Are you a commercial real estate broker or lender? Have you been informed that your client needs a Phase 2 Environmental Site Assessment (ESA) for a property they are looking to purchase?
Perhaps you are unsure about the exact scope of a Phase 2 ESA. Would you like to learn what is involved in a Phase 2 environmental assessment? Then, this guide is for you. Below, you can find handy reference material regarding Phase 2 ESAs, including what they are, when they are needed, their impacts, and what tests they should include.
What Is a Phase 2 ESA?
A Phase 2 ESA is a more in-depth analysis than a Phase 1 Environmental Site Assessment .
During a Phase 1 ESA, inspectors will identify recognized environmental conditions ( RECs ). Then, Phase 2 ESAs include a detailed assessment of previously discovered RECs. Examples include contaminants in the soil, groundwater, and air.
Unlike Phase 1 ESAs, the purpose of a Phase 2 site assessments do not follow a stringent checklist. Instead, they are tailored around the findings of the Phase 1 ESA.
For instance, suppose that your Phase 1 ESA revealed possible groundwater contamination and no other concerns. The Phase 2 ESA would focus on testing groundwater for hazardous substances in this scenario.
If significant hazards are discovered during a Phase 2 ESA, the site will require remediation . Environmental remediation involves eliminating or reducing environmental hazards. Remediation makes commercial property safe to use for business purposes.
When Are Phase 2 ESAs Needed?
Phase 2 environmental site assessments are needed if a Phase 1 ESA reveals that contamination may be present. However, buyers may request a Phase 2 ESA even if the Phase 1 ESA results do not reveal any hazards. This is uncommon, though. Typically, buyers will not schedule a Phase 2 ESA unless an environmental consulting firm recommends one.
Phase 2 ESAs provide detailed information about the scope of contamination. Buyers can use this information to weigh the risks and benefits of buying a property. Environmental firms may provide buyers with a quote on remediation services after performing a Phase 2 ESA.
What Is Involved in a Phase 2 Environmental Assessment?
The scope of a Phase 2 environmental assessment will vary from site to site. Testing is typically focused on RECs discovered during the Phase 1 ESA. The most common tests include the following:
1. Soil Vapor Sampling
Contaminated soil can emit hazardous vapors into the air. These vapors may leak into structures that are on the commercial property.
During soil vapor sampling, inspectors will install vapor pins. They install these pins in a building’s slab. They may also place pins at strategic locations within a column of soil.
Once the soil vapors are sampled and harvested, inspectors test them in a lab. Site assessors document their findings in the Phase 2 ESA report.
2. Geophysical Surveys
Site assessors perform geophysical surveys to identify buried hazards. Some examples include:
- Septic systems
- Hydraulic lifts
- Chemical reservoirs
- Storage tanks
Inspectors typically perform surveys using a special radar device. This device can penetrate the soil and locate buried structures or equipment.
Inspectors may also use metal detectors during the geophysical survey. Metal detectors can reveal the location of steel drums, piping, and other metallic objects. Inspectors will document their findings and map out the location of all items of concern.
3. Water Sample Collection
If water-based hazards may be present, inspectors will perform groundwater sampling. They will install monitoring wells in key locations on a commercial property. These wells will collect water samples so that inspectors can test for contamination.
Inspectors may leave monitoring wells in place indefinitely so that property owners can routinely analyze water samples.
4. Soil Sampling
Soil sampling is one of the most basic forms of Phase 2 ESA analysis. The exact nature of soil sampling activities will vary depending on the intended use of the property. At times, inspectors may only collect shallow samples using a hand-powered auger. But sometimes, they might need to deploy a drilling rig to retrieve soil at greater depths.
Inspectors will carefully analyze all soil samples. During this analysis, they will search for concentrations of RECs that exceed state or federal thresholds.
What Is Included in a Phase 2 ESA Report?
Once the assessment is complete, a Phase 2 ESA report will detail the findings. It will document what hazards are present, if any. Site assessors will compare current hazard levels to state or federal guidelines. The report will also include recommendations for site remediation.
Buyers should adhere to the recommendations of a Phase 2 ESA report. If they do not take the report seriously, then they may expose themselves to serious liability.
For example, landowners might be held responsible for any injuries caused by environmental hazards. They may also have to pay for environmental cleanup efforts if they are sued by the EPA or private citizens.
The Role of Phase 2 ESAs in Property Transactions
Phase 2 Environmental Site Assessments (ESAs) play a crucial role in transaction of properties by providing vital information about the environmental condition of a property. They help buyers, sellers, and lenders make informed decisions about the acquisition, sale, or financing of a property. A thorough Phase 2 ESA can uncover potential contamination issues that may affect property value, liability, or future development plans. By identifying and quantifying the extent of contamination, a Phase 2 ESA helps stakeholders evaluate the potential costs and risks associated with remediation efforts and navigate any necessary regulatory compliance processes.
In addition to protecting the financial interests of all parties involved, Phase 2 ESAs also ensure that environmental liabilities are properly addressed and managed. This reduces the risk of unforeseen environmental issues arising after the transaction is completed, which can lead to legal disputes, regulatory penalties, or costly remediation efforts. By conducting a Phase 2 ESA during the property transaction process, stakeholders can better understand and mitigate environmental risks, ensuring a smoother and more transparent transaction experience.
How to Obtain a Phase 2 ESA
Phase 2 ESAs are often needed if Phase 1 ESAs reveal the presence of hazardous substances. A Phase 2 ESA is essential to protecting your real estate clients from investing in contaminated property. Phase 2 ESAs can also provide insights into what remediation efforts your client must schedule to make a property safe for use.
Frequently Asked Questions
A Phase I ESA is a non-intrusive investigation that focuses on identifying potential environmental risks based on record history, regulatory databases, and a visual inspection of the property. A Phase 2 ESA is a more detailed, intrusive investigation work that involves sampling and analysis to determine the type, presence, extent, and nature of any contamination at the property. A Phase 2 ESA is typically conducted after a Phase 1 ESA has identified potential environmental risks or areas of concern.
Samples are taken during a Phase II ESA from a variety of media, including soil, groundwater, surface water, and soil vapor. The precise sample methods employed will depend on the environmental factors at the location and any possible hazardous pollutants.
Samples collected in the environment during a Phase 2 ESA are sent to certified laboratories for analysis. Laboratories use various analytical methods, such as gas chromatography, mass spectrometry, or atomic absorption spectroscopy, to identify and quantify the contaminants present in the samples.
In cases where contamination is discovered during the Phase 2 ESA, additional steps may be necessary, such as conducting a Phase 3 ESA (remediation planning) and implementing a remediation plan to mitigate the environmental risks and meet regulatory requirements.
The duration of a Phase 2 ESA can vary depending on the size and complexity of the site, the specific concerns identified during the Phase 1 ESA, and the regulatory requirements. It can take anywhere from three to four weeks to complete.