What is included in a proper Phase I Environmental Site Assessment?
The competition for environmental companies who perform Phase I Environmental Site Assessments (or Phase I) is fierce, with many companies competing for work from the same banks or lenders. As a result, there can be a wide range in cost estimates to conduct a Phase I for a property. However, the old adage, “you get what you pay for” routinely comes into play when comparing costs from different vendors and the lowest cost isn’t always the best deal.A proper Phase I completed in accordance with the American Society for Testing and Materials (ASTM) starts with a thorough site inspection, where the inspector visually observes every accessible area of the property. Any areas of a property that cannot be inspected are considered a limiting condition and should be identified in the report accordingly. A competent professional will document any limiting conditions, so the client will have an understanding of the areas which a complete evaluation could not be completed.
A proper Phase I doesn’t end after the site inspection. It is also important to review historical documents such as aerial photographs, Sanborn Fire Insurance (Sanborn) maps, city directories, historic topographic maps and any other critical documents that might be part of the local or State records. An example includes a Sanborn map which may show a small circle on a property with the letters “GT”, which stands for Gas Tank. Is it still there? Was it removed? Did it leak? Not looking for and including this little circle with the letters “GT” in your evaluation can lead to liability issues. We have seen Phase I reports where the basement wasn’t entered, only to have subsequent inspections find an oil tank switch or an old dry-cleaning machine. Instances like this open up the dreaded environmental risk can of worms and in the end, it could be the new property owner who has assumed a significant liability because a more cost-effective Phase I was conducted.
Professional database companies are also an important part of performing a thorough Phase I. These are services utilized by a reputable environmental company in order to evaluate potential and identified issues with a property or adjoining property that could lead to liability issues down the road. It should be the goal of your Phase I provider to limit your liability by researching and reviewing everything possible for a property. Whether it’s a small commercial property or a large industrial property, each property should be thoroughly evaluated and reviewed by competent professionals. You get what you pay for has never been more true with Due Diligence as environmental regulations are becoming more rigorous and the costs associated with remediating a property keeps getting higher. Hiring trained and competent professionals for your Due Diligence needs is the first step to reducing your liability. It might even help you sleep better at night knowing you are paying a little more to get a whole lot more.
Craig Sadowski, an environmental consulting professional, has 21 years of experience in the consulting industry. He is a project manager at Brockerhoff Environmental Services LLC.