8/10/2019 11-25-14 MASTER New Waste Site Cleanup Rules http://slidepdf.com/reader/full/11-25-14-master-new-waste-site-cleanup-rules 1/117 Environmental Business Council of New England Energy Environment Economy EBC Site Remediation and Redevelopment Program What Do the New Waste Site Cleanup Rules Mean for Development & Construction in Massachusetts?
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8/10/2019 11-25-14 MASTER New Waste Site Cleanup Rules
Anthropogenic Background means those levels ofoil and hazardous material that would exist in theabsence of the disposal site of concern and whichare:
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(e) petroleum residues that are incidental to the normal operation of motorvehicles.
(d) releases to groundwater from a public water supply system; or
(c) associated with sources specifically exempt from the definitionsof disposal site or release as those terms are defined in MGL c.21E and 310 CMR 40.0006;
(a) attributable to atmospheric deposition of industrial process or engineemissions and are ubiquitous and consistently present in theenvironment at and in the vicinity of the disposal site of concern;
(b) attributable to Historic Fill;
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(c) was contaminated with metals, hydrocarbons, and/or polycyclicaromatic hydrocarbons prior to emplacement, at concentrationsconsistent with the pervasive use and release of such materialsprior to 1983;
(d) does not contain oil or hazardous materials originating fromoperations or activities at the location of emplacement;
(e) is not and does not contain a generated hazardous waste, otherthan Oil or Waste Oil
(f) does not contain chemical production waste, manufacturingwaste, or waste from processing of metal or mineral ores,
residues, slag or tailings; and(g) does not contain waste material disposed in a municipal solid
Information specific to the 2014 MCPimplementation is located athttp://www.mass.gov/eea/agencies/massdep/cleanup/regulations/site-cleanup-regulations-and-standards.html#6
• Urban Fill —Historic Fill• Naturally occurring arsenic• Industrial or manufacturing history• Former gas station• Former dry cleaner• Underground storage tanks (USTs)
– Often found during construction• Former Manufactured Gas Plant (MGP) Site• Landfill• Odorous organics
Development on Contaminated Property
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• From Time of Tier Classification – Phase II now due 3 years (was 2) – Phase III now due 4 years (was 2) – Phase IV now due 4 years (was 3) – Permanent Solutions or Remedy Operation Status
(ROS) still 5 years
• Four years from notification to Phase II
• Simplify compliance with just Release Abatement Measure (RAM)
Complete Construction before Phase II Due
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• Design considerations – Vapor barrier (contaminant dependent) – Sheet vs. spray applied membrane – Piping and subgrade ventilation layer
– Vent stack(s) above roofline – Power for fan – Automated notification to MassDEP of system failure
• Construction considerations – Welded or taped membrane seams – Seals around penetrations (utilities, columns) – Quality control testing including smoke testing
Complex Design Considerations for VaporMitigation
V B i D il
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– Indoor air testing at least 3 times over 2 years• Active system
– Indoor air testing during heating season and verify pressuredifferential across slab
– Annual checks for pressure drops and fan operation – Remote telemetry that notifies owner and MassDEP upon
system failure
– Notify occupants and MassDEP of system shutdowns lasting30 days – Owner certification that the $$ is available for repairs – Annual certification that system is operating
Long-Term Considerations
Transactional Impacts Associated with VI Issues
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• More uncertainty concerning what it takes to achieve MCP• Extended timeframes to conduct sampling• How do you evaluate a site that was closed under the “old” system?
• Redevelopment of VI sites, if at all, may be conducted in a muchmore conservative manner – This is particularly so with respect to proposed residential and
mixed-use site redevelopment projects• More sampling; more data; more remediation (beyond NSR?)• More time, more money, and a more conservative approach results
in fewer sites being redeveloped
G R di ti
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• EPA: “ The practice of considering all environmental effectsof remedy implementation and incorporating options tominimize the environmental footprints of cleanup actions.”
• MassDEP: Five core elements for reducing theenvironmental footprint of a cleanup: – Minimizing total energy use and maximizing renewable
energy use; – Minimizing air pollutants and greenhouse gas emissions; – Minimizing water use and impacts to water resources;
– Reducing, reusing and recycling material and waste; and – Protection of land and ecosystems
Green Remediation
Standard Guide for Greener Cleanups
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• Use local staff (including subcontractors) when possible tominimize resource consumption• Use local laboratory to minimize impacts from transportation• Use stressed vegetation to locate contaminant hotpsots to guide
development of sampling and analysis plans and optimize
design of monitoring well network• Minimize clearing of trees throughout investigation and cleanup• Restore and maintain surface water banks in ways that mirror
natural conditions• Implement an idle reduction plan for vehicles• Use gravel roads, porous pavement, and separated pervious
surfaces rather than impermeable materials to maximizeinfiltration
Example Green Remediation BMPs
Brownfield Tax Credits
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• Soil management will continue to be a costly andsignificant aspect of development• Urban fill is now less regulated by MassDEP, but
it still costs a lot to dispose of
• More projects will require vapor mitigation• The design and installation of vapor mitigationsystems are more complex because ofMassDEP’s requirements
• Think about the underground, early and often, asyou develop programming.
Takeaways
Questions?
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• Headquarters: Framingham, MA• Home grown, family owned business• Charitable contributions: $600,000• We’re part of the fabric in the community • Vested interest with environmental regulations
Cumberland Farms – Gulf: Who we are
UST C li C F ti
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The Environmental team handles spills thatoccur below the surface, installmonitoring wells and remediatethe site, following all Federal, Stateand Local regulations.
The Compliance team keep the stations incompliance with current Federal, State, and Localregulations by performing tank testing and filling outthe proper paperwork. Environmental Compliancehandles surface spills.
C t ti A ti iti
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“Clean” Soils – No detections and/or below established state
background levels (e.g., metals) . Typically from a “greenfield” site.
“Gap” Soils – Soil contaminated below applicable state remediationstandards for the generating location. Not Clean and not Remediation(not saturated with petroleum; not soil for residential use but possiblycould be re-used at commercial facilities or re-used on site).
• As an OCC regulated bank, an internal environmental risk unit isrequired. The OCC Comptroller’s Handbook booklet, “Commercial Real
Estate Lending,” provides guidance for bank examiners and bankers oncommercial real estate (CRE) lending activities.
• Other agencies, including but not limited to SBA, FDIC, Fannie Mae, andFreddie Mac, also require environmental due diligence reviews priorto real-estate collateralized lending transactions.
• The level of review is often dependent upon property risk (historicaland current), lending amount, and transaction type .
• The staff evaluates environmental risk as part of deal screens/lendingtransactions to limit potential future Bank losses and environmentalliabilities relative to real estate collateral.
• The staff provides timely and cost effective solutions to environmentalrisk issues.
Regulations that drive Environmental Due Diligencefor Borrowers
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• OCC’ s Handbook booklet, provides guidance for bank examiners and bankers on commercial realestate (CRE) lending activities
• Comprehensive Environmental Response, Compensation & Liability Act of 1980 (CERCLA)1. CERLCA is commonly know as SUPERFUND2. Established to address abandoned hazardous waste sites and establishes a liability
framework for determining who can be held accountable for release of hazardous substances3. Provides protection for Innocent land owners, contiguous property owner or bonafide
prospective purchaser.4. Required to conduct “All Appropriate Inquiry (AAI)” in compliance with 40 CFR Part 312, prior
to acquiring the property; and, 2) Comply with all continuing obligations after acquiring the
property.• What Is “AAI” ?
AAI is the process of evaluating a property’s conditions and environmental liabilities and isdefined under EPA Final Rule Standards and Practices for All Appropriate Inquiries, effectiveNovember 1, 2006 or the ASTM E1527-13 standard .
AAI must be conducted or updated within one year prior to the date of acquisition of aproperty.
Why Banks conduct Environmental Due DiligenceDespite CERCLA Exemptions
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• Under CERCLA/Superfund, Banks that take real estate as collateral (mortgages) associated withlending transactions are generally EXEMPT from CERCLA liability, as long as the Bank does not
“participate in management ”. “Participation in Management ” has been defined by the courts asexercising decision making control.
• Despite CERCLA Exemptions, Banks conduct Environmental Due Diligence Review for all CRElending transactions because ….
• Environmental risk is not limited to a single point in time . Must evaluate past andproposed future business operations.
• The physical appearance or attributes of a piece of real estate or a structure built uponthe real estate provides only a limited view of potential environmental issues. Mustunderstand the historical use of a property and the environmental regulatory complianceof present and past occupants, especially as related to off-site waste disposal.
• Environmental risk to a customer is not limited to the value of the specific propertybut can extend to considerable fines, fees and resultant remediation costs to be borneby any owner or operator who causes or contributes to a facility’s environmentalproblem.
• Environmental risk to a lender is not limited to impairment of collateral securing aspecific loan but can extend to amounts far beyond the principal of the underlying loanas outlined above, if the lender has exercised significant control over a borrower’soperations and is deemed to be the owner or operator.
Types of Environmental Due Diligence Reports1 P S E l i A I l B k P d d P d l i l i k d
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1. Pre-Screen Evaluation: An Internal Bank-Produced Product to evaluate environmental risk anddetermine the appropriate level of environmental due diligence for the transaction.
2. Transaction Screen Report; Developed by the American Standards for Testing Materials (ASTM)
under Practice E1528-06 and includes questionnaire and database search obtained fromcommercial vendor, summarizing federal/state government environmental records.
Questionnaire- completed by Relationship Manager and Borrower/Site Owner during Siteinspection.
Database Search - ordered by the Bank’s Environmental Unit from a pre -qualified vendor.
Alternative Approach: Screen Reports can be ordered from environmental consultant vendors.
3. Phase I: Developed by ASTM under Practice E1527-13, Completed by environmental consultantvendor and includes Site inspection, historic review of property use, review of federal/stategovernmental environmental records. Either the Unit orders/reviews the report or Unit reviewsborrower-provided report.
4. Phase II: Includes completion of soil and groundwater sampling in areas of concern.
5. MCP (or other state) Regulatory Submittals: Includes all investigation/remediation reportscompleted to address open release incidents.
Evaluating and Quantifying Environmental RiskAs Part of a Lending Transaction
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Myth: Financial Institutions only lend on CLEAN properties!
• Review existing reports (Phase Is, Phase IIs, regulatory submittals (MCPreports) or ordering new reports – don’t always have to start over.
• Identify significant environmental issues and require further investigation
• Quantify environmental liabilities/costs for all areas of concern through SiteAction Plan including details on required environmentalinvestigation/remediation, associated costs, and timeframes for completion.
• Utilize appropriate tools to mitigate environmental risk at closing (i.e.:environmental reserve accounts/undertakings, environmental insurance, andconstruction budget line items/contingencies)
• Ensure loan documents allow for continued monitoring of knownenvironmental issues throughout the term of the loan .
Difference Between Environmental Risk Evaluationsfor Lending Transactions vs. Work Out/Foreclosure
E i l R i f L di T i
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• Reasonably evaluate and quantify environmental issues and liabilities through reportreviews.
• Ensure borrower investigates and remediates environmental issues prior to OR withinshort timeframe post-closing
• Establish mitigants to ensure that Bank is protected in event of default and has resourcesto pay for environmental issues (environmental reserve/insurance/budgets)
• Do NOT participate in management or exercise decision-making control overenvironmental investigations/compliance.
Environmental Review for Work Out/Foreclosure Transaction:
• Update Information! Order new environmental reports to ensure no new issues andqualify for AAI protections
• Quantify any new environmental issues through investigation BUT no remediation pre-foreclosure
• Sell It!! After foreclosure, market property for resale/lease “at earliest practicable time,on commercially reasonable terms, taking into account market conditions and legalregulatory requirements.”
Will the April 2014 MCP Changes Affect EnvironmentalDue Diligence Reviews for Financial Institutions?116
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• New MCP changes will not significantly impact Bank’s approach toevaluating and quantifying environmental risk
• Bank relies on expertise of qualified environmental consultants to completereports (do not complete internally)
• New MCP changes will require internal staff training to understand new
approach and terminology (no more RAOs, etc.)
• New MCP changes will likely simplify internal Bank review process , asregulations improve requirements for AULs (ensure restrictions transfer withdeed), less “releases” due to historical fill, and broader definition of background
conditions.
Presentation Summary & Take Aways…. 117
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Will not significantly impact Bank due diligence process
May decrease number of release Sites and improve processby ensuring use restrictions transfer with deed, result in less“releases” due to historical fill, and broader definition of backgroundconditions.
What if myproperty isContaminated?
Banks DO lend on impacted properties!
Various tools can be used to mitigate environmental risk atclosing (i.e.: environmental reserve accounts/undertakings,environmental insurance, and construction budget lineitems/contingencies)
Why Banks
RequireEnvironmentalDue Diligence
To Comply with Regulatory RequirementsIdentify and Quantify Environmental LiabilitiesLimit Borrower and Bank Risks
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