HOME      LESSON MENU         BAD ASSESSMENTS INTRO                                                                                                                 BACK      Case Study 5 
Environmental Due Diligence Boot Camp
Really Bad Environmental Assessments
Case Study 4


We were asked to review a Phase 1 Environmental Site Assessment (represented as ASTM 1527-compliant; completed in 2003 by an out-of-area consulting firm hired by the lender) when the prospective buyer noticed that the assessment report claimed that there had been no development on or in the area of the subject property prior to 1977.  The buyer grew up in the local area, and knew that the area of the subject property had been developed at least as early as the mid-1960s.


The subject property is currently located within the city of Springfield.  What we discovered however, after a little research, was that property is located in an area that had been under the governmental jurisdiction of the adjacent city, Eugene, up until 1976. 


Prior to 1977, there is no occupancy information for the subject property and surrounding area in records for Springfield – the information is instead listed in records for Eugene, using an entirely different address numbering system than the one currently in use.


Our review found that the subject property had been first developed in 1959...  a gasoline service station was located on the property from 1959 through 1974.


Follow-up work determined that the underground tanks (4) had never been removed from the ground, and no environmental investigation or cleanup had ever been completed for this property.  The prospective buyer subsequently made closing of the transaction contingent upon completion of environmental cleanup activities.  The final cleanup cost was just under $ 100,000.


This example points out once again the potential danger of using an environmental assessment firm that doesn’t have a strong background in, and understanding of, local history. 




Just because it's labeled an "ASTM Phase 1 Environmental Site Assessment",
doesn't guarantee that the findings or conclusions are accurate. 
                                                                                       BAD ASSESSMENTS INTRO                                                                                      
                                                                                                                                                                                                                           Case Study 5  
Copyright © 2011 OMNICON Environmental Management, All Rights Reserved


POSTED:  28 February 2011