If you’re in the process of buying or refinancing a commercial or industrial property, you’ve probably heard of a Phase I Environmental Site Assessment. The analysis, often called an ESA, is a report that identifies potential or existing environmental contamination liabilities.
What does an ESA involve? A trained professional known as an “environmental professional” investigates the property through review of historical records (aerial photographs, fire insurance maps, and topographic maps), government records, interviews with current and past property occupants/owners, and a thorough site inspection. This information is used to determine if there are any conditions that indicate releases of petroleum or hazardous materials/chemicals at the site, now or in the past. These conditions are known as RECs or recognized environmental conditions.
ECSI recently worked on an ESA for a gasoline station. This was a little more interesting since the underground storage tanks are a recognized environmental condition. As part of our research through the Underground Storage Tank Branch we found there had been a petroleum spill on the property, fortunately it was effectively mitigated by an environmental emergency response company.
It’s important to understand that a Phase I ESA is only a visual, surface site inspection and document review. There is no drilling, sampling or testing during a Phase I. Still, an ESA can find information not within the scope of the project such as the presence of asbestos, mold, or wetlands.
What’s the result of a Phase I? The environmental professional draws conclusions from the site inspection and record research to identify any RECs and to make recommendations for further investigation. Very often, if no REC’s are found or as in the case of the gas station, the facility is in operational compliance with all state requirements, then no further investigation is required.