North American developers and contractors are well aware of the high costs associated with transferring soil from developments. These costs only increase when some or all of that soil contains regulated contaminants such as petroleum hydrocarbons or metal concentrations. Due to past activity on properties, soil contaminants can test above safe background levels.
Keith Etchells discusses assessing and managing regulated waste soil and “clean” or inert soil to avoid additional expenses, risks, and delays when moving soil on your project is necessary. Using his expertise and California regulations as context, he covers the regulatory framework and legal requirements regarding proper soil transport and disposal, with best practices to avoid risk and liability.
Proper Planning – From Phase I ESA to Soil Sampling to Soil Management Plan
The California Water Code and Titles 23 and 27 of the California Code of Regulations are often interpreted to mean any soil with detectable concentrations of hazardous substances or metals above interpreted background levels as a “waste” upon excavation and export from a job site.
Based on the characterization of exported soil as waste, developers must discharge it to a waste management unit licensed and permitted for treatment or a disposal facility. These select facilities treat, store, dispose of, or reuse soils under appropriate local, state, and federal regulations.
Proactively and efficiently complying with regulations and minimizing the risks of improper disposal helps avoid project delays and uses a progressive assessment process. Assessment starts with completing a Phase I Environmental Site Assessment (ESA) report to identify the recognized environmental concerns (RECs) that may exist. Move to a second step if a Phase I ESA report indicates RECs or environmental concerns of possible soil impact.
What Constitutes Hazardous Waste?
Using soil sampling and analyses, complete a Phase II ESA. The findings of the Phase II ESA may indicate the presence of soil impacts from chemical constituents such as petroleum hydrocarbons, solvents, and pesticides.
Additionally, naturally occurring metals such as arsenic can be elevated from regional geologic sources at levels that exceed regulatory screening levels and disposal standards. Are these hazardous wastes? That depends on the concentrations and elevations of the chemical constituents or metals in the soil. Properties with previous land use often show concentrations of these constituents below hazardous waste levels but high enough to designate certain soils as regulated “non-hazardous” waste. Dispose of or recycle this waste at a properly licensed facility.
Whether profiling waste soil for off-site disposal at a licensed receiving facility or characterizing the extent and composition of ”clean” or inert soil for transportation to another nearby construction site that needs fill soil, guide the process and action using the soil sample collection and analyses for various constituents of concern. These are identified in the Phase I ESA report to facilitate approval for the various soil waste types at the appropriate disposal facilities.
Waste Profiling Data Requirements
Most landfill and treatment facility operators generally want waste profiling completed with no more than a year-old data. However, justifications can be made for using older data if it demonstrates that the soil samples still represent current site conditions. Proper design and completion of soil sampling plans by qualified professionals should provide sufficient data to answer important questions:
If you need to move clean soil:
Minimizing Cost Overruns and Project Delays
Early characterization of contaminated and inert soil provides much more confidence in disposal cost ranges used in project planning. Characterization also helps determine the feasibility of disposal strategies to limit the exported amount of impacted soil. They minimize potential litigation associated with toxic tort and improper waste disposal practices.
While some contaminants may not be present in concentrations below applicable screening levels, any detectable chemical constituents or metals above background concentrations are regulated waste, which costs more to export. Facilitating better communication between the selected grading contractor and your trusted environmental consulting company facilitates earlier soil characterization. Waiting until grading starts to test soil can cause project delays and increase the cost of rushed laboratory analyses and unexpected additional disposal costs to meet construction schedule needs.
With the help of your environmental consultant and consultation with design and construction team members, you can employ value-added strategies to reduce soil disposal costs. When requiring soil export on a job, one strategy involving soil with relatively low levels of contaminants below human health risk screening criteria but still considered a regulated waste entails the preferential reuse or burial of that soil on site.
Soil Reuse – Savings and a Lower Carbon Footprint
Reuse typically results in significant savings since it allows the preferential disposal of inert soil as opposed to the costlier disposal of impacted soil. This can be completed if the limits of the impacted soil versus inert soil are adequately delineated through prior soil sampling and analysis, which provides the confidence of knowing which soils are inert and which soils are impacted when it comes time to grade and export soil.
A qualified environmental professional with a proven background servicing the construction sector will guide you through the nuances of applying the appropriate regulatory guidance. These professionals can design various strategies to reduce soil disposal costs, often covering the cost of soil sampling and analysis while providing additional risk management and liability protection to your project.
The Benefits of a Soil Management Plan
The Soil Management Plan covers all aspects of properly handling and managing waste soils during development. Your consultant works with your design and, or construction team to develop the feasibility of soil management strategies best engineered to reduce soil disposal costs.
During the grading process, the environmental professional oversees the Soil Management Plan during the movement of impacted soil to minimize environmental risks from improper disposal during grading. Improper disposal can result in costly fines or recourse from an import site. Your project professional and plan will minimize delays that would otherwise result from the discoveries during grading of previously unknown soil impacts, such as underground fuel tanks or previous dumping areas.
Environmental oversight during grading and having a soil management plan in place are often required with regulatory oversight, whether through voluntary oversight programs or when regulatory oversight is a condition of obtaining a grading permit.
Clean Soil Export Considerations
Exporting fill material from a previously listed contaminated site may require local Regional Water Quality Control Board approval in California. Failure to properly assess whether these requirements govern your site could lead to costly fines from your state. The receiving facility may also need Regional Board approval. In my experience, the land owner and contractor could face liability in both scenarios.
Documentation for Large Developments
SCS Engineers supports a large infill development project requiring more than a million cubic yards of clean fill to achieve the final grade. Using a project-specific environmental and geotechnical import specification, we’ve identified potential sources from nearby construction projects and supply facilities to meet import requirements. It details the number of soil samples and laboratory analyses based on design and regulatory standards.
Whether the export site provides soil sample analytical data or the cost of soil sampling an export site is taken on by our client, SCS reviews the soil analytical data before soil import for adherence to import specifications. A “Clean” or Inert Soil letter documents the vetting process and quality of the imported soil. The developer avoids the risk of project delays due to inadequate sources of clean soil available or increased costs associated with importing soil if finding an acceptable local clean fill source proves difficult.
The Fine Print – Additional Fees May Apply
For example, any generator site in California incurs hazardous waste generation and handling fees when disposing of five or more tons of hazardous waste soil within a calendar year. The current rate is $49.25 per ton. The state requires that generators maintain waste manifests for each truckload of exported soil and weight tickets associated with any hazardous waste disposal so it can register and report hazardous waste disposal quantities to the California Department of Tax and Fee Administration. Failure to register and pay these state fees results in auditing and significant penalty fees. The generator will often need a temporary Environmental Protection Agency identification number.
Environmental planning for developers is often a complex undertaking. We hope this article and its explanation of soil transfer details from an environmental professional will help keep your project on time and within budget.
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 the ownership, transfer, or operation of commercial, industrial, and waste disposal properties. Contact Keith if you have questions about soil remediation on LinkedIn or the SCS Professionals Directory.
Additional Remediation and Planning Resources:
SCS announces that Rachel McShane, a licensed environmental professional, is now working on the firm’s St Louis due diligence team. She is supporting the growing demand for SCS’s due diligence and brownfields redevelopment and remediation services in the region. McShane comes to SCS with nearly 20 years of experience, with particular expertise in Phase I and II environmental site assessments for both public and private sector markets, as well as client and personnel management.
McShane is a welcome addition to SCS’s clients who require due diligence services. “Lenders and developers need to understand what kinds of liability they may have if they’re lending on or buying a piece of commercial real estate. As CERCLA and state laws dictate, they may be responsible for some or all costs associated with cleaning up or mitigating property contamination. A solid, ASTM-compliant Phase I will give them a thorough background on the regulatory and development history of a given site and surrounding area,” states McShane.
Commercial developers and lenders depend on environmental professionals to use U.S. EPA rules and state regulations that prove they have conducted all appropriate inquiries regarding the property at the time of acquisition.
McShane explains: “An AAI-compliant Phase I ESA confers CERCLA liability protection and helps assure you know what you’re getting into when taking on a new loan or buying a new property. Even if a client is not particularly concerned about a given site being potentially eligible for entry into the Superfund program, it still behooves them to know what other contaminants could be present, as even minor releases can sometimes cost hundreds of thousands of dollars or more to address.”
Welcome to SCS Engineers, Rachel!
Additional Resources at a Glance
SCS Engineers periodically prepare SCS Technical Bulletins – short, clear summaries of rules, plans, and standards. In 2021, ASTM International published an updated consensus guidance document for evaluating environmental conditions at properties involved in commercial real estate transactions.
This SCS Technical Bulletin for the revised E1527-21, Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process addresses definitions and terminology, clarifies industry practice for the historical records review of the subject and adjoining properties, and provides for updates and additions to appendices, report outlines, and other collateral.
Our updated edition now includes the revised guidance speaks to the business risk associated with emerging contaminants, such as Per- and polyfluoroalkyl substances (PFAS).
Read, share, download the A New Standard Practice for Phase I Environmental Site Assessments Tech Bulletin here.
For more information about Environmental Due Diligence, please visit our website.
Environmental due diligence is a form of proactive environmental risk management typically conducted before purchasing, selling, or leasing a property or business. Due diligence investigations can help prevent costly environmental liabilities by identifying them early in the transaction, thereby protecting all parties’ interests. There is an increased opportunity for significant cost-savings when the hired consultant accounts for tangential aspects during their investigation.
Environmental due diligence encompasses tangential aspects that are not the primary focus of the investigation. Aspects such as these may indirectly impact the environmental risks or liabilities associated with the property or business or the transaction’s overall feasibility or value.
Tangential Aspects of Environmental Assessment: A Case Study
A major oil company requested environmental due diligence for a large property acquisition. The property acquisition was part of a larger company acquisition and involved hundreds of oil and gas well locations, facilities, tanks, and equipment. It was necessary to modify the Phase I assessment for the work. Of the hundreds of well locations, 50 were chosen for Phase I work and field verification. According to the consultants, any environmental liabilities exceeding $2 million must be identified during this evaluation. Phase I examined the locations of wells for potential environmental liabilities, such as petroleum releases, but did not examine the wells themselves. Even though the consultants were experts in evaluating the condition of oil and gas wells, the oil company addressed this aspect of the investigation in-house. The company did not consider the tangential legal implications, liability for plugging costs, potential impacts on property value, and potential penalties for non-compliance with regulations.
Many wells excluded from the consultants’ due diligence were over 50 years old and out of operation. The company’s in-house investigators did not perform a field review. The result was an underestimation of the number of wells that required plugging and their associated costs. The estimate for plugging a well was between $20,000 and $30,000 per well. The plugging costs for this transaction were much higher, ranging from $80,000 to $120,000 per well, resulting in a $42 million increase. The oil company made a mistake in thinking the plugging costs were insignificant. Environmental due diligence should always include tangential factors.
Additional examples of tangential aspects of environmental due diligence might include the following:
The information obtained during or upon completing an investigation can inform negotiations and contractual arrangements between the parties involved in the transaction. Environmental consultants could spot some issues big enough to kill a deal. Other issues may allow buyers to adjust the purchase price or negotiate an indemnity to shift financial responsibility for environmental risk. It may also be possible to purchase environmental insurance for sufficient financial protection.
The specific steps involved in environmental due diligence depend on the type and scope of the transaction, as well as any applicable regulations or guidelines. Consult an experienced environmental professional to ensure that your due diligence process meets all your needs and requirements. Find out more about SCS’s environmental due diligence services.
The announcement of new developments, especially new housing, is always welcome, given nationwide shortages. Wood Partners recently spoke of its Alta Cuvee project in Rancho Cucamonga, CA., an area experiencing high growth rates. With the construction currently underway, the community plans to open in late 2024.
Careful development companies follow all environmental guidelines set forth by local, state, and federal agencies to ensure sustainability. At the Alta Cuvee project, SCS Engineers performed a Phase I Environmental Site Assessment, ensuring due diligence on the part of Wood Partners.
Today’s commercial real estate transactions take environmental issues into consideration. Complex laws can impose significant environmental liabilities on purchasers, sellers, and lenders, whether or not they caused the problem and whether or not they still own the property.
When looking for a new home, look for reputable companies that perform due diligence. When looking for environmental due diligence services, look for engineers and consultants providing comprehensive services for the welfare of future tenants, owners, and your firm’s reputation.
All Appropriate Inquiries (AAI) is a process of evaluating the environmental condition of a property and assessing the likelihood of contamination. Parties must comply with the requirements of the AAI Rule or follow the standards set forth in the ASTM E1527-13 or E1527-21 Standard Practice for Phase I Environmental Site Assessments to satisfy the statutory requirements for conducting all appropriate inquiries.
SCS’s Mike Miller explains the impact of the new ASTM E1527-21 Due Diligence Standard. Mike covers the history, CERCLA, defenses, and the changes impacting due diligence in the new Standard in this video. Watch it here. Use chapters in the timeline to jump from topic to topic at these start points:
Learn more about Environmental Due Diligence and All Appropriate Inquiries, and meet Mike Miller, SCS’s National Expert. Today’s commercial real estate transactions must take environmental issues into consideration. Complex laws can impose significant environmental liabilities on purchasers, sellers, and lenders, whether or not they caused the problem, and whether or not they still own the property. Environmental Engineers can help protect you and your investment.
SCS Engineers provides comprehensive environmental due diligence services nationwide and announces two new SCS National Experts to lead the expanding practice. Vice President Michael Miller and Project Manager Justin Rauzon take the helm to meet the expanding demand for these environmental services. Mr. Miller is in SCS’s Omaha, Nebraska location and Mr. Rauzon in the Long Beach, California headquarters office. Both professionals work nationwide and continue to support their regional clients in their new positions.
Miller focuses on comprehensive environmental management and consulting for private and federal clients. Project solutions typically involve solid waste, hazardous waste, environmental assessment, compliance audit, feasibility studies, environmental permitting, and training. His environmental due diligence experience includes work at fuel storage and vehicle maintenance facilities, petroleum retail sites, agricultural, chemical processing, and pharmaceutical manufacturing plants, active and closed landfill sites, abandoned chemical disposal sites, and numerous dry cleaner sites.
Mr. Rauzon has a diverse background in biological and environmental sciences and regularly performs environmental assessments and compliance audits at North American sites. Rauzon’s technical and management experience is with soil, soil vapor, and groundwater investigations on industrial, commercial, landfill, greenfield, and residential properties. He has extensive experience with environmental laws and regulations in the United States and Mexico.
Both work through all project phases, from developing cost estimates to implementing due diligence tasks ranging from site assessments to full remediation. SCS Engineers’ Environmental Due Diligence and All Appropriate Inquiries practice is comprehensive. The practice’s services cover Environmental Insurance Claims and Underwriting Support, Financing and Company Acquisition Support, Property Inspections and Abatement, Property Transactions, and Solid Waste Management Financing.
SCS’s Brownfields and Voluntary remediation engineers rely on the due diligence practice and developers, contractors, municipal officials and city managers, and advisors such as banks, insurance firms, and attorneys to private and public entities.
SCS Engineers Vice President Ashley Hutchens is now the Environmental Services Director for its Long Beach and Las Vegas operations. Besides managing her current projects and clients, Hutchens will manage the environmental professionals and technicians in each city. She is responsible for allocating resources for business development, project management, and coordinating activities with other SCS offices nationwide.
“Ashley’s proven capabilities solving environmental challenges for industries will serve our Long Beach and Las Vegas clients well,” said Julio Nuno, SCS Senior Vice President.
Hutchens has 18 years of experience in property evaluation and due diligence, site assessment, characterization, remediation; vapor intrusion assessment and mitigation; and hazardous waste management. She has led hundreds of projects, including all phases, from the development of cost estimates for site assessment, mitigation, and remediation, to groundwater monitoring and sampling, preparation and review of final reports, interfacing with regulatory agencies, and management of all aspects of projects, staff, and various subcontractors.
SCS Engineers’ environmental solutions directly result from our experience and dedication to solid waste management and other industries responsible for safeguarding the environment. For more information about SCS, please visit us at www.scsengineers.com, or contact .
Thanks to South Florida’s hot real estate market and impressive growth rates, a dwindling supply of properties are available for development in the area. The Atlantic Ocean limits South Florida’s development options to the east and Florida Everglades to the west. Due to these supply limitations, developers seek to redevelop contaminated landfills, golf courses, and agricultural land. Environmental due diligence is essential to the successful redevelopment of these types of properties. Depending on the property’s size and the extent of the contamination, redeveloping contaminated properties can cost upwards of a million dollars.
Typically, developers will have to deal with contaminants like ammonia at a landfill redevelopment project, arsenic at a golf course redevelopment project, or pesticides at agricultural redevelopment projects. In some cases, remediation and assessment using the standard or “default” cleanup target level (CTL) can stop a project from proceeding. However, before abandoning the project, developers should consider the potential for establishing alternative cleanup target levels (ACTLs) for the site’s contaminants.
Several technical strategies are available to developers considering redeveloping contaminated properties to reduce overall costs and expedite the construction schedule. Costs associated with managing material above a default CTL can include disposal of contaminated material, importing clean fill, and delays to permitting and construction schedules if an environmental regulator determines your assessment is incomplete.
Understanding Default Cleanup Target Levels
Environmental regulators use a range of tools to develop default CTLs. Default CTLs can be based on complex equations that consider toxicity and exposure assumptions such as ingestion rates, body weight, age, and exposure levels. Soil properties are also considered. In some cases, human health may not even be the determining factor in calculating a default CTL. Rather, a particular contaminant’s environmental impact on the local ecosystem may be what determines its default CTL.
While default CTLs are useful tools to formulate remediation strategies on a broad range of sites, default CTL values will be overly conservative for other sites. More explicitly, some sites’ present and future use and exposure characteristics are so different from the assumptions used to calculate the default CTLs – that the default CTL does not accurately correspond to the risk associated with the proposed sites’ use. In such cases, explore the development of an alternative cleanup target level (ACTL).
Establishing Alternative Cleanup Target Levels
With the right approach, a site ACTL could provide significant cost savings while maintaining regulatory compliance. But buyers beware; choose your environmental consultant carefully. The consultant should understand the site-specific factors that affect the calculation of the ACTLs. Often, a knowledgeable consultant has a good idea of the outcome even before investing the client’s time and money pursuing the alternative.
Cost and Schedule Benefits
To illustrate cost and development time-savings, consider a simple example of arsenic-contaminated soil at a residential development. Suppose there are no other reuse options available for the contaminated material, and the material must be disposed of at a landfill. Given 100,000 cubic yards (cy) of contaminated material at a disposal cost of $60 per cy, we estimate 6 million dollars in disposal costs, not including importing clean fill. However, if the site is an age-restricted residential community, certain exposure assumptions could be modified to calculate a much higher ACTL for arsenic. The soil would no longer be regulated as contaminated, and costs associated with disposal, imported material, and soil tracking are eliminated. Soil that was considered contaminated based on the default CTL is now clean based on the ACTL.
Let us look at a more complex example. Consider the case of a site contaminated with dieldrin, a common pesticide found at golf courses and agricultural properties. A leachability ACTL recalculates the default leachability of a particular soil contaminant. A leachability ACTL uses site-specific soil chemical and physical properties, such as soil organic matter content, bulk density, and annual average soil moisture content, and determines a more realistic risk profile associated with soil that could potentially leach contaminants into the groundwater. With an ACTL above the default CTL, remediation may not be necessary, or the site may not require a deed restriction, or ongoing costs associated with monitoring of the groundwater or operation of a remediation system could be eliminated, making the completed project more attractive to potential buyers.
Developing ACTLs is a careful, thoughtful strategy that an experienced environmental consultant can propose based on the site’s unique conditions. The developer’s financial objectives and schedule and the property end-use must be carefully considered to develop a thorough redevelopment approach. The use of an ASCTL could mean the difference between a project that is financially infeasible and one that is attractive and profitable.
About the Author: Troy Schick, PE, specializes in stormwater and groundwater management and voluntary remediation of properties, including brownfields and former landfills. Troy uses his experience at SCS Engineers and education as an Environmental Engineer and Environmental Manager with field inspection, sample collection, documentation, and project management to benefit Florida communities. Troy is available for consultation at tschick@scsengineers.
SCS Engineers announces Brittney Odom’s promotion to the Southeast region’s Environmental Services Director. Odom will continue expanding and integrating SCS’s environmental engineering and consulting operations to provide more streamlined and efficient services in her new role. She will lead environmental operations in Alabama, Florida, Mississippi, Georgia, and the Caribbean. As with all SCS leaders, she continues serving her clients in Boca Raton in her expanded role.
Odom supports real estate developers, municipalities, banks, and insurance firms to identify properties’ environmental conditions. Next, depending on soil, water, and geotechnical testing determines the appropriate environmental due diligence and the engineering activities necessary to redevelop them and be in 100% compliance with local and federal rules.
There is an active push to develop more affordable residential housing in the U.S. Real estate developers and residents want to be close to business and transportation hubs, but potential development sites could require remediation. Once agricultural sites, golf courses, or at one-time housing industrial operations, these properties need environmental testing, due diligence, possibly remediation, or vapor intrusion barriers to ensure the safe redevelopment. No matter the condition, properties with a past can return to pristine condition and make desirable residential and mixed housing locations, supporting economic development.
“It’s important to know and understand all of the options ahead of time to keep costs down and environmental quality up for sustainable communities,” stated Odem. “You need to reassure all parties that there is no leaking storage tank or anything that could compromise health.”
Her focus recently is on the redevelopment of large-size properties contaminated with arsenic and other legally applied pesticides. These property types include golf courses and agricultural land that have become inactive but are in high demand for residential use. These projects may need soil management, including remediation, soil blending, and placement restrictions.
Odom has years of experience conducting environmental site assessments, overseeing remediation activities, and submitting regulatory reports, including Phase I & II assessments in Florida, Tennessee, Louisiana, Texas, and the Caribbean. These focus on gas station properties and bulk storage terminals for large oil companies, often located on prime waterfront sites.
Additional highlights in Odom’s professional career include expertise in the applicable Florida Regulatory Chapters and Standard Operating Procedures. She also has experience in state and international cleanup efforts and their associated regulatory procedures. She participated in successful environmental closure efforts, with imposed engineering controls and property restrictions.
Odom has ten years of experience managing subsurface investigation and conducting oversight during remedial activities, including source removal and remediation system installation. She holds certifications in 40-Hour HAZWOPER/OSHA training, Loss Prevention System, CPR, RCRA Hazardous Waste, DOT Hazardous Waste, and American Petroleum Institute certification.
“Brittney’s breadth of experience solving the complexities of large scale redevelopment while meeting all environmental regulatory compliance enables her to innovative better solutions,” said Carlo Lebron, SCS vice president and director of SCS’s Southeast operations. “She’s an expert, with access to our deep bench of engineers, scientists, technology, and even economists within SCS.”