Man, It Stinks in Here!

Managing Vapor Intrusion in Commercial Real Estate Development

 

With the proliferation of Brownfield Redevelopment throughout the United States in the last decade, managing Vapor Intrusion in connection with commercial real estate development has gained increasing attention from policymakers, environmental consultants, and the real estate development community.  Increased scrutiny is being brought to assess, quantify and manage indoor air quality in connection with the regulatory approvals needed to develop some properties.  Indeed, Vapor Intrusion and indoor air quality have been receiving a growing level of attention by the national media, and the public-at-large.

 

What is Vapor Intrusion?

 

Vapor Intrusion is the manner in which certain chemicals in soil and/or groundwater migrate into buildings, and degrade air quality.  Frequently, these chemicals involve volatile organic compounds or VOCs, and radon.  VOCs are commonly associated with methane, petroleum hydrocarbons and chlorinated hydrocarbons. For example, methane is common in and around landfills, petroleum contamination associated with gasoline service stations and solvents associated with dry cleaning facilities are common sources of Vapor Intrusion that must be managed in the context of commercial real estate development.  VOCs from these sources easily become gases or vapors and readily disperse into air even in small air spaces within soil and underneath buildings.  Radon is produced by naturally decaying uranium and is found is varying concentrations throughout the United States.  These vapors can migrate into buildings through cracks and penetrations in foundations, and, ultimately into indoor air spaces.

 

Why the concern?

 

With the shifting regulatory trends in recent years to allow the redevelopment of environmentally impaired properties without incurring liability for the “sins of the past”, many commercial real estate developers have actively sought out distressed properties to redevelop.  Historically, once the initial assessments and investigations were completed, and necessary approvals obtained, little thought was given to the management of future indoor air quality.  While a new development may overlay contaminated groundwater, many believed that there would be little or no human exposure to these chemicals if, for example, there were no drinking water supply wells located on the property.  In recent years, policymakers and environmental scientists have recognized that gaseous vapors can (and do) intrude into buildings resulting in individual exposure to these pollutants.  As such, Vapor Intrusion must be sufficiently addressed to reduce potential risks to human health.   

 

Individuals experience varied health effects from exposure to indoor air contamination.  Depending on the type and concentration of chemical pollutants, people can experience eye and respiratory irritation, headache, nausea and a variety of other respiratory and neurological symptoms.  Usually these effects are temporary and disappear when the person leaves the exposure area.  As with all toxicological exposures, dose (time) and concentration are important considerations in determining health effects, if any, from Vapor Intrusion.  According to EPA, the greatest concern appears to be associated with low-level chemical exposure over many years, as this would increase the risk of cancer, among other health concerns.  However, chemical vapors prompting customers to exclaim, “Man, it stinks in here” are never good for business. 

 

In some instances of vapor intrusion and the resulting human exposure have resulted in litigation.  For example, a personal injury lawsuit in Texas – City of San Antonio v. Pollock resulted in a significant jury award for an alleged “toxic tort”In 1992, the Pollock family moved into a home abutting a City of San Antonio landfill.  A daughter was born in 1994 and was diagnosed with acute lymphocytic leukemia in 1998.  The Pollock family alleged that benzene from a nearby landfill leaked into their home and proved to a jury that benzene and other toxic gases caused the child to develop leukemia.  The jury awarded the Pollock family a total of $46.2 Million that included $10 Million in punitive damages.

 

Another concern is economic injury claims for injuries to real property and the diminution in property value.  In 2003, two major law firms – one of which included environmental activist, Erin Brockovich – filed suit for vapor intrusion damages for 120 plaintiffs that were attributed to an IBM facility.  The IBM plant in Endicott, New York was alleged to be responsible for numerous spills & leaks of various VOCs that contaminated Endicott’s soil and aquifer.  Widespread vapor intrusion of VOCs contaminated the basements of area homes.  The independent settlement in 2004 was for a total of $2.2 Million for the property owners ($10,000 or 8% for each property’s fair market value at a $50,000 maximum) in exchange for no further claims against IBM.

 

Spills of dry cleaning solvents have also forced the evacuation of strip malls and their tenants until remedial actions can be taken to collect and manage the vapors, and even residential developers have incurred legal liability for failing to disclose groundwater contamination plumes underlying subdivisions near former gasoline service stations. 

 

Certain properties pose greater risks for Vapor Intrusion and others.  Sites that have shallow groundwater tables, certain soils types, and fractured bedrock underlying the surface can all increase the likelihood of Vapor Intrusion when source materials are present.  Vapor Intrusion will migrate through these materials faster than, say, tight silts and clays, and can lead to degraded indoor air quality.  When foundation cracks, holes in concrete floors, and other gaps around utility pipes, etc. are present, Vapor Intrusion can follow these pathways of migration into buildings and structures.   

 

Where are the regulations?

 

Vapor Intrusion is not independently regulated by federal law, but is addressed under remediation requirements of the Comprehensive Environmental Response, Compensation & Liability Act (“CERCLA” or “Superfund”) and the Resource Conservation & Recovery Act (“RCRA”).  Both the CERCLA and RCRA laws require that hazardous contamination be cleaned up to non-harmful levels in various media such as soil or water.  It is worth noting that the federal Clean Air Act (“CAA”) is focused on outdoor air and generally precludes the Environmental Protection Agency from regulating indoor air and vapor intrusion, however, emissions from Vapor Intrusion remediation systems may be subject to the CAA.  Accordingly, it is important to consult with an experienced environmental attorney to determine what, if any, permits are required in connection with proposed environmental remediation. 

 

 There are no established regulations for managing Vapor Intrusion.  However, EPA does provide draft guidelines in a three-tiered approach:  (1) primary screening, (2) secondary screening and (3) site-specific pathway assessment.  Each tier gives a set of questions as a guide to determine if vapor intrusion exists and if so, lists unacceptable risks, but does not identify risk reduction or remediation techniques.  A knowledgeable environmental professional should be consulted regarding Vapor Intrusion management.

 

Many states apply the EPA guidance, and states such as California, Minnesota, New Jersey, New York, and Delaware have or are working on vapor intrusion laws or guidelines.  Again, local environmental attorneys and consultants are an important resource for determining what laws and/or regulations may apply. 

 

The American Society for Testing & Materials (“ASTM”), which has developed a number of nationally recognized environmental standards, has formed a committee that is currently working on a draft of this “best practice” and plans to release a “Standard Practice for Assessment of Vapor Intrusion in Structures on Property Involved in Real Estate Transactions” within the year.  It is likely that, when published, the ASTM standard will be widely accepted by both the regulated community and policymakers as a reliable practice to assess and manage Vapor Intrusion issues. 

 

 

Practical Considerations for Managing Vapor Intrusion Risk

 

Not surprisingly, EPA suggests evaluating Vapor Intrusion when a real estate site is contaminated or is near a site with contaminated soil or groundwater.  A Vapor Intrusion assessment should be conducted by a qualified environmental consultant or engineer, who is capable of making recommendations to manage environmental risk associated with Vapor Intrusion.  It is advisable to have legal counsel included in such consultations.    

 

Generally, the first step managing Vapor Intrusion is to evaluate the threat posed.  Several modeling tools exist for this purpose including the Johnson and Ettinger Model for Subsurface Vapor Intrusion Into Buildings which is available from EPA’s website.    

 

On heavily contaminated or high-risk sites, source removal will frequently be required to effectively manage Vapor Intrusion Risk.  Where high concentrations of VOC contamination or other source of Vapor Intrusion are discovered on-site in connection with redevelopment, they should be removed from the subject property, to the extent possible.  Source removal can involve the removal of pollutant-saturated soils from under the slab of a proposed structure, and/or pumping and treating groundwater.  Generally, limited soil removal is the most effective manner to address near surface source materials.  While relatively costly, removal of contaminated groundwater should be considered where phase-layered product is present.  For example, it is not uncommon for a floating layer of gasoline to be present on the surface of the groundwater where a significant release has occurred.  Similarly, due to chemical characteristics of chlorinated VOCs, these materials can form pools of product on the bottom of an aquifer.  In both instances, these sources materials can be effectively recovered or neutralized using in-situ chemical oxidation reagents as part of a comprehensive environmental remedial program and should be incorporated into the overall development of the project.  If such actions are warranted, be certain to allow sufficient time and budget to allow for evaluation, negotiation between buyer and seller, permitting considerations and installation.    

 

At sites with lower levels of soil or groundwater contamination are present, an engineered impermeable barrier or Vapor Intrusion barrier may be appropriate.  Engineered barriers include compacted clay layers, and synthetic membranes placed under the foundation slab. Additionally, a series of inter-connected horizontal PVC pipes laid in a gravel pack can effectively collect and direct Vapors away from the foundation.  Such sub-slab soil venting systems can be either active or passive depending upon whether a vacuum is used to “suck” vapors out of the soil.  Sub-slab venting systems are frequently combined with synthetic barriers to achieve an even greater level of protection.  Sub-slab venting systems and barriers, when appropriate, often results in far less transactional costs than source removal, and may even be considered as a prophylactic measure.     

 

According to Charles “Chic” Crealese, Principal with the Boston-based GZA GeoEnvironmental Technologies, Inc., a national environmental consulting firm, Sub-slab venting systems can even be installed after-the-fact as an effective remedial measure.  “GZA has experienced a high rate of success in remedial design and installation of sub-slab venting systems to address Vapor Intrusion resulting in degraded indoor air quality”, says Crealese.  In one case, the owner of a strip mall was forced to evacuate all of its tenants due to Vapor Intrusion when a drycleaner tenant experienced a significant release of solvents.  GZA’s environmental professionals quickly assessed the level of contamination, evaluated various remedial alternatives, and ultimately recommended, designed and installed an effective sub-grade venting system.  “The sub-slab venting system required cutting trenches through the foundation slab, installation of a network of perforated PVC pipes that where tied into a vacuum extraction system, which then was then passed through a series of granulated, activated carbon filters and released to the ambient air”, said Crealese.  The entire process took less than 90 days, and allowed tenants to move back into the strip mall without concern of further Vapor Intrusion.          

 

 

Closing Thoughts

 

Managing Vapor Intrusion in connection with your next commercial real estate development makes good sense.  It also opens up the range of properties that were considered for development “but for” specific environmental issues.  Moreover, the failure to adequately manage Vapor Intrusion can result in significant environmental and legal liability.  Proper assessment and remedial alternatives should take into consideration EPA’s guidance on this subject, and the development community should stay-tuned to pending standards from ASTM.  Consultation with qualified environmental consultants and legal counsel can assist you in developing a cogent strategy to address Vapor Intrusion issues.  Given the amount of time, effort and resources invested in commercial real estate development, buildings shouldn’t stink.

By Michael P. Carvalho, Esq.
CARVALHO & ASSOCIATES, P.C.
Retail Law Strategist
Published October 2010

 


 

MICHAEL CARVALHO is an environmental attorney and President and Shareholder at Carvalho & Associates, P.C., headquartered in Marietta, GA. He practices law in Massachusetts, Georgia, Michigan and Washington, D.C. His national practice includes litigation, regulatory enforcement matters, and transactional issues associated with the re-development of environmentally impaired real property.  He is a former environmental consultant and nationally recognized expert in Brownfield Redevelopment.  He can be reached at (678) 354-0066 or by e-mail.