Re: Use of Urban history to identify Brownfields -Reply

["Bruce Klafter" <bklafter@orrick.com>]

Regarding the use of historical information -

What you're describing (if I understand it correctly) is
already a part of standard Phase 1 Envirnmental Site
Assessment.  The ASTM Standard for site assessments
calls for the use of historical maps, Sanborn maps
(insurance company), interpretation of aerial photos, title
reports and personal interviews.  

Doing an in-depth historical research effort will probably not
yield more valuable information than those type of sources. 
It is uncommon to find historical information that reveals
much about waste handling practices.  The key then to
designing a followup investigation (or "Phase II") is the type
of uses that took place on the site historically and their
approximate locations.  For example, if the site was formally
a foundry, you would sample for heavy metals (among other
things) and the location of the shop and storage areas
would be the best places to look for contamination.

I cannot imagine any brownfields project proceeding without
a well done Phase 1.   Phase 1's are a comodity, but some
companies do a much better job than others.

Attached is a brief article on how to read a Phase 1.



HOW TO READ A "PHASE 1" ENVIRONMENTAL
ASSESSMENT REPORT - THE SMART WAY

Bruce S. Klafter


As potential environmental liabilities continue to increase in terms of
magnitude and complexity, virtually every commercial development is now
preceded by a "Phase 1"-type investigation or assessment.  The aim of such
investigations is to identify and better understand the potential
environmental liabilities associated with a particular piece of the property.

  While it is easy to obtain a "Phase 1" from a myriad of consultants, it
is far more difficult to evaluate the information contained in the report
and to determine the need for further investigation.  It is also a
challenge to determine whether or not conditions disclosed in a report
require a response in the form of remedial work or in the form of
contractual arrangements with tenants or other parties.  The following are
some suggestions on how to read a Phase 1 report with a critical eye so
that its value is maximized.

WHAT IS A "PHASE 1" ASSESSMENT?

A preliminary environmental site assessment has generally come to be known
as a "Phase 1" even though that term is not used in any statute or
regulation.  Although it is also generally accepted that a Phase 1 will
include an inquiry into the previous uses and ownership of real property,
the particular sources of information used in such a review are by no means
standardized.  Unless you are familiar with your chosen consultant's normal
scope of inquiry, it is perilous to simply request "please do a Phase 1 on
the ABC Corp. property."  The scope of the consultant's investigation
should always be spelled out and agreed upon before any work is performed.

A comprehensive Phase 1 assessment will reference and interpret a variety
of sources of information, including but not limited to the following:

* A title search to identify previous owners and users.

* Aerial photographs dating as far back in time as possible to ascertain
prior uses of the property.
* Regulatory lists, both state and Federal, to identify reported releases
of hazardous substances, leaking underground storage tanks and generators
of hazardous waste, both on-site and off-site within a 1/2 to 1 mile radius.
* Information on site geology to assess the potential for migration of
contaminants, potential impacts to groundwater, etc.
* Regulatory agency files to determine current conditions and pending
enforcement actions.
* Reconnaissance of the property to discover signs of potential hazardous
conditions, e.g. leaking drums, discolored soils or paving, standing water.
* Interviews with owners and employees to understand the nature of the
business being conducted on the premises.  A review of operating plans,
hazardous materials or waste handling programs may also be appropriate.

A number of trade groups have attempted to craft standards or protocols for
site assessments in order to bring some uniformity to the practice.  The
most widely accepted effort has been that of the American Society for
Testing and Materials ("ASTM").  ASTM assembled a group of real estate,
legal and engineering professionals to draft a standard for assessments in
commercial real estate transactions.  Although ASTM's scope of work is
effectively an industry standard, it has not been adopted or promulgated by
any government agency.  Until an official standard for environmental site
assessments emerges, the level of inquiry conducted must simply be
"appropriate" at the time of the transaction.  Unless the transaction
involves few risks, such as a bare piece of rural land, the scope of an
assessment should always be discussed with legal counsel and with a
reputable, experienced consultant.

HOW TO DECIPHER THE REPORT

It may be tempting to skip right to the "Conclusions and Recommendations"
section of a report and see whether or not the property has received a
clean bill of health, i.e. no identified conditions requiring additional
investigation or remedial action were encountered.  The consultant's
conclusions are certainly important, but the report's reliability is more a
function of the completeness of the information-gathering and the
reasonableness of the interpretation of that data.  Although site
assessments are something of a commodity now, the consultant should
indicate whether or not particular conditions are potentially significant.
The consultant's professional judgment should be reflected in the findings
and questionable findings should be addressed to the consultant.  

A Phase 1 should be read with the following types of questions in mind
regarding specific sections and the overall scope of the report:  
Regulatory databases - The key is determining whether the site itself is
listed or whether identified "generators" of hazardous waste and leaks from
underground storage tanks pose any threat of cross-contamination, i.e.
migration of contaminants onto or beneath the property to be developed.
What distance from the site are the generators located?  What types and
quantities of chemicals are in use?  Have any of those chemicals been
released into the environment previously and, if so, has any enforcement
action followed?  Were the leaking tanks located upgradient (in terms of
groundwater movement) and close enough to be of concern?  County, township
and local records may not be accessible by a computer search, so a
comprehensive search will often require a visit to the appropriate offices
or a number of telephone contacts.
Geology and physical description of the site - This type of technical
information should be discussed in terms of the practical implications for
the development.  What direction is the groundwater flow and at what rate(s)? 
 At what depth is groundwater encountered beneath the property?  What
quality is the groundwater and is it used for drinking water?  What soil
types are present and can pollutants migrate rapidly in such soils?
Prior investigations or remedial work - Summaries of earlier reports and
work should be critical and unambiguous.  An agency investigation may have
concluded, for example, that a site required "no further action at this
time".  Has the site simply been assigned a low administrative priority or
has the presence of significant contamination actually been ruled out?  Was
any sampling and remedial work done in accordance with all rules and
regulations or did the contractor cut a few corners?  If contamination was
detected, is it reasonable to do no further work or is additional soil or
groundwater testing advisable?  Does the level of contamination detected in
soils or groundwater exceed any regulatory guidelines?  For completed work,
such as a tank removal, is there evidence of all necessary permits and
approvals from the authorities?

Site reconnaissances or inspections - A worthwhile and legitimate
inspection requires some time and should flag conditions that deserve
closer scrutiny.  A report should reflect that a reasonable amount of
effort has been expended and that the consultant has not simply driven by
the property and looked out the window.  Are the boundaries of the property
fenced or otherwise well-defined?  If suspect conditions are noted, are the
descriptions complete, i.e. size, shape, color, odor, and location?  Have
knowledgeable employees or representatives been interviewed in an effort to
learn more about the suspect conditions?  Where possible asbestos
containing materials ("ACM") are spotted, does the ACM appear to be
friable, damaged or otherwise in need of removal?  Is further investigation
of any conditions recommended?

CONCLUSIONS

Where a transaction or development is preceded by a Phase 1 environmental
site assessment, it is critical to understand the scope of the report and
the services to be provided by the environmental consultant.  It is equally
important to read Phase 1 reports carefully and to insist that key
interpretations and recommendations are made from the assembled data.  The
purpose of obtaining a Phase 1 assessment is not to accumulate more
information, but rather to identify potential environmental liabilities so
that those liabilities can be dealt with in some fashion.  Developers
should dedicate themselves to learning how to read a Phase 1 or should rely
upon legal counsel or other experienced advisers to perform that task.
??

(..continued)