Due Diligence Through Phase I ESAs
The land you’re eyeing for your next acquisition might look perfect, but remember your due diligence.
While it’s easy to see what’s there now, it’s certainly not obvious for almost any buyer to know what the land looked like 10, 20 or even 50 years ago. There might be no trace of a former business that could be responsible for contamination migrating from a neighboring property or previous hazardous substance storage.
That’s where ONE Environmental Group comes in to help.
Jeff Duncan, Principal from ONE Environmental Group, recently completed Phase I Environmental Site Assessments (ESAs), the main component of environmental due diligence, on a couple tracts of land that were approximately 2 acres each in the Williamsburg, VA area. Only this was something of a special project. Habitat for Humanity Peninsula and Greater Williamsburg was the client.
The nonprofit acquires land to develop homes for low-income families. The tracts of land located in Williamsburg will hold the future homes of families who have never owned a home because of their lower income.
“I certainly took it to heart,” Duncan said. “We know their cause, and it’s a great one. We are fortunately in a position to complete the effort at a very cost-effective rate.”
There was a time when a Phase I ESA involved trips to obtain historic information at sources such as Virginia Department of Transportation’s Richmond headquarters to examine historical aerial photographs and topographic maps of the property.
“Their hardcopy files were stored in large rotating storage systems and you’d have to locate the necessary age ranges of the aerials needed and make copies,” Duncan said. “You’d have to go to the public library to pull and copy city directories.”
Today’s online environmental database sources provide a more precise record in addition to removing the logistics. Duncan ordered environmental database reports that included all the regulatory recordings compiled by the Department of Environmental Quality, the Environmental Protection Agency as well as other regulatory and informational sources.
“If there’s ever been a spill or a leaking petroleum tank, they are usually found in the regulatory databases,” he said.
Reports can be hundreds of pages; Duncan sifts through all of the material looking for red flags. Sending out Freedom of Information Act requests to city and county entities, including fire, planning and health departments, is an additional step.
One of the final steps — a site reconnaissance — remains an important one. Even in the era of computerized reports, Duncan left his Tidewater office to walk the land himself.
“I look for anything that is an environmental concern — vent pipes, storage tanks, soil staining and/or stressed vegetation — to name a few” he said.
Ultimately the user of the report, in this case Habitat for Humanity, would qualify for innocent land owner defense if needed since a qualified Environmental Professional has performed a Phase I ESA following current American Society for Testing Materials (ASTM) guidelines. A Phase I must be completed within six months of closing.
Duncan did not find any Recognized Environmental Concerns (RECs) during his assessment. That means the Habitat crew can begin laying the foundation for what will be lucky homeowner’s future houses and backyards.
Moved by the Habitat for Humanity Peninsula and Greater Williamsburg mission? Visit them online at HabitatPGW.org to learn more and support their work.