Environmental Due Diligence

Transcription

1 2017 NJ Land Conservation Rally Environmental Due Diligence Stephen Kehayes Michelle Slosberg Peter Sorge, LSRP

2 1. Introduction 2. Due Diligence Process 3. Potential Problems 4. Investigation 5. Regulatory Framework 6. Funding Options 2

3 In business since 1986 Joseph Sorge Founder, Principal Peter Sorge President, Second Generation Supports public, non-profit and private clients Due diligence, site remediation, regulatory compliance 3

4 Introduction to Due Diligence 4

5 Why conduct environmental due diligence? Evaluate potential environmental risks Typically completed before a property transaction Identify significant environmental problems before sale is completed Understand the property history May be required for funding Limits buyer s liability NJ Spill Act Innocent Purchaser Defense CERCLA Innocent Landowner Defense: The Defendant must have undertaken, at the time of acquisition, all appropriate inquiries (AAI) into the previous ownership and uses of the property consistent with good commercial or customary practice 5

6 Phase I Environmental Site Assessment ASTM Standard Used throughout USA Evaluate site and neighbors Identifies Recognized Environmental Conditions (RECs) Frequently required by financial institutions Preliminary Assessment (PA) NJDEP Standard New Jersey only Evaluate on-site only Identifies potential areas of concern (AOCs) and provides recommendations for further investigation Required for NJDEP funding (i.e. Green Acres, Blue Acres, HDSRF) 6

7 Identified during a Phase I Defined as: The presence or likely presence of any hazardous substances or petroleum products in, on, or at a property: (1) due to any release to the environment (2) under conditions indicative of a release to the environment; or (3) under conditions that pose a material threat of a future release to the environment. (ASTM, E Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process ) 7

8 Two other types of RECs: Historical REC (HREC) Controlled REC (CREC) 8

9 Historical Recognized Environmental Condition (HREC): A past release has occurred and was remediated to unrestricted criteria to the satisfaction of the applicable regulatory agency. Example: A chemical spill occurred in 1995, remediation was completed to the most restrictive standards in place at the time and a No Further Action letter was issued. Does not typically required further investigation. The Phase I must evaluate the historical data and confirm that the remediation is still protective. 9

10 Controlled Recognized Environmental Condition (CREC): A past release has occurred and contaminants were allowed to remain in place under engineering or institutional controls. Example: A chemical spill area was investigated; contaminated soil was left in place and covered with a cap. The property has a notice on the deed indicating that contamination is still present and residential use is not permitted. A Restricted Use No Further Action letter was issued. Does not typically require further investigation. 10

11 Identified during a Preliminary Assessment Any existing or former distinct location or environmental medium where any hazardous substance, hazardous waste, or pollutant is known or suspected to have been discharged, generated, manufactured, refined, transported, stored, handled, treated, or disposed, or where any hazardous substance, hazardous waste, or pollutant has or may have migrated (NJDEP, N.J.A.C. 7:26E Technical Requirements for Site Remediation) 11

12 The Due Diligence Process 12

13 Gather information about current and historic uses Data Collection includes: Historic Aerial Photographs Sanborn Maps Business Directories Public Records Requests File Reviews Historic Records Database Searches 13

14 Conduct a thorough site inspection Interview site owner and occupants At a developed property, inspect all utility areas and basements. Take note of areas of former structures Especially important to inspect any areas where chemicals may be stored, transported or used. Look out for fill and vent pipes that may be indicative of underground storage tanks. 14

15 At an undeveloped property, inspect the entire property, pay special attention to areas that may be accessible for dumping or that may receive runoff. 15

16 A Phase I / Preliminary Assessment will include all findings of the data collection and site inspection Summarizes site history and inspection Evaluates any previous remediation Provides conclusions regarding potential environmental concerns. 16

17 What kinds of issues are identified most frequently on conservation projects? 17

18 Above-Ground Tank Underground Tank 18

19 Chlordane, DDT, Dieldrin, Lead, Arsenic, etc. Typically only requires investigation if the property will have a sensitive use (residential, school, childcare) May not require investigation for passive use under Green Acres 19

20 May not qualify as a REC Debris removal is typically required for Green Acres funding. Re-evaluation may be needed after debris removal. 20

21 Defined as: Non-indigenous material, deposited to raise the topographic elevation of the site, which was contaminated prior to emplacement, and is in no way connected with the operations at the location of emplacement and which includes, without limitation, construction debris, dredge spoils, incinerator residue, demolition debris, fly ash, or nonhazardous solid waste. Historic fill material does not include any material that is substantially chromate chemical production waste or any other chemical production waste or waste from processing of metal or mineral ores, residues, slag or tailings. In addition, historic fill material does not include a municipal solid waste landfill site. N.J.A.C. 7:26E-1.8 Common in urban areas Often contains contamination including metals and semi-volatile organic compounds See NJ Historic Fill maps for initial information 21

22 YOU ARE HERE 22

23 NJDEP Data Miner Database: NJDEP GeoWeb: NJDEP Historic Fill Maps: Historic Aerials: Princeton University Sanborn Map Collection: NJ Assessment Records Search: =0&adv=1 County-specific online deed databases (see County Clerk website) 23

24 What if additional investigation is recommended? 24

25 Before sampling, evaluate the potential outcome and how the data will be managed and distributed. What responsibility does a potential purchaser have to report data showing contamination to NJDEP? No reporting responsibility for a party that does not own the property.* *If the sampling shows that the condition is an Immediate Environmental Concern, may be an obligation to report data to NJDEP, regardless of interest in the property. If the owner becomes aware of the contamination, they have an obligation to report to NJDEP. If the property is purchased and the purchaser knows of contamination, they have an obligation to report after the transaction. 25

26 Once a property owner is aware of contamination on their property they have an affirmative obligation to notify the NJDEP and remediate. Proceed carefully Licensed Site Remediation Professional (LSRP) needs to be retained to direct the remediation 26

27 Investigation Methods 27

28 May include metal detection, radiodetection and ground penetrating radar Non-intrusive evaluation to identify anomalies in the ground Underground storage tanks Septic tanks Buried well heads Former excavations or soil disturbance Buried debris Utilities Piping Useful initial tool to understand site conditions and ensure safe work. 28

29 Soil borings being used to sample soil at depth. 29

30 Monitoring wells are installed to sample ground water 30

31 Case Studies 31

32 What was below the lawn adjacent to a former leather processing facility? 32

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35 USTs at a farm in Hillsborough, NJ During removal small holes were identified in the heating oil tank. Soil samples did not exceed NJDEP Standards A ground water sample was collected and results were also below NJDEP Standards. NJDEP issued a No Further Action Letter with no soil removal A gasoline tank was removed and no leak was present. 35

36 Undeveloped land in Bedminster, NJ Historic agricultural use identified in aerial photographs during Preliminary Assessment. Site currently includes wooded area and fields. Land planned to be used for passive recreation. No investigation or remediation of historically applied pesticides is required for Green Acres funding for passive recreation. No investigation required for farmland preservation

37 Two farm dumps were identified during the Preliminary Assessment of a farm in Andover, NJ Materials included tires, trash, household appliances, concrete and metal. 37

38 Debris was removed including 25 tires, and 120 cubic yards of miscellaneous debris. 38

39 Schoolyard, Newark, NJ Preliminary Assessment (PA) was completed for Green Acres funding. Historic urban fill material was identified during the PA and confirmed with test pits. Fill containing bricks, metal and plastic was present. 39

40 Schoolyard, Newark, NJ Excavation of fill material was not practical or costeffective The fill was capped in place with a new play yard. A notice was filed on the deed and a Remedial Action Permit was obtained from NJDEP. A Response Action Outcome (RAO) was issued to close the case. The cap is periodically inspected and reports filed with NJDEP. 40

41 Regulatory Framework 41

42 Established sweeping changes in the NJ remediation process Site owner has an affirmative obligation to remediate any discharge. Phase-in completed in Eliminated No Further Action (NFA) letters for new cases, except unregulated tanks. Licensed Site Remediation Professionals (LSRPs) have responsibility for oversight of environmental investigation and cleanup. Once a cleanup is complete the LSRP issues a Response Action Outcome (RAO) to close the case. 42

43 As of November 2016: Total Number of Active LSRP Cases: 11,370 Number of LSRPs Submitting Documents: 638 Total Number of RAOs Issued: 9,052 43

44 Licensed Site Remediation Professionals (LSRPs) have responsibility for oversight of environmental investigation and cleanup An LSRP is not needed to conduct a Green Acres Preliminary Assessment or a Phase 1 Environmental Site Assessment If a new release or contamination is identified an LSRP must be retained to address the issue When the process is complete the LSRP issues a Remediation Action Outcome (RAO) letter to close the case The RAO is subject to an NJDEP audit for up to 3 years Guide to Hiring an LSRP: ide.pdf 44

45 Funding Options 45

46 Green Acres & Blue Acres Farmland Preservation Grants Hazardous Discharge Site Remediation Fund (HDRSF) 46

47 Can be used by local government and non-profits to acquire land for public outdoor recreation or conservation. Must ensure that properties acquired or developed with public funds can be utilized for recreation without risk to public health. Requires a Preliminary Assessment for environmental due diligence. 47

48 All non-profit funding is in the form of a 50% matching grant. For local government, funding depends on project type, population density and open space tax. Matching grants from 25% to 75% and loans available. Funds may be used for land acquisition, appraisals, survey, environmental assessments, well testing, relocation, demolition, incidental costs, construction, and engineering. 48

49 An LSRP is not required to conduct a Green Acres Preliminary Assessment SRRA C.58:10B d. (2) "The provisions of this section shall not apply to any person who: (a) does not own a contaminated site, (b) conducts a preliminary assessment or site investigation of the contaminated site for the purpose of conducting all appropriate inquiry into the previous ownership and uses of the property as provided in section 8 of P.L.1976, c.141 (C.58: g)" If a release is identified an LSRP must be retained to address the issue. 49

50 Purchase of flood-prone residential properties Homes are demolished and properties preserved for recreation and conservation Applies to homes flooded in Superstorm Sandy or previous storm events Requires a Preliminary Assessment Underground storage tanks must be removed by owner 50

51 The State Agriculture Development Committee (SADC) will provide grants to nonprofits to fund up to 50% of fee simple acquisition or development easement values on qualified farms to ensure their permanent preservation for agricultural use. Applications due within 90 days of notice in the NJ Register Nonprofit must publish notice of application and notify the municipality and county agriculture development board. SADC ranks applications based on soil types, percentage of tillable acres, proximity to other preserved farms and open space, local commitment to agriculture, farm size, development threat and other factors. 2 appraisals required 51

52 Provides funding to non-profit community groups to employ a LSRP to improve community understanding of environmental conditions at a contaminated site. Organization must be incorporated or in the process. Organization must be 501(c)3, in the process, or affiliated with a local 501(c)3. One or more members must live in the same neighborhood as the site. Available during remedial investigation ($10,000) and cleanup ($10,000). 52

53 HDSRF provides public and private entities with grants and loans for investigation and cleanup of contaminated sites. Public entities (municipalities, counties, redevelopment entities, non-profits) are eligible for grants of 100% of the investigation, capped at $3 million per applicant per year Public entities eligible for grants of 25% - 75% of cleanup costs, capped at $3 million per applicant per year, or $5 million in Brownfields Development Area (BDA). 75% of cleanup for recreation or conservation 50% of cleanup for affordable housing 25% of cleanup for use of approved innovative technology or by achieving limited restricted use or unrestricted use, capped at $250,000. Public entities eligible for loans of 100% of investigation and cleanup costs, capped at $3 million per year. 53

54 Innocent Party Grant available for 50% of cleanup costs, capped at $1 million per project. Must have acquired site prior to 12/31/1983, hazardous substances not used by applicant, applicant did not discharge hazardous substances or waste in area where the discharge was discovered. Private entities that perform cleanup voluntarily and cannot obtain funding from a conventional funding institution are eligible for loans for 100% of investigation and cleanup costs, capped at $1 million per year. 54

55 Start thinking about due diligence early. Understand the purpose of due diligence for the project. Carefully evaluate the property and its history. Evaluate potential funding options. Proper environmental due diligence helps contribute to... Healthy Land Healthy Water 55

56 Questions? 57 Fourth Street Somerville, NJ Michelle Slosberg Project Manager Peter Sorge President Stephen Kehayes Senior Manager 56