A Environmental Site Assessment is a report prepared for a real estate holding which identifies potential or existing environmental contamination liabilities. The analysis, often called a ESA, typically addresses both the underlying land as well as physical improvements to the property; however, techniques applied in a Phase I ESA never include actual collection of physical samples or chemical analyses of any kind. Scrutiny of the land includes examination of potential soil contamination, groundwater quality, surface water quality and sometimes issues related to hazardous substance uptake by biota. The examination of a site may include: definition of any chemical residues within structures; identification of possible asbestos containing building materials; inventory of hazardous substances stored or used on site; assessment of mold and mildew; and evaluation of other indoor air quality parameters^[1]. Contaminated sites are often referred to as "brownfield sites." In severe cases, brownfield sites may be added to the National Priorities List where they will be subject to the U.S. Environmental Protection Agency's Superfund program.

Actual sampling of soil, air, groundwater and/or building materials is typically not conducted during a Phase I ESA. The Phase I ESA is generally considered the first step in the process of environmental due diligence. This type of study is alternatively called a Level I Environmental Site Assessment. Standards for performing a Phase I site assessment have been promulgated by the US EPA^[2] and are based in part on ASTM in Standard E1527-05.^[3] If a site is considered contaminated, a Phase II Environmental Site Assessment may be conducted, ASTM test E1903, a more detailed investigation involving chemical analysis for hazardous substances and/or petroleum hydrocarbons.

Actions triggering the Phase I ESA

A variety of actions^[8] can cause a Phase I study to be performed for a commercial property, the most common being:

• Asbestos Containing Building Materials (ACBM)
• Lead-Based Paint
• Lead in Drinking Water
• Mold
• Radon
• Wetlands
• Threatened and Endangered Species
• Earthquake Hazard
• Vapor Intrusion

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

Phase II Environmental Site Assessment is an investigation which collects original samples of soil, groundwater or building materials to analyze for quantitative values of various contaminants^[9]. This investigation is normally undertaken when a Phase I ESA determines a likelihood of site contamination. The most frequent substances tested are petroleum hydrocarbons, heavy metals, pesticides, solvents, asbestos and mold.

Phase III Environmental Site Assessment is an investigation involving remediation of a site. Phase III investigations aim to delineate the physical extent of contamination based on recommendations made in Phase II assessments. Phase III investigations may involve intensive testing, sampling, and monitoring, “fate and transport” studies and other modeling, and the design of feasibility studies for remediation and remedial plans. This study normally involves assessment of alternative cleanup methods, costs and logistics. The associated reportage details the steps taken to perform site cleanup and the follow-up monitoring for residual contaminants.

A variety of actions^[8] can cause a Phase I study to be performed for a commercial property, the most common being:

• Asbestos Containing Building Materials (ACBM)
• Lead-Based Paint
• Lead in Drinking Water
• Mold
• Radon
• Wetlands
• Threatened and Endangered Species
• Earthquake Hazard
• Vapor Intrusion

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

Phase II Environmental Site Assessment is an investigation which collects original samples of soil, groundwater or building materials to analyze for quantitative values of various contaminants^[9]. This investigation is normally undertaken when a Phase I ESA determines a likelihood of site contamination. The most frequent substances tested are petroleum hydrocarbons, heavy metals, pesticides, solvents, asbestos and mold.

Phase III Environmental Site Assessment is an investigation involving remediation of a site. Phase III investigations aim to delineate the physical extent of contamination based on recommendations made in Phase II assessments. Phase III investigations may involve intensive testing, sampling, and monitoring, “fate and transport” studies and other modeling, and the design of feasibility studies for remediation and remedial plans. This study normally involves assessment of alternative cleanup methods, costs and logistics. The associated reportage details the steps taken to perform site cleanup and the follow-up monitoring for residual contaminants.