LAND LESSONS- Phase One Environmental Site Assessment  

What is a Phase One Environmental Site Assessment? 
You’re a developer searching for a great site for a residential community driving a road you seldom drive. You see water and sewer lines being installed, new homes under construction, as well as a new grocery-anchored shopping center.  
A mile down the road, you see a homemade “For Sale” sign in front of a stand of woods. The owner lives in Florida and recently inherited the land from her grandma. Her price is very fair. You know you can build several hundred houses on those fifty acres. Builders will purchase finished lots here. Looking at the back of the envelope, you smile. These numbers work. This purchase is going to make you rich. 
What you don’t know is what you don’t know. A Phase One, or “ESA”, ferrets out risk by investigating the history of the subject property and adjacent properties. 

The first step is to hire a firm specializing in these studies. The property owner completes a questionnaire. This is followed by a site visit to observe current conditions and, if possible, past conditions. A review of federal, state, local, and tribal databases to determine if the subject or adjacent properties ever held an above ground storage tank (AST) or underground storage tank (UST) that could have leaked is completed. Petroleum from a gas station a quarter mile up the road can migrate underground, contaminating all properties in its path. Next, historical records are examined – aerial photographs, topographic maps, directories of businesses, Sanborn fire insurance maps to determine if there is anything in the history of the subject property or adjacent property that may have caused any type of contamination. Lastly, the researcher will review public records looking for any red flags which can include fines, title or judicial liens that may have been placed against the property. 

If little is found, a Phase One Environmental Site Assessment Report is issued. The cost is $1500 – $4500 and the process takes less than a month. 
Why do a Phase One?  

Risk management. Under federal law, if you purchase a property that you can demonstrate was not shown to be contaminated at time of purchase. If you had an ESA performed, you are entitled to claim the “Innocent Purchaser Defense” under the Comprehensive Environmental Response, Compensation, and Liability Act, (CERCLA), commonly known as the Superfund law, should the site later be found to be contaminated. Without it, you could be held responsible for the environmental clean-up and possible fines; thus, lenders will mandate an ESA to mitigate risk. 
Thanks to your Phase One ESA, you discover what you didn’t know about that stand of woods for sale. Historical aerial photos showed that in 1952 the land was an apple orchard which points to land potentially contaminated with arsenic pesticides. This problem may be able to be mitigated once contamination is confirmed through a Phase 2 site assessment….. but that is a story for another day.