Deal Making Strategies for Contaminated Properties Webinar - - PowerPoint PPT Presentation

Deal Making Strategies for Contaminated Properties Webinar

Presented by: W&M Environmental Group

Webinar Introduction

 What are my options for buying, selling, and

lending on contaminated properties?

 Do I pass on the deal or move forward?  How much is this going to cost?  This webinar focuses on S

• lutions for

contaminated properties in Texas.

 We have only one hour and can’ t address

everything!

Michael Whitehead

 Chairman, W&M Environmental  BS in Soil Science and MS in Soil Chemistry from the University of Florida  25 years professional experience  Phase I ESAs to Regulatory Closure of Contaminated Sites

Determine if Property is Contaminated



TCEQ and/ or EP A files showing previous sampling results



Previous sampling from current owner (not on file)



RECs, HRECs, and/ or CRECs noted in Phase I ES A



Historic RECs (HREC) indicate property cleaned up and closed through state regulatory program with no use restrictions; S ampling on case by case basis; TCEQ reviews on case by case basis



Controlled REC (CREC) – S ite closed (and maybe cleaned up) but has use restrictions (commercial vs. residential)



S

• me level of Phase II Investigation consisting of soil, groundwater,

and/ or soil gas



Compare sampling results to TCEQ TRRP PCLs or PS T Action Levels; EP A is rarely involved with Texas sites



S

• il gas levels compared to EP

A VIS Ls; TCEQ regulates indoor air but not soil gas

Limited or Comprehensive Sampling



Limited Phase II Investigation performed to save money; usually Geoprobe vs. drilling rig; temporary vs. permanent wells; fewer samples and less analyses



A more accurate site picture may be obtained by more samples and analyses, but not always



More expensive permanent wells to determine groundwater flow direction and evaluate metals in groundwater; poor water quality will likely result in a “ hit” with metals



Extra cost may NOT give you the “ bang for the buck” you expected



Key: Good EP that works with you to obtain your obj ective, focus on key issues, and balance between accuracy and costs

Vapor Intrusion (VI)



Many historically closed sites (VCP , LPS T , and CA) did NOT include an evaluation of soil gas or indoor air (vapor)



Impact to S ite from on-S ite/ off-S ite vapors associated with underlying groundwater or impacted soil in vadose zone



VI considered from on-S ite sources as well as off-S ite sources (depends on groundwater flow direction and can range from 1/ 3 mile for BTEX to 100 feet for VOCs



VI typically evaluated with subgrade/ subslab soil gas samples; indoor air samples may be required inside buildings



S

• il gas results compared to EP

A VIS Ls and is NOT regulated in Texas (TCEQ regulates indoor air)



For W&M, primary VI concerns are typically: TCE, VC, and benzene

TRRP vs. PST Rules



In Texas, most sites are regulated through the TCEQ or RRC rather than EP A (S uperfund or Brownfields)



For TCEQ, sites fall under the TRRP or PS T rules and regulations



TRRP rules (30 TAC 350) are utilized by the VCP , DCRP , CA, and

• enforcement. COCs detected in Phase II are compared to

TRRP PCL tables



PS T rules (30 TAC 334) are for PS T facilities containing petroleum products; COCs are compared to PS T Action Levels



Data is compared to applicable program; if above PCLs or Action Levels, then S ite is an “ Affected Property” or LPS T case

Site Contaminated, What are My Options?



Determine appropriate remediation, closure strategy and costs



Can I S creen “ out of TRRP”



Voluntary Cleanup Program (VCP) - gold standard



Leaking Petroleum S torage Tank (LPS T) Program



Innocent Owner Program (IOP) limited to properties that did not “ cause or contribute” to contamination (off-S ite sources)



Approval of City Municipal S etting Designation (MS D) followed by TCEQ Certification to restrict use of groundwater



Dry Cleaner Remediation Program (DCRP) for dry cleaners and property owners with dry cleaners (strip centers)



Corrective Action Program – mostly used with industrial facilities



TCEQ or EP A Brownfields Programs (depends on city)



Closure may not address all potential environmental concerns such as asbestos, vapor, and/ or construction-related costs

“Screen out of TRRP”



Contaminants above PCLs (higher of default residential PCLs and TS BCs)



However, COCs are below S ite-specific background or COCs do not leach (S PLP) and have not impacted groundwater



Typically used with soil metals such as lead and arsenic present in most urban soils



For example, TCEQ PCL (TS BC) for lead is 15 ppm and most soils in large cities are above this level



Can impacted soil be removed and remaining soil is “ clean”



S ite-specific soil lead based on 8 or more “ background” soil samples using Upper Prediction Limit (UPL) calculation



Option to submit to TCEQ for review, if you want TCEQ’s concurrence; Otherwise letter to file



TCEQ review usually takes 45 to 60 days

TCEQ VCP



VCP primary option for contaminated real estate in Texas



TCEQ issues Certificate for all contaminants, all media, and current and future land owners



Not re-opened except to change property use (commercial to residential)



$1,000 fee + on-going review fees



AP AR required and maybe a drinking water survey; expect comments and changes



Class 3 Groundwater = 100 X Default PCL



RAP , RACR, and even RAER may be required if remediation part of closure



Most cases take 10 months to 2 years; more complicated sites take longer and final Certificate may linger with TCEQ

TCEQ IOP



IOP for properties that did not “ cause or contribute” to contamination



Not required by TCEQ but provides formal review with agency concurrence



No shallow soil impacts; high to low COC concentrations in groundwater across site; no on-site sources in Phase I ES A



IOP does not require remediation or on-going groundwater monitoring



May not absolve property owner from VI issue and/ or potential VI abatement/ mitigation



Property Owner may have to deal with additional construction costs (e. g., excavated soil is impacted)



TCEQ issues IOP Certificate, which does not run with land and has to be resubmitted to TCEQ for next owner



S ites can have both IOP and VCP

TCEQ LPST



Limited to sites with PS Ts (US Ts and AS Ts); comingled plume may be disqualified



LPS T cases handled by PS T group in Austin; 30 TAC 334 rules and regulations



Re-imbursement money no longer available for new cases



TCEQ uses PS T Action Levels to evaluate sampling data rather than TRRP PCLs



Can be quicker and cheaper than TRRP , since it only addresses PS T releases



TCEQ issues a No Further Action letter



Previously closed LPS T cases - TCEQ likely to keep closed if COCs similar or below previous closure levels



Closed LPS T sites may be re-opened due to higher COC levels, vapor, and/ or other contaminants (metals)

TCEQ and City MSDs



MS D used to restrict use of groundwater in selected locations, especially where groundwater is not primary source of drinking water



MS D eliminates groundwater pathway, which is generally the most restriction cleanup level. With MS D, “ perc” in groundwater goes from 0.005 ppm to 500 ppm



MS D MUS T be pre-approved by City before TCEQ will review MS D application



Cities with MS D include: Dallas, FW, Arlington, Grapevine, Garland, Plano, Waco, Wylie, Houston, Denton, Wichita Falls, Beaumont, Brownsville, Tyler, etc.



Once approved by City, TCEQ is very likely certify the MS D



MS D is used with another TCEQ program (typically VCP) because it doesn’ t provide “ closure” in and of itself

TCEQ DCRP



DCRP is for cleanup of dry cleaner facilities and associated properties (shopping centers)



Pay $5,000 deductible for Application; Phase II and remediation costs credited towards deductible



Must pay quarterly fees ($375) as long as Corrective Action is performed



Must pay back fees starting Dec. 2007 ($1,500/ year)



Assessment, remediation, and closure activities performed by TCEQ contractor and paid by TCEQ



TCEQ addresses DCRP based on ranking; S ites with low risk given low priority



TCEQ does not allow use of MS D with DCRP cases



Lower cost strategy to address dry cleaners but most sites are generally not closed in reasonable time period

Corrective Action and Other Options



Corrective Action falls under TRRP but is primarily used for Industrial facilities



Key differences of CA to VCP: 1) no time line for reviews; 2) NF A letter vs. Certificate; and 3) CA applicant does not have to address all COCs in all media



TCEQ BS A or EP A Brownfields: limited money available for cities and public entities; TCEQ pays for Phase I/ II ES A using selected contractors



TCEQ Enforcement – generally the result of non-compliance or being non-responsive to the TCEQ requests



TCEQ or EP A S uperfund -(RS R/ West Dallas) – S uperfund less likely these days with alternate programs and limited funding



Railroad Commission of Texas (RRC) VCP for oil and gas properties

Remediation Strategies



First of all, we prefer risk-based closure strategies for most Real Estate deals



TCEQ provide risk-based strategies to address contaminants such as MS D, Class 3 Groundwater, site specific background, site specific PCLs, etc.



Remediation of soil and/ or groundwater may be required to meet TCEQ program PCLs or Action Levels



S

• il Treatment: excavation, bio-treatment, stabilization, etc.



Groundwater treatment: bio, IS CO/ Chem. Ox, pump and treat, and/ or NAPL abatement



S

• il gas abatement or installation of vapor barriers to reduce

VI to below EP A VIS Ls and in some cases TCEQ RBELs

Closure Strategies



Proper Assessment, Cost Estimating & S cheduling



Have does contamination change the deal? Can buyer get a price reduction?



Limited or Comprehensive Phase II Investigation



Can we “ screen out of TRRP” ?



If not, what is best TCEQ program



Does city have MS D?



Can we close the deal prior to regulatory closure?



Using an escrow based on cost estimates (with contingency factors) to close the deal prior to final regulatory closure



Working with TCEQ in an effective manner to shorten review cycle and close site as fast as possible



Do you have an environmental team that has successfully “ closed” sites?

“NOT SO FAST”



Don’ t rely on Geotech Information for environmental decisions (Proj ect in S an Antonio missed lead)



Limited sampling at dry cleaner missed “ hot spots” and consultant called site clean. S ite ended up in VCP and used MS D as remedy – big change in price and timing for seller



Consultant called S ite contaminated based on metals in the soil; Used S ite-specific background & S creened out of TRRP



Metals in groundwater may be result of high turbidity; S ite may not be contaminated



Misunderstanding the application of TRRP; Improper use of Class 3 groundwater PCLs without being in program



Hotel California (“ you can check out anytime you want, but you can never leave” ) – Groundwater treatment/ monitoring can become a never ending treadmill

Summary



Accurate assessment and cost estimating helps you and your clients make the right deal – Find a valued partner!



Proper evaluation of data to determine if you have an Affected Property or LPS T case; Can I “ S creen out of TRRP” ?



Determine best program for you to cleanup/ close site: VCP , CA, LPS T , IOP , & DCRP



Is there a risk-based option available or is physical remediation required to close the S ite?



S ites left open for a long time will rack up bigger bills



Closed sites (VCP) may still have environmental concerns like VI and added construction costs (removal of impacted soil)



Who side are we on? Environmental may help buyer with better purchase price and closing date options; for seller, completed environmental should minimize delays in the RE closing

Contact Information

W&M Environmental Group, LLC

www.wh-m.com Michael Whitehead - mwhitehead@ wh-m.com

Plano/ Dallas - 972-516-0300 906 East 18th S treet Austin – 512-493-9691 11500 Metric Blvd., S uite 460 Houston – 713-316-0025 10075 Windfern Road S an Antonio – 210-319-5116 110 Broadway, S uite 390 Fort Worth – 817-402-3128 6825 Manhattan Blvd. #125