Due Diligence

January 17th, 2018

New SBA Environmental Regulations in Effect

U.S. Small Business Administration (SBA) has updated its environmental requirements for the 7(a) and 504 loan programs effective January 1, 2018.  SBA’s SOP 20 10 5 (J) includes a tiered approach for its environmental review process, depending on the use of the site and loan amount.

Most of these requirements are familiar to those who have been involved with SBA lending the last several years, but there are a few changes to note:

  • SBA now specifies that the ‘Records Search with Risk Assessment’ (RSRA) must include historical records back to the property’s first developed use, or back to 1940, whichever is earlier. Previously, SBA did not specify a year for its historic research requirements but left it up to the Environmental Professional’s discretion.  In addition, this RSRA must include all supporting documentation.
  • All dry cleaners currently in operation at the site require a Phase II Environmental Site Investigation.  Previously, the Phase II was only mandatory if a dry cleaner had been in operation at the property at least 5 years.
  • SBA specifies that vapor intrusion must now be addressed for dry cleaners, in additional to soil and groundwater contamination.
  • Environmental Professionals must review tank and equipment testing compliance documentation for all gas stations and include this documentation in the Phase I ESA appendices.
  • SBA added new NAICS codes to its list of “environmentally sensitive industries.”

Gabriel is pleased to be a trusted partner for SBA lenders.  Our environmental reports will meet all new requirements in January 2018.  If you have any questions about our SBA-compliant reports, contact Natalie Neuman, Group Leader Assessment Services, at nneuman[at]gabenv.com or 773-486-2123.

March 2nd, 2016

Join Gabriel at the upcoming Commercial Deal Makers Forum

Gabriel’s Executive Vice President Steve Sawyer will be a featured MORe-logopanelist at the upcoming Commercial Deal Maker’s Forum sponsored by Mainstreet Organization of Realtors.

Join Gabriel for an informative commercial networking and interactive round table event.  Topics include:

  • Environmental Concerns – Steve Sawyer, CHMM – Gabriel Environmental Services
  • Property Management – John LeTourneau, Coldwell Banker
  • Branding Yourself on Social Media – Brian Palm, Palm Real Estate Ventures
  • Due Diligence – Thomas Jaros, Levenfeld Pearlstein, LLC
  • SBA for Commercial Lending – Wells Fargo
  • Legislative Environmental of Illinois – Erik Breila, Illinois Department of Commerce


Monday, March 21, 2016

5:30 pm – 7:30 pm

Harry Caray’s Lombard

70 Yorktown Shopping Center, Lombard, IL

$35, includes cocktails and heavy appetizers


Additional information and registration available at the Mainstreet Organization of Realtors event page.

May 4th, 2015

Gabriel is considering launching a webinar series. We need your feedback.

webinar clipartDue to the popularity of our ongoing seminar series, Gabriel is considering launching a webinar series on various environmental issues.  We understand that not everyone can easily join us in person at our Chicago headquarters.

Would you be interested in attending free webinars hosted by Gabriel?  We welcome your opinions in the quick 7 question survey below:


Thank you for your feedback. We will keep you posted on topics and dates for upcoming webinars, depending on results of the survey.

Survey will close May 8th, 2015.

April 9th, 2015

President Obama knows the value of a Phase I Environmental Site Assessment

In an interview with NPR’s Steve Inskeep  about the Iran nuclear deal, President Obama showed that he understands the importance of conducting a Phase I Environmental Site Assessment prior to purchasing a property, to make sure there are no “environmental disasters” on the land.


“The analogy I used is it’s sort of like you’ve signed a contract to purchase a home, but you’ve still got the, you know, the appraisal, the inspector, you’ve got to make sure that there isn’t some kind of environmental disaster on the land. And until you actually sign, you know, that mortgage and that document, the deal is not closed.”


Full interview: www.youtube.com/watch?v=p_T8rSmgMWQ

Transcript:  www.npr.org/2015/04/07/397933577/transcript-president-obamas-full-npr-interview-on-iran-nuclear-deal

March 4th, 2015

Going back in history with the Pullman District

In celebration of Chicago’s historic Pullman District being designated a national monument, the Chicago Tribune has published historical photos and maps of the area.  One of their interesting maps is an interactive “now” and “then” comparison using a fire insurance map from 1901 and a current aerial photograph.


sanborn map - pullman district

Click on the map to link to the interactive version on the Chicago Tribune website


This interactive map is a great example of how Gabriel uses historic fire insurance maps as part of our Phase I Environmental Site Assessment research.  We compare the fire insurance maps for the area where our subject property is located with today’s maps, looking for any past uses of a property that may indicate hazardous substances were used previously and therefore may still be present in the soil or groundwater, or may be associated with a vapor migration or intrusion issue today.

For more information on fire insurance maps, read our earlier blog post “History of Fire Insurance Maps.”

Thanks to Dianne Crocker at EDR for the link to this map.

November 14th, 2014

Phase I Environmental Site Assessment Spotlight: City Directories

During the course of a Phase I Environmental Site Assessment (ASTM E1527-13), Gabriel reviews historical research from several sources to help determine  the previous use of the subject property and neighboring properties.  Some of the key historical documents we reference when conducting a Phase I are the city directory listings.

Polk City Directory 1923

These city directories list all known occupants of each street address for a certain address range, searching back to when city directories were first produced in that particular community. By reviewing an address range that includes the subject property and adjoining properties, we can get a more complete picture of what businesses were previously located at the subject site itself and nearby sites.  For corner properties, we review city directories along both roadways because historically the properties could be addressed as either street.

Some of the city directories that we review include R. L. Polk & Co., Illinois Bell Telephone, the Reuben H. Donnelley Corporation, Cole Information Services, and the Haines Company, Inc.

Case Study

Recently, Gabriel was hired to conduct a Phase I on a strip mall with a known former dry cleaner.  A previous Phase I, conducted by another firm, had discovered this former cleaning operation because it was listed as a Small Quantity Generator with the Illinois EPA.  When reviewing the city directories, Gabriel learned that this dry cleaner had moved within the shopping center in the 1980s, which meant that there were two storefronts that could have been affected by the dry cleaning chemicals.  A previous Phase II had shown contamination in the area of the known dry cleaner, so there is a good probability that the previous storefront with the dry cleaning operation also has contamination due to similar chemical usage and housekeeping practices.

If you have questions about how Gabriel uses city directories in our Phase I research, contact Natalie Neuman, Group Leader Assessment Services, at 773-486-2123 or nneuman[at]gabenv.com.

July 25th, 2014

EPA Closes Comment Period for AAI Rule Amendment

Effective July 17th, 2014, U.S. Environmental Protection Agency (EPA) has closed the comment period for its proposed rule amending the All Appropriate Inquiries (AAI) regulations.  This proposed change would remove reference to the older Phase Iepa_logo2 Environmental Site Assessment ASTM standard (E1527-05) and confirm that Phase I assessments should be completed to the current ASTM standard (E1527-13).  EPA believes this change would promote the use of the current standard and reduce any confusion by having two standards in the regulatory reference documents.

EPA confirms that any Phase I’s conducted between November 1, 2005 and the date of the proposed rule implementation that were conducted to the ASTM E1527-05 standard would comply with the All Appropriate Inquiries regulations.

Only five comments were submitted during the comment period, with four in favor of the rule change for clarification purposes.  The one negative comment urged the EPA to continue allowing the use of 1527-05 in order to avoid the investigation of vapor as a pathway of concern.

EPA is reviewing the comments and will issue their final rule shortly.  Implementation of this amendment is expected to occur one year after the final rule is published in the Federal Register.

For further information about this proposed change, visit the EPA’s Proposed Rule webpage.

July 17th, 2014

When is a Limited Environmental Site Assessment Appropriate?

When it comes time to check off the “environmental site assessment” on the due diligence check list, some clients ask us about the cheapest and quickest option we offer. At times these Limited Environmental Site Assessments (ESAs) are appropriate and can save our clients money during the closing process. Other times, however, opting for a limited assessment can leave out important information that our clients should know before taking title to a property.

Our Phase 1/2 Limited ESA includes a site visit and very limited historical research. Our Environmental Professionals will look for any visual indications of Recognized Environmental Conditions (RECs) such as an underground storage tank or Business Environmental Risks such as asbestos, lead paint and mold. A limited ESA does not include a regulatory database search nor a full historical review.

We offer a Phase 1/2 instead of a Transaction Screen (TS) since we feel that the TS does not provide our clients with the information they are most interested in for these smaller properties, including key issues such as asbestos, lead paint and USTs. Additionally, our Phase 1/2 report puts the pertinent information in a more user-friendly narrative than the TS checklist.small multifamily residential

As a general rule of thumb, these Phase 1/2’s are best used for small residential properties or small commercial sites in a light commercial area. Properties in dense commercial or industrial areas are much more likely to have had some historical use which should be investigated as part of the due diligence process. Larger residential properties are also at a higher risk for environmental concerns since many of them formerly had heating oil tanks or are located in commercial areas.

Below are a few examples of why a full Phase I would be useful to our clients instead of the more limited Phase 1/2:

  • A review of fire insurance maps show that the adjacent property was formerly a dry cleaner. It is now redeveloped as a restaurant so no visual signs remain. Without this full historical review, our client would not have known that their site is potentially contaminated by this adjacent site.
  • A review of village building permits shows that there was a heating oil tank installed on our client’s property in the 1950’s. There are no visual indications of the tank on the property, but there are also no permits for its removal. Without this full historical review, our client would not have know that there may still be an underground storage tank on their site.
  • A review of the regulatory database search shows that the neighboring property is enrolled in the Site Remediation Program (SRP) through the Illinois EPA but has not yet received a No Further Remedation (NFR) Letter. A further review of the FOIA files from IEPA show that this site is heavily contaminated due to its former use as a printer. Without this regulatory and governmental agency file review, our client would not have known that their site may be impacted by this neighboring contamination.

A Limited ESA is best suited for properties such as a 6-flat surrounded by other residential properties or a small storefront in a light commercial or residential area.

If you have questions about when a Limited ESA is appropriate or concerns about a specific site, contact Natalie Neuman, Group Leader Assessment Services, at nneuman[at]gabenv.com or 773-486-2123.

May 28th, 2014

HUD Adopts E1527-13 for all Phase I Requirements

The U.S. Department of Housing and Urban Development (HUD) has updated its guidance documents for the Office of Housing and Federal Housing Administration (FHA) to require the latest ASTM standard (E1527-13) effective May 16, 2014.  This change affects several guidance documents throughout Office of Housing/FHA, including, but not limited to, the Multifamily Accelerated Processing (MAP) Guide, the Condominium Project Approval and Processing Guide, Handbook 4600.1 REV-1, Section 232 Mortgage Insurance for Residential Care Facilities, and Handbook  4615.1, Mortgage Insurance for Hospitals.

HUD specifically details the addition of the term CREC (Controlled Recognized Environmental Condition) and inclusion of vapor to the migration pathway as important reasons to require ASTM E1527-13.

“The new CREC definition will result in some environmental conditions being listed as CRECs if they have been remediated to restricted levels, as opposed to an unrestricted or de minimis level, and will be a great tool for Office of Housing/FHA staff to assess whether the site is appropriate for residential use,” stated Carol Galante, Assistant Secretary for Housing – Federal Housing Commissioner.

If you have any questions about the new Phase I standard, contact Natalie Neuman (nneuman[at]gabenv.com or 773-486-2123).

April 17th, 2014

Streeterville Developers Face Contamination Complications

Developers in the Streeterville area are learning how the past use of a property can affect today’s new developments due to lingering environmental issues. In this case, the environmental issue comes in the form of radioactive thorium.  Prolonged exposure to thorium can increase the risk of lung, pancreatic and bone cancer.

In the early 1900’s, Lindsay Light Co. manufactured lantern wicks for gas lanterns, coating them with a thorium-based solution.  Their original plant was located at 22 W. Hubbard St, and they later expanded to 316 E. Illinois St. and 161 E. Grand Ave.   The company gave away the sandy by-product of the thorium ore to be used around Streeterville as free landfill material.

Map source - Chicago Tribune April 17, 2014

Map source – Chicago Tribune, April 17, 2014


In the 1930’s, Lindsay Light Co. moved out to West Chicago, and the past use of the properties was forgotten for decades.  In the 1990’s, however, the EPA traced the company’s origins from West Chicago back to Streeterville after investigating radioactive contamination at the West Chicago facility and surrounding areas.  EPA now requires special permits and radiation consultants for developers working in Streeterville and the Near East Side.  All excavated dirt for new buildings, sewer repairs, or other street maintenance must be analyzed with a gamma ray detector.  If any of the dirt exceeds the EPA’s thorium limit, the soil is removed to a special radioactive waste landfill.  Developers of the Loews Hotel and various residential projects in the area have learned that this special protection means construction can take longer than expected – and cost more money too.  In the past decade, more than 50,000 cubic yards of thorium-contaminated soil have been excavated and shipped to a Utah landfill which is licensed to accept radioactive waste.

Developers in the area just got good news from the U.S. Department of Justice, who negotiated a legal settlement with Lindsay Light Co’s successor for a total of $5.1 billion for the continued cleanup of various thorium-contaminated properties across the United States.  Streeterville/Near East Side will receive $121 million for their continued cleanup efforts, and West Chicago will receive an additional $9 million.  To date, West Chicago has spent nearly $750 million cleaning up its radioactive contamination, with much of that funding also coming from earlier legal settlements with Kerr-McGee (Lindsay Light Co’s successor).

“We’re only halfway through the redevelopment of the neighborhood,” said Gail Spreen, the head of the Streeterville Organization of Active Residents. “They’ll likely find more thorium along the way.”

In addition to the thorium contamination, properties in the Streeterville area may also have contamination from other past industrial use.  The area was once heavily industrialized and a busy seaport.  Developers working in the area are learning the importance of doing their full environmental due diligence, including a Phase I Environmental Site Assessment completed by highly qualified Environmental Professionals and following the ASTM E1527-13 standard.  By knowing the site’s history and potential environmental risk prior to purchasing the property, developers can negotiate a better deal for the property and/or require clean up prior to taking title. They will also be able to factor in the additional time and expense to deal with the contaminated soil.

Caveat emptor: let the buyer beware…especially in Streeterville.

Source: Chicago Tribune, “Just off Mag Mile sits city’s toxic past.” 4/17/14.

EPA Superfund information: Lindsay Light Company sites