The Environmental Condition of the Property

WHILE ENVIRONMENTAL CONSIDERATIONS WILL AFFECT DEVELOPMENT OF THE SITE, WE EXPECT THAT THE CITY WILL HAVE ACHIEVED REGULATORY CLOSURE FOR KNOWN ENVIRONMENTAL IMPACTS, AND THAT, WITH LIMITED EXCEPTIONS, ENVIRONMENTAL CONSIDERATIONS WILL BE GENERALLY CONSISTENT WITH OTHER REDEVELOPMENTS IN DEEP ELLUM.

As with any property but particularly important considering the long industrial history of the Deep Ellum area, redevelopment plans must consider the potential for environmental impacts in soil, groundwater and soil vapor. According to City files, the Service Center property was historically used as a cotton gin and oilfield equipment manufacturer from the early 1900s through the 1970s. The historical facility included repair and machine shops, paint shops, electroplating shops and a foundry. Historical information indicates that underground storage tanks (USTs) were present on the east central portion of the Service Center Property. The City redeveloped the Site in the early 1980s, and the City’s use includes a service shop, fueling center, and car wash, as well as various City offices. In the fueling center, five USTs are currently in use, and various other USTs have previously been in use and removed.

The City of Dallas is actively addressing environmental conditions at the Service Center. Investigations identified petroleum and chlorinated solvents affecting groundwater at the property, primarily in the central portion in the vicinity of the current car wash and fueling center. The City’s response includes response actions under two Texas Commission on Environmental Quality (TCEQ) programs.

• Voluntary Cleanup Program (VCP): First, the City has enrolled a portion of the Service Center in the TCEQ VCP as

VCP No. 2901. The City has also applied for a Municipal Setting Designation (MSD), which would formally prohibit the use of groundwater at the property. With the MSD, the City would only be required to address remaining potential exposure pathways in the VCP property, including direct contact with soil, to obtain a VCP Certificate of

Completion. Working through the MSD and VCP may take 1-2 years, but is likely to result in regulatory closure for this portion of the property. With the VCP Certificate, future owners and operators of the Site would be released from liability to the state for investigation or remediation.

With respect to the VCP, we recommend that the City pursue a Certificate for residential use (with the current use, the City could pursue Commercial/Industrial closure, which would require further regulatory interaction for redevelopment of residential parcels).

• Leaking Petroleum Storage Tank Program: In addition to the VCP, the City has addressed releases from the

USTs through the TCEQ’s LPST program. The City detected phase-separated petroleum hydrocarbons in the subsurface, and removed those to the extent practicable considering the existing development at the property.

The LPST program issued a “No Further Action” letter to the City in 2016.

According to the City’s MSD application, impacts remain in soil and groundwater at the property. It appears likely that regulatory closure will be achieved prior to the commencement of redevelopment. Even with regulatory closure, there will be some remaining environmental considerations for development and construction, including:

• Based on the historical use of the property and the available data, soil management plans will likely be required to provide information on addressing previously undiscovered impacts. Soils may not be suitable for unrestricted reuse off-site, and exported soil may require landfill disposal.

• Residual impacts in groundwater could pose the potential for vapor intrusion to indoor air of future site buildings constructed at grade. The need for vapor mitigation for any specific building should be considered in diligence reviews.

• The existing USTs will need to be removed prior to redevelopment. Considering that residual phase-separated petroleum was allowed to remain in place at the time of the previous No Further Action letter, it is possible that

TCEQ will require additional remediation when the USTs are removed.

In addition to subsurface considerations, based on the age of the buildings, it is possible that asbestos and other hazardous building materials could be present. An asbestos survey should be performed prior to demolition, and asbestos and other hazardous materials abated or properly managed during demolition.