The Phase 1 Environmental Site Assessment (Phase 1 ESA) updates have been finalized by the ASTM and forwarded to the EPA for final review and approval. Summer of 2022 is expected to be the date of approval and adoption. Could these changes impact the amount of money that developers spend on Phase 1s and Phase 2s?
Changes to the Phase 1 ESA standard is focused mainly on “clarifications” vs actual changes. The most important part of the update is the clarification that historical research (done during the Phase 1 ESA) include “adjacent sites” in a more indepth manner than in the previous standard. It also clarifies that for the “subject site” – which types of historical sources need to be reviewed (at a minimum).
Historically, a consultant used keywords in the business name or permit search to identify any high risk uses (dry cleaners or hazardous materials). The updated standard lines out the requirements on what the EP should research to arrive at that conclusion. This includes, but isn’t limited to: Aerial, Topographic Maps, Sanborn Maps and City Directories. Based on the research – if any “high risk” property types are identified: industrial, retail and manufacturing) – the environmental professional will be required to do a deeper dive. The goal is to answer the question: What did they do? What did they use (hazardous materials or petroleum products?
Simply put, what that means is that if you are purchasing or refinancing a retail, industrial or mixed use property and the adjacent sites are properties with multiple tenants and a long occupancy history- the responsibility of the person performing the Phase 1 ESA (environmental professional, EP) is to investigate with a high level of certainty the businesses that occupied the adjacent site.
Most reputable firms that have a clean history of performing Phase 1 ESAs (without being sued) – they already dealt with this level of detail on their Phase 1 ESAs. Specifically, being deliberate about reviewing the available data and going into detail on the surrounding sites. When any environmental professional from Essel reviewed adjacent site data and saw any “high risk” uses – we knew we needed to do a deeper dive and verify. Going the extra step to verify is something that we see as our duty – regardless of whether the ASTM standard now mentions it. For our technical team – it was the only way to do the report and to provide the results our clients need.
While the clarifications for the EP on the subject & adjacent site history can be a big change – there are other smaller changes to the standard that will impact the way the Phase 1 ESA is prepared and written – but not necessarily a significant impact on the turnaround and cost.
We highlight some of those changes here:
- Title Searches: more in-depth title searches that are required to go back to 1980 (as opposed to the last title change of ownership)
- Data Gaps: EP required to identify in the report any data gaps that may have prevented them from reaching a conclusion or identifying the historical uses of the site
- Definitions: Various types of definitions are being updated so that EPs stay consistent
- How long is a Phase 1 ESA good for: 180 days from when the initial work was started NOT the date of report
For our next blog post – we will cover the three (3) questions you should ask any company preparing your Phase 1 ESA.