Phase I Environmental Site Assessment
What is a Phase I Environmental Site Assessment?
Under the general standard ASTM E1527-13 a Phase I Environmental Site Assessment (ESA) is typically performed for a real estate holding that identifies potential or existing environmental contamination liabilities. The analysis, often called an ESA, typically addresses both the underlying land as well as physical improvements to the property. The Phase I ESA is generally considered the first step in the process of environmental due diligence. In general, the assessment is performed to uncover any environmental risks before purchasing a property. Phase I’s are also performed to identify if any contamination’s have occurred since a last Phase I or if a property owner/manager rents the property to an entity that may have caused an environmental concern.
Standards for performing a Phase I site assessment have been promulgated by the US EPA and are based on the updated ASTM standard in Standard E1527-13. The actual sampling of soil, air, groundwater and/or building materials is typically not conducted during a Phase I ESA.
If a site is considered contaminated, a Phase II Environmental Site Assessment may be conducted, ASTM test E1903, a more detailed investigation involving chemical analysis for hazardous substances and/or petroleum hydrocarbons.
If the site has contamination, then a Phase III may be issued. A Phase III is the actual remediation/removal of the contamination.
Who should have a Phase I performed?
Any entity that is going to purchase land to be developed or is a commercial/industrial property, or leases land commercially, should have a Phase I performed. This reduces risk later on that may not have been known. Phase I’s are known to release “Landowner Liabilities”. A big misconception is a deed releases the landowner but it does not, environmentally.
What is performed in a Phase I ESA?
Records review – The examination of a site include scope items such as: definition of any chemical residues within structures; inventory of hazardous substances stored or used on site; review of Federal, State, Local and Tribal Records out to distances specified by the ASTM 1527-13 and AAI Standards (ranging from 1/8 to 1 mile depending on the database). This is:
- Examination of municipal or county planning files to check prior land usage and permits granted;
- Conduct file searches with public agencies (State water board, fire department, county health department, etc.) having oversight relative to water quality and soil contamination issues.
- Examine historic aerial photography of the vicinity.
- Examine current USGS maps to scrutinize drainage patterns and topography.
- Examine chain-of-title for Environmental Liens and/or Activity and Land Use Limitations (AULs).
In most cases, the public file searches, historical research and chain-of-title examinations are outsourced to information services that specialize in such activities.
On-site requirement – Performance of an on-site visit to view present conditions (chemical spill residue, die-back of vegetation, etc.); hazardous substances or petroleum products usage (presence of above ground or underground storage tanks, storage of acids, etc.); and evaluate any likely environmentally hazardous site history to include evaluation of risks of neighboring properties upon the subject property.
All Appropriate Inquiry (AAI) – AAI requires an interview of persons knowledgeable regarding the property history (past owners, present owner, key site manager, present tenants, and neighbors).
Non-Scope Items – include visual inspections or records review searches for:
Asbestos Containing Building Materials (ACM)
Lead-Based Paint Lead in Drinking Water
Threatened and Endangered Species
Qualifications – Under ASTM E 1527-13 parameters were set forth as to who is qualified to perform Phase I ESAs. The new parameter defined an Environmental Professional as
- someone with a current Professional Engineer’s or Professional Geologist’s license or registration from a state or U.S. territory with 3 years equivalent full-time experience;
- have a Baccalaureate or higher degree from an accredited institution of higher education in a discipline of engineering or science and 5 years equivalent full-time experience; or
- have the equivalent of 10 years full-time relevant experience. (defined as an Environmental Professional (EP) by the guidelines of the EPA)
A person not meeting one or more of those qualifications may assist in the conduct of a Phase I ESA if the individual is under the direct supervision or responsible charge of a person meeting the definition of an Environmental Professional when concluding such activities.
Most site assessments are conducted by private companies independent of the owner or potential purchaser of the land.
Specialty Phase I’s
The Small Business Administration’s environmental policy (SOP 50 10 5) has particular requirements regarding environmental due diligence on “high risk” properties, which includes Phase I Environmental Site Assessments and sometimes additional investigation.
Due diligence is done, generally on all “high risk” properties require a Phase I Environmental Site Assessment (according to SBA’s NAICS code list of environmental sensitive industry). “Low risk” properties can start with a lower level of due diligence, usually either an Environmental Questionnaire or a Records Search with Risk Assessment (RSRA) report. There is one exception to the high risk property rule, which is for “car wash only”facilities, where there are no other environmentally sensitive operations such as auto servicing or fueling – these facilities can begin due diligence with the Transaction Screen Report (TSA) which is under the standard ASTM 1528-05.
The scope of work for an SBA Phase I Environmental Site Assessment is the same as the AAI / ASTM E1527-13 scope of work, but there are a few nuances with the report discussed below. The main components of the Phase I ESA are a site and area reconnaissance, review of regulatory and historical records, and interviews withkey site personnel.
SBA Requirements for Dry Cleaners and Gas Stations
Dry cleaners in operation for more than 5 years require a Phase I Environmental Site Assessment and a Phase II Environmental Site Assessment. This is due to the hazardous nature of the most common dry cleaning chemical known as Perc or PCE (perchloroethylene), as well as the high percentage of dry cleaner facilities that have had a release to the environment.
Gas stations (and other commercial fueling facilities) require a Phase I ESA and a compliance review to determine that underground storage tanks and associated equipment are in compliance with state requirements for tightness testing. If the environmental professional determines that further investigation is warranted (for example based on the age of the facility or a failed line tightness test), then a Phase II ESA will be necessary.
SBA Requirements for Child Care Facilities
Child care centers, nursery schools and residential care facilities occupied by children don’t require at Phase I ESA (unless some other high risk use is identified at the property), but if they were constructed before 1980 they must undergo a lead risk assessment for paint and testing for lead in drinking water. This is because children are of course the most sensitive to lead exposure. Lead testing is not required by the SBA for other properties without sensitive occupants.
Services we provide
ECAN provides multiple services with Phase I’s. From sending out our professional members to perform the Phase I ESA, or project overview, to report reviews, we can service your needs.
ECAN also has the ability to generate a Phase I report for your company with the use of our EPA recognized Environmental Professionals (EP). Contact us for the specific details.