Archive for March, 2010

Phase II Site Assessments- Appropriate Scopes of Work

March 25th, 2010

Question – Our borrower is seeking to refinance a multi-tenant retail facility (the borrower reportedly did not undertake environmental due diligence at the time of purchase).  Pursuant to the Phase I Site Assessment which we ordered as part of our due diligence, we learned that the facility was constructed on a former gas station site which had ceased operation in the early 1980s, a long time before the State began requiring registration of underground storage tanks (USTs). The environmental consultant recommended a Phase II site assessment to determine if there were any impacts associated with this identified historical use.    The proposed Phase II scope of work includes taking organic vapor analysis (OVA) field measurement readings of soil borings obtained from the perimeter of the site only, down to a depth of five (5) feet below land surface (bls), at which point, the groundwater level is likely to be detected.  The consultant believes that if no OVA readings are detected, he would not have to recommend any further investigation.   However, we are wondering if this Phase II scope of work is sufficient to reasonably determine the historical environmental risks at the site.  Should we feel comfortable in accepting this scope of work?

Response – Under these facts, the scope of work does not appear tailored to identify the primary risk factor at the site: the potential for historical petroleum impacts.  The identified issue is the former gas station (we will assume that no auto repair activities took place at the site and that only fuel dispensing operations took place).  There are two immediate areas of concern which should be considered for investigation.

The first is the UST pit area.  Since the station apparently closed prior to the implementation of regulations requiring registration of all USTs, it is unknown whether the former USTs were removed after the gas station operations ceased, or if they were merely abandoned in place (possibly with a certain amount of fuel left inside, which has been the case at a number of older sites).   If the lender and/or the owners wished to determine whether the USTs were still in place at the site, a ground penetrating radar survey would be an appropriate assessment tool.  However, even if the USTs were properly removed from the site, that does not mean that impacts from historic spills or leaks may not still be present at the site.

Also, almost all gas station USTs are placed so that the tank bottoms reach to a depth of 8-12 feet bls, even if local groundwater levels are above that depth, for a variety of operational reasons.  Therefore, soil testing to a depth of only five feet is probably going to miss the most likely areas/depths of potential petroleum impacts at the deepest spot in the tank pit.   Also, since groundwater is reportedly found at depths of up to five (5) feet bls, the bottoms of any USTs would be at groundwater levels and, therefore, a groundwater sample, not just a soil sample, would be appropriate at this location.

The second area of concern is the dispensing island(s) area to which product piping would lead.  The dispensing area is another area with an historically high likelihood for impacts to have occurred.  The proposed scope of work should include soil sampling in this area also; testing the soil only at the perimeter is not a good indicator of impacts at the primary source locations.

By testing the soil only on the perimeter instead of at the most likely sources areas and only to a depth of five feet bls, and by using only OVA methods (which are less accurate indicators of impacts) , instead of submitting samples for laboratory analysis, the proposed scope of work does not provide the most reasonable assessment of potential impacts.   The scope of work should be revised to include soil and groundwater sampling and testing, and possibly even a ground penetrating radar survey, to more fully understand the potential environmental risks at the site.  A Phase II assessment can cost thousands of dollars, and it is important for all the parties to ensure that the scope of work is tailored to provide as much pertinent information as possible.