Environmental Due Diligence and the Power of Online Research
Patricia Feeley, CPG-11020
Over twenty years ago, I started in the field of environmental consulting, con- ducting Phase I and II Environmental Site Assessments (ESAs) in accordance with American Society for Testing and Materials (ASTM) standard 1527-93. The process has been refined over the years; many of the elements are the same but the accessibility of the data and the ability to “see” the site from your computer has gone beyond my imagination. Google Earth™ has created a snapshot view of a property that has become a standard part of the Phase I ESA process. The accessibility of the Google Earth maps, aerial views, and street views have become a vital tool in the environmental assessment process that enhances the environmental profes- sional’s ability to provide a reliable and cost effective service to the real estate community.
The Comprehensive Emergency Response Compensation and Liability Act (CERCLA) combined with the sub- sequent Superfund Amendments and Reauthorization Act (SARA) in 1986 created legislation for what has become known as the “innocent landowner’s defense.” In summary, a landowner pur- chasing a contaminated property may not be held liable for the contamination if the purchaser at the time of acquisition “completes all appropriate inquiry into the previous ownership and uses of the property consistent with good commer- cial or customary practice.” Legislative guidance includes the following:
1. Specialized knowledge or experi- ence on the part of the defendant (purchaser);
2. Whether the purchase price was below market value;
3. Commonly known or reasonably ascertainable information;
4. Obviousness of the contamination; and
5. The ability to detect the contamina- tion by investigation.
These broad statements were the beginning of the practice of Environmental Site Assessments for commercial and real estate transactions that are now commonly performed by environmental professionals as a stan- dard due diligence in acquiring com- mercial property. Why is this important? You may choose to purchase an old strip mall that has been vacant for 20 years. You want to demolish the building and build a new building, when excavat- ing for building footings or boring for geothermal, the construction workers come across a strange chemical odor in the soil. If you had performed your due diligence and had an environmental professional conduct a Phase I ESA, the site history would have identified a former cleaners operated at the strip mall. The former cleaners may have used tetrachlorethene (perc or PCE) and filed chemical inventory generator paperwork with the state EPA. The historical use of chemicals on the site would have lead to a Phase II ESA with soil and groundwater sampling in or around the building. Without property due diligence to investigate the property, a new property owner can be held liable for the contamination and corrective action cleanup may be required.
In response to the CERCLA and SARA legislation, ASTM created a sub-commit- tee in 1989 to develop an all appropriate inquiry to investigate historical property uses and obvious contamination. The result of this subcommittee was the ASTM Standard 1527 published in 1993. These standards have been updated over the years in 2005 and 2013. In 2013, Code of Federal Regulations (CFR) published 40 CFR Part 312 Innocent Landowners, standards for conducting All Appropriate Inquiries (AAI).
The Phase I ESA requires historical research and current research of a site address. Database records can be avail- able on line for registered underground storage tanks (USTs), leaking USTs, and chemical waste records from state
departments. Historical aerial photo- graphs can be found on line. The amount of on line research that can be conducted to complete a Phase I ESA today versus 20 years ago is astounding, exciting and efficient. Even to the extent of being able to view a relatively current image of the site address from above and street view 360 degrees, thanks to Google Earth, Google Maps and other mapping resources in the public domain. I have used Google Earth to prep myself and colleagues for the site visit, preparing to look for remnants of a gas station, of chemical storage areas on or adjacent to the subject site. It has also been incred- ibly useful to remember what may have been visible or not visible during a site visit. The site visit, depending on the size of the site and building, may have taken 1-4 hours, but was a one-time chance to observe. The ability now to conduct the research, review the data, visit the site, write the report, and revisit the site by Google Earth is an incredibly useful public free resource that enhances the environmental professional’s ability to provide quality due diligence for prop- erty real estate transactions.
However, by no means am I suggest- ing that the site visit can be replaced by Google Earth. We environmental profes- sionals must keep in mind that Google Earth represents a snapshot in time and may or may not represent current condi- tions. I have checked Google Earth and found a site under construction, while the site visit indicated construction was complete and the park or commercial building was fully operating; or the opposite, finding the former structure being razed. Both snapshots are useful information to include in the Phase I ESA report, but I do caution to document the timeframe of the Google Earth image the same as we document the aerial pho- tographs reviewed and the topographic maps reviewed. Google Earth also has limitations only allowing views from streets, while site visits include a walk of the full site; the front, the back, the side,
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