Contamination at thousands of shopping centers across California from previous business operations presents problems for property owners who wish to continue commercial use, redevelop, and maintain property value. Commercial property remediation targets returning these buildings and land to predevelopment conditions, presenting opportunities for reuse and redevelopment.
One property owner discovered that securing adequate funding and working closely with state and regional regulatory agencies leads to success despite changing regulations and oversimplifying regulatory health risk assessment methods. The Draft Cal-EPA Supplemental Vapor Intrusion Guidance (DSVIG) suggests changes to the methods in which vapor phase transport and potential health risks are modeled and calculated for occupants of buildings with known soil or groundwater contamination beneath them. These changes, the result of a multi-year working group collaboration, recommend an arguably more conservative calculation of indoor air quality. The changes rely on EPA work and guidance, with empirically derived attenuation factors (AFs), which will increase the number of sites requiring additional environmental assessment and mitigation to achieve health risk standards. Although the DSVIG is currently draft guidance, there is evidence that regional regulatory agencies have already adopted AFs in calculating indoor air quality.
Diamond Bar Commercial Center Assessment and Mitigation
Drucker Survivors Trust owns and operates a multi-tenant commercial building in Diamond Bar, California, including a dry cleaner at one time. The former cleaners caused an unauthorized release of dry cleaning solvent containing chlorinated volatile organic compounds to the subsurface during its operation.
Financing for this all too common situation requires environmental due diligence in the form of research commonly completed in a Phase I Environmental Site Assessment followed by an assessment to characterize potential liabilities associated with chlorinated solvent releases before lenders provide funding.
Regulatory oversight in California can either be voluntarily engaged or involuntarily if assessment activities on an adjacent or nearby property indicate the presence of chlorinated volatile organic compounds in the subsurface linked to dry cleaning operations in the vicinity.
The Drucker Survivors Trust sought approval from the applicable regulatory agency, Los Angeles Regional Water Quality Control Board (LARWQCB), to assess and mitigate the chlorinated solvent release to ensure the protection of human health and reduce environmental liabilities associated with the property.
Regulatory closure is the acceptance of assessment and remediation activities by the governing regulatory entity to bring the site into compliance. Compliance, in this case, required assessment and mitigation of beneficial use groundwater underlying the property impacted by the solvent release and completing soil vapor assessment and health risk screening calculations under current state and federal guidelines.
Guidance on vapor assessment and associated health risk screening methods have changed rapidly in California state environmental regulations. As environmental engineers and consultants, SCS professionals manage an extensive list of vapor assessment, health risk assessment, and vapor intrusion mitigation projects resolving these vapor–related issues.
To start this project, the SCS team prepared a successful grant application securing more than $650,000 in funding from the California State Water Resources Control Board’s Site Cleanup Subaccount Program (SB 445, established in 2014). This state-provided grant money enables the assessment and mitigation necessary to close with the LARWQCB.
Subsurface assessment activities defined the extent and scale of chlorinated solvent impacts to soil vapor, soil, and groundwater, enabling the design of a remediation program. To reduce the groundwater contamination to cleanup levels set by the LARWQCB, SCS Engineers designed and implemented an injection program to deliver engineered chemicals directly to the groundwater plume. The injected chemicals destroy the chlorinated solvents via in situ chemical reduction and stimulation of biological degradation.
While challenging drilling conditions precluded previous consultants from attempting groundwater remediation, SCS industry experts safely achieved up to a 99 percent concentration reduction within the groundwater plume. SCS designed a soil vapor assessment that relied more on site-specific data collection and less on conservative default assumptions while conforming to the most current regulatory guidance targeted at minimal impact on the building tenants.
SCS managed all aspects of the project, including grant requirements and communication between the client, regional and state water board staff, city staff, and subcontractors. Obtaining and managing entrance under state waste discharge requirements is necessary, and SCS completed all necessary permitting and reporting requirements to facilitate the groundwater mitigation activities. Careful planning and experience with similar projects minimized impacts on tenants and kept the project on a strict timeline with no missed regulatory deadlines. SCS continues working with the LARWQCB to conclude the client’s final closure requirements and is in the process of applying for an additional $900,000 in SCAP funding to implement the final stages of the project targeted at obtaining final regulatory closure.
Changes Coming to Regulatory Guidance
Recent changes to regulatory guidance in California are arguably making obtaining closure on sites with vapor intrusion health risk concerns more difficult to achieve. The Draft Cal-EPA Supplemental Vapor Intrusion Guidance (DSVIG) suggests changes to the methods in which vapor phase transport and potential health risks are modeled and calculated for occupants of buildings with known soil or groundwater contamination beneath them. These changes, which result from a multi-year working group collaboration, recommend a more extensive and site-specific data collection effort. They include indoor air quality calculation methods relying on EPA work and guidance and empirically derived attenuation factors (AFs) which some would argue lead to overestimating potential health risks.
The consequences of the DSVIG are potentially significant if adopted as is and appear likely to result in more sites being “screened in” with vapor intrusion issues and more sites requiring mitigation. The impact, resultant costs, and possibly detrimental secondary effects such as decreases in affordable housing production, particularly in urban infill areas. And while none would argue with appropriate protection of health risk, the question is whether the studies and empirical data used to support the DSVIG represents the best available science and is truly representative and predictive of risk.
The DSVIG adopts an attenuation rate of 0.03 for the flux of both soil and sub-slab vapor to indoor air based on a previous 2012 EPA Study comprised of empirical data collected from buildings arguably not representative of modern construction in California.
The development of a reliable screening level attenuation factor for California based on high-quality, recent, California-specific data:
1) Will be protective of human health, as no toxicological imperative or basis supports a call for accelerated or immediate action (as evidenced by the fact that the DSVIG workgroup commenced its work in 2014 and issued the review draft in 2020).
2) Will ensure California’s environmental policy satisfies the gold standard for data quality and insightful analysis in which the state once took pride.
3) Will not unnecessarily decimate the California housing development market. The empirically derived screening level AF in the DSVIG is overly conservative based on the available data. More accurate empirical data and measurement methods for site-specific measurement are available.
With respect, oversimplifying the VI health risk assessment methods has constrained the environmental community’s ability to apply science-based health risk screenings, often resulting in costs associated with additional environmental assessment and mitigation. An additional revision to the DSVIG to utilize a screening level AF more reflective of the current California data and building specifications could save state resources, increase infill development by reducing urban sprawl, promote housing development, all while protecting human health.
About the Author: Keith Etchells is a professional geologist and hydrogeologist with over two decades of experience assisting clients in managing environmental risks associated with ownership, transfer, or operation of commercial, industrial, and waste disposal properties. His particular technical expertise involves aspects of groundwater science and engineering relevant to contaminated sites and landfills, including supervision and conduct of subsurface data acquisition, remedial design and implementation, conceptual site model development, aquifer testing, extraction well design, groundwater quality evaluation and treatment, vapor intrusion health risk assessment and mitigation, predictive modeling, and contaminated soil and groundwater remediation design.
He is responsible for designing analytical, geotechnical, and hydrogeological data collection programs to complete subsurface assessment and remediation. He has prepared subsurface assessment documents, property mitigation plans, vapor intrusion risk assessment documents, soil management plans, aquifer characterization documents, conceptual site models, and groundwater remedial design and implementation documents.
When Virtual Care Providers, Inc. (VCPI) set out to sell their company, David Bartlett, VCPI Chief Financial Officer, thought they had their environmental due diligence squared away. “We did our due diligence in 2006 when we purchased the property,” said Bartlett. “Unfortunately we discovered that the original Phase 1 Environmental Site Assessment (ESA) missed some potential issues.”
To complete the sale, VCPI needed to conduct a new Phase 1 assessment. That’s when David hired SCS Engineers to help VCPI through the environmental due diligence process. “When Ray Tierney and his team went through the Phase 1 process, they discovered there was something there. The original Phase 1 from our prior consultant missed some things.”
Long before it was a data center, the property owner used hazardous chemicals in their manufacturing process. As part of that process, they stored some of the chemicals on the exterior of the property. Although the chemicals had been removed long ago, some of them had spilled onto unpaved areas. While VCPI had no knowledge of the property’s prior use when they bought it, SCS Engineers uncovered detailed records and photos of the chemical storage in state agency files.
“Of course the parties involved in the sale were concerned about these past issues and the impact they could have on the sale and ongoing use of the property,” Bartlett confirmed. “We initiated a Phase 2 to gain clarification. Then we worked with the Wisconsin Department of Natural Resources (WDNR) to get the property closed.” In the end, no active remediation was required. However, these steps were necessary to get the WDNR to grant site closure.
“Being in this situation was painful,” Bartlett admitted. “But SCS Engineers’ integrity shone through in every step and was absolutely critical. Everyone that I worked with at SCS Engineers gave us peace of mind that the steps we took weren’t just to pad pocketbooks. Ray’s team showed us how each step in the process was necessary to get us past the problems, on to resolution, and on to the successful sale of our company. I completely trusted the information SCS Engineers gave us.”
“Without Ray and his team, we never would have been able to expedite the process. We simply didn’t have the connections or the relationships with the WDNR to move it along. SCS Engineers’ familiarity with the process and relationships with the WDNR really helped speed us to resolution, which allowed us to move forward with the sale of our business.”
“I don’t know what would have happened or how long it would have taken without SCS Engineers’ expertise. The depth and breadth of their knowledge shed light on issues I wasn’t aware of. Not only did Ray’s team help us uncover the issues, they gave us a plan to determine the extent of those issues and helped show us how to move past them. Their expertise, knowledge, and guidance were critical.”
VCPI kept the sale of their business on track and closed on December 22, 2016.
Thank you for your kind letter, Mr. Bartlett. We were happy to help resolve the issues leading to the sale and the safe ongoing use of the property by its new owner.
“I was afraid a consultant might give into the temptation to recommend extreme measures for personal financial gain, but SCS Engineers is not like that. They gave me and my buyers just what we needed.” ─ Patti Filkins | Mt. Horeb, WI
Today’s commercial real estate transactions both large and small must take environmental issues into consideration. Complex laws and rules can impose significant environmental liabilities on purchasers, sellers, and lenders, whether or not they caused an environmental problem, and whether or not they still own the property.
SCS’s nationwide presence and expertise make us the consultant of choice for companies requiring environmental due diligence on portfolios of properties with multiple locations throughout the country that require a quick turnaround. We have the capacity to expedite multiple, concurrent investigations, giving the parties adequate time to make informed decisions regarding potential liabilities.
We also serve individuals, like Patti Filkins (link to testimonial). SCS Engineers has conducted thousands of environmental assessments in connection with business transactions throughout North America and around the world. We offer a range of due diligence services, from Desktop Reviews to Phase I Environmental Site Assessments to Environmental Regulatory Compliance Reviews, for all types of assets. SCS has particular expertise in solid waste facilities and specialized industrial and manufacturing operations.
We have considerable experience supporting environmental due diligence for corporate mergers and acquisitions. SCS is particularly valuable evaluating environmental and operational risks to supporting private equity recapitalization used to fund solid waste infrastructure expansion.
Our staff includes engineers, geologists, hydrogeologists, risk assessment specialists, real estate experts, and other environmental professionals. Environmental regulation is complex. No matter how big or small the property, approaches to addressing hazardous substance contamination must satisfy local, state, and Federal requirements.
Lenders, insurance companies, buyers, and sellers trust our professionals to know and perform what is necessary to make a property safe and always within environmental compliance guidelines and the law.
Learn more about these services at SCS. Each link takes you to our services and related case studies, articles, and events: