Need a Phase I or II ESA? ---- Read this first (Part 2)

In my last post we saw how Ontario’s new “Brownfield” legislation has resulted in:

1. Phase I ESA’s costing more and taking longer.
2. More Phase II’s ESA being recommended.
3. Property owners receiving copies of Phase I & II’s, regardless of who orders them.
4. 65% of pollutants having more stringent guidelines, including the most common offenders (wastes from motor oil, gasoline and dry cleaning solvents).

You can refer back to September 14^th blog for details.

Additional implications of the new regulations are as follows:

5. More sites will not 'pass the test'.

The new Ministry of Environment (MOE) regulations on how Phase I's are prepared will result in more Phase II's ESA being recommended.  Also the new regulations have imposed lower thresholds for the most common pollutants.

Result: More sites will be deemed ‘contaminated’.

6. Developing a property requires a Record of Site Condition (RSC).

While this is not new news perse, in order to get a RSC approved the supporting Environment Site Assessments (Phase I and II) and remediation reports (if applicable) will have to meet the MOE standard. Therefore Phase I and II’s done to the CSA standard will not be accepted.

Result:  Getting approval for a RSC (necessary condition on most commercial deals and required by municipalities to approve redevelopment) will be more difficult.

7. Sites not being redeveloped can use the CSA-standards for Phase I and II ESA’s...

...BUT most financial institutions have adopted the new (stricter) MOE-standards into their underwriting guidelines*.

*Many bankers I have talked to indicate that in some cases (ie. mortgage refinance on a site with ‘lower risk’ activities) the CSA standard will be permitted. Tip: check with the bank first before ordering a report.