enough is enough eermgnvironmental risk management today … · enough is enough eermgnvironmental...

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 [email protected]

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

[email protected]

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




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


2015

Planning

Operation

Report on Nature and Extent of Impacts

Post Closure Plan


Work Plan or RAP


Certificate of Completion


OwnerExit Strategy


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



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



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


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



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


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”



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


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”)


2015

Planning

Construction

Operation

Presumptive Remedy





Recommendations

Environmental




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



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


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




2015

Planning

Construction

Operation

Baseline Environmental Assessment *

Presumptive RemedyDue Care Plan*

or DDCCBrownfield Incentives



OwnerExit Strategy

•Indicates the three key liability protection documentsValue engineered items

Bold Indicates Required Item



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




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


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


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



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



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)



Due Diligence Phase I ESA*Phase II Investigation

Baseline Environmental A t *

OwnerE it St t


Planning

Construction

Assessment *


Due Care Plan* orDDCC

Brownfield Incentives

Exit Strategy

Construction

OperationPost Closure Plan


No Further Action Rpt.Certificate of Completion


Operating Permits, Plans

2015

Post Closure Plan



and Programs

Sellers Approach - TraditionalSellers Approach TraditionalAssessment Risk Management Value Creation

Objectives

Phases

Site Management Historical Review


Conceptual Site Model Impact Investigation

Report on Nature and E t t f I t

OwnerE it St t

PlanningExtent of Impacts


Work Plan or RAP

Exit Strategy

OperationPost Closure Plan


Certificate of Completion

Operating Permits, Plans

2015

Post Closure Plan


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

Provided by ASTI Environmental. For more information call 1-800-395-ASTI

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 [email protected] 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.




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




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




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




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.




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.

ENVIRONMENTAL

Investigation • RemediationCompliance • Restoration

Since 1985