Phase I Site Assessment

A Phase I Environmental Site Assessment, also known as a Phase I ESA, a Phase One Environmental, a Site Assessment, and other variations, is a specific standard for evaluating the environmental condition of and liability associated with a real estate asset.  Avant Environmental Services is expert at implementing the ASTM International Standard E 1527-21, Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process.  This standard, which has been in existence for 30 years and is periodically updated, defines the minimum requirements of an ESA.  It must be performed by an “Environmental Professional” as defined in the Standard.  If performed properly, a Phase I will meet the requirements of the EPA’s All Appropriate Inquiry (AAI) Standard referenced at 40 CFR Part 312 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known as Superfund law.  AAI is the process of evaluating a property’s environmental conditions and assessing potential liability for any contamination. Every Phase I Environmental Site Assessment conducted with EPA Brownfields Assessment Grant funds must be conducted in compliance with the AAI Final Rule.  The AAI Final Rule provides that ASTM International Standard E1527-21 and E2247-16, Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process for Forestland or Rural Property are consistent with the requirements of the final rule and can be used to satisfy the statutory requirements for conducting AAI and providing you with protection from liability.  Avant Environmental Services has at times used both standards in preparing a Phase I ESA, for example a large ranch property with an attached commercial operation, or a large parcel adjacent to an urban area.  Either of these ASTM standards meet the requirements of AAI and as such will provide the ESA user with protection from potential liability under CERCLA as an innocent landowner, a contiguous property owner, or a bona fide prospective purchaser.

As such, performing a Phase I ESA should be automatic prior to purchasing or obtaining title to any real estate holding that may have environmental contamination.  And you want someone to prepare it who has much experience with ESAs.  Before you think that there can’t be any contamination on your property, bear in mind that even agricultural lands are known to have had lead arsenate and other persistent pesticides used, or may have had a farm or ranch “dump”, or a prior owner or operator may have performed maintenance on equipment using regulated solvents, or mill tailings may have been used for fill dirt, other potential sources of contamination.  Contamination on adjacent or nearby properties may have impacted your target property, and this information is needed by owners and developers.  In fact, many of our clients have chosen to have an ESA performed prior to selling real estate for the purpose of documenting the environmental condition at the time of the sale, thereby limiting preventing future claims by others for contamination that occurred after the sale.

So what is a Phase I ESA? It consists of several main components. These are:

Historical Research

• Historical aerial photograph review
• Reverse Street Directories
• Topograpic maps including historical maps
• Sanborn fire insurance maps
• Title information
• Library Historical sections or local History Museums
• General knowledge of the history of an area (Avant has worked in our region for over 25 years and knows a great deal of what has gone on here)
• Geological, hydrological, and soils mapping
• Existing environmental reports relevant to the property

Regulatory Research

• EPA and other Federal records including reviews of agency files
• State Environmental agencies (CDPHE, OPS)
• Local fire department, planning department, municipality, and county records

Interviews and Document Review

• Interview Owners, Occupants, Operators, Neighbors, and Purchaser
• Interview State and Local agents and regulators
• Review all provided reports

Site Visit

• Inspection of entire property and all structures by an Environmental Professional
• Catalogue presence of hazardous materials, universal wastes, petroleum products, and other potentially regulated compounds such as polychlorinated biphenyls (PCBs)

Report

• The final report must contain specific elements
• “Recognized Environmental Conditions” as defined by the ASTM standard must be defined in the report
• Recommendations for action may or may not be included as the Client directs

So now you have your Phase I report. What do you do next? If there are Recognized Environmental Conditions, you have several options. You may choose to move forward with the acquisition knowing about the conditions. You may require the Seller to cure those problems prior to transfer. Or you may work out an escrow account to be used by you to remedy the problem. It may be possible to apply for a Colorado Voluntary Cleanup Plan and No-Further Action letter from the CDPHE, which also will protect the owner from CERCLA liability. Utah property owners may similarly apply for a voluntary cleanup.