Cost of a Phase I Environmental Site Assessment

Your bank says they need a Phase I Environmental Site Assessment before they will give you a loan. The first question we get is: What is a typical Phase I Environmental Site Assessment cost?

What is a Phase I Environmental Site Assessment?

A Phase I Environmental Site Assessment (sometimes called a Phase I ESA or just Phase I) is a prescribed method of inspecting a property and investigating its history in an effort to uncover potential environmental issues that could adversely affect its value. A Phase I ESA is typically performed by an Environmental Professional in accordance with the American Society for Testing Materials (ASTM) International Standard E1527-13.

Each Phase I ESA follows the same four-stage process:

Records Review
Site Reconnaissance
Interviews
Report Preparation

Complete Phase I Environmental Site Assessment Cost

The cost of a Phase I ESA is reflected in the level of effort required to meet the objectives in the ASTM standard. Factors that go into the level of effort, and therefore cost, for the completion of a Phase I ESA include current property use, historical property use, size of the property, environmental history, use of adjacent properties, location of the property, and experience level of the Environmental Professional who conducts the assessment.

Property use

Is the current business engaged in environmentally-sensitive activities? For example, does the business store or manufacture chemicals or petroleum products? Are there polychlorinated biphenyl (PCB) transformers on the property? Are there drains or disposal pits on the property? The more sensitive the industrial use of the property, the more effort will be involved to complete the assessment.

Historical use of the property

Did any previous owners of the property operate environmentally-sensitive businesses? The current owner may operate a benign business but if the previous owner operated an environmentally -sensitive business, the assessment may have to be much more extensive.

Size of the property

Is the property a small building on a ¼ acre parcel or does it co Phase I Environmental Site Assessment cost nsist of large industrial buildings on several acres? Larger properties require much more time to complete an assessment.

History of regulatory activity

Are there existing environmental permits in place(air, water/National Pollutant Discharge Elimination System (NPDES), waste, wetlands, etc.)? Is there a history of notices of violations, citations, claims, enforcement actions, administrative proceedings, or complaints/lawsuits (including threatened or pending) regarding environmental problems? The more regulatory activity associated with a property, the more time it will take to complete the assessment.

Adjacent property use

Are there environmentally sensitive businesses on neighboring properties? Waste from neighboring properties can spread beyond their borders and cause adverse impacts. The level of effort required to ascertain the potential for offsite impacts varies with the types of businesses in the area.

Location of the property

Is the property in a remote location? Are records available? An Environmental Professional must travel to inspect the property and may also have to travel to Federal and state offices in order to inspect regulatory files. The more travel time required, the higher the cost.

Experience level of the Environmental Professional

ASTM requirements dictate the minimum qualifications of the Environmental Professional who is responsible for the final report. However, based upon the complexity of the property, it may be wise to engage someone with more than the minimum experience.

Environmental liabilities can severely affect the value of a property and sometimes even exceed the value. Under Federal regulations, liability is imposed regardless of fault and is also joint and several, meaning that liability can be imposed regardless of relative contribution. A Phase I ESA is used to mitigate this risk.

At Ambipar Response EMS, the average cost for a Phase I Environmental Site Assessment ranges from $1,800 to $4,000. Our staff of professionals has performed hundreds of site assessments. Based upon this experience we can review the cost factors ahead of time and provide a firm quote. If a more extensive Phase II ESA or site remediation is required for proper due diligence, we have that experience as well.

Please feel free to contact us with any further questions regarding Phase I ESAs.