Final Phase I Scope - Nomura Standard.pdf

8/14/2019 Final Phase I Scope - Nomura Standard.pdf

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SCOPE OF WORK

Phase I Environmental Site Assessments

Date: July 12, 2004

NOMURACREDIT & CAPITAL, INC.

2 WORLD FINANCIALCENTER, BUILDINGB

NEWYORK, NEWYORK 10281-1198


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PHASE I ENVIRONMENTAL SITE ASSESSMENTS NOMURA CREDIT & CAPITAL, INC.

SCOPE OF WORKVersion 3 (May 14, 2002)

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TABLE OF CONTENTS

1.0 Introduction.............................. ........................................................ ...................................... 1

1.1 Objective ................................................. ....................................................... ........... 11.2 The Consultant.................................................. ........................................................ . 21.3 Updated Report.............................. ........................................................ .................... 2

2.0 Scope of Work......................... ........................................................ ...................................... 3

2.1 Document Review and Interviews... ........................................................ .................... 32.1.2 General................................................. ........................................................ . 32.1.3 Government Agency Provided Information................................... .................... 42.1.4 Use and Ownership History ........................................................ .................... 62.1.5 Physical Setting Sources .................................................... ............................. 82.1.6 Zoning Designation................................................... ...................................... 9

2.2 Walk-Through Survey............................................................................. .................... 9

2.2.1 General................................................. ........................................................ . 92.2.2 General Site Setting .................................................. .................................... 102.2.3 Interior and Exterior Observations ............................................... .................. 122.2.4 Interior Observations ................................................ .................................... 142.2.5 Exterior Observations ........................................................ ........................... 15

3.0 Special Criteria ..................................................... ....................................................... ......... 16

3.1 Asbestos .................................................. ....................................................... ......... 163.2 Lead.............................................. ........................................................ .................. 173.3 Radon...................................................... ....................................................... ......... 173.4 Vehicle Lifts ..................................................... ....................................................... 183.5

Dry Cleaners..................................................... ....................................................... 18

3.6 Mold......... ........................................................ ....................................................... 19

4.0 Interviews............. ........................................................ ....................................................... 21

4.1 Site Personnel................................................... ....................................................... 214.2 Federal, State Provincial and Local Officials............................................. .................. 224.3 Third Party Personnel............................................................................. .................. 224.4 Prior Assessment Usage ....................................................... .................................... 22

5.0 Preparation of a Report..................................................................... .................................... 22

5.1 Executive Summary................................................................................ .................. 235.1.1 General Description...................... ....................................................... ......... 23

5.1.2 Conclusions .................................................... .............................................. 235.1.3 Project Summary Schedule.. ........................................................ .................. 235.1.4 Recommendations .................................................... .................................... 235.1.5 Operations and Maintenance Plans ....................................................... ......... 245.1.6 Cost Estimates ............................................... .............................................. 24

5.2 Salient Building Facts................................ ....................................................... ......... 245.3 Purpose and Scope ..................................................... .............................................. 245.6 Exhibits...................................................................... .............................................. 25


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5.6.1 Photographs ................................................... .............................................. 255.6.2 Additional Supporting Documentation............................................................. 255.6.3 Questionnaire................................................. .............................................. 26

Appendix

Sample Pre-Survey Questionnaire

Sample Dry Cleaner Checklist

Recommended Scope of Work for Phase II ESA involving Dry Cleaners


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1.0 Introduction

The purpose of this guide is to define expected and customary practice for conducting Phase I

Environmental Site Assessments (ESA) on behalf of Nomura Credit & Capital, Inc. Nomura

Credit & Capital, Inc. and its affiliates (collectively, NCCI), its successors and assigns, ratingagencies and certain investors involved in the Securitization (as defined below) or other disposition,

will use and rely upon this Report in connection with a planned securitization involving the Subject,

or a whole loan sale or other disposition of the related loan (collectively the Securitization),

NCCI, may at its option elect to include selected information in the Report in the offering

memorandum or other disclosure materials relating to the Securitization.

The minimum criteria shall be American Society for Testing and Materials (ASTM) E 1527-00

Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessments:

Phase I Environmental Site Assessment Process, which have been enhanced to meet NCCI

requirements. The specific enhancements are described below. For specific clarification, refer to

the published ASTM guidelines. The report shall be prepared in connection with the proposedrefinancing or financing of all property types (herein referred to as Subject). All ESAs

submitted by Consultant shall comply with the Scope of Work.

1.1 Objective

The purpose of the ESA is to observe and report, to the extent feasible pursuant

to the processes prescribed herein, recognized environmental conditions in con-

nection with the Subject and identify those areas of environmental uncertainty that

warrant further investigation or clarification. The Report will identify those areas

that will require remedial repair work and will assign them an associated esti-

mated remedial cost.

The ESA will be based upon six components:

Documentation Review

Walk-Through Survey

Special Criteria (Asbestos, Lead, Radon, Dry Cleaners, Vehicle Lifts, Mold,

etc.)

Interviews

Preparation of a Report

Without limiting the foregoing, the purpose of a Phase I Environmental Site As-sessment (ESA) is to determine the likelihood that environmental contamination

exists at the Subject due to current or previous activities on or in the vicinity of the

Subject. Based on the results of the ESA, the Consultant will state their conclu-

sions concerning potential environmental liability, the likelihood of any environ-

mental contamination at or surrounding the Subject and compliance with environ-

mental and health and safety laws and regulations. The Consultant will make a

recommendation regarding the need for any additional due diligence (e.g., soil


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and/or groundwater sampling). The ESA shall be completed subject to the most

current ASTM standards and this Scope of Work.

1.2 The Consultant

Approved Consultants will be selected by NCCI based upon the firms experience

with conducting ESAs for securitizations, national recognition, and a consistent

track record of providing a high quality product that is generally well-received by

NCCI, the rating agencies, and investors that rely on these reports. It is our intent

to obtain a consistent level of reporting and standard formatting from a limited list

of approved Consultants. It is recognized, however, that the qualifications of the

Consultant are highly dependent on many factors that may include professional

education, training, experience, certification or professional licensing/registration

of both the Consultants field observers and the ESA reviewer. It is further rec-

ognized that the Consultant has the responsibility to select, engage, or employ the

field observer and the ESA reviewer with appropriate credentials. Notwithstand-

ing, the Consultant shall carry the following minimum insurance coverage:

Type of Coverage Coverage Amount

Workers Compensation Statutory Limits

General Liability $1,000,000 per claim / $2,000,000 aggregate

Umbrella $2,000,000

Automobile $1,000,000

Professional Liability (E&O) $2,000,000 per claim and aggregate

Approved Consultants will be asked to execute a Standard Master Agreement

with NCCI and to provide evidence of the foregoing coverage. All Consultants

will be retained directly by NCCI.

Although, it is NCCIs intent to obtain a consistent level of reporting and standard

formatting from a limited list of approved Consultants, from time-to-time, NCCI

may accept an existing report prepared by a Consultant not on NCCIs approved

list at the time such report is prepared, provided: (i) the report conforms with the

Scope of Work identified in this guide, (ii) the Consultants qualifications and insur-

ance coverage meet NCCI criteria, (iii) the report is certified to NCCI, including

NCCIs standard reliance language, (iv) the report is reviewed by a Consultant

from NCCIs approved list for conformance with NCCIs Scope of Work and

customary industry standards, (v) the existing report was prepared by prior to

NCCI considering financing, and preparation a new report would cause unduecost or hardship to the property owner, and (vi) the existing report was prepared

within the past six(6) months.

1.3 Updated Report

Updated reports are not acceptable. The ESA must be completed in

accordance with this scope of work. Worthy of note; however, the use of prior


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reports in connection with preparation of this ESA is acceptable, and there is no

need to re-do work presented in a previous report, provided that the information

contained in the reports are reliable and proper supporting documentation is

provided so that the Consultant would come to the same independent conclusion.

For example, if the Consultant is relying on historical photographs from a previous

report, the photos must be included and in sufficient detail so the Consultant wouldreasonably come to the same independent conclusion. Previous reports

referenced in the ESA must be included in the report.

2.0 SCOPE OF WORK

2.1 Document Review and Interviews

2.1.2 General

The objective of the document review and interviews is to augment the

walk-through survey and to assist the Consultants understanding of the

Subject and identifying recognized environmental conditions in connection

with the Subject. Prior to conducting the walk-through survey, the Con-

sultant is to provide the borrower with a Questionnaire, which are to be

completed by the borrower or its representative and forwarded to the

Consultant. The Questionnaire will be included as an Exhibit to the Con-

sultants report.

The Consultant should make appropriate inquiries and review only such

record information that is reasonably ascertainable from standard

sources. If information is not practically reviewable or not provided to

the Consultant in a reasonable time for the Consultant to formulate an

opinion and complete the ESA, such fact should be stated in the ESA and

the Consultant is to have no further obligation of retrieving such docu-

mentation or reviewing it if it is subsequently provided. Nevertheless, if

pursuant to the Consultant's appropriate inquiry, material information is

received by the Consultant contemporaneous to the preparation of the

ESA, but too late to be included in the report, the Consultant should for-

ward it to the NCCI with a cover letter clearly defining the assessed

property and a description of the attached information..

Information typically requested from the borrower, or the borrowers rep-resentative include:

Previously Prepared ESAs

Safety Inspection Reports

Asbestos Surveys

Lead Paint Surveys of Inspection Reports

Operation & Maintenance Plans for Lead or Asbestos


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Underground/Aboveground Storage Tank Registrations

Waste Disposal Records

Environmental Permits

Deed Restrictions or Environmental Liens

Historical and Current Tenants Listing

Outstanding citations for environmental violations Chain-of-Title

Leasing literature, listing for sale, marketing/promotion literature, floor

plans, etc.

Building and Site Plan

2.1.3 Government Agency Provided Information

Consultant shall solicit and obtain information or other record information

from government agencies or from commercial services. Records per-

taining to the Subject site as well as adjacent and surrounding propertiesshall be reviewed and an evaluation of potential impacts to the Subject

site shall be performed.

2.1.3.1 Database Review

A database search including a review of all applicable federal,

state and local agency files shall be conducted in order to identify

potential environmental concerns or public health concerns asso-

ciated with the Subject site as well as adjacent and surrounding

properties within the approximate minimum search distances as

outlined in the ASTM Standard E 1527-00 or the most recent re-

vision.

The database search shall include a compilation, summary and

reduction of data and an evaluation of the potential impacts to the

Subject. Orphaned (also known as unplottable) sites must be ad-

dressed within the contents of the report.

The Consultant must determine the potential impact on the

Subject from hazardous waste activities at neighboring properties.

The Consultant must review the most recent information

available on waste sites within one mile of the Subject. This

information may be obtained from state and federal

environmental protection agencies. The Consultant mustcomment on the impact of these sites on the Subject and explain

the rationale for Consultant's opinion.

The Consultant must review at least the following data sources.

Search radii must comply with ASTM 1527-2001:

Federal National Priorities List (NPL or Superfund).


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Federal Comprehensive Environmental Response,

Compensation and Liability Information System (CERCLIS).

Federal RCRA CORRACTS TSD facilities list.

Federal RCRA non-CORRACTS TSD facilities list. Federal

ERNS list.

State lists of hazardous waste sites identified for investigationor remediation; State-equivalent NPL.

State-equivalent CERCLIS.

State landfill and/or solid waste disposal site lists State

registered UST lists for the Subject and adjoining properties.

State leaking UST lists. For identified LUSTs, the Consultant

should note (i) if it is up-gradient, down-gradient, or

cross-gradient to the Subject; (ii) the current status of

remediation; and, (iii) the probability of contamination to the

Subject.

2.1.3.2 Agency F il e Review

Reasonably ascertainable files pertaining to the Subject site shall

be reviewed. Reasonably ascertainable files pertaining to adja-

cent and surrounding sites identified as showing evidence of po-

tential environmental concern shall be reviewed to evaluate po-

tential impacts to the Subject site. This information may include

the following: distance from Subject site, hydraulic gradient from

the Subject site, type and extent of known contamination,

groundwater flow direction, regulatory status of issue, type of

remediation activities being performed or proposed, the status of

any remedial activities, and the likelihood of impact to the Subjectsite, etc.

2.1.3.3 Envir onmental Records Main tained On-Site

Environmental records maintained at the Subject site or available

from the site contact shall be reviewed. These records shall in-

clude, but may not necessarily be limited to: asbestos surveys,

Phase I or Phase II Assessments; contamination assessment re-

ports, remedial action workplans; underground storage tank regis-

tration; leak detection monitoring; construction materials; system

design details; installation details; installation dates; closuredocumentation; vehicle lift and other equipment maintenance re-

cords, frequency of maintenance, removal/decommissioning

documentation including any analytical results; previous environ-

mental site assessments; oil-water separator and/or similar drain-

age unit service records including draining, cleaning, and inspec-

tion records; waste disposal documentation; environmental com-

pliance, etc.


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2.1.3.4 Envir onmental Records Obtained From Other Sources

Pertinent environmental records from sources other than those

discussed above may be available and shall be reviewed. These

other sources may include, but may not necessarily be limited to:

previous site owner/operator(s); site with business associations tothe Subject site (i.e., headquarters site, another dealership with

the same owner as the Subject site, etc.); adjacent and surround-

ing property owner/operator(s), etc.

2.1.3.5 Additi onal Environmental Record Sources

One or more additional state or local source of environmental re-

cords should be checked, if readily available, in accordance with

ASTM Guidelines, to enhance and supplement federal and state

sources identified above. Some types of records and sources

that may be reviewed include: Department of

Health/Environmental Division; Fire Department; Engineering

Department; Planning Department; Building Department; Tax

Assessor; Local Pollution Control Agency; Local Water Quality

Agency; and Local Electric Utility Company.

2.1.4 Use and Ownership History

2.1.4.1 General

All obvious uses of the Subject and surrounding properties shall

be established from the present back to the Subjects obvious

first developed use or back to 1940, whichever is earlier. The

purpose of this review will be to identify potential sources of

contamination from historic site or neighboring site usage.

Particular attention should be focused on identifying past owners

or operations at the site that may have generated, treated, stored

or disposed of solid, hazardous or radioactive wastes, substances

or materials.

All relevant information sources should be investigated to come

to a definitive determination. The following is a list of

recommended information sources to be used in making thisdetermination.

Chain of Title

A chain of title search dating back to at least 1940 or a review of

readily accessible ownership records shall be performed at the

Subject site, if this information is reasonably ascertainable. Re-


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Readily available historic maps such as Bromley Maps, Real

Property Maps and 7.5 Minute Series USGS Topographic Maps

should be reviewed as part of the assessment.

Prior Assessments

Standard Historical sources reviewed as part of a prior environ-

mental site assessments do not need to be searched or reviewed

again, provided the information is determined to be reliable and

the adequate supporting documentation is provided to reproduce

the same result, if the research was independently conducted by

the Consultant. However, uses of the Subject since the prior

assessment should be identified either through standard historical

sources.

Other H istorical Sources

Other credible sources can be used to identify the prior uses of

the Subject . The category includes, but is not limited to miscel-

laneous maps, newspaper archives, and the records in the files

and/or personal knowledge of the property owner and/or occu-

pants.

2.1.5 Physical Setting Sources

2.1.5.1 Topographi cal Map

A current USGS 7.5 Minute Topographical Map (or equivalent)

showing the area on which the Subject is located shall be re-

viewed. One or more additional physical setting sources may be

reviewed.

2.1.5.2 F lood Zones

The Consultant is to note whether the Subject encroaches upon

the 100-year flood area designated as Special Flood Hazard Ar-

eas Inundated by 100-Year Flood on FEMA maps, as amended.

2.1.5.3 Soil Maps

If maps are readily available, a discussion should be included of

the soil information, including, soil types, slope, drainage, texture,

depth, permeability, soil reaction, and depth to the seasonal water

table.


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2.1.5.4 Bedrock/surf icial Geology maps


the geology including physiographic province, formation, material

type, and thickness.

2.1.5.5 Groundwater Maps


the hydrology including source, aquifer formation, and estimated

ground water level. The local and site specific expected

groundwater flow direction and depth shall be determined or in-

ferred based on existing data specific to the Subject site or local

area data. If site specific or local data is not available, the

groundwater flow direction and depth shall be estimated.

2.1.6 Zoning Designation

The Consultant is to identify the zoning designation of the Sub-

ject.

2.2 Walk-Through Survey

2.2.1 General

The Consultant shall perform a complete walkthrough of the entire prop-

erty and a representative number of tenant spaces or apartments. The

Consultant shall make appropriate attempts to obtain access to all portionsof the Subject site and shall note any limitations of access to the Subject

site.

For complexes with multiple buildings, the exterior envelopes of all resi-

dential buildings should be surveyed. For complexes built in phases, each

construction phase should be surveyed. Representative observation of

the interiors should include a mix of units, which are occupied, vacant,

damaged, and under renovation or repair. Representative observation of

the interiors of each construction phase should include a sufficient num-

ber of top and bottom floors. Generally, a representative number of units

shall consist of 10% of all occupied, 100% vacant, and 100% damaged ordown units. The consultant may use their professional judgement for lar-

ger properties, greater than 200 units, if it is determined that the units are

typical, based upon their inspection of at least 5% of the occupied units.

All vacant and down units should be observed.

For non-residential properties or buildings built in phases, each construc-

tion phase should be surveyed. For a property that contains multiple


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buildings, the concept of representative observations extend to each build-

ing individually and not to all buildings as a whole. Representative obser-

vations should include a mix of tenants (occupied and unoccupied) and

common areas. The Consultant shall include a tabular list of the tenants

names and use of the Project. Operational activities of environmental

concern should be discussed, such as industrial processes, dry cleaning,etc. Industrial processes should be discussed from raw material stage to

the finished product. Any required permits should also be discussed.

To the extent that the following items are visually and/or physically ob-

served on the site visit, or identified in the interviews or records review,

they shall be identified in the report.

2.2.2 General Site Setting

2.2.2.1 Curr ent Use of the Subject PropertyThe current use(s) of the Subject shall be identified in the report.

Any current uses of the Subject likely to involve the use, storage,

treatment, disposal, or generation of hazardous substances or

petroleum products shall be identified. Unoccupied spaces should

be noted. In identifying the current uses of theSubject, more

specific information is more helpful than less specific information.

2.2.2.2 Past Use of the Subject Property

To the extent that past uses of properties are visually and/or

physically observed on the site visit or are identified in theinterviews or records review, they shall be identified in the report.

Current uses identified shall be described in the report if they are

likely to indicate a recognized environmental condition.

2.2.2.3 Cur rent use of Adjoini ng Properti es

To the extent that current uses of adjoining properties are visually

and/or physically observed on the site visit, or are identified in the

interviews or records review, they shall be identified in the report.

Current uses so identified shall be described in the report if they

are likely to indicate a recognized environmental condition.

2.2.2.4 Past use of Adjoin ing Properties

To the extent that past uses of adjoining properties are visually

and/or physically observed on the site visit, or are identified in the

interviews or records review, they shall be identified in the report.

Past uses identified shall be described in the report if they are

likely to indicate a recognized environmental condition.


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2.2.2.5 Cur rent or Past Uses of the Sur rounding Ar ea

To the extent that current and past uses of the surrounding area

is visually and/or physically observed on the site visit, or are

identified in the interviews or records review, they shall be

identified in the report. Past uses identified shall be described in

the report if they are likely to indicate a recognized environmentalcondition.

2.2.2.6 Geologic, Hydrogeologic, Hydrauli c, and Topographi cal

Conditions

The topographic conditions of the Subject shall be noted to the

extent visually and/or physically observed or determined through

interviews, as well the general topography of the surrounding

area. If any information obtained shows there are likely to be

hazardous substances of petroleum on the property or on nearby

properties and those hazardous substance may migrate,topographic observations should be analyzed in connection with

geologic, hydrogeologic, and topographic information obtained

pursuant to the Record Review and Interviews to evaluate

whether hazardous substances or petroleum products are likely to

migrate to the Subject, or within or from the Subject, into

groundwater or soil.

2.2.2.7 General Description of the Structures

The report shall generally describe the structures or other

improvements on the property, for example: number of buildings,

stories, age, ancillary structures, heating and cooling systems, etc.

2.2.2.8 Roads

Public streets adjoining the Subject shall be identified in the report

and any roads, streets, and parking facilities on the property shall

be described in the report.

2.2.2.9 Potable Water Supply

The Consultant must identify the drinking water supplier and

verify with the supplier that the water quality is acceptable ac-

cording to federal and/or local guidelines as described below. If

the Subject is on a municipal system, the drinking water does not

need to be tested for lead or other impurities unless lead piping is

utilized (including water fountain supply lines).

If the Subject is not provided with municipal water or if lead

piping is utilized, drinking water samples for the Subject must be

obtained, tested and compared to State drinking water quality


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standards to determine whether compliance is currently being

achieved. If a State program does not exist, Federal Safe

Drinking Water Act standards apply.

2.2.10 Sewage Disposal Systems

The sewage disposal system shall be identified in the report.

Inquiry shall be made as to the age of the system, specific

mention to on-site treatment facilities or septic systems should be

made.

2.2.3 Interior and Exterior Observations

2.2.3.1 Cur rent Use of the Subject

The current use(s) of the Subject shall be identified in the report.

Any current uses of the Subject likely to involve the use storage,

treatment, disposal, or generation of hazardous substances orpetroleum products shall be identified. Unoccupied spaces should

be noted. In identifying the current uses of the Subject, more

specific information is more helpful than less specific information.

2.2.3.2 Past Use of the Subject

To the extent that past uses of properties are visually and/or

physically observed on the site visit, or are identified in the

interviews or records review, they shall be identified in the report,

and current uses so identified shall be described in the report if

they are likely to indicate a recognized environmental condition.

2.2.3.3 Hazardous Substances

To the extent that present uses are identified that store, treat or

dispose of or generate hazardous substances and petroleum

products on the property, hazardous substances and petroleum

products shall be identified in the report and the approximate

quantities involved, container, and storage condition described in

the report. Conditions that do not appear to conform with good

commercial, customary practice, or regulation should be noted.

2.2.3.4 Storage Tanks

Aboveground

The Consultant shall observe and note the presence and location

of all aboveground storage tanks and storage areas.


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The Consultant shall observe and note the presence of secondary

containment around each aboveground storage tank and storage

area.

The Consultant shall visually inspect and note the integrity of

each aboveground storage tank, container and secondary con-tainment structure (if present) in each storage area.

The Consultant shall visually inspect each tank and container and

the surface beneath each tank and container for evidence of

staining or a release that may indicate a potential environmental

impact. If staining or a release is observed, the Consultant shall

visually inspect and note the integrity and type of the pavement

material including the presence of cracks, expansion joints, de-

grading material and floor drains that may indicate a potential re-

lease to the subsurface.

Underground

The Consultant shall observe and note the locations of all under-

ground storage tanks at the Subject . This shall include the loca-

tions of all currently operating, inactive, temporarily out of ser-

vice, abandoned and removed underground storage tanks.

The Consultant shall evaluate the operational status or closure

status of each tank. If the tank is active, the Consultant shall

opine as to the tanks expected useful life. If the tank is inactive,

the Consultant shall, if possible, evaluate if the tank has remaining

product or has been filled with concrete, grout, sand, etc.

The Consultant shall evaluate the regulatory compliance of each

underground storage tank. This shall include, but may not neces-

sarily be limited to, the following: review of tank registration

documents; visually inspecting and noting the presence or ab-

sence of overfill protection; leak detection; corrosion protection,

etc.

The Consultant shall visually inspect and note the condition of the

soil and pavement surrounding each tank for evidence of staining

and overfilling which may indicate a potential environmental im-pact. If staining or evidence of overfilling is present, the Consult-

ant shall note the integrity and type of the pavement material in-

cluding the presence of cracks, degrading material and expansion

joints that may indicate a release to the subsurface environment.


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2.2.4.2 Stains or Corrosion

To the extent visually and/or physically observed or identified in

interviews, stains or corrosion on floors, wall, and ceilings shall be

described in the report, except staining from water.

2.2.4.3 Drains or Sumps


interviews, floor drains and sumps shall be described in the

report.

2.2.5 Exterior Observations

2.2.5.1 Pits, Ponds or lagoons


interviews or records review, pits, pond, and lagoons on the

property shall be described in the report, particularly if they are in

connection with waste disposal or waste streams.

2.2.5.2 Stained Soil or Pavement


interviews, stained soil or pavement shall be described in the

report.

2.2.5.3 Stressed Vegetation


interviews, material stressed vegetation shall be described in the

report.

2.2.5.4 Solid Waste


interviews or records, areas that are apparently filled or graded

by non-natural causes suggesting trash or other solid waste

disposal, or mounds or depressions suggesting trash or other solid

waste disposal, shall be described in the report. In addition thelocation of trash dumpsters, compactors, or disposal areas should

be identified, including any indication of improper storage.

2.2.5.5 Waste Water


interviews or records review, waste water or other liquid


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(including storm water) or any discharge into a drain, ditch, or

stream on or adjacent to the property shall be described in the

report.

2.2.5.6 Wells


interviews or records review all wells (including dry wells,

irrigation wells, injection wells, abandoned wells, other wells, or

irrigation wells shall be described in the report.

2.2.5.7 Septic Systems


interviews or records review all indications of on-site septic

systems or cesspools should be described in the report.

3.0 SPECIAL CRITERIA

3.1 Asbestos

If warranted by the age of the related building(s), the Consultant must inspect the

Subject for asbestos-containing materials (ACM). The purpose of the

inspection is to discover whether significant quantities of ACM were used in the

construction of the building or added subsequently and to determine the

approximate quantity and condition of such materials. As discussed in "Guidance

for Controlling Asbestos-Containing Materials in Buildings," EPA 56015-85-024(June 1985) ("Purple Book"), particular attention during the inspection must be

focused on identifying asbestos-containing pipe and boiler insulation,

texture-finished ceiling and wall materials (popcorn type) and sprayed or

troweled-on structural coverings. Friable ACM (that is, material that releases

fibers when subjected to finger pressure) is of greatest concern.

Samples of materials suspected of containing asbestos must be collected, if

possible, by methods that do not show visible destruction, and should be analyzed

by a qualified professional utilizing polarized light microscopy and dispersion

staining. The number and quantity of samples must be sufficient to provide

meaningful results. For all Subjects, the number of samples taken must be basedon the number of suspected materials observed. If the Consultant determines the

Subject to be free of ACM, the Consultant will so certify such within the report.

The Consultant shall develop and provide, upon request, an operations and

maintenance (O&M) program to maintain in place any ACMs that are

determined to be in good condition. All recommendations are to be made in light

of existing local asbestos handling regulations and must include the cost for

additional testing or remediation, if any.


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The report must include tabulations of the type of material, exact location of the

sample, condition and approximate quantity of the material, and asbestos

concentration. If samples are positive, photographs of typical conditions of the

areas tested must be included. A copy of the laboratory analytical report must be

appended to the ESA.

3.2 Lead

For multifamily projects, residential properties, schools, churches, and day care

centers only, the Consultant must test assets built before 1978 for the presence of

LBP.

An adequate number of samples must be collected commensurate with the

Subjects size to establish the content and condition of lead based paint. If the

Subject was a multi-phased project, all phases should be covered in the sampling.

However, if certain phases were constructed post 1978 it is not necessary to test

them. Between a minimum of 10 and a maximum of 30 samples must becollected, at a minimum of 10 samples per 100 units. In addition, the Subject shall

be tested in one of the following forms depending upon which form shall be more

suitable: 1) chemical reaction swabs (which indicate a presence of lead in excess

of .5% lead by dry weight), 2) XRF (X-ray Fluorescence Technology) and/or 3)

laboratory analysis of chip samples using Atomic Absorption Spectrometer in

accordance with ASTM D3335-85a. Set forth below are suggested surfaces to

be analyzed:

Doors and door frames

Painted woodwork

Stair railings

Chair rails

Window frames, wells and sills

Walls

Any areas of flaking and chipping paint

Exterior hand railings and playground equipment

Other painted surfaces that could be identified as chewable to a child

(typically within 4 feet of the finished floor)

The results of the testing are to be included in the written report along with

recommendations for either no further action, additional testing, remediation or

implementation of a lead based paint O&M program. All recommendations are tobe made in light of existing local lead based paint regulations and must include the

cost for additional testing, remediation of the implementation of an O&M

program.

3.3 Radon


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Record searches must be completed for multifamily projects, residential proper-

ties, schools, churches, and day care centers only, to determine extent of radon

gas in the Subjects geographical area. If the Subject is in an area of known pro-

pensity of accumulation and exposure, based upon review of records, testing must

be completed to determine if the Subject is experiencing radon levels above the

maximum allowable level, as established by the EPA, of 4 Pci/L per million. If itis determined that the Subject is experiencing higher than maximum allowable

levels of radon gas than the Consultant shall recommend additional investigation

or a probable solution to the problem along with the costs to cure.

3.4 Vehicle Lifts

The Consultant shall observe and note the presence, location and type of all

currently operating and former vehicle lifts. The Consultant shall determine if

these vehicle lifts are underground hydraulic lifts or aboveground lift units and if

any subsurface components are associated with each type of these vehicle lifts.

The Consultant shall visually observe and note areas of patched concrete or pav-

ing in the buildings that may potentially indicate locations of former vehicle lifts.

3.5 Dry Cleaners

NCCI shall be advised by the Consultant, through its due diligence, as to the exis-

tence or former existence of on-site dry cleaning operations. If operations are or

were found to exist on site then the following scope of work shall apply and be

initiated after first consulting with NCCI. The review of all current and past ten-

ants must be performed to determine the existence of current or previous dry

cleaning activities.

In an effort to establish a uniform approach to dry cleaning issues, NCCI recom-

mends the following approach with regard to the performance of on-site dry

cleaning. The purpose is to make sure our liability is limited, to a reasonable extent

without going overboard with Phase II recommendations. In each case, a dry

cleaning Checklist should be completed for each operational dry cleaner.

Operational dry cleaning facilities which have either been present on a prop-

erty for more than 5 years and/or have had more than one owner/operator

will be considered a recognized environmental condition and warrant further

evaluation. Additionally, if a dry cleaner operated on the property and is nolonger present, this would be considered a recognized environmental condition

and further evaluation would be warranted.

It should be noted that this policy is NOT intended to exempt dry cleaning fa-

cilities which have not been present for more than five years from scrutiny

and independent conclusions and recommendations. A recent (< 5 yrs.) dry

cleaning operation will be expected to have appropriate secondary contain-


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ment, identification and appropriate disposal of all hazardous waste streams,

and appropriate training/maintenance records for all dry cleaning equipment

that use PCE. The Consultant should affirmatively state these conditions ex-

ist in the report.

The Consultant will verify that the dry cleaner is operating in compliance with allapplicable Federal, State and Local laws. This includes, but is not limited to, any

dry cleaning program that each State may have.

Based upon a thorough field investigation of the surrounding area and examination

of waste manifests, etc. the Consultant shall make a determination as to whether

or not it is evident the dry cleaning establishment has conducted business without

incident or detriment to the environment.

If it is determined, through thorough investigation, that the dry cleaning establish-

ment has not apparently contaminated the environment then no further action is

required by NCCI. Notwithstanding, NCCI may require dry-cleaning establish-

ments to maintain an acceptable secondary containment system for storage drumsand any dry-cleaning equipment if deemed necessary by federal, state or local or-

dinances.

If identifiable risks are found to be evident with the handling practices, age, or

day to day operations of the dry cleaning establishment and, in the Consultants

opinion, those practices or operations may have detrimentally affected the envi-

ronment then a Phase II Environmental Site Assessment may be warranted.

3.6 Mold

A limited Mold Screening evaluation must be performed. The purpose of this task is

to provide limited property investigation to allow the NCCI to evaluate the potential

impacts of mold-related issues concerning the Property. The screening involves a

visual assessment for water-damaged areas, and a visual inspection for mold coloni-

zation and areas of amplification (Scope Abelow). Additionally, consultant will rec-

ommend response actions based on the results of visible observations and sampling,

if performed. It should be noted that a recommendation for additional investigation

and sampling may be warranted in certain situations.

As an option, NCCI may request non-culturable sampling to be performed that will

allow identification of genus, and relative density of mold spores on the area affected

(Scopes Aand B, below). As there are currently no regulatory guidelines concerning

exposure to mold, these sampling results can provide useful information regarding

the aggressiveness of mold growth.

A) V isual I nspection: Consultant will inspect interior building components for con-

spicuous visual indications of mold growth and/or water damage.

For multi-family properties, consultant will inspect the following building

components/areas in the representative number of units inspected (typically 10%):


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- Interior walls and ceilings (bathrooms, kitchens and bedrooms);

- In-unit and common mechanical closets;

- Areas under kitchen and bathroom sinks;

- Flat roofs (for evidence of water ponding);

- Operative status of ventilation equipment (kitchen and bathroom fans).

For retail, office and industrial properties, consultant will inspect the following

building components/areas:

- Interior walls and ceilings;

- Mechanical rooms;

- Flat roofs (for evidence of water ponding).

Additionally, for both property types, consultant will perform the following tasks:

1) Interview the site contact for information related to water damage/intrusion,

mold growth, and tenant complaints;

2) Interview the site contact for information related to maintenance responsibility

(outsourced or in-house staff) history of HVAC equipment, and whether any

operational problems related to moisture accumulation have been identified;

3) Note the presence of olfactory indications of mold (musty odors);

4) Photograph all affected areas observed.

The following activities are excluded from the scope of this limited mold screening.

These activities should not be construed as all-inclusive, nor is it implied that any

exclusion not specifically noted below is a requirement of this screening:

Providing an opinion on the health effects of mold;

Identifying the source of moisture or water leaks conducive to mold growth and

amplification;

Entering of crawl or confined space areas, or determination of previous sub-

structure flooding or water penetration unless easily visible or if such informa-

tion is provided;

Walking on pitched roofs, or any roof areas that appear to be unsafe, or roofs

with no built-in access;

Observation of flue connections, interiors of chimneys, flues or boiler stacks, or

tenant owned or maintained equipment;

Removing or relocating materials, furniture, storage containers, personal effects,

debris material or finishes that obstruct access or visibility;


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Conducting exploratory probing or testing of materials or equipment, or disman-

tling or operating of equipment or appliances;

Reporting on the condition of subterranean or concealed conditions, as well as

items or systems that are not permanently installed or are tenant owned and

maintained;

Entering or accessing any area of the Property deemed by consultants inspec-

tor to pose a threat to the safety of any individual or to the integrity of any build-

ing system or material.

B) Sampling Option: When the conspicuous presence of mold growth is observed

through visual analysis (as described in Scope A, above), consultant may con-

duct limited non-culturable bulk sampling, via tape lift method of each affected

area, or recommend further investigation by a mold remediation specialist

4.0 INTERVIEWS

Interviews shall be conducted in person, by phone or in writing. Proper supporting

documentation should be provided for all interviews, which should be included in the ESA

report. Questions shall pertain to current and historical activities and events that indicate

potential environmental concerns at the Subject site and adjacent and surrounding proper-

ties. This information shall be used to supplement information obtained through the

Records Review and Site Visit.

In the case of referrals made to other people or agencies, the Consultant shall make

follow-up inquiries, when appropriate. To the extent practical, persons interviewed as a

result of previous environmental site assessments shall be questioned again about newinformation learned since the prior assessment.

The following list of sources and types of information to be investigated is not intended to

be a complete list and only serves as a guide for the completion of this task.

4.1 Site Personnel

Site personnel interviewed shall include, but may not necessarily be limited to, the

site manager, maintenance personnel, employees, occupants, tenants, etc. At a

minimum, the Consultant shall request information concerning the following:

Location, age, and construction materials of all former and current above and be-

low ground storage tanks, in addition to staining and leaks associated with any and

all tanks on the subject property.

Location, age and installation design of all former and current vehicle lifts, opera-

tion and maintenance records of vehicle lifts including frequency, amounts of flu-


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ids added, reported leaks, and decommissioning and removal activities including

analytical results.

Information concerning historical or current releases to the environment for the

subject site and adjacent and surrounding properties.

Pertinent information regarding the construction, modification and renovation of

the facility, the presence of former and current utilities and other processes or ac-

tivities which may indicate evidence of potential releases to the environment.

Location, age, construction materials, maintenance and operation information of

all former and current product/waste storage areas and drainage systems.

4.2 Federal, State Provincial and Local Officials

Officials interviewed shall include, but may not necessarily be limited to, representativesof the local fire department, representatives from the local health agency, representatives

from the building, planning, utilities departments, etc., and representatives from the agency

is responsible for environmental matters (i.e., concerning spills, releases, violations,

permits, etc.).

4.3 Third Party Personnel

Interviews with third party personnel shall include, but may not necessarily be lim-

ited to, former site owners, nearby property owners, former employees, tenants,

etc.

4.4 Prior Assessment Usage

Persons interviewed as part of a prior Phase I Environmental Site assessments

consistent with this Scope of Work and ASTM Standard 1527 do not need to be

questioned again about the contents of their answers they provided at the time.

However, they should be questioned about new information learned since that

time, or other questions about conditions since the prior Phase I Environmental

Site Assessment.

5.0 PREPARATION OF A REPORT

Consultant shall prepare a report describing the procedures, observations, and recommen-

dation. It is the desire of NCCI to obtain similar report formats for ease of use and

consistent reporting. Accordingly, NCCI recommends using ASTM Standard 1527 as a

guide. Notwithstanding, the format, each report must contain the following essential

elements.


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5.1 Executive Summary

5.1.1 General Description

The opening paragraph should identify the Subject, and provide pertinentinformation such as use, size, age, location, construction type, design style,

and apparent occupancy status.

5.1.2 Conclusions

The Executive Summary shall include a conclusion that summarizes all

recognized environmental conditions connected with the Subject and the

impact of these recognized environmental conditions on the property.

The report shall include one of the following statements:

We have performed a Phase I Environmental Site Assessment in con-

formance with the scope and limitations of ASTM Practice E 1527 and

NCCI Securities International, Inc. for the (Subject). Any exception to,

or deletions from, this practice are described in this report. This assess-

ment has revealed no evidence of recognized environmental conditions in

connection with the Subject, or This assessment has revealed no evi-

dence of recognized environmental conditions in connection with the Sub-

ject except for the following (to be listed).

5.1.3 Project Summary Schedule

A table of the salient aspects of the investigation should be included in theExecutive Summary.

5.1.4 Recommendations

Recommendations for further investigation must be provided in the ESA

if it is determined that further investigation may provide additional clarifi-

cation of a Recognized Environmental Condition, or quantification. In ad-

dition, recommendation for further investigation should be provided for

any areas of environmental uncertainty that warranted further investiga-

tion.

Recommendations may include a file review, Phase II Environmental Site

Assessments, obtain additional supporting documentation from the bor-

rower or third parties, etc.

In making recommendations for additional investigation, the consultant

must recognize that their recommendation must be practical, and give a

clear direction for NCCI.


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When no recognized environmental conditions and no further action is

warranted, a statement must be included in the report.

5.1.5 Operations and Maintenance Plans

Is some instances, typically encountered areas of environmental concern

can be addressed with a routine solution, such as Asbestos and Lead. In

those cases, it is appropriate to recommend the implementation of an op-

erations and maintenance plan.

5.1.6 Cost Estimates

General cost ranges should be provided, which correspond to recommen-

dations.

5.2 Salient Building Facts

Following the Executive Summary, the consult should provide a one page

summary of the salient building facts, such as Name, Location, Size of

Buildings, Rentable Square Footage, Units, Acreage, Parking, Construc-

tion Type, Mechanical Systems, Borrower name, Site Contact, Date of

Walk Through Survey, Person Conducting Site Visit, On-site Contact,

etc.

5.3 Purpose and Scope

Provide a short paragraph specifically stating the purpose of the report.

Subsequently, a general description of the methodologies utilized. This

section should also identify the date of authorization, any supporting

documentation provided by the borrower of their representative, i.e. plans,

rent roll survey, etc., and person interviewed for the ESA.

This section should also describe any material deviations from this scope

of work.

NCCI standard reliance language identified below must be included in this

section of the report.


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Nomura Credit & Capital, Inc. and its affiliates (collec-

tively, NCCI), its successors and assigns, rating agencies and certain

investors involved in the Securitization (as defined below) or other dispo-

sition, may use and rely upon this Report in connection with a planned se-

curitization involving the loan secured by the Subject or a whole loan sale

or other disposition of the related loan (collectively, the Securitization).NCCI, at its option, may elect to include selected information contained in

the Report in the Offering Memorandum or other disclosure materials re-

lating to the Securitization and the Consultant agrees to cooperate in an-

swering questions by any of the above parties in connection with the Se-

curitization.

5.6 Exhibits

5.6.1 Photographs

Photographic documentation of the site shall include, but shall not be lim-

ited to, the following:

Typical views of the exterior and interior

Typical views of the surrounding properties

Typical views or representative environmental issues investigated by the

consultant (USTs, ASTs, Transformers, Pits, Ponds, Lagoons, Dry

Cleaner Equipment, Mechanical Rooms, etc.)

All material concerns and/or areas of environmental uncertainty dis-

cussed in the text of the report.

5.6.2 Additional Supporting Documentation

The following additional supporting documentation should be included in

the report, if available:

Database Reports

Topographical Map

Aerial Photographs

Site Plans

Laboratory Results

References

Rent role

Leasing literature, listing for sale, marketing/promotion literature, floor

plans, etc.


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Environmental Permits or Registrations

Previous Reports

Any addition information deemed relevant to the report

5.6.3 Questionnaire

Copies of the completed (or incomplete) checklist should be included in

this section.

Final Phase I Scope - Nomura Standard.pdf

Documents

Transcript of Final Phase I Scope - Nomura Standard.pdf