Phase I Environmental Site Assessment
Enviro Consulting & Mitigation offers Phase I Environmental Site Assessment. This service (also known as ESA or Phase I ESA) researches the current and historical uses of a property as part of the commercial real estate transaction process. Our goal is to assess if tenants had ever used the property in a way that impacted the soil or groundwater.
In some cases, contaminated soil or water sources underneath a property pose a threat to the environment and human health. If these issues are found, it presents a potential liability for the lender and/or owner, and affects the value of the property.
A Phase I ESA completed before a real estate transaction is complete satisfies the requirements of CERCLA’s (Comprehensive Environmental Response, Compensation and Liability Act) innocent landowner defense under All Appropriate Inquiries (AAI).
Phase I ESA reports apply for all properties including vacant land, agricultural land, multi-family residential properties, commercial land, and industrial land. All Phase I ESA reports must comply with ASTM E1527-13 (exceptions are made for properties that are primarily undeveloped land, see ASTM E2247-16 for details).
A Phase I ESA typically includes the following:
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A site visit to record current and past property conditions, the use of the property, and the use of adjacent properties.
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Federal, state, tribal, and local regulatory databases often review underground storage tanks (USTs), aboveground storage tanks (ASTs), known or suspected contamination cases, hazardous substance storage sites, and hazardous waste disposal sites (including petroleum products, institutional solvents, and engineering controls).
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A thorough review of historical records, such as insurance documents, maps, and production records.
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A review of state and local agency records, including but not limited to state environmental agencies, Building Departments, Fire Departments, and Health Departments.
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Interviews with current and past property tenants or those familiar with the property.
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Interviews with the Report User for title or judicial records for environmental liens and activity and use limitations (AULs). It is the User’s responsibility to provide any and all information to qualify for the innocent landowner defense.
This research is then evaluated by the Environmental Professional (EP) to identify environmental risks to the property. Risks can include current or historic operations that are known (or suspected) to have used hazardous substances or petroleum products. Common hazardous operations include dry cleaners, gas stations, auto repair shops, printing operations, and manufacturing. ASTM E1527-13 also addresses issues concerning contamination in soil vapor and the vapor migration potential as a risk to surrounding tenants.
The discovery of certain hazardous substances is often recorded. This included asbestos (or related materials), lead-based paint (LBP), mold growth, and high levels of lead or radon in drinking water. While not required for Phase I ESA, these tests can be included upon request.
On-site projects associated with Fannie Mae, Freddie Mac, U.S. Department of Housing and Urban Development (HUD), and the Small Business Association (SBA) each have their own report requirements.
Once a Phase I ESA is complete, the EP will summarize their concerns and make recommendations about what actions are needed.
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A recognized environmental condition (REC) indicates contamination or potential contamination.
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A controlled recognized environmental condition (CREC) identifies that the property has been affected by contamination and was investigated and remediated.
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A historical recognized environmental condition (HREC) identifies the property was affected by contamination at some point and has been investigated and remediated.
The identification of a REC will often include a recommendation for a Phase II Environmental Site Assessment to collect soil, groundwater, or soil vapor samples to analyze contamination levels.