What is a Phase I Environmental Site Assessment?
- What Does a Phase I Environmental Site Assessment Include?
- How Much Should You Expect to Pay for a Phase 1 Environmental Site Assessment?
- What If You Need to Perform a Phase II ESA?
- The Benefits of Phase I Environmental Site Assessment
- Do You Need a Phase I Environmental Site Assessment for a Child Care Facility?
- Related Articles
You may need a Phase I environmental site assessment (ESA) if you purchase or redevelop a commercial building – including schools and child care facilities.
Here’s what that means.
When you buy or lease a piece of commercial property, the last thing you want to happen is to get hit with a bunch of unforeseen costs down the road. Yet, unfortunately, this happens all too often.
For example, say you buy commercial property intending to open a child care center. Things are going well until one day, the state comes in and tells you that you need to re-do part of your development because of some contamination on your site, which poses a risk to the children.
Alternatively, maybe an environmental issue pops up that wasn’t previously disclosed on the commercial real estate listing, and now it’s too late to back out of the deal.
Cases like these are not uncommon, but they can be avoided with a Phase I environmental site assessment (ESA).
A Phase I ESA will provide you with an accurate assessment of the environmental risks located on a commercial property. The inspection will uncover any potential for hazardous substances on a site that may threaten human health or the environment before the property is acquired.
The results of a Phase I ESA inform you of any environmental issues that need to be addressed on the property – and provide you with information to deal with any challenges that may arise. From there, you can make a more informed decision regarding the acquisition of the commercial property.
What exactly does a Phase I ESA entail, and how much will it cost? Let’s take a closer look.
What Does a Phase I Environmental Site Assessment Include?
Typically, a Phase I ESA involves a historical review and on-site inspection of the commercial property by an environmental consulting firm. After completing the assessment, they’ll compile their findings into a report for your review.
Here’s what you can expect:
Historical Review of the Property Site
During a Phase I ESA, your environmental consultant(s) will research the history of the property and the land it’s built on. The historical review helps uncover any previous use or activities on the site that could have exposed the property to hazardous materials.
To get a complete understanding of the site’s history, your environmental consultant(s) may need to do some detective work. This typically involves combing through public records and speaking with previous owners, neighbors, and community members for any information about the property.
The records reviewed during a Phase I ESA may include the following:
- Property ownership records
- Property tax records
- Government documents of zoning, land use, and environmental activities near the site
- Aerial photos of the site from different periods in history
- Regional historic resource surveys
- Hazardous material disposal records from local government agencies (if available)
On-Site Inspection of the Property
In addition to reviewing the site’s historical records, your environmental consultant(s) will conduct a thorough inspection of the property site and surrounding area.
During the on-site inspection, your environmental consultant(s) will walk around the property for any visual signs of waste or contamination – which may include the following:
- Unusual materials or substances in the soil
- Former underground storage tanks
- Noticeable odors
- Evidence of spills or leaks
- Dead vegetation
Report of Findings and Recommendations
Once the Phase I ESA is completed, your environmental consultant(s) will provide you with a clear, concise, and easy-to-understand report of the findings and recommendations. The report will include a summary of the work completed and details about any hazardous materials found on the site.
If any soil or water samples revealed a positive presence of hazardous material, the report would suggest mitigating the contamination. Mitigation may include removing or properly disposing contaminated soil or capping the area where hazardous materials were detected. They may also recommend a follow-up Phase II ESA to test for any contaminants in the soil or water.
You can use the report of findings and recommendations to help make informed decisions about your property. For instance, you may be able to renegotiate a better deal on the purchase price or cancel the deal entirely.
If you decide to buy (or lease) the commercial property that’s contaminated, the Phase I ESA report can help you put together a successful remediation plan.
How Much Should You Expect to Pay for a Phase 1 Environmental Site Assessment?
Now that you know what a Phase I ESA entails, you’re probably wondering how much you should expect to pay for the service.
In most cases, the cost of Phase I ESA falls somewhere between $2,000 to $5,000. However, the cost of a Phase I ESA can vary depending on factors like the size of your property and the environmental consultants you hire.
For example, you may pay more for a larger property with multiple buildings than you would for a smaller building on one acre of land. Additionally, you’ll likely need to pay more for a Phase I ESA if your environmental consultants need to travel a long distance for the inspection. However, many environmental consultants offer a free quote ahead of time.
Keep in mind that the total cost of a Phase I ESA shouldn’t be the only deciding factor when choosing an environmental consulting firm. You should also consider factors like environmental consultants’ experience and their history of success.
When comparing prices and services, be sure to check how long it takes for an environmental consulting firm to complete this service, their qualifications, and what they will include in their reports.
What If You Need to Perform a Phase II ESA?
Suppose your environmental consultants detect hazardous materials during the initial site assessment, and you still plan to purchase the property. In that case, you may need to conduct a Phase II Environmental Site Assessment.
During a Phase II ESA, your environmental consultants will collect samples from your property and then send them to a laboratory for testing. The lab will analyze the samples in their entirety and provide you with a report for each test performed.
Finally, your environmental consultants will use the results to determine whether or not your soil is contaminated and what (if anything) should be done to clean it. Based on those test results, they will recommend a course of action that will help you meet environmental laws and regulations.
The cost of this procedure can get expensive because you must pay for each test performed. However, it’s necessary if you want to ensure the safety of your employees and customers – and avoid expensive fines and penalties.
The Benefits of Phase I Environmental Site Assessment
A Phase I ESA can help you save time and money in the long run by identifying potential environmental risks before you purchase or redevelop a property.
An environmental site assessment can also help you determine whether or not the property you’re thinking about buying is safe for commercial purposes. Nobody wants to harm the health of their employees and customers by purchasing a contaminated property. This is not only a moral issue; it can also result in lawsuits and hefty fines.
Finally, a Phase I ESA can help you demonstrate due diligence to your lenders. For example, if you can prove that your company took proactive steps to ensure the safety of the property before buying it, lenders will be more likely to approve your loan application.
With a Phase I ESA, you’ll be able to rest easy knowing that your commercial property is safe for your business.
Do You Need a Phase I Environmental Site Assessment for a Child Care Facility?
If you’re thinking about buying commercial property for a child care facility but have concerns about its conditions, the team at Paul Sakson Environmental is here to help.
Our firm has been providing quality environmental assessments to child care facilities in the state of New Jersey for more than 25 years. We’ll carefully inspect the property and surrounding area for any signs of hazardous contaminations that could affect the health of children and staff – so you can have peace of mind in your investment.