Purpose:
To establish guidelines for the environmental review of all land prior
to acquisition
Date Approved:
February
13, 2003
Background:
The
U. T. System Environmental Review Policy for Acquisitions of Real Estate
adopted in 1991 required that all appropriate inquiries be made as to the
condition of each proposed real estate asset prior to acquisition so as to
minimize the potential for exposure to claims for damages under the applicable
laws governing the environment and hazardous materials. At that time it was anticipated that the
policy would be modified at such time as a nationwide industry standard was
created. The ASTM standards now
incorporated into the policy are universally recognized as the new national
standard. Additional text and editorial
changes to the policy clarify the levels of environmental screen necessary for
a variety of property types and the processes to be followed for
implementation.
At
the August 13, 1998 meeting, the policy was amended to address leases of real
property as well as the acquisition of title to real property by purchase,
gift, exchange, or otherwise and was renamed the U. T. System
Environmental Review Policy for Acquisitions of Real Property Assets. Amendments to the policy were made at the
November 11, 1999 meeting to lower the risk associated with
enforcement of the Endangered Species Act and the Clean Water Act and at the
February 13, 2003 meeting to include inspection for mold.
It is the policy of The
University of Texas System to minimize its potential for exposure to claims
made under the applicable laws governing the environment and hazardous
substances by making all appropriate inquiry with regard to the environmental
condition of real property assets, including leaseholds, prior to acquisition.
To reduce the risk of liability,
the U. T. System will complete an environmental site assessment (ESA) prior to
acquisition of any real property asset, except as specifically provided in this
policy. For purposes of this policy,
the term "real property asset" means any interest in real property
except a mineral interest severed from the surface estate, a leasehold in
improvements only, or a leasehold less than five years in duration that does
not contemplate any improvements to be constructed by U. T. System or other
activities that would result in disturbance of the soil. The term specifically includes without
limitation any acquisition in fee simple of real property, any leasehold on
which U. T. System will construct improvements, and any leasehold where an
underground storage tank, water wells, or monitoring wells exist. Federal and State statutes impose certain
liabilities on owners of real property, including public institutions of higher
education, when hazardous or other regulated substances have been deposited,
stored, or released on the property. Hazardous and other regulated substances include not only the most
dangerous or toxic substances, but also a wide array of chemicals and
compounds, many of which are components of household trash or are found in raw
materials and wastes. Environmental
Hazards may also include the presence of molds in or on improvements. Liabilities related to hazardous and other
regulated substances may include costs associated with removal of these
substances from the property, including overhead and enforcement expenses. If environmental hazards are identified, the
U. T. System should then weigh the risks that may arise with respect to such
hazards in determining whether the acquisition is beneficial and
appropriate. If no risks are identified,
the U. T. System may, under certain circumstances, be able to assert a defense
to liability if contamination that was unknown at the time of acquisition is
later discovered.
1. At a minimum, prior to acquisition of any
real estate asset, the benefited component, with respect to purchases of land
or leaseholds to be used for campus purposes, or the Real Estate Office with
respect to all other real property assets, will conduct an initial ESA using
the American Society for Testing and Materials (ASTM) transaction screen
process E1528. For purposes of the
policy, "benefited component" means the component that will use and
have control over land acquired by purchase, gift or bequest, or lease. The benefited component will determine the
scope of further assessment based on the property's location and history, and
findings of the transaction screen.
2. The chief business officer of the benefited
component or the chief business officer's delegate will coordinate the review
process for purchase of real property assets to be used for campus purposes.
a. No component of
the U. T. System will add property to the inventory of campus real property
assets until a qualified university employee or a qualified outside professional
retained by the component performs an ESA in accordance with this policy.
b. The benefited
component will pay all costs of the ESA that are not paid by a donor or an
external entity whether the acquisition is by purchase, gift, bequest, or other
means.
c. Any
office or component of the U. T. System will notify the Real Estate Office immediately
upon identification of a real property asset which may be donated or bequeathed
to the U. T. System or any component institution.
d. No component will make a commitment to accept a donation or bequest
of a real property asset until the appropriate office has complied with this
policy with respect to such asset.
3. All ESAs will comply with the appropriate
standards established by ASTM, unless otherwise specifically provided for in
this policy.
4. The Real Estate Office may require, when
appropriate, an investigation of other environmental issues or conditions
beyond the scope of the ASTM guidelines, such as mold, lead, biological,
radiation contamination, endangered species, or wetlands.
5. If the initial transaction screen
indicates areas of concern, the "Responsible Officer" (Real Estate
Office or Chief Business Officer of the benefited component with respect to
real property assets to be used for campus purposes, as appropriate) may (i)
reject the real property asset, (ii) accept the real property asset with the
identified risks, or (iii) require further investigation in the form of a Phase
I, II, or III ESA.
6. If the Responsible Officer requests a Phase I ESA, a qualified
outside professional will perform the ESA unless the component or the U. T.
System has a qualified employee to complete the review.
a. All contracts
for Phase I ESAs must be in a form acceptable to the Office of General Counsel.
b. The Office of
General Counsel and the Responsible Officer shall review the Phase I ESA
report.
c. If the Phase I
ESA indicates areas of concern, the Responsible Officer may (i) reject the real
property asset, (ii) accept the real property asset with the identified risks,
or (iii) require additional investigation in the form of a Phase II or III ESA.
7. A qualified outside professional must conduct any Phase II ESA,
unless the component receives express written permission from the Executive
Director, Real Estate Office to conduct all or part of the Phase II ESA
in-house based on the institution's expertise. The Phase II ESA should include an extensive review of prior uses
of the land and records pertaining to those uses, an examination and sampling
of the property, and testing of all samples collected.
a. All contracts
for Phase II ESAs must be in a form acceptable to the Office of General
Counsel.
b. The Office of
General Counsel and the Responsible Officer will review the Phase II ESA
report.
c. If the Phase II
ESA indicates areas of concern, the Responsible Officer may (i) reject the real
property asset, (ii) accept the real property asset with identified risks, or
(iii) require additional investigation in the form of a supplemental Phase II
or a Phase III ESA.
8. A qualified outside professional must
conduct any Phase III ESA. The ESA
should include extensive physical sampling of the site, testing of all samples,
estimates of the extent of contamination, and estimates of the total cost to
clean up the site.
a. All contracts
for Phase III ESAs must be in a form acceptable to the Office of General
Counsel.
b. The Office of
General Counsel and the Responsible Officer will review the Phase III ESA
report.
c. If the Phase
III ESA identifies unacceptable contamination or cleanup estimates, the real
property asset will be rejected and will not be acquired.
9. The Real Estate Office will maintain
complete ASTM guidelines for the ESA transaction screen process, as revised
from time to time. The Real Estate
Office will distribute the guidelines at cost to any component business and
development offices upon request.
10. When the U. T. System or a benefited
component conducts an ESA either in-house or using a qualified outside
professional and elects, based on the results of the ESA, not to acquire the
real property asset under review, it is the System's policy to provide a copy
of the ESA, with an appropriate disclaimer to the seller/current landowner or
landlord, if requested.
The
level of screening will vary according to type of real property asset, history
and location.
1. Residential:
a. Have a
qualified in-house individual or outside professional conduct an inspection.
b. Conduct a site
visit and a review of aerial photos for the past 50 years if such photos
are readily available from libraries or archives. If there is concern about past land uses (i.e., the property was
vacant and in a remote or formerly industrial/
commercial area, the site visit indicates distressed vegetation, or there is
other evidence of contamination), then a 50-year title search may be warranted.
2.
Vacant/Unoccupied
Lands: Step 1.b above. The site visit should include
(a) asking neighbors about prior uses such as dumping, and (b) inspecting
along on-site roadways or fence lines where historical dumping would be more
likely to have occurred. Aerial photos
may be particularly useful in evaluating historical dumping on vacant lands.
In geographical areas where endangered species might be
present, a review of U. S. Fish and Wildlife Service maps might be appropriate
in determining if further investigation on this issue is warranted.
Visual inspection of the site for topographical,
hydrological, and vegetative indicators of wetlands may also be appropriate,
depending on the geographical location of the property.
3. Commercial Sites: Steps 1.a and 1.b above. A 50-year title search will be useful in
evaluating former uses of commercial property. Every attempt should be made to obtain from the current or past owners,
operators and/or tenants the nature of business conducted at the site including
a review of copies of any permits, licenses, notices of violation or consent
agreements issued to owners, operators or tenants of the site.
4. Industrial Sites: Engage a qualified outside professional to conduct a Phase I ESA in accordance with ASTM Phase I Standard E1527, including a review of copies of any permits, licenses, notices of violation or consent agreements issued to current or past owners, operators or tenants of the site.
Last reviewed March 2003