Phase I Environmental Site Assessment (ESA)

ASTM E1527-21

Unless you are in banking, a veteran in commercial real estate sales or you buy and sell commercial real estate all year long, your understanding of a Phase I ESA will fall somewhere between novice to its some form of inspection.    That sentence is based on close to 30 years of dealing with purchasers of real estate who were told by their legal counsel or bank that a Phase I was necessary to purchase a commercial property.

Here is where people get confused, depending on who is asking for the Phase I, who really benefits varies.

Pro Tip:  When a bank requires a Phase I, the bank is protecting themselves, not you.  They don't want you to default on the load due to expensive environmental issues that devalue the property.  People will stop paying mortgages walk away when remediation expense outweighs property value and the bank is stuck with a contaminated asset.

When a buyer wants a Phase I, they are protecting themselves from buying an environmental cleanup that devalues their asset.   The bank may also require a Phase I for the reason above.

Think about it, it makes sense.

So what can you expect from a Phase I, aside from waiting a few weeks for the Phase I to be completed?

A Phase I Environmental Site Assessment (ESA) is prepared following  ASTM E1527-21.  The AST standard has changed many times over the years.   Your expected scope of  Scope of Work will consist of the following:

• Review of available documentation provided by involved parties as well as a review of historical information from a variety of sources which were readily available (i.e., historical aerial photographs, city directories, historical insurance maps, discussions with knowledgeable people, etc.). The obvious use of the Subject Property shall be defined from the present, back to the Subject Property’s first developed use, or back to 1940, whichever is earlier. If the specific use of the Subject Property appears unchanged over a period longer than five years, then it is not required to research the use during that period.
  
• Review of adjacent property uses only to the extent that this information is revealed in the course of researching the Subject Property itself. The identification of adjacent properties will be identified to a distance determined at the discretion of the environmental professional.
• Review of an environmental database, plotted in accordance with ASTM standards which is defined by the appropriate minimum search distance determined from the outside of the Subject Property measured from the nearest Subject Property boundary, which includes a delineation of both plottable and unplottable sites with associated environmental considerations.
• Review of readily available local, State and Federal information sources for indications of potential recognizable environmental conditions relative to the Subject Property.
• Interviews with past and present owners and occupants of the Subject Property. The interview of past owners, operators, and occupants of the Subject Property who are likely to have material information regarding the potential for contamination at the Subject Property shall be conducted to the extent that they have been identified and that the information likely to be obtained is not duplicative of information already obtained from other sources.
  
• Reconnaissance of the Subject Property and surrounding area to visually identify areas considered to be recognized environmental conditions.

Does any of that look like it would be finished in a couple days?  Clearly not so the novice will be surprised that a Phase I report can take weeks, being thorough is a slow deliberate process. 

What about quality of a Phase I?   Well Phase I quality varies for sure, dependent on the skill level (read experience) of the environmental professional performing the Phase I and also the senior project manager review of the Phase I.  Restaurants, mechanics, really any service industry will have varying degrees of quality and performing a Phase I is no different.   Experience is better with a Phase I.

Pro Tip:  Many firms discount the Phase I so they get the Phase II work.  The Phase II, if necessary is many times the cost of the Phase I, think 5K, 10K 16K.   Even though you may not want a Phase II and only wanted your hand stamped by doing a Phase I, Phase II work is very common.  And most consultants that do Phase I work don't have equipment for Phase II so their cheap price for Phase I is made up on the Phase II. 

At Curren you can expect your Phase I will be performed by someone with at least 10 years experience and we do 90% of our Phase II work in house, which means we save you money.

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