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Why is a Phase I different in San Francisco, California?

Phase I Environmental Site Assessments (ESAs) for commercial real estate in San Francisco, California may differ in several ways compared to other areas. Some potential differences could include:

Geology and soil conditions: San Francisco is located in a seismically active region and has a variety of soil types, including unstable soils and fill material. These factors may affect the potential for environmental contamination and the risk of damage to buildings and structures.

Land use history: San Francisco has a long history of industrial and commercial development, which may increase the likelihood of contamination from previous land uses.

Climate and weather: San Francisco has a Mediterranean climate with frequent fog, which can impact the condition of buildings and structures over time.

Environmental regulations: California has strict environmental regulations, which may impact the scope and requirements of a Phase I ESA in San Francisco.

Overall, Phase I ESAs in San Francisco may require more detailed analysis and consideration of specific local factors to accurately assess the potential environmental risks of a commercial property.

Here’s why:

  1. Many factories and industrial operations sprouted up to meet the growing demand post-gold rush in the mid-1850s, including rail yards, fuel terminals, shipyards, and tanneries. Many of these operations were primarily along the waterfront, especially in the areas South of Market, China Basin, and Bay View/Hunters Point. After the devastation of the 1906 earthquake and fire, reconstruction occurred rapidly and much of the existing shoreline was reclaimed from the bay for real estate development using undocumented fill, which included debris from the 1906 earthquake, adding interest to environmental site assessments.
  2. Another area with a history important to ESAs is the San Francisco Shipyard, which was originally constructed in the late 1800s and was home to Union Iron Works. The area was later acquired by the US Navy at the beginning of World War II and then became known as the Hunters Point Naval Shipyard, which has been shown to have documented cases of contamination that can impact redevelopment and real property transactions.
  3. Many of the commercial office buildings and hotels downtown, in addition to residences throughout San Francisco, were previously equipped with heating oil tanks. Many of these are vaulted tanks either within an encased concrete vault or with earthen floors. The majority of the heating oil tanks are out of use and/or have been removed; however, due to historical use, an Environmental Professional (EP) must be aware that the potential for heating oil underground storage tanks (USTs) exists in San Francisco and it is important to carefully view basement and ground level areas and review records from both the San Francisco Fire Department as well as the Department of Public Health, both of which may maintain old heating oil tank records.
  4. San Francisco is a densely populated region that encompasses an approximate area of 49 square miles. As in any urban environment, the regulatory database report researched as part of the ESA process will often have many regulatory listings that will take careful consideration and will need to be addressed within the Phase I Environmental Report. Because San Francisco is so densely populated, evaluation of the regulatory database report will require more effort than an Environmental Site Assessment conducted in a more suburban, rural, or more recently developed area.
  5. San Francisco has many dry-cleaning facilities throughout the city and can be densely packed in some areas. In addition, old industrial sites and military sites in San Francisco can present vapor intrusion risks, as well as gasoline station sites and other petroleum hydrocarbon-impacted properties.

Given these unique situations around San Francisco’s Phase I ESAs, hiring an experienced professional for your commercial real estate due diligence is important.