Thursday, July 20, 2017

SBA Phase I Environmental Assessment And Reliance Letter For Minnesota Bank

Caltha LLP Project Summary

Project: Phase 1 ESA To Meet SBA Environmental Review Requirements
Client:
National Bank
Location(s):
Minneapolis, Minnesota

Key Elements: Phase 1 ESA, SBA Environmental Policy, SBA Reliance Letter

Overview: Caltha LLP was retained by this national bank to conduct a Phase 1 Environmental Site Assessment to meet the requirements of the US Small Business Administration (SBA) loan guarantee program. A Phase I report was issued to the Lender and a standard SBA Reliance Letter was issued to the SBA. The Phase 1 report was reviewed and approved by SBA.

For more information on Caltha LLP services, go to the Caltha Contact Page

Phase 1, Phase 2 Investigations and Site Cleanup For Former Minneapolis Gas Station

Caltha LLP Project Summary

Project: Site Remediation For Redevelopment of Former Gas Station
Client:
Redeveloper
Location(s): Minnesota

Key Elements: Site investigations, Response Action Plan, Oversight of corrective actions

Overview: This former filling station was located in Minneapolis, Minnesota and was planned to be demolished to construct a new mixed used retail/restaurant building. A Response Action Plan (RAP) was prepared by Caltha to address potential petroleum impacts associated with the former use of the property that might be encountered during excavation activities. During excavation, it was discovered that the building had been constructed on top of an ash waste dump. Caltha quickly prepared a supplemental RAP to address removal, handling and disposal of the lead-contaminated ash during excavation and got the RAP approved through the Minnesota Pollution Control Agency Voluntary Investigation & Cleanup (VIC) program. Caltha coordinated all waste analyses required to gain waste acceptance at a disposal site. Ash was removed from the site and redevelopment of the property preceded as planned.

For more information on Caltha LLP services, go to the Caltha Contact Page

Response Action Plan and Construction Monitoring To Address Soil Contamination

Caltha LLP Project Summary

Project:Site Investigation, Response Action Under Voluntary Site Cleanup Program
Client:
Site Redevelopment Company
Location(s):
Minnesota

Key Elements: Phase 1 Environmental Site Assessment, Phase 2 Limited Site Investigation, Response Action Plan

Overview: Caltha LLP was retained by a site redevelopment company to conduct a Phase I ESA on this previously developed property. The assessment determined that past chemical releases had occurred on the property due to historical industrial activity on the property. A Phase 2 investigation was conducted which confirmed that contamination was present which would need to be addressed during the demolition and redevelopment of the site. Caltha prepared a Response Action Plan to be implemented during site redevelopment, which as approved by the State agency. Caltha then oversaw implementation of the RAP in coordination with the redevelopment contractor.

For more information on Caltha LLP services, go to the Caltha Contact Page

Phase 1 Environmental Assessment For Duluth, Minnesota Historical Industrial Site

Caltha LLP Project Summary

Project: Phase 1 ESA
Client:
Property Owner
Location(s):
Duluth, Minnesota

Key Elements: Phase 1, Environmental Assessment, All Appropriate Inquiry

Overview: Caltha LLP was retained by the property owner to conduct a Phase 1 Environmental Site Assessment for their property located in Duluth, Minnesota. Historical records indicated that the property was in industrial use from at least 1910 through 1970s. The assessment was conducted to meet the requirements of ASTM E-1527-13 and the US EPA All Appropriate Inquiry requirements. The assessment determined based on historical records where past industrial activities and bulk fuel storage occurred on the property.

For more information on Caltha LLP services, go to the Caltha Contact Page

Iowa Due Diligence Audit | Risk Management Plan Assessment

Caltha LLP Project Summary

Project: Due Diligence RMP Focused Compliance Audit of Cold Storage Facility
Client:
National Food Processing Company
Location(s):
Iowa

Key Elements: Due Diligence, Environmental compliance audit, Multimedia compliance audit, Accidental Release Prevention, Risk Management Program

Overview: Caltha LLP was retained by a national food processing company to conduct a multimedia environmental compliance audit of this cold storage facility as part of its due diligence. The scope of the audit covered all media including wastes, hazardous waste, wastewater, hazardous materials, DOT HazMat and air emissions. Due to the use of anhydrous ammonia refrigerant systems, the facility was subject to the Accidental Release Prevention provisions of 40 CFR 68. The majority of the audit was to review operations for compliance with the requirements of the Risk Management Program and Process Safety Management. This included conformance with the International Institute of Ammonia Refrigeration guidelines. Caltha provided IIA certified auditors to conduct the review.

For more information on Caltha LLP services, go to the Caltha Contact Page

Tank Farm Phase 2 Investigation At South Dakota Farm Operation

Caltha LLP Project Summary

Project: Tank Farm Investigation
Client:
Agricultural Production Sector
Location(s):
South Dakota

Key Elements: Phase 2 Investigation, leaking tank, SPCC requirements

Overview: Caltha LLP was retained by a potential investor group to conduct a Phase 2 Limited Site Investigation (LSI) at this large farm site. During a Phase 1 Environmental Site Investigation, visual evidence of past leaks and spills were identified within the tank farm. Due to recent changes to Federal Spill Prevention, Control & Countermeasure (SPCC) rules which would require above ground tanks at agricultural facilities to comply with SPCC rule, the tank farm was expected to require upgrades. The key question was what cost impact would be expected during tank farm upgrade to address existing contamination. The results of the investigation provided clarity to the potential investors on the range of cost impacts.

For more information on Caltha LLP services, go to the Caltha Contact Page

Sunday, January 1, 2017

Five Things Every Commercial Lender Should Know About Environmental Liabilities

Accepting a property with known or potential environmental issues as collateral creates special challenges for the commercial lender. This could include properties with old tanks and old spills or leaks - even those that may long ago been have been cleaned up and closed by State agencies.

Although more challenging, such properties can be addressed in a reasonable time frame, while minimizing the potential liabilities for the Lender. Five key points the commercial Lender must keep in mind are :

1 - Old Issues - Even "Closed" Issues Can Effect The Value Of The Asset.

For the Lender, the key risk to be managed is the potential that contamination on a property can have a material impact on the property value, and/or make the property less marketable in the event the Lender comes to own the property due to foreclosure. Old issues can directly affect the future use of a property. When old contamination issues are "closed" by agencies, it is common that restrictions are put in place that limit the future use of the property, or that require further cleanup if any redevelopment of the site is planned. This can reduce the value of the property to prospective Buyers.

2 - If The Lender Ends Up Owning A Tank, They Own The Liabilities.

In most States, laws protect Lenders from being financially responsible to investigate and cleanup contamination on a property they acquired through foreclosure. The exception is for tanks that remain on the property. The responsibility for investigations and cleanup of leaking tanks falls to the "owner" of the tank, which is typically the property owner. If a Lender comes to own tanks on a property due to foreclosure, the Lender may be responsible to remove the tanks, and if leaking tanks are discovered, the Lender may be directly responsible for the remediation Therefore, Lenders need to pay particular attention to tanks left on a property, especially if tanks have been abandoned in-place.

3 - Plan Ahead For  You And Your Borrower  To Obtain Liability Protections.

If you or your Borrower require liability relief letters, such as a no further action or no association letter, you will need to factor in the time required for these issues to be addressed. It is important to remember that agencies will issue these letter only if contamination is actually documented on the property, not simply based on the possibility that contamination could be present. Therefore, in some cases a site investigation needs to be conducted. As an example, a typical scenario might be:

2 weeks - Phase 1 Environmental Site Assessment
3-5 weeks - Phase 2 Investigation
1 week - Prepare and submit request to agency
4 weeks - Agency review and issuance of letter

Therefore it is not unusual for it to take 10-12 weeks to go through the process.

4 - "Closed" Or "No Further Action" Does Not Mean "Clean"

When agencies issue a closure letter, no further action letter, or similar, they will often allow some contamination to remain on the property. The agency has simply concluded that the remaining contamination does not pose a significant risk to human health or the environment - under the existing conditions. These determinations are always "as-is, where-is" determinations. This does not mean that the agency has determined the site to be clean or that future uses or redevelopment of the property will not require further investigation and cleanup.

5 - Unfortunately New Issues Can Be Discovered.

One of the most challenging situations is when new contamination issues are uncovered, especially coming from neighboring properties. Leaking tanks and other sources of contamination are newly discovered each year, which can create additional issues which may need to be resolved between the Lender, the Borrower and the State agency. In addition, over time cleanup standards can change and new information on risks from contamination can "reopen" some closed issues. One example is the current interest in "soil vapor encroachment"; many leaking tank sites that were closed prior to 2010 were not evaluated to determine if contaminants are migrating though soils and into nearby buildings. Although these sites may be closed, they can be reopened to address soil vapors. Therefore, evaluations of soil vapor intrusion have become increasingly common, especially since 2013.

By understanding the process, the Lender can play an important role in transforming these formerly contaminated properties into usable and marketable properties, increasing their value and the value of nearby properties. And at the same time, manage the Lender's future liabilities.

For more information go to:
Phase 1 Environmental Site Assessment Buyer's Guide
Regulatory Briefing - Landowner Liability Protections and All Appropriate Inquiry

Tuesday, December 20, 2016

Five Things Every Realtor Needs To Know When Representing Contaminated - Potentially-Contaminated Properties

Representing a property with known or potential environmental issues creates special challenges for the commercial real estate professional. This could include properties with old tanks and old spills or leaks - even those that may long ago been have been cleaned up and closed by State agencies.

Although more challenging, such properties can be sold in a reasonable time frame, while minimizing the liabilities of both the Seller and the Buyer. Five key points the real estate professional must keep in mind are :

1 - The Seller "Owns" The Liabilities.

Until the transfer of ownership, the Seller (the current property Owner) owns the environmental liabilities on the property. A prospective Buyer is motivated to identify these liabilities to determine if they could impact the value of the property or restrict their use of the property. In the absence of definitive information, Buyers will tend to over estimate the impact of these potential or actual liabilities, on the value of the property.

2 - Sellers Cannot Control Future Use Or Activities On the Property & Cannot Control A Buyer's Future Risks.

When spills or leaking tanks are discovered on a property, the agency (typically the State) will oversee cleanup, either through enforcement actions or through a voluntary cleanup program. Once the agency determines that any remaining contamination at a site is no longer a significant risk , the agency will "close" the site or issue a "no further action", and allow any remaining contamination to be left in-place. The important point to remember is that this closure is an "as-is, where-is" approval. As long as property use remains the same, and any remaining contamination is left undisturbed, then this closure could be transferred to any future property owners. If a future owner chooses to change the property use, redevelop the property, etc., then the agency may need to be notified and further cleanup may be needed. A seller has no control over future actions on the property which could potentially reopen closed contamination issues.

3 - Plan Ahead For Buyer and Their Lender To Obtain Liability Protections.

If Buyers or their Lender require liability relief letters, such as a no further action or no association letter, you will need to factor in the time required for these issues to be addressed. It is important to remember that agencies will issue these letter only if contamination is actually documented on the property, not simply based on the possibility that contamination could be present. Therefore, in some cases a site investigation needs to be conducted. As an example, a typical scenario might be:2 weeks - Phase 1 Environmental Site Assessment
3-5 weeks - Phase 2 Investigation
1 week - Prepare and submit request to agency
4 weeks - Agency review and issuance of letter Therefore it is not unusual for it to take 10-12 weeks to go through the process.

4 - Buyers and Sellers Must Work Together

For a successful transaction, the Buyer and the Seller must work together. This may mean the Seller granting access to the property for a Phase 1 environmental site assessment and a Phase 2 investigation, if required. The Seller will also need to be involved if contamination is discovered so that proper agency notify occurs. This notification opens up a pathway for the Buyer and their Lender to get liability protection letters from the agency. Likewise, the Buyer will need to communicate all results to the Owner (if the Buyer directed a Phase 2 investigation) to ensure the Seller has the information they need to notify agencies. The Buyer will also want to let the Seller know if they intend to request liability protections from the agency - it is possible that the Seller can also request similar types of liability protections for themselves.

5 - Unfortunately New Issues Can Be Discovered.

One of the most challenging situations is when new contamination issues are uncovered, especially coming from neighboring properties. Leaking tanks and other sources of contamination are newly discovered each year, which can create additional issues which may need to be resolved between the Seller, Buyer, Lenders and the State agency. In addition, over time cleanup standards can change and new information on risks from contamination can "reopen" some closed issues. One example is the current interest in "soil vapor encroachment"; many leaking tank sites that were closed prior to 2010 were not evaluated to determine if contaminants are migrating though soils and into nearby buildings. Although these sites may be closed, they can be reopened to address soil vapors. Therefore, evaluations of soil vapor intrusion have become increasingly common, especially since 2013.


By understanding the process, the real estate professional can play an important role in transforming these formerly contaminated properties into usable and marketable properties, increasing their value and the value of nearby properties.


For more information go to:
Phase 1 Environmental Site Assessment Buyer's Guide
Regulatory Briefing - Landowner Liability Protections and All Appropriate Inquiry

Sunday, December 11, 2016

Five Things Due Diligence Auditors Should Know About New RCRA Rules

The Hazardous Waste Generator Improvements Rule (Federal Register Volume 81, Issue 228 , November 28, 2016) includes some new elements to the RCRA – some of which are more stringent compared to the existing rules and some less stringent. The rule becomes effective on May 30, 2017. The rule will affect all facilities that generate hazardous waste, regardless of size. Therefore, EH&S auditors should be aware of these rule changes and the clarifications the rule provides, especially in the Preamble, on EPA's interpretations of existing RCRA requirements for hazardous waste generators.


All auditors that review hazardous waste compliance as part of due diligence should review the final rule, including the Preamble. Some key points are:

1 - Clarifications on EPA's Expectations On Identifying & Handling Hazardous Waste.


The final rule provides clarifications auditors can refer to on how generators are expected to identify, characterize and manage wastes. Although this does not change existing requirements, the Preamble to the Rule discusses the accuracy of waste determinations, where in the process wastes should be characterized/sampled, and other technical clarifications auditors need to be aware of. Interestingly, EPA estimates that 20-30% of generators are currently not in compliance with existing rules on identifying and characterizing waste streams.
Because these clarifications to existing rules do not change rules, they are already "effective".

2 - Independent Requirements verses Conditions of Exemption.


For auditors, some of the more interesting portions of the Rule's Preamble provide a detailed discussion of "Independent Requirements" and "Conditions of Exemption". Although this provides useful clarifications to the existing RCRA rules, it does not change existing requirements. It also provides needed clarifications on how the different types of requirements are applied by EPA to RCRA enforcement action.
In summary, independent requirements are rules that apply to all hazardous waste generators, regardless of generator status. For example, the requirement to identify hazardous wastes. Conditions of Exemption are requirements generators can chose to meet in order to avoid more stringent requirements. For example, LQGs store wastes on-site for less than 90 days to avoid being regulated as a TSDF. They could elect to store wastes longer than 90 days, but would then be held to the requirements that apply to TSDFs.

3 - Sections of RCRA Rule Have Been Reorganized.


One of the purposes of the Hazardous Waste Generator Improvements Rule is to make the requirements for hazardous waste generators more accessible and logical, especially for new generators. To accomplish this, EPA has reorganized the sections of the RCRA generator rules, and many existing sections have been renumbered.
The practical implications of this change for auditors is that regulatory citations referencing the Federal rules in audit reports may change. Although not required, authorized States may opt to reorganize sections of State rules.
One of the challenges facing auditors will be auditing against State rules that incorporate portions of the Federal RCRA rules by reference, especially if references to 40 CFR are no longer accurate.

4 - Effective Date Will Have Limited Immediate Impact


The effective date of the final rule is May 30, 2017. However, the number of generators who will be subject to the Rule on that date is limited. The Rule will be effective on May 30th only for generators in States or Territories that do not have authorized RCRA programs, including:
  • Iowa
  • Alaska
  • Tribal Lands
For States with authorized RCRA programs, the Hazardous Waste Generator Improvements Rule (or portions thereof) will only become effective once State programs are updated. Auditors should be aware of one caveat - some States have incorporated Federal RCRA rules into their State rules by reference. Therefore, in those States the potential exists that revisions to the Federal Rule can be immediately effective.

5 - States Will Only Be Required To Enact Limited Changes To State Programs ; Differences Between State Programs May Increase.


The final Hazardous Waste Generator Improvements Rule includes elements that are more stringent compared to the existing rules and some elements that are less stringent (allow more flexibility). Authorized States will only be required to incorporate portions which are more stringent, and have the discretion to include, or not, those portions which are less stringent than existing State rules.
Therefore, environmental compliance auditors need to be cognizant that the differences between State program requirements for hazardous waste generators may increase as State programs are updated.


Click here for more detailed summary on the key changes to the RCRA requirements for hazardous waste generators.


Caltha LLP assists Sellers, prospective Buyers and their Lenders in meeting Due Diligence, Environmental Site Assessment and Environmental Review requirements. To request a quote on-line, go to Caltha Environmental Assessment Quote Web Page.
For further information contact Caltha LLP at info@calthacompany.com or Caltha LLP Website

Sunday, August 28, 2016

Small Business Adminstration Environmental Record Search - 3-5 Day Turn Around

The US Small Business Administration guaranteed loan program requires some level of environmental review for all loans. This ranges from a simple Environmental Questionnaire to a full ASTM Phase 1 Environmental Site Assessment.


One of the most requested services Caltha LLP provides to SBA Lenders is a "Record Search With Risk Assessment" or RSRA Report. Caltha prepares hundreds of RSRA report for banks and other lending institutions across the country that participate in the SBA guaranteed loan program.


Typical turn-around time: 3-5 business days
Format: Electronic report in PDF format
Geographic Coverage: Any property located in US


To request a quote to prepare an RSRA report, fill out the quote request form. You will receive a quote by email the same day, you can then authorize the work by email.


RSRA Quote Request Form