Due Diligence Presentation (Preview)


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Due Diligence Presentation (Preview)

  1. 1. Environmental Due Diligence Overview © 2011 GLE Associates, Inc.
  2. 2. Company Background <ul><li>Formed in 1989 </li></ul><ul><li>Strong Base of Technical Expertise </li></ul><ul><li>Geographic Accessibility </li></ul><ul><li>Financial Stability </li></ul><ul><li>Client Satisfaction </li></ul>
  3. 3. Offering Full-Service Capabilities <ul><li>Architects </li></ul><ul><li>Engineers </li></ul><ul><li>Environmental Consultants </li></ul><ul><li>Construction Management </li></ul><ul><li>LEED Accredited Professionals in all major disciplines </li></ul>
  4. 4. <ul><li>Tampa, FL </li></ul><ul><li>Orlando, FL </li></ul><ul><li>Gainesville, FL </li></ul><ul><li>Jacksonville, FL </li></ul><ul><li>Ft. Lauderdale, FL </li></ul><ul><li>Atlanta, GA </li></ul><ul><li>Nashville, TN </li></ul>Office Locations
  5. 5. Environmental Due Diligence Overview <ul><li>Why complete Environmental Due Diligence? </li></ul><ul><li>Types of Due Diligence </li></ul><ul><li>Phase I, Phase II, and Phase III ESA Process </li></ul><ul><li>SBA Guidance – Environmental Risk Management </li></ul><ul><li>Sources of Error on Phase I ESA Process </li></ul><ul><li>Vapor Intrusion </li></ul><ul><li>Questions </li></ul>
  6. 6. Why Complete Environmental Due Diligence?
  7. 7. <ul><li>Formal Environmental Policy </li></ul><ul><li>Regulatory Pressure </li></ul><ul><li>Loan Risk Management </li></ul><ul><li>- New loan origination </li></ul><ul><li>- Facilityproperty acquisition </li></ul><ul><li>- Foreclosure </li></ul><ul><li>- Loan extension or refinance </li></ul><ul><li>- Monitoring over Life of Loan </li></ul>Why Complete Environmental Due Diligence?
  8. 8. <ul><li>EDR 2010 Annual Survey of Financial Institutions </li></ul><ul><li>Reviewed Lender Environmental Policy requiring EDD </li></ul>Why Complete Environmental Due Diligence?
  9. 9. Types of Environmental Due Diligence <ul><li>Phase I ESA Process ASTM E 1527-05 </li></ul><ul><li>Phase II ESA Process ASTM E1903-97 </li></ul><ul><li>Phase III ESA Process </li></ul><ul><li>Remediation Action Plan </li></ul>
  10. 10. <ul><li>Definition: </li></ul><ul><li>“ The purpose of this practice is to define good commercial and customary practice in the United States of America for conducting an environmental site assessment of a parcel of commercial real estate with respect to the range of contaminants within the scope of Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) (42 U.S.C. §9601) and p etroleum products . As such, this practice is intended to permit a user to satisfy one of the requirements to qualify for the innocent landowner , contiguous property owner , or bona fide prospective purchaser limitations on CERCLA liability (hereinafter, the “ landowner liability protections ,” or “ LLPs ”): that is, the practice that constitutes “ all appropriate inquiry into the previous ownership and uses of the property consistent with good commercial or customary practice.” </li></ul>Phase I ESA Process ASTM 1527-05
  11. 11. <ul><li>Goal of a Phase I ESA: </li></ul><ul><li>CERCLA Liability Protection </li></ul><ul><li>Determination of “Recognized Environmental Concern” </li></ul><ul><li>Determination of “Business Environmental Risk” </li></ul>Phase I ESA Process ASTM 1527-05
  12. 12. <ul><li>Definitions (con’t): </li></ul><ul><li>Recognized Environmental Conditions “ the presence or likely presence of any hazardous substances (HS) or petroleum products on a property under conditions that indicate an existing release, a past release, or a material threat of a release of any hazardous substances or petroleum products into structures on the property or into the ground, ground water, or surface water of the property . The term includes hazardous substances or petroleum products even under conditions in compliance with laws.” </li></ul>Phase I ESA Process ASTM 1527-05
  13. 13. <ul><li>Definitions: </li></ul><ul><li>Business environmental risk “ a risk which can have a material environmental or environmentally-driven impact on the business associated with the current or planned use of a parcel of c ommercial real estate , not necessarily limited to those environmental issues required to be investigated in this practice. </li></ul><ul><li>Consideration of business environmental risk issues may involve </li></ul><ul><li>addressing one or more non-scope considerations.” </li></ul>Phase I ESA Process ASTM 1527-05
  14. 14. <ul><li>What is included in a Phase I ESA Report: </li></ul><ul><li>Records Review </li></ul><ul><ul><li>Regulatory database search </li></ul></ul><ul><ul><li>Regulatory agency file review </li></ul></ul><ul><li>Historical Use </li></ul><ul><ul><li>Aerial Photographs </li></ul></ul><ul><ul><li>Sanborn Maps </li></ul></ul><ul><ul><li>City Directory Review </li></ul></ul><ul><ul><li>Land Title Records </li></ul></ul><ul><ul><li>BuildingProperty Tax Records </li></ul></ul><ul><ul><li>Zoning Land Use Records </li></ul></ul>Phase I ESA Process ASTM 1527-05
  15. 15. <ul><li>What is included in a Phase I ESA Report: </li></ul><ul><li>Site Visit </li></ul><ul><ul><li>Visually and physically observe the property </li></ul></ul><ul><ul><li>Currentpast use of property and adjoining properties </li></ul></ul><ul><ul><li>Color Photographs </li></ul></ul><ul><ul><li>Site Plan </li></ul></ul><ul><li>Interviews </li></ul><ul><ul><li>Current Property OwnersOperatorsOccupants </li></ul></ul><ul><ul><li>Local Government Officials </li></ul></ul>Phase I ESA Process ASTM 1527-05
  16. 16. <ul><li>Limitations of a Phase I ESA Report: </li></ul><ul><li>Out of Scope Items </li></ul><ul><ul><li>Sampling </li></ul></ul><ul><ul><li>Asbestos, Lead, Mold, Radon </li></ul></ul><ul><ul><li>Cultural or Historical Resources </li></ul></ul><ul><ul><li>Wetlands, Ecological Resources, or Endangered Species </li></ul></ul><ul><ul><li>Health, Safety, or Regulatory Compliance </li></ul></ul><ul><ul><li>Checking Title Records for Environmental Liens or Land Use </li></ul></ul><ul><ul><li>Restrictions </li></ul></ul><ul><ul><li>Property Appraisal or Review of Purchase Price </li></ul></ul>Phase I ESA Process ASTM 1527-05
  17. 17. <ul><li>Limitations of a Phase I ESA Report (con’t): </li></ul><ul><li>Phase I ESA report, per the standard, </li></ul><ul><ul><li>Is only good for 180 days, </li></ul></ul><ul><ul><li>At which point an update will need to be performed </li></ul></ul>Phase I ESA Process ASTM 1527-05
  18. 18. Phase II ESA Process ASTM E1903-97 <ul><li>Follow-up investigation based on the results of the Phase I ESA </li></ul><ul><li>Scope is determined by Environmental Professional to properly address “Recognized Environmental Conditions” and “Potential Environmental Concerns” </li></ul><ul><li>Typically includes soil and groundwater sampling on the subject property for laboratory analysis </li></ul><ul><li>Results of laboratory analysis compared to local, state and federal regulatory guidelines </li></ul>
  19. 19. Phase III ESA Process <ul><li>Goal – to determine the horizontal and vertical extent of </li></ul><ul><li>contaminations impacts in order to estimate the method and </li></ul><ul><li>cost of cleanup </li></ul><ul><li>Typically includes additional soil and groundwater sampling and laboratory analysis </li></ul><ul><li>Results of laboratory analysis compared to local, state and federal regulatory guidelines </li></ul><ul><li>Development of a Remedial Action Plan </li></ul>
  20. 20. Contact Us <ul><li>For a copy of our complete presentation or to schedule a lunch n’ learn please contact us at: </li></ul><ul><li>[email_address] </li></ul><ul><li>1-888-453-4531 </li></ul><ul><li>www.gleassociates.com </li></ul>