Phase I – Environmental Site Assessments

Phase I
Environmental Site Assessments

The Phase I Environmental Site Assessment (ESA) consists of a more thorough investigation than the TSA. The objectives of a Phase I ESA are to assess the current condition and use of a subject property, historical land uses at a subject property, past and present uses of adjacent properties and their possible environmental impact on a subject property, and to identify Recognized Environmental Conditions (RECs), Historic Recognized Environmental Conditions (HRECs), Controlled Recognized Environmental Conditions (CRECs) and Vapor Encroachment Conditions (VECs) at the subject property.

A REC is defined by the ASTM as the presence or likely presence of any hazardous substances or petroleum products on or at a property: 1) due to any release to the environment; 2) under conditions indicative of a release to the environment, or 3) under conditions that pose a material threat of a future release to the environment.

A HREC is defined by the ASTM as a past release of any hazardous substances or petroleum products that has occurred in connection with the property and has been addressed to the satisfaction of the applicable regulatory authority, without subjecting the property to any required controls (e.g., property use restrictions, Activity and Use Limitations, Institutional Controls, or Engineering Controls).

A CREC, which is a new type of REC, is defined by the ASTM as a REC resulting from a past release of hazardous substances or petroleum products that has been addressed to the satisfaction of the applicable regulatory authority (e.g., as evidenced by the issuance of a No Further Action letter or equivalent, or meeting risk-based criteria established by the regulatory authority), with hazardous substances or petroleum products allowed to remain in place subject to the implementation of required controls (e.g., property use restrictions, Activity and Use Limitations, institutional controls, or engineering controls).

A VEC is defined by the ASTM as the presence or likely presence of vapors from COCs in the subsurface of a property caused by the release of vapors from contaminated soil and/or groundwater on or near the property.

Migrate/migration is defined by the ASTM as the movement of hazardous substances or petroleum products in any form from either soil, liquid at the surface and/or subsurface, and/or vapor in the subsurface.

The Phase I ESA is conducted in general accordance with the American Society for Testing and Materials document Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process document (ASTM E 1527-13), and the Environmental Protection Agency’s amended All Appropriate Inquiry (AAI) rule (40 CFR 312).

It consists of four key components: 1) Records Review, 2) Site Reconnaissance, 3) Interviews, and 4) Report Preparation.

The records review includes searching through Federal, state, and local lists which identify problem sites. The approximate minimum search distance may vary depending on the list, however, it is typically a one-mile radius for state and Federal hazardous waste site lists and a one-quarter-mile radius for other lists. The search is performed by a data management computer service. Information about the subject property’s physical setting such as topography and geology is also reviewed. Available information concerning the historical use of the subject property is researched and includes the review of the following: aerial photographs, city directories, fire insurance maps, tax records, a chain of title records, and other historical sources. If available, geotechnical reports and other previous assessments, construction drawings, grading plans, permits, Material Safety Data Sheets, and other information are reviewed.

The most crucial component of Phase I ESA is site reconnaissance. During a site reconnaissance, a LandScience environmental professional visits the subject property and visually inspects the exterior of the subject property and the interiors of the on-site facilities. Observations are documented in writing, and distinguishing features are photographed. Information concerning the uses of the subject property is gathered during the site reconnaissance. The general condition of the adjacent properties, geologic or hydrologic setting, structures, water supply, and waste disposal methods are also investigated during the site reconnaissance.

Exterior observations include the identification of water bodies, evidence of underground storage tanks, stained soils, stressed vegetation, waste containers, groundwater monitoring wells, etcetera. Interior observations include the identification, use, storage, and disposal of hazardous materials and petroleum products, tanks, odors, miscellaneous containers, the existence of possible polychlorinated biphenyl (PCB) containing equipment, etcetera. Heating and cooling systems, stains, drains, and sumps are also noted and documented.

The third component of Phase I ESA consists of locating, interviewing, and questioning persons knowledgeable about the subject property and the occupants of the subject property. Typically, as part of the interview process, local regulatory officials familiar with the subject property area are contacted and interviewed.

Once the first three components of the Phase I ESA are completed, an evaluation of the information gathered is conducted and a Phase I ESA report is prepared. The report includes concise conclusions and recommendations for further action if needed. It also includes photographs showing distinguishing features observed during the site reconnaissance, a site plan, a site location map, and copies of key documents (such as pertinent regulatory information)

What is Phase I – Environmental Site Assessment (ESA)?

Phase I Environmental Site Assessment (ESA) is a standard environmental due diligence process conducted to evaluate the potential environmental liabilities associated with a property transaction, such as buying or selling of commercial or industrial property. It is a critical step in any commercial real estate transaction, and it is designed to identify the presence or potential for contamination on the property that could pose a threat to human health and the environment.

The Phase I ESA typically includes a comprehensive review of available public records, site history, and interviews with site personnel to identify potential environmental concerns that may affect the property’s value. The process also involves a physical inspection of the property to identify potential sources of contamination, including underground storage tanks, chemical spills, and other hazardous materials.

The goal of the Phase I ESA is to identify potential environmental liabilities associated with the property, which may include contamination, regulatory violations, and other environmental issues. The findings of the Phase I ESA are typically summarized in a report that provides recommendations for further investigation or remediation if necessary.

The Phase I ESA is typically conducted in accordance with the American Society for Testing and Materials (ASTM) Standard E1527-13, which is the industry standard for environmental site assessments. The report is a critical tool for lenders, buyers, and sellers, as it provides critical information for making informed decisions regarding the property transaction.

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