What is a Phase 1 Environmental Site Assessment?
A Phase 1 Environmental Site Assessment is a must when acquiring commercial and/or industrial property. What is a Phase 1 Environmental Site Assessment, often referred to as a “Phase 1 or a Phase 1 ESA”?
A Phase 1 ESA is a report that summarizes a site visit and a records review of a property and its surrounding area to determine if any additional environmental investigation is warranted to understand the liability risks associated with the identified property.
I have listed a brief summary of key activities generally associated with a Phase 1 report:
The purpose of a Phase 1 Environmental Site Assessment is to use a consistent systematic approach to identify any existing or potential environmental conditions that may be present or affect a real estate property.
The process of completing a Phase 1 ESA has four components:
- Records Review
- Chain of title review. What has the property been used for in the past? Are there any uses that raise a red flag based on past usage?
- Determine surrounding land use. This can be a very important part of the assessment as the risk of contamination can increase significantly if the surrounding area or properties have documented or potential contamination.
- Historical aerial photograph review. A report will almost always include historical aerial photographs to review a time-line for development of the property as well as surrounding properties.
- Agency contacts and related record searches. Agencies such as fire departments, local health departments, petroleum tank management associations, water departments, etc., generally are contacted in order to gather current and historical pertinent information concerning the property and the neighboring area.
- Site Reconnaissance
- A visual inspection of the property and improvements plays an important role in a Phase 1 ESA.
- The confines of the building(s) are inspected and property boundary measurements observed. The focus of a Phase 1 inspection is environmental and does not include the structure or any of the systems of the building
- Photographs are taken of the property.
- No physical testing or sampling is conducted during a phase 1 assessment
- Interviews will be conducted with anyone who may have information that would help with the report. For example, past and present property managers, tenants and owners
- If there is concern over surrounding properties, interviews may be conducted with people who have been or are involved with that property.
- Agencies contacted above such as fire departments, local health departments, petroleum tank management associations, water departments, etc., generally are contacted in order to gather current and historical pertinent information concerning the property and the neighboring area.
- Documentation. Findings, opinions and conclusions must be supported by documentation to facilitate the assessment.
- Scope of Services. The report will describe all services preformed in detail to allow for another party to reconstruct the work completed during the investigation.
- Findings. The Findings section indentifies known or suspected recognized environmental conditions.
- Opinion. Includes the environmental professional’s opinions of the impact on the property of conditions indentified in the Findings Section.
- Additional Investigations. The environmental professional should include an opinion if any additional investigations are necessary to further clarify any findings that may indicate there are environmental concerns.
- Data Gaps. Should there be any significant data gaps that affect the ability to evaluate the property these need to be indentified and commented on.
- Conclusions. Provides a summary all recognized environmental conditions connected with the property.
If conditions apply, a Phase II Environmental Audit may be necessary.