Are you a commercial real estate broker concerned about the environmental condition of a commercial real estate property? It’s time to dig into what’s involved in the final stage of addressing issues with the property.
If you have already completed Phase 1 and Phase 2 Environmental Site Assessments, but problems persist, you may wonder, “What is a Phase 3 Environmental Site Assessment?”
In summary, Phase 3 ESAs are also known as:
- Brownfield assessments
- Remedial action plans
- Phase 3 environmental site evaluations
All of these terms refer to the same remediation process. However, interchangeable terminology is often used at this stage of the assessment process. RSB Environmental wants to take the guesswork out of due diligence.
In this article, we’ll shed some light on a Phase 3 ESA for remediation purposes so that you have greater confidence in supporting your clients during this critical assessment.
What is a Phase 3 Environmental Site Assessment?
A Phase 3 ESA is a remediation process intended to address soil and groundwater contamination. A Phase 3 ESA can also be used as an assessment designed to reinvigorate brownfields, which is a property that’s seen decreased usability due to contamination.
Brownfields are typically abandoned, but not always. In some instances, brownfields may only be suitable for specific commercial operations. If your client wants to use it for other purposes, a Phase 3 ESA will be necessary. Once the contamination has been removed, the site can be re-zoned.
When is a Phase 3 ESA Required?
A Phase 3 ESA follows a Phase 1 and Phase 2 ESA. During a Phase 3 ESA, our team will work to remove contamination from a subject site, where we use information gathered during the first two phases of the assessment to guide our efforts.
– A Phase 1 ESA is a preliminary site assessment. During a Phase 1 ESA, we’ll check for signs of potential hazards and review the site’s usage history. If a Phase 1 ESA reveals potential hazards, a Phase 2 ESA will be required.
– During a Phase 2 ESA, we’ll collect groundwater and soil samples and test them for contaminants. The mere presence of contaminants doesn’t warrant a Phase 3 ESA, as this assessment will only be necessary if contaminants are present in excessive quantities.
However, a Phase 2 ESA report will outline whether a Phase 3 ESA is needed. It will also include estimated remediation costs, which can help your client determine whether they want to move forward with a deal.
Phase 2 findings can also be used to negotiate a lower purchase price. For example, let’s say that a Phase 2 ESA reveals that a Phase 3 ESA is needed, and remediation costs are estimated at approximately $200,000. In this scenario, your client could attempt to obtain the land for $200,000 below the asking price. Doing so would offset most of the expenses associated with the remediation.
Legal and Regulatory Framework for Phase 3 ESAs
The legal and regulatory framework for Phase 3 Environmental Site Assessments (ESAs) is established by federal, state, and local environmental laws and regulations, which are designed to protect human health and the environment from the risks associated with contaminated sites. In the United States, the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), commonly known as the Superfund law, and the Resource Conservation and Recovery Act (RCRA) are the primary federal laws governing the assessment and cleanup of contaminated properties. These laws, along with state-specific regulations, set forth the standards for conducting Phase 3 ESAs and specify the requirements for remediation, reporting, and compliance.
It is essential for property owners, developers, and consultants involved in Phase 3 ESAs to understand and adhere to the applicable legal and regulatory requirements. Non-compliance can lead to penalties, fines, and potential legal liabilities. Moreover, a properly conducted Phase 3 ESA can offer protection from liability under CERCLA’s “innocent landowner” defense or help secure a “No Further Action” letter from the regulatory agency, which can be beneficial for property transfers, financing, or redevelopment. To navigate the complex legal and regulatory landscape, it is advisable to engage the services of an experienced environmental consultant and legal counsel with expertise in environmental laws and regulations.
Frequently Asked Questions
A Phase 3 Environmental Assessment (EA) is an advanced stage of the environmental site assessment process that focuses on the remediation of identified contamination issues from previous Phase 1 and Phase 2 assessments. The main objective is to develop and implement a plan to clean up the contamination, ensuring the site is safe and compliant with environmental regulations.
A Phase 3 EA is necessary when a Phase 2 assessment confirms the presence of contamination at levels exceeding regulatory guidelines or posing a risk to human health and the environment. It is also required when there is a need to address the liability of the property owner or if the cleanup is mandatory to meet the conditions for property transfer, redevelopment, or financing.
The Phase 3 EA process involves a series of interconnected steps. It begins with a thorough review of the findings from the Phase 1 and Phase 2 assessments to fully understand the nature and extent of the contamination. Based on this information, a site-specific Remedial Action Plan (RAP) is developed, which outlines the cleanup methods, goals, and timelines. Next, the chosen remediation techniques are implemented to clean up the contaminated site. Throughout the process, monitoring and sampling are conducted to ensure the effectiveness of the remediation and compliance with regulatory standards. Finally, the cleanup activities are documented, and a final report is submitted to the relevant regulatory agencies.
During a Phase 3 Environmental Assessment, various remediation techniques are employed to address contamination issues. These may include excavation and disposal of contaminated soil or materials, in-situ chemical oxidation or reduction to treat soil or groundwater contamination, and bioremediation, which uses microorganisms to break down contaminants. Other techniques, such as soil vapor extraction, can remove volatile organic compounds from the subsurface, while pump and treat systems can be used for groundwater contamination. In some cases, capping or containment of contaminated areas may be necessary to prevent further spread of contaminants.
The duration of a Phase 3 EA depends on several factors, including the size and complexity of the site, the extent and type of contamination, the selected remediation methods, and regulatory requirements. It can range from a few months to several years. It is essential to work closely with environmental consultants and regulatory agencies to ensure a timely and effective cleanup.