What is a Phase I, II & III Environmental Site Assessment?

 

Environmental Site Assessments (ESAs) are sequential evaluations used in commercial real estate to identify, confirm, and clean up property contamination prior to sale.    Phase I, II & III fall under the category of buyer Due Diligence and is meant to protect a purchaser from buying legacy or undisclosed environmental liability.     Environmental liability typically falls upon the owner of the property even if they did not cause the contamination.

phase I ESA

A Phase I is research and visual Inspection of a property, that looks for Recognized Environmental Conditions (RECs).   Phase I is a non-intrusive historical and visual record review of a site history relative to environmental issues.  A Phase I has zero testing, because you are looking to see if any areas warrant testing, which you cannot predict until the Phase I is completed.

 

The photo to the right shows that the property, which is now a medical office was once a gasoline filling station in 1940, which had underground petroleum tanks.  This site would require a Phase II to scan the site at a minimum to see if the tanks are s till present and hence would require removal.  Since the tanks was listed in 1940, they were used decades before environmental regulations and hence the state regulatory agency would not have reports on the property.    The tanks would be considered a REC (Recognized Environmental Condition)

 

 

 

 


Phase II GeophysicalPhase II Environmental

A Phase II investigates the REC to see if an issue is present.   In this situation, the photos above show Curren performing a Geophysical Evaluation of the site with Ground Penetrating Radar (GPR).  The photo to the left shows the GPR unit, the photo to the right shows the GPR detecting multiple buried tanks.  The next step would be Phase II which is removal and testing of the tanks.

Now let's say the GPR did not locate any buried tanks.   As a buyer or seller, you might be happy that no tanks were found?   Well, although you do not have to remove tanks you have to test the soil and groundwater where the tanks were located to verify no contamination is present.

In another example let's say the Phase I finds out the property had a tenant that was a dry cleaner.  The Phase II then would involve physical soil and groundwater sampling.  

A Phase III is remediating an issue that was found as part of the Phase II. If the Recognized Environmental Condition is confirmed, a Phase III would fix the problem. Phase III focuses on site remediation and cleanup.  The photos below show the tank that were found by the GPR survey and the removal of the tanks.

What is a Phase III?Phase III tank removal

 

What does a Phase I, II & III cost?  Clearly costs are dependent on the complexity of the siter. Truth be told, no one wants a Phase I to find issues, but it happens all the time, some general costs for Phase I, II and II are listed below.

 

How much does a Phase I cost? 

A Phase I can cost around $2,000 to $2,800 and 2 to 3 weeks to complete.

 

How much does a Phase II cost?

Phase II can cost $1,000 or $15,000 or more depending on how many RECs must be investigated.

 

How much does a Phase III cost?

Phase III is the physical remediation or an installed and managed engineering control of a problem identified by either a Phase I or Phase II.    A Phase III could cost $10,000, could also cost $275,000, it depends on the complexity.

 

How can you reduce the cost of environmental due diligence, Phase I, II & III?

A Phase I properly takes a few weeks and costs a few thousand dollars, anything less that that is not normal and you will likely get a less than quality product.  But more important, you will get a more expensive Phase II and III because the company has to make up their margin on additional work, kind of like a cheap turkey at thanksgiving, it gets you in the door to buy higher margin good.   So cheaper and faster not always the best.  

Next, know that any Phase I could turn into testing, does the company doing the Phase I do this inhouse or do they subcontract and markup the services?   You can save 20% hiring companies like Curren that do inhouse servicers, this is referred to as turn key.

 

Phase I, II, III Environmental Site AssessmentAt Curen we employ white- and blue-collar personnel to manage all aspects of environmental due diligence.  We own and operate geophysical   equipment, XRF Lead Analyzers, equipment, excavators, drilling units and are licensed for tank removal in 3 States.

 

Bottom line if testing or remediation is required, you are not shopping to find subcontractors to do the work when you engage Curren Environmental you get one stop Turnkey service

 

 

 

 

 

 

 

 

Environmental Due Diligence can be long and expensive and requires professional guidance.

Curren has over 28 year's experience with Environmental Due Diligence

Expert Due Diligence Advice

888-301-1050

 

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