Environmental Site Assessments

Frequently Asked Questions About Phase I Environmental Site Assessments

What is a Phase I ESA?

A Phase 1 environmental site assessment (ESA) is the initial part of environmental due diligence in evaluating the environmental conditions of an industrial or commercial property. To find out if a commercial or industrial property may present an environmental risk (i.e., before a sale), a Phase I ESA is conducted, which is essentially a review of property and regulatory files, personnel interview, and a walk-over of the property.

A proper Phase I ESA is required to provide liability protection for prospective purchasers, contiguous landowners, or innocent landowners. A Phase 1 ESA protects these entities from environmental liability under the federal Comprehensive Environmental Response, Compensation and Liability Act, known as CERCLA. If potential spill or release areas are identified on the property, then a Phase II investigation (where soil and groundwater samples are collected for analysis) is typically performed.

Even with the Innocent Landowner Defense, it is necessary for commercial real estate owners to do their due diligence to find out whether contaminants and environmental risks are likely to be present. Most of the time, lending institutions will require a Phase I and/or Phase II ESA before approving a loan on a commercial property, especially if the real property is a site where a gas station or an underground storage tank was formerly located.

What is involved in a Phase I ESA?

A Phase 1 ESA is an evaluation of the current and historical uses of a subject property and the activities that have been conducted at a site, for the purpose of identifying all areas at which a release to the environment has occurred or will imminently occur.

The goal of the Phase I ESA is to identify “recognized environmental conditions” (REC) on a property. ASTM has published an industry standard for conducting Phase I ESAs under ASTM Standard 1527-13 (also known as ASTM E1527-13), which also has been accepted by the U.S. Environmental Protection Agency (EPA) to meet the All Appropriate Inquiry (AAI) standard. The EPA is the federal regulatory agency that has the power, through CERCLA, to hold property owners responsible for any release of hazardous materials / contaminants on their land and ensure that adequate cleanup occurs.

Phase I ESA tasks include reviews of site regulatory files, review of local and historical records relevant to understanding the current and historical uses of the property, interviews with personnel knowledgeable of site activities, and a site visit. These tasks need to be performed by or under the supervision of a qualified environmental professional.

What is involved in a Phase 1 ESA in Connecticut?

The State of Connecticut uses its own standard for Phase I ESAs that are included in the Connecticut Department of Energy and Environmental Protection (CTDEEP) Site Characterization Guidance Document (SCGD). In accordance with the SCGD, the goal of the Phase I ESA is not only to identify site releases and imminent releases, but to also identify all areas at which a release to the environment has the potential to have occurred. These potential releases are called “areas of concern” or AOC. A Phase I ESA in Connecticut should also provide sufficient evidence on whether the site meets the definition of an “establishment” and is subject to Connecticut’s Transfer Law.

What is not part of a Phase I ESA?

A Phase I ESA does not include lead or asbestos testing, radon testing, or any other hazardous building material testing. A Phase I ESA does not include site or facility compliance evaluations nor does it include the collection and analysis of soil, water or air samples.

How long is a Phase I ESA good for?

The shelf life of a Phase I ESA is typically one year but may be less or more based on the intensity of use at the site and judgement of the environmental professional. For example, if the site has been vacant for two years, a Phase I ESA report may be usable over that period.

What is the difference between a Phase I and Phase II ESA?

A Phase II (ESA) is the continuation of the environmental due diligence process and an evaluation of the RECs or AOCs identified during the Phase I ESA. The goal of the Phase II is to confirm or refute the presence of releases from each of the AOCs or REC.

During a Phase II ESA, soil, groundwater, surface water, or soil vapor samples are collected from the property in question and analyzed by laboratories for chemicals of concern. If these chemicals, or contaminants, are found in the environment, additional sampling and testing or remediation may be necessary.