In our last blogpost, we determined that after the completion of an EDR LoanCheck, you can take a few simple steps to avoid a costly Phase I Assessment. In this case study, we’ll talk about a Phase I that recommends additional testing.

In one recent case, a Phase I was completed for a commercial retail property situated in a commercial/light industrial suburban area. The report concluded that Phase II testing was necessary, including the advancement of soil borings and the installation of groundwater monitoring wells. The rational for testing was based solely on the presence of a 50-gallon gasoline UST as depicted at the subject collateral on a 1932 Sanborn Fire Insurance Map.

Was a Phase II really necessary? Not nessesarily. Let’s further review the details:

The UST represented on the Sanborn map was likely used to fuel vehicles at a former nursing home that improved the site, and was not associated with additional USTs and not used for retail sales. The UST is not depicted on any additional maps after 1932; the area of the former UST was excavated down to at least 15-feet to support site redevelopment into a retail strip mall with a subterranean parking garage in 1955; and the site is not situated in a groundwater protection area or in a residential neighborhood.

Using these mitigating factors and a little logic — such as the size of the UST and the likelihood that it was removed more than 50 years ago — PVC made a reasonable determination that a Phase II was not necessary. It was extremely unlikely that this gasoline UST remained on-site, nor was it likely to have significantly impacted soil and groundwater conditions on the property. It’s noted that the author of the Phase I Assessment was unwilling to opine on these mitigating factors.

In this example, the client was able to forgo a costly and time-intensive Phase II by relying upon PVC and using some common sense.

Next time, we’ll consider what to do when your subject collateral is listed as a spill site.