cost $15,000 Key ASTI Staff George Kandler Carey Kratz* Dianne Martin *Indicates Project Manager
The Conner Creek Greenway is part of the GreenWays Initiative of the
Community Foundation for Southeast Michigan and was initiated by the Detroit
Eastside Community Collaborative (DECC). The Conner Creek Greenway will
stretch from 8 Mile Road south to the Detroit River, tracing the original Conner
Creek. The Greenway will provide pedestrian and bike paths, beautification
with plants and flowers, historical signage, and other opportunities linking
people, businesses, schools, and shops. The entire Conner Creek Greenway is
expected to be completed in 3 to 5 years.
ASTI Environmental was retained by Hamilton Anderson Associates (Project
Engineers and Designers) on behalf of the DECC to conduct Phase I
Environmental Site Assessments of three areas of the Greenway to date.
ASTI’s role in this grant-funded project was to identify known and/or potential
environmental hazards that could represent a health risk to the pedestrians and
workers, and to provide recommendations if such hazards were determined to
exist. Areas researched and investigated included nearby existing or historic
underground storage tanks and the nearby industrial facilities. ASTI’s findings
have assisted in continued receipt of funding from the Michigan Department of
Transportation and the Greenways Initiative and in the project design process to
provide a healthy environment for the workers and pedestrians.
ECOLOGICAL EVALUATION A S T I E N V I R O N M E N T A L
ASTI Environmental performed an ecological evaluation and
identified regulated natural features on 891.56 acres known as
the former Detroit House of Corrections property. ASTI
assessed development constraints on the property with regard
to wetlands, woodlands, rivers/streams, floodplains, and
threatened/endangered species. This entailed both on-site
fieldwork to determine the extent of the stream, wetland and
woodland features and in-office reviews/analyses of floodplains
and endangered species.
As part of the inventory, ASTI also flagged all wetland
boundaries, totaling over 200 acres, on the property. ASTI also
identified a potential wetland mitigation area on the property. A
final report described the natural features identified on site and
the local, state, and federal regulations applicable to each
feature, thus determining the ecological constraints
encountered on the property. This information was used to
bolster the prospective sale of the property.
Client City of Detroit Contacts Bruce King 313-471-5103 Location Wayne County, MI Project Date 2002 Project Cost $48,000 Key ASTI Staff Dianne Martin* * Indicates Project Manager
ENVIRONMENTAL CONCERNS INVENTORY A S T I E N V I R O N M E N T A L
Client City of Ferndale Oakland County Contacts Mr. Derek Delacourt City of Ferndale Community and Economic Development Director 248-546-2363 Mr. Brad Hansen Oakland County Environmental Grant Program Coordinator 248-858-8073 Location Ferndale, MI Project Date 2011 Key ASTI Staff Thomas Wackerman* Sarah Pavelko Brian Earl * Indicates Project Manager
ASTI Environmental conducted an Environmental Concerns Inventory (ECI) of 193 light industrial parcels located along the east side of the rail road in the City of Ferndale. The objective of the ECI was to identify specific environmental impacts that may affect redevelopment and to provide a basis for beginning the discussion on area-wide redevelopment. The inventory included a review of publically available databases, site inspection for all properties (from the right-of-way or on the City owned property), and a review of agency files. ASTI utilized this information to prepare a ranking of redevelopment potential based only on environmental impediments (both known and perceived). An interactive map was provided that allows the user to see an overview of the entire project area while identifying the environmental concern(s) on each parcel. The user can select from multiple layers featured on the map for additional analysis of existing site conditions and actual or assumed impediments to redevelopment. The ECI supported the City's commitment to redevelopment in their industrial core by providing information on potential future uses that would require minimum environmental remediation or control. A site specific evaluation to support property purchase or redevelopment is the next step in this long term process. This project was partially funded by the Oakland County EPA Site Assessment Grant.
TECH BITSASTI ENV I RONMENTA L
ENVIRONMENTAL INFORMATION FOR YOUR BUSINESS
June 2013
Initiative funds have been shifted from the DEQ loan program to the DEQ grant program, and the Com-munity Revitalization Program is focusing on specific types of urban Redevelopment. There is now great-er flexibility in the management and relocation of contaminated soil on site which minimizes transportation and disposal costs.
CommercialThe management of the Above/Un-derground Storage Tank program has been shifted from the DEQ to the Dept. of Licensing and Regula-tory Affairs (LARA) and is closely following the provisions of Part 201 with respect to corrective action ac-tivities for venting groundwater.
Liability exemptions continue for lessees that do not cause impacts, but other changes have occurred. Seven chemicals, including Per-chlorethylene (PERC), commonly used by dry cleaners, have revised criteria for soil and/or groundwa-ter. Of these seven, two have less restrictive criteria while the remain-ing five have slightly to signifi-cantly more restrictive criteria. The PERC criteria changes were all for
ENVIRONMENTAL
With recent changes in legislation, both the environmental assessment and brownfield incen-tives programs in Michigan have new options and requirements. As-sessments are more focused on soil gas and vapor intrusion from histor-ical impacts, and although the Base-line Environmental Assessment is still the key document for state li-ability protection, there is more em-phasis on Due Care Plans and No Further Action (NFA) Letters, and on the associated maintenance and control requirements. Incentives are still available, but are now fo-cusing on traditional downtowns and commercial corridors and on projects that have clear financing gaps.
What all of this means is that you have more options when choosing site closure and you will need to consider these options earlier in the development process. Accordingly, the following are some key points by specific asset classes for Real Estate developers to consider.
Downtown Mixed Use$12.5MM in Clean Michigan
www.asti-env.com
Central Great Lakes 810.225.2800
West Great Lakes 616.957.5601
ServicesAsbestos, Mold and Lead AssessmentsBaseline Environmental
AssessmentsBrownfield and Historic
RedevelopmentCompliance Permitting
and AssessmentsDue Care PlansEcological SurveysEnvironmental Concerns
AssessmentsEnvironmental Due
DiligenceHabitat RestorationIndoor Air QualityNEPA ReportsPhase I ESAsReclamation PlansRedevelopment I IncentivesRemediationRestorationSHPO AssessmentsSoils/Groundwater
InvestigationsStormwater ManagementTransaction ScreensUST ClosuresWetland Mitigation and
Banking
ENVIRONMENTAL DUE DILIGENCE FOR REAL ESTATE DEVELOPMENT IN MICHIGAN
Tech-Bits is intended to provide information concerning current environmental issues, and is not intended to provide technical or legal advice regarding any particular situation. Specific questions should be addressed to your environmental professional. ©2013 by ASTI
Tech-Bits is a publication of ASTI ENVIRONMENTAL, P.O. Box 2160, Brighton, Michigan, 48116-2160. For a free subscription call 800.395.ASTI or visit www.asti-env.com
the volatilization pathways which is indicative of the DEQs focus on this issue for due care. Therefore, properties that might not have had a soil vapor concern according to the previ-ous criteria might now exceed the new more restrictive criteria and therefore require more investigation, remediation or the installation of engineering controls. This requirement is expected to undergo additional modifications in the next year or two.
IndustrialSeven chemicals, Including Trichlorethylene (TCE), a common degreasing agent, have re-vised criteria for soil and/or groundwater. Two are less restrictive criteria but the remaining five have slightly to significantly more restric-tive criteria. The TCE criteria changes were all for the volatilization pathways which is indica-tive of the DEQs focus on this issue for due care Therefore, properties that might previously not have had a soil vapor concern according to the previous criteria might now exceed the new more restrictive criteria and therefore require more investigation, remediation or the installa-tion of engineering controls. This requirement is expected to undergo additional modifica-tions in the next year or two.
Michigan Occupational Health and Safety Ad-ministration (MIOSHA) standards, often less restrictive than DEQ, can now be used to eval-uate and close manufacturing facilities, where volatilization to indoor air is the only criteria. This change should prove to be more helpful in closing manufacturing facilities with potential indoor air issues.
Senior and Affordable HousingAlthough not required by the regulations, an NFA Letter may be necessary to satisfy fund-ing agencies. Alternatively, a Certificate of Completion can be requested from DEQ fol-
lowing the completion of any response activity when using controls to achieve closure, but it is still not yet clear whether MSHDA will ac-cept this strategy. HUD is now requiring Ra-don testing in nine counties in Southern Lower Michigan known as Zone 1 (high risk) and in 30 counties in Mid and Lower Michigan, Mon-roe County and the Upper Peninsula known as Zone 2 (medium risk) for all environmental reports submitted to HUD after June 4, 2013 (regardless of the date of the report).
Residential CondominiumsThere is a new liability exemption for residen-tial condominium owners as long as hazardous substance use within the unit is consistent with residential use.
Local Units of GovernmentThe due care exemption for public use prop-erty has been eliminated, resulting in the need for Due Care Plans and operations and mainte-nance of due care controls. Also, Municipali-ties no longer have to pledge their full faith and credit for Brownfield Loans.
These changes are largely the result of a col-laborative effort between regulators, the reg-ulated community, and professionals. ASTI views these changes as logical and timely and moving in a direction that will streamline the maze of regulatory requirements and shorten the Real Estate development process.
Contact George Kandler today at 800/395-ASTI to discuss your next project.
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