What is a Phase I Environmental Site Assessment Checklist

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A Phase I Environmental Site Assessment (“ESA”) is the first step of due diligence within the transactional process of a commercial property. Whether requested by the current owner, a potential buyer, a financial lender, a real estate agent, a lawyer or a governmental official, the Phase I ESA determines and assesses actual or potential contamination onsite, be it via current activities, historical operations, or leakage from a neighbouring property. More information about the Phase I ESA can be found here.

Diving deeper into the report, a thorough Phase I ESA report is systematic and methodical; combining observations seen on-site with current and historical property records, as viewed through the eyes of a designated environmental specialist. Evaluating the following categories in a checklist-like sequence ensures that diligence is adhered to and no stone is left unturned. With over 30 years of experience in conducting Phase I ESAs, Venture Engineering’s diligence begins here:

  • Geographical Site Information: The geographical location, types of activities undertaken on-site, and the industries, utilities and activities undertaken in proximity of the site may all have an environmental impact on the property. By identifying hazardous waste, known contamination, or other relevant environmental litigation for which the property is a subject, Recognized Environmental Conditions (“RECs”) can be brought to light and addressed.
  • Review of Historical Property Records: Through the review and investigation of current and historical aerial photographs as well as documentation of past businesses/facility operations as readily available through the governmental archives, the area’s development over time can be plotted. Combining this mapping of development with our environmental expertise and knowledge, lingering environmental concerns can be flagged for testing and evaluation in the name of due diligence.
  • Results of the On-Site Inspection: Upon visiting the site and evaluating the exterior and interior facility, a determination can occur of what the property is currently used for; whether industrial, commercial, recreational, agricultural, natural or other purposes. By understanding the use and operations that occur on a daily basis, the environmental impact of those operations can be inferred and addressed. Other signs of environmental stress such as site vegetation, soil erosion, odours, and still water may also be called out to recommend future phases of testing (which occur in the Phase II ESA).
  • Tenant or Stakeholder Interview Notes: By interviewing the occupants currently operating on-site, such as laboratories, service stations, dry cleaners, doctors/dentists, pharmaceuticals, equipment services, photo development, trade working, vehicle servicing, or others, as well as establishing the length of time for which they have occupied and conducted business on the property, any environmental impact of their operations can be better understood and gauged in terms of significance and severity. These same occupants may also have insight and historical knowledge into previous tenants or activities which may have left an environmental impact.
  • Documentation of Adjacent Properties, in all Directions: Through the observation and documentation of operations being conducted on adjacent properties in all directions, environmental impact and runoff can be evaluated.  Land useage that involves chemical related activities, storage areas, activities requiring above or underground storage tanks, or waste dumps may directly impact the subject property. Other noteworthy factors include the distance to the nearest landfill, service station, chemical plant, railway and heavy manufacturing plants.

Reporting and Summary of Recognized Environmental Conditions (“RECs”) 

  1. By calling out the presence or likely presence of Current RECs, Historical RECs (including spills and remedial action plans) or known and controlled RECs (including ongoing remediation action plans), the direct environmental impact on a property can be better understood and evaluated from a liability perspective. Factors with impact may include:
    1. Roadways or pipelines
    1. Known spills on file
    1. Visible soil contamination
    1. Storage tanks above or below ground
    1. Known removal or recommended removal of underground storage tanks
    1. Electrical transformers on site
    1. Chemicals or fuels handled on site
    1. Waste dumps or landfills

Venture Engineering will conclude the report with a professional opinion based on the factual evidence gathered during the Phase I ESA, along with a recommendation of whether a Phase II ESA is suggested based on the findings and observations.

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