Phase I Environmental Site Assessments

PM Environmental completes comprehensive Environmental Site Assessments (ESA) in accordance with the (1) United States Environmental Protection Agency (USEPA) Standards and Practices for All Appropriate Inquiries {(AAI), 40 CFR Part 312} and (2) guidelines established by the American Society for Testing and Materials (ASTM) in the Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process / Disignation E 1527-05/13 (ASTM Standard Practice E 1527-05/13): Phase I Environmental Site Assessment, for real estate transactions, property development,  bank financing, re-financing, and foreclosures, and other in-house proactive audit programs.

The purpose of a Phase I Environmental Site Assessment is to gather sufficient information to develop an independent professional opinion about the environmental condition of the property and to identify actual or potential environmental contamination, which may impact the property value or affect claim to an “innocent land owner” exemption following acquisition.

Services include:

  • Completed to ASTM 1527-2005/2013 standard satisfying All Appropriate Inquiry

  • Executive Summary, Clear Scope of Work, and Provision of Supporting Documentation and Sources Checked are included in the Phase I ESA

  • In-house research department with extensive archive of historical information

  • On-Site reconnaissance for a standard Phase I ESA with in-depth interviews of knowledgeable site contacts

  • Interviews with appropriate Government and Private Sector Sources of Information

  • Review of standard environmental record sources from local, state, and federal agencies within ASTM approximate minimum search distances

  • Regular updates for all stakeholders during process

  • Strict client confidentiality

  • Clear summary of Recognized Environmental Conditions (RECs)

  • Incorporation of specific lender requirements for issuance or reliance language for the purposes of making loan decisions.

  • If conditions warrant additional investigation, a written Phase II Environmental Site Assessment proposal describing means for identifying and characterizing environmental contamination revealed during a Phase I ESA will be prepared upon request

  • HUD, Fannie Mae/Freddie Mac compliant

  • Use of PARCEL for multiple site portfolios

  • Visual inspection for the purpose of identifying suspect Asbestos Containing Materials (ACMs).

  • Vapor Encroachment Condition (VEC) screening availiable upon request in accordence with ASTM Standard 2600-10.

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Phase I Environmental Site Assessments (ESA’s) should be an essential step in acquiring commercial or industrial property, but there are many questions stakeholders involved have about Phase I ESA’s. Phase I Environmental Site Assessments are the introductory phase of investigating if there is a potential for environmental risk or contamination on a property that would affect the value of the real estate property and if additional investigation and testing is warranted.

What Initiates a Phase I ESA?

There are several reasons why a property may require a Phase I Environmental Site Assessment:

Transfer of Ownership

Many transfers of ownership of a commercial property are required by law to receive a Phase I Environmental Site Assessment.

Financing

Many banks will not approve a loan for the purchase of a property if a trained environmental professional has not reviewed the property for risk of environmental contaminants. This reduces risk of the transaction and gives them a more reliable figure of the value of the property.

What Are the Concerns?

There are many contaminants on a property that could require further testing and remediation. These are some of the common concerns with a property that may be addressed in a Phase I ESA. If the property used to contain or still contains underground storage tanks or above ground storage tanks, then there is a risk that they may have leaked over time and the soil and/or groundwater is contaminated with petroleum hydrocarbons.

  • Petroleum Hydrocarbons
  • Indoor Air Quality
  • Lead
  • Asbestos
  • Mold
  • Radon
  • Pesticides
  • Polychlorinated Biphenyls
  • Radiological Hazards
  • Wetlands
  • Endangered Species
  • Cultural and historical resources
  • Ecological resources

What is the Process?

ASTM International has issued a set of standards known as Standard E1527 for environmental professionals to follow in order to conduct a Phase I ESA accurately and to set a consistent standard for Phase I ESA’s. These standards are frequently updated to cover additional hazardous materials, as it was done recently. Banks and other lenders may request additional investigations done that are not included in the list of ASTM standards.

Review of Records

The environmental professionals will examine records that show previous transfer of ownerships of the property and what the properties were used for. Any heavy industrial activates might raise some red flags and warrant further inspection or testing in a Phase II ESA. Aerial photographs will also be reviewed to show any historical changes or developments done on the property or on surrounding properties.

Site Reconnaissance

A site reconnaissance involves a visual inspection of the property and the surrounding properties. Pictures may be taken of the property and some measurements may be conducted, but testing for environmentally hazardous materials is not conducted in a Phase I ESA.

Interviews

Interviews may be conducted with anyone or any organizations that can be helpful in providing additional information on the property or surrounding properties. The environmental professionals may meet with local health departments, fire departments, water departments, and petroleum tank management associations.

Report

A written report will be conducted by the environmental professionals that will outline the findings from the Phase I ESA and any conclusions that can be made regarding the property. If environmental contamination may be present, a Phase II Environmental Site Assessment may be recommended.

Changes to the ASTM E1527-13

In 2013, the ASTM updated the standard for Phase I Environmental Site Assessments with the E1527-13, which immediately replaced the E1527-05 standard. The majority of the changes were to include more detailed guidance on provisions that were already in the standard.

For a more detailed explanation of the ASTM E1527-13 and changes made, please read our article - A Closer Look at the ASTM E1527-13 Changes.

Not familiar with the Environmental Due Diligence Process? Click here for the basics

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