Phase I & II Environmental Site Assessments

The Environmental Site Assessment (ESA) is an important part of any commercial property transaction and may also be a requirement for a LEED project. Federal, State and local laws make current and prior property owners liable for the cost of cleaning up contaminated soils, groundwater and surface water. If you are buying – or financing – a property, you need to know if any contamination or hazardous conditions exist before the transaction. The cost of cleanup may not be limited to your property, but may include adjacent properties where surface and groundwater contamination might have originated from your property. ESAs are the industry standard to screen for costly environmental contamination issues.

A variety of actions can cause a Phase I ESA to be performed for a commercial property, the most common being:

  • Purchase of real property by a person or entity not previously on title
  • Contemplation by a lender to provide a loan on the subject real estate
  • Partnership buyout or principal redistribution of ownership.
  • Application for LEED designation
  • Application to a public agency for change of use or other discretionary land use permit
  • Compulsion by a regulatory agency who suspects toxic conditions on the site
  • Divestiture of properties

Phase I ESAs conducted and produced by KEM are prepared in accordance with ASTM E-1527-05. Generally, a Phase I ESA investigates historical and current uses of the property to identify recognized environmental conditions which may impact continued use or planned development of a site. Environmental sampling is generally NOT a part of a Phase I ESA. If a significant environmental concern is discovered as a part of a Phase I ESA, there is generally a recommendation to conduct a Phase II ESA.

Phase II ESAs are conducted if the Phase I ESA identifies a “Recognized Environmental Condition,” or concerns that require further testing and evaluation. The purpose of a Phase II ESA is to perform environmental sampling and data collection that will allow for an objective, specific, and analytical solution(s) to environmental concerns that were identified as a part of the Phase I ESA. A typical Phase II ESA may involve drilling for a subsurface evaluation of potentially contaminated soils or groundwater, or sampling for indoor air quality concerns from suspected vapor intrusion issues at the subject property.