An emerging environmental issue is creating liability for property owners and driving down property values nationwide. It’s called vapor intrusion, and the concern is so serious that regulators in at least three states have reopened formerly closed properties to examine an issue that’s especially important to Brownfield developers: the potential for vapor intrusion is considered one of the most significant obstacles to the safe reuse of contaminated property, and thousands of properties slated for redevelopment may be affected.

While a vapor intrusion condition can be challenging, it need not kill a redevelopment deal. Early assessment is key, because it’s far easier and far more cost effective to address the issue in the planning stages of redevelopment rather than after the fact. ASTM International released a national vapor intrusion standard, E 2600 March 3, 2008, which could have a significant impact on brownfield projects for two important reasons; it defines “good commercial and customary practice” for assessing vapor intrusion risk, and many lenders are willing to adopt the standard into their environmental policies.  

Vapor Intrusion Basics
Contaminants that lead to a vapor intrusion condition may exist in soil, in groundwater or as vapor clouds, and because contamination can migrate laterally, nearby structures and those directly above the contamination are at risk. Certain conditions raise the chance that the issue will develop, including shallow groundwater, porous soil, fractured bedrock, a cracked building foundation, holes in floors, and gaps around pipes and utility lines. Sites with operations involving petroleum products and chlorinated solvents, or other volatile and semi-volatile organic compounds, are susceptible.

Vapor intrusion is not a new environmental risk; what’s new is that there have been a rising number of cases involving the liability associated with vapor intrusion conditions over the past few years. EPA and state regulators have become increasingly concerned about the potential risks of vapor intrusion due to scientific data that indicate that the problem could be more widespread than initially believed.

It can also be costly for property owners who may face personal injury and property damage claims from panicked tenants who cite the “unsafe working environment” rationale to break leases. A property with a vapor intrusion condition can become devalued, stigmatized or both, making it difficult for the owner to attract new tenants or sell the property. The issue also presents a potential for costly toxic tort litigation. Because vapor intrusion is sometimes caused by contamination that falls under the umbrella of CERCLA’s hazardous substances, property owners may face liability for cleanup under federal CERCLA law and state CERCLA-based programs.

Additional Concerns
The growing awareness of vapor intrusion as a potential exposure pathway is of particular concern for developers of brownfield properties. Brownfield sites are also commonly found in urban areas, which are more likely to be adjacent to other contaminated properties. They typically contain old buildings in which deteriorating conditions can facilitate a vapor intrusion condition. Any planned buildings must meet updated building codes and energy-efficiency requirements, resulting in tightly sealed structures that may also exacerbate the problem.

Vapor intrusion also calls into question the validity of so-called risk-based cleanups—the method of leaving residual contamination onsite that EPA and most state brownfield programs adopted 10 years ago to expedite remediation and reduce redevelopment costs. Because early risk-based cleanups did not address vapor intrusion, sites with “no further action” letters are increasingly being reopened, which can be costly and create significant uncertainty for site owners.

And, because contamination can migrate far from the original source, it’s difficult to predict where a problem will occur.

“In most brownfield redevelopment projects, there are no buildings (so there is no indoor air to test) or, if there are, the developer plans to knock them down to make way for new ones,” says Hartman. “Interpreting the potential risk to a future building from existing contamination is difficult.”

“While NFA reopeners at the developer’s request may increasingly become necessary to satisfy buyer, lender or insurance requirements, perhaps the greater concern are sites where off-site migration has occurred and there are down-gradient residential properties nearby,” adds Gail Artrip, P.E., a project director for Carlson Environmental in Chicago. “The potential liability can be substantial.”

EPA says it’s often more protective of human health and the environment and more cost effective in the long term to eliminate contamination. But this isn’t always practical.

“Long-term management—operations, maintenance and monitoring, as well as institutional controls—can be burdensome,” admits Lenny Siegel, director for the Center of Public Environmental Oversight in Mountain View, Calif. “In most cases, however, the type of contamination that causes the most serious vapor intrusion risks—chlorinated volatile organic compounds—cannot be eliminated easily or quickly. Treatment or removal is a long-term goal, but reuse shouldn’t have to wait for completion.”

Anthony Buonicore, P.E., DEE and chairman of ASTM’s vapor intrusion task group, agrees. “There are many ways to address contamination,” he notes. “If the concern is vapor intrusion, it may be more cost- effective to install a vapor barrier and/or a sub-slab depressurization system rather than spend significant money to clean up the property.”

“In most cases it’s not too costly to preventively install vapor barriers and even sub-slab depressurization systems,” says Siegel. “Standard HVAC systems can also serve as mitigation, so mitigation is just a minor challenge.”

Today, the pre-purchase environmental due diligence process for commercial and industrial properties is accomplished with a Phase I ESA conducted in accordance with guidelines established in the federal All Appropriate Inquiry rule or its equivalent, ASTM Standard E 1527-05. Fortunately, the information collected for a traditional Phase I ESA, such as the history of site activity and the nature and extent of contamination, is useful in evaluating vapor intrusion potential.

Federal and State Laws 
Recognizing the need to address the vapor intrusion pathway, EPA and approximately 30 states have responded on the legislative and regulatory front. In 2001, EPA issued “Draft Guidance for Evaluating the Vapor Intrusion to Indoor Air Pathway from Groundwater and Soils.” However, the federal guidance’s was last updated six years ago. Actively involved in the creation of ASTM’s vapor intrusion standard, EPA says its guidance will be revised as appropriate when “the state-of-the-science improves.” Meanwhile, state guidelines are inconsistent with one another and with EPA’s document.

ASTM’s Standard
Recent case law proves that a vapor intrusion condition is a real business and health risk with widespread implications. Designed to be used “reasonably and early on” in a real estate transaction, ASTM E 2600 “Standard Practice for Assessment of Vapor Intrusion into Structures on Property Involved in Real Estate Transactions” is made up of four tiers, which gradually progress from a simple screen toward a more complex vapor intrusion assessment.

Tier 1 outlines a conservative screening effort that environmental professionals can use quickly and inexpensively to weed out properties unlikely to have a vapor intrusion issue. Tier 2 consists of a more complex assessment involving increasingly greater use of site-specific data. If a potential vapor intrusion condition cannot be ruled out using the first two methods, the user can proceed to Tier 3, which includes more sophisticated testing of the interior or exterior of the structure. To save time and cost, the user can skip to Tier 4, which describes general mitigation alternatives such as implementing institutional or engineering controls or installing a vapor intrusion mitigation system.

While a vapor intrusion assessment is not a standard component of a Phase I ESA, ASTM’s vapor intrusion standard allows screening to be incorporated as a supplemental scope of work, similar to how an asbestos assessment can be added to the Phase I.

“For developers who do business across state lines, the standard is particularly helpful in establishing policies and procedures to be implemented by environmental professionals tasked with conducting the evaluation regardless of where the sites are located,” says Artrip.

Although local governments don’t typically take vapor intrusion into consideration in the construction approval process, it’s important for a developer to take the initiative.

“With the new ASTM standard, there is too much potential liability if the pathway is ignored,” warns Hartman.

Environmental professionals should first check to see whether state regulations exist because they could be more stringent than ASTM’s standard.

The Future
While ASTM’s new standard does not have the weight of law, it does provide much-needed guidance for dealing with vapor intrusion. “The framework is helpful because it provides numerous exit points along the way, prompting the stakeholder to occasionally rethink whether continued evaluation is desired, and even encouraging a jump to mitigation under certain circumstances, where it might be more cost-effective than continued data gathering and evaluation,” says Artrip.

Buonicore envisions that the Phase I ESA process will change in light of the new standard.

“In view of the potential liability, I believe that within a year all Phase I’s will include a vapor intrusion assessment conducted in accordance with the new standard.”

Clearly it is in the best interest of brownfield redevelopers to be proactive in addressing the issue given all of the attention now being placed on vapor intrusion exposure.

“In most cases,” says Siegel, “the people who will eventually own or occupy buildings over VOCs are not part of the decision-making process, whether it is done under ASTM guidance or regulatory statute. If they later discover that they are being exposed, or simply that they were not warned of potential exposures, they will sue. It’s safer for developers to address the problem up front.”  

Derek Ezovski is the managing director of Environmental Data Resources’ Property Due Diligence Group.