A Phase 1 Environmental Site Assessment (ESA) is an evaluation and report of environmental risks that commercial real estate either currently faces or could face in the future. The ESA must adhere to ASTM Standard E1527-13 and the All Appropriate Inquiry (AAI) requirements to protect purchasers of commercial property. It is common that a Phase 1 ESA is required by a lending institution providing the funding for a purchase or refinancing.
Also known in the industry as environmental due diligence, the ESA addresses potential environmental issues with the commercial land, the structure and the neighboring properties. The reports generated by Alpha are extremely comprehensive and may contain several hundred pages of discussion and background information. Our digitally prepared reports are well organized and written to be easily understood, yet are compliant with the most stringent financial institution requirements. We take our Phase 1 Assessment very seriously and will use as much information as possible to provide you with the most accurate picture of the site.
“If you need solid professional service for environmental testing, assessment or cleanup without the drama I recommend you give Alpha a call. This is a company that even the people who work there like! You will get prompt no-nonsense service. They explain even complicated issues to your client in understandable terms giving them confidence to make their decisions. You will be glad you called. . . . “- Cathleen Woodruff Aug. 2013
What considerations are there with a Phase I ESA?
- Phase 1 ESAs aim to identify any Recognized Environmental Conditions (RECs).
- If the Phase 1 ESA identify RECs that require further investigation, a Phase II assessment may be necessary.
- Industrial and other complex sites will require more time to review all relevant information and will cost more.
- An “environmental professional”, as defined by the ASTM, is required to sign-off on the report.
- ESAs can be very subjective and the final decision relies on the experience of the environmental professional. It is important to hire a company that has extensive experience with Phase I ESAs so subjectivity is decreased.
- Phase 1 ESAs are valid for six months and may be amended within one year of the report date.
- Depending on the changes that have been made since a previous Phase 1 ESA was completed, in many cases it may be more prudent to generate a new report.
What is included with a Phase I ESA?
- Prepare owner and User questionnaires and provide to client.
- Comprehensive database records review of all available federal, state, local and municipal records.
- Review of Historic land use.
- Site reconnaissance of the subject property and surrounding properties.
- Interviews with site tenants, property owner, local officials and other applicable sources.
- Review of previous environmental documents and reports.
- Review of historic permits including underground storage tank permits.
- Photographic documentation of property and surrounding property.
- Local geologic setting, soils characterization and groundwater use.
- Aerial photograph and Sanborn Fire Insurance Maps review.
- Review of other documents such as building department records, tax assessment maps and title records.
- Detailed report summarizing findings and provide recommendations if applicable.
Here an example of how much properties and surrounding areas can change over time. The aerial photographs below show the same location of SE 82nd Avenue and SE Division Street in Portland Oregon. The first photograph is form 1935 and shows spare residential development. The second photograph is from 2009 and shows dramatic residential and commercial development. The environmental professionals at Alpha have looked at literally thousands of these photographs and many times can identify historic hazards long since gone.
Why do I need to do a Phase 1 ESA?
In 1980, Congress passed legislation that contained a concept where an innocent purchaser of property would be held liable even if they didn’t cause the contamination themselves. Essentially, fault was assigned purely based on ownership. In 1986, additional legislation was passed that included an “innocent landowner” defense as long as the purchaser followed “All Appropriate Inquiries” (AAI).
To create a standard for these inquiries, the American Society for Testing and Materials released their first version of the E 1527 process, more commonly known as the Phase 1 Environmental Site Assessment. While the E 1527 process has gone through various revisions over the years, it continues to be a set of strong guidelines that can help property buyers stay protected in the event of property contamination.
Common Concerns Discovered During a Phase 1 ESA
- Underground Storage Tanks.
- Former gas stations.
- Automotive repair facilities.
- Dry cleaners.
- Improperly stored or leaking drums and containers.
- Stained and/or contaminated surface soil.
- In ground hydraulic lifts.
- Illegal dumping.
- Old electrical transformers that may contain PCBs.
- Unregistered drywells.
- Wrecking yards.
What does a Phase 1 ESA cost?
The cost of a Phase I ESA is dependent on many things. The ASTM and AAI requirements for the Phase I are very stringent and are designed to protect the buyer and/or financial institution. A Phase I ESA on simple property with no apparent historic concerns is about $2,400. More complex properties like industrial sites, former gas stations and dry cleaners require more time for research and higher costs should be anticipated.
If you are in need of a Phase 1 ESA or would just like to talk to someone about your property, call Alpha Environmental today at 503-292-5346 for more information.