For this week’s blog we’ll look at Phase I Environmental Site Assessments (Phase 1’s), which is often the due diligence starting point for a broad range of properties both inside and outside of New Jersey.  Although a Preliminary Assessment (PA) is the first phase of the process set forth in the New Jersey Technical Requirements for Site Remediation, we’ll focus on Phase I’s as they are commonly required by lending / financial institutions and conducted in accordance with ASTM Standards.  So…why do a Phase I and “How much will it cost and how long will it take?” 

Start with the why: the purpose of a Phase I ESA is to enable a party to satisfy one the CERCLA landowner liability protections. In layperson’s speak: the Phase I ESA allows a party to identify environmental “issues” on a commercial Site (real property) before taking ownership and potentially becoming liable for someone else’s spill and/or contamination.   

How much and how long will it take? If an environmental professional tells you $1,000 and it will take 1-week to complete, you must have found a super black Friday deal!  But wait…are you willing to accept a lower-value effort to save a few dollars, especially when the long-term costs associated with soil and/or groundwater contamination could be tens of thousands of dollars, if not millions?    Hopefully not.  A Phase I ESA that is completed in accordance with current ASTM standards will typically take a few weeks, cost between $2,000 and $3,000 and be completed by an environmental professional with at least 5 years of experience.

Some other key points to consider:

• Professional judgement varies between individuals and corporations, which may ultimately impact whether a Recognized Environmental Condition (REC) is properly identified and whether future investigations are warranted.

• Local or state agencies generally must respond to an Open Public Records Act (OPRA) request within 7 days (these are generally key resources to obtain “historical” information on a Site).

• Phase I ESAs do not include testing or invasive studies, mold, lead-based paint, asbestos and radon (generally referred to as non-scope considerations).

• Consider talking with a reputable real estate or environmental attorney.

• A Phase I ESA should not be viewed as a commodity, as the quality, consistency, and pricing is highly variable. 

For further information regarding Phase I’s (and/or the Due Diligence process), please don't hesitate to contact us.  tfrancis@cardinallsrp.com