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Five Mistakes to Avoid with Your Next Phase I Environmental Site Assessment
As Florida's real estate market continues to gather steam, we are increasingly being asked to review environmental assessments in connection with real estate transactions and during development permitting. This update is the first in a series that, we hope, will help you understand the basics of environmental due diligence, assessment, remediation, and brownfields.
The first step in environmental due diligence is a Phase I Environmental Site Assessment ("ESA"). A Phase I ESA is a non-intrusive investigation into past and current uses of a property to evaluate the potential existence of hazardous substances or petroleum contamination. It includes (1) a review of publicly available records; (2) a site visit; (3) interviews of owners, occupants, and government officials; and (4) a report describing the results of the investigation and, when requested, the environmental professional's opinion about the condition of the site.
A Phase I ESA should always be conducted before purchasing commercial real estate or a business that owns such property or lending money to be secured by commercial real estate. A Phase I ESA is important because, among other reasons, it is the first step a potentially responsible party may take to avail itself of certain defenses to Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") liability. CERCLA holds property owners, operators, and others strictly liable for response costs incurred as a result of a release or threatened release of hazardous substances.
In our practice, we have identified a number of common mistakes to avoid in your next Phase I ESA:
- Do not rely on an outdated Phase I ESA. In recent years, the standards for performing a Phase I ESA have changed, and even when the correct standards are used, Phase I ESAs are only good for some purposes for six months.
- Do not wait until the last minute. To be done correctly and thoroughly, Phase I ESAs are time consuming, and may result in having to fulfill further requirements, such as a Phase II ESA, site remediation, and mandated reporting to government agencies. Given the potential liabilities involved, careful consideration of environmental due diligence should be made as early as possible.
- Do not rely uncritically on the conclusions in a Phase I ESA. Phase I ESAs are one step in a scientific property-assessment process. Always consider engaging an environmental lawyer to review draft and final ESAs and to discuss the details of those assessments with the environmental professional before relying upon his or her conclusions.
- Do not focus only on price. All Phase I ESAs are not created equal. If you get a quote for a Phase I ESA that is substantially lower than other quotes, ask questions to determine why that is. If you know that your property may have a particular type of environmental issue, consider an environmental professional who has successfully dealt with that issue.
- Do not assume that a Phase I ESA is all the environmental due diligence you need. The appropriate level of due diligence depends on the nature of the property and of the transaction. A Phase I ESA is designed to identify potential soil, surface water, or groundwater contamination. It does not typically seek to identify "non-scope" issues such as asbestos building materials or lead-based paint, and does not assess compliance with environmental laws or permits.
For more information on Phase I ESAs, including some insights on contract considerations, please
view this presentation.
Stearns Weaver Miller's Land Development, Zoning & Environmental Practice Group has extensive experience with Phase I ESAs involving a myriad of real estate and corporate transactions across Florida. Our team is available to assist you with your environmental due diligence, assessment, and remediation issues. Please contact
Reggie Bouthillier,
Jeff Collier, or
Jake Cremer for more information.
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| MEET THE AUTHORS
*Special thanks to Ayodale Tan, who assisted in the drafting of this update. Dale is a law clerk in the Tampa office and a third-year Juris Doctor Candidate at Stetson University College of Law.
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Dual State Homestead Exemption Prohibited
A case before Florida's Fourth District Court of Appeal addressed whether a person or family may claim a homestead exemption in Florida and in another state. The 4th DCA held that an individual or family unit may have but one homestead exemption, regardless of where the homes are. The Supreme Court declined to review the decision.
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Investment Backed Expectation Must Be Clear for Inverse Condemnation Claim
The Florida Supreme Court recently declined to review a ruling, by the Third District Court of Appeal, that a party must submit evidence of specific plans in support of a claim of investment-backed expectations in an inverse condemnation action.
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Unnecessary Hardship Dependent on Similar Land Uses
A court in Florida's Sixth Circuit Court ruled against a landowner who claimed an unnecessary hardship because the owner was subject to setback restrictions but its residential neighbors were not. The court found no unnecessary hardship because the landowner was subject to the same setback restrictions as commercial landowners in the area.
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Quasi-Judicial Immunity in Takings Claims
The First District Court of Appeal ruled against the Suwanee River Water Management District in an inverse condemnation action that followed the District's flooding of a field and draining of a pond. The court held that the District did not have quasi-judicial immunity from a takings claim because its actions were not comparable to a judge's.
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Agricultural Tax Classification Not Limited to Statutory List
The Fourth District Court of Appeal held that that the listing of agricultural activities in the agricultural tax-classification statute is non-exclusive. Firm attorneys Jacob T. Cremer and John N. Muratides, successfully assisted a family seeking a reappraisal of their property after they were denied an agricultural tax classification.
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Injunctions for Zoning Violations and Skydiving: An Unlikely Pair
The First District Court of Appeal reversed an injunction entered in favor of Walton County and against farmers who were operating a skydiving business on their farm, finding that the County did not establish a clear legal right to the injunction. The local zoning board had found that the skydiving business did not violate the County's zoning code. View More
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Development-focused Appraisals in Eminent Domain
The Third District Court of Appeal recently affirmed an $855,000 judgment against Sunny Isles Beach in a takings case. The City, which took the property for an emergency evacuation bridge, appraised it for $1,000. On appeal, the City argued that the trial court had erroneously admitted evidence of development plans, even though the landowners never took affirmative steps to develop the land initially. The Third District rejected the City's argument in favor of the "development approach" to determining market value. View More
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Vin's Practice:
With over 25 years of public and private sector experience in the Tampa Bay region and throughout Florida, Vin focuses on land use, zoning, permitting, land use litigation and governmental affairs. He also is heavily involved in the creation of many economic development projects and public-private partnerships throughout the region representing clients' interests from RFP and unsolicited offer creation to conclusion of the project. He is certified by The Florida Bar as a specialist in City, County, and Local Government Law, and has advised numerous boards and authorities within local government on these issues while serving as a Senior Assistant County Attorney in Hillsborough County. He also has extensive experience representing clients in residential, commercial, industrial, and mixed-use projects, including shopping centers, office buildings, planned unit developments, hotels, assisted living facilities and public facilities. In addition, Vin is frequently engaged in cutting edge issues for clients within numerous jurisdictions, including the adoption of mobility fees in Hillsborough County and the protection of client's interests regarding such fees including vesting opportunities.
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Recent Successes: Land use and economic development counsel to Florida window and door manufacturer, NewSouth Window Solutions, in connection with the construction of a new 235,000 square foot manufacturing and distribution facility in Tampa that will serve as its corporate headquarters. We advised on the project from concept through to groundbreaking. This work included land use entitlement work, significant sign variances, property tax abatement and mobility fee buy-down representation.
Community Involvement: Vin is the Chairman of the Tampa Sports Authority Board of Directors. The Tampa Sports Authority manages Raymond James Stadium (home to the NFL's Tampa Bay Buccaneers and the University of South Florida Bulls) and three public golf courses in Tampa. As Board Chair, Vin guides the organization in its mission to plan, develop, and maintain a comprehensive complex of sports and recreational facilities for the Tampa Bay area.
Vin also sits on the Tampa-Hillsborough Economic Development Corporation Executive Committee and Chairs its Business Development Committee.
Vin is also actively involved in many professional organizations, including the International Council of Shopping Centers, the Real Estate Investment Council and the Urban Land Institute.
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