Kelly Caris - Phase I ESA Forest Site Walk

Before you can proceed with developing a piece of real estate, there are certain steps you must take. One of those is the Phase I Environmental Site Assessment (ESA). This article explores what it is, the entire process, and what to do after an assessment.

What is a Phase I Environmental Site Assessment?

A Phase I environmental site assessment reviews the environmental condition of the property to determine the extent of real estate development that can be carried out. This assessment analyzes the current and historical uses of the land to understand if development will be a liability to the landowner due to potential or known contamination.

Who completes the Phase I Environmental Site Assessment?

The environmental analysis is done by an environmental professional (EP) according to the American Standard for Testing and Materials. You can reach out to an environmental firm to hire and consult with an EP.

Is Phase I ESA necessary?

Phase I ESA is obligatory on any property that is larger than 4 units. It is compulsory for all commercial properties but not necessary for multi-family properties. A Phase I ESA can help a purchaser meet the All Appropriate Inquiry (AAI) and qualify as an Innocent Land Owner.

What is the Phase I ESA process?

The Phase I ESA process comprises site visits, reviews of multiple databases and historical records. 

In detail:

  • The first step is a site visit to the property and adjacent properties to observe current use.

  • Then, there is a review of federal, state, tribal, and local regulatory databases to observe the historical use of the land. Among the things looked out for are USTs, ASTs, and a history of hazardous substances.

  • There is also a review of agency records to determine if there are records with the health department, fire department, etc.
  • The EP may look at historical aerial photographs, topographical maps, city directories, and fire insurance maps.
  • There will be interviews with people familiar with the property including past and current owners, occupants, and operators.
  • Finally, there will be an interview with the Report User. The Report User is the person requesting the assessment. It determines how much the person knows about the land and if the person is eligible to use the innocent landowner defense.

What are the results to expect from Phase I Environmental Site Assessment?

At the end of a Phase I ESA, the EP will look at concerns found and make recommendations. If no concerns were detected, there would be no need for any other assessments. If anything is detected in the land, a Phase II assessment will be warranted.

You can expect the following results from a Phase I ESA: REC, CREC, HREC.

The Recognized Environmental Condition (REC) indicates that there may be contamination of the land.

A Controlled Recognized Environmental Condition (CREC) indicates that there was a previous contamination that was investigated under regulatory guidance. However, the contamination is still present and requires continued compliance with engineering and/or institutional controls. Changes to the property use will require regulatory approval.

A Historical Recognized Environmental Condition (HREC) shows that there was a historical release on the property that has been granted regulatory closure. The contamination has been remediated and the property can be redeveloped.

What steps to take after a Phase I ESA depend on the results of the assessment. 

If your property has no RECs, you can go ahead with the purchase and development of the land. If an REC is found, you should carry out a Phase II ESA to confirm contamination and determine next steps.

Leaaf Environmental provides landowners, real estate developers, engineers, and architects with in-depth environmental assessments done to the satisfaction of the most current ASTM standards. Contact our experts today to learn more.