A Phase I ESA is a report ordered by stakeholders in real estate transactions to provide disclosure on possible or existing environmental contaminants on a property site or its surroundings.
WHAT IS A PHASE 1 ENVIRONMENTAL SITE ASSESSMENT?
A Phase I Environmental Site Assessment, or Phase I ESA, is a report ordered by stakeholders in real estate transactions to provide disclosure on possible or existing environmental contaminants on a property site or its surroundings.
WHO NEEDS A PHASE I ESA?
Buyers, owners, investors, developers, lenders – any person or organization taking on substantial risk in a real estate transaction will benefit from having the findings of a Phase I ESA before the transaction is concluded
Most lenders, as well as the US Small Business Administration, require environmental due diligence be completed before approving commercial loans
All property buyers who wish to avoid the weight of liability for environmental contaminants already existing on or near the property in question, are required to conduct a Phase I Environmental Site Assessment to be eligible for CERCLA liability protection
WHY DO I NEED A PHASE I ENVIRONMENTAL SITE ASSESSMENT?
The vast majority of lenders require environmental due diligence before approving commercial loans. In addition, proper due diligence is a stakeholder’s greatest weapon for reducing the delays and surprises that often derail a deal.
Some of our clients work within rapid turnaround times, while others have more time to make their decisions. But one thing everyone shares is the desire to avoid obstacles and address potential issues up front.
At the end of the day, you need a Phase I Environmental Site Assessment for any property in which you’re a stakeholder for the peace of mind of having a comprehensive understanding of the possibilities, obstacles and costs associated with lending for, or making a new property purchase.
Even if a “recognized environmental condition” (REC), “historical recognized environmental condition” (HREC), or “controlled recognized environmental condition” (CREC) is identified by the Phase I ESA, you can still close the deal and avoid federal clean-up liability through a legal defense known as the “bona fide prospective purchaser.”
But without completing a Phase I ESA prior to closing on the property, you effectively forfeit this and all other “innocent landowner” legal defenses against a recognized environmental condition liability.
WHAT IS THE PROCESS FOR A PHASE 1 ESA?
The goal of a Phase I Environmental Site Assessment is to identify or rule out the presence of RECs. All valid Phase I ESAs adhere to the latest ASTM standard: E1527-13.
At EBI, your Phase I ESA begins with you. It is extremely helpful and can often decrease the turnaround time of a report when you provide:
- The reason for your transaction: are you acquiring, selling, financing, etc.? The plan for the property can help your consultants hone their approach
- Timing for the report: How fast do you need it? Are there transaction deadlines waiting for the results?
- Property details: construction date, acreage, square footage, age of the building, etc.
- Historical information about the property and building operations
- Any known concerns about the property or prior reports
- Site access concerns: Is the roof inaccessible? Is it challenging to access in the winter?
From there, your consultant will begin crafting the scope of work required to produce a comprehensive Phase I ESA.
WHO CONDUCTS PHASE I ENVIRONMENTAL SITE ASSESSMENTS?
This is an important question many real estate stakeholders forget to ask. According to the EPA’s standards for All Appropriate Inquiries (AAI), an Environmental Professional (EP) must conduct or be in responsible charge of all appropriate inquiries (a Phase I ESA is one way to satisfy AAI).
So… who conducts Phase I ESAs? The short answer is, it depends who you hire.
It could be a qualified and seasoned Environmental Professional like one of EBI’s 400 full-time employees. Other providers may staff the job with a new college graduate in training under a qualified EP, or sub the job out to a freelance EP who will visit your site, take down notes with his/her assessment, and email them to the consulting firm’s “report generator,” who, having never set foot on or seen your property, writes your Phase I ESA.
At the end of the day, much of the quality in your Phase I depends on who you hire. Look for a consultant with a robust and experienced full-time staff of EPs to save yourself from costly oversights and liability.
HOW MUCH DOES A PHASE I ESA COST?
With EBI, a standard Phase I ESA ranges in price between $2,000-$5,000 or more.
At EBI, we pride ourselves on delivering the highest quality, most comprehensive assessments a consulting team can provide. We do not sacrifice the quality of your data for the sake of brevity, nor do we send out inexperienced apprentices to your property site, for the sake of reducing our costs.
EBI is widely known for being comprised of the best, brightest, most experienced real estate environmental professionals. We are a unified and dedicated team of senior staff specialists, collaborating daily to meet our clients’ goals and needs.
There are cheaper options than EBI Consulting. It’s up to each stakeholder to decide what matters most: a cheaper, corner cutting, faster-than-average report, or a rapid turnaround of in-depth insights that help drive sound business decisions and negotiations.
WHY SHOULD I CHOOSE EBI CONSULTING OVER OTHER ENVIRONMENTAL CONSULTING FIRMS?
If you were supervising the cross-country shipment of a valuable work of art, would you hire:
An experienced moving company that subcontracts out different segments of the trip and relies on several drivers, trucks, stops, and dispatchers to keep the artwork intact and on track for timely delivery, or
An experienced moving company with the track record and capacity to execute a direct route with a single truck and safe and timely delivery?
Can you tell which type of service EBI strives to provide?
We pride ourselves on hiring and retaining the highest caliber engineers, scientists, and technical experts who work as a collaborative team on project after project, amassing knowledge and experience both as individuals and as a cohesive team.
EBI has the know-how, capacity, and decades of experience serving as trusted partners to our clients across every phase of their real estate investments.
The EBI Advantage is simple: exceptional outcomes from exceptional analysis. No short cuts. We meet your unique needs, solve problems, and create value for your business.