In the United States, a phase 1 environmental report is a professional report prepared on a commercial real estate holding that describes potential or current environmental contamination liabilities in the area under consideration. The report is often prepared by a team of federal, state and local environmental assessors. It is issued by a variety of agencies such as the U.S. Environmental Protection Agency (EPA), the U.S. Department of Transportation (DOT), the U.S. Army Corps of Engineers (U.S. Navy and Marine Corps) or the Georgia Department of Transportation. The report is normally released after a public review process. A phase 1 environmental report is used by companies, counties, zoning boards, and regional planning organizations as part of the required pre-purchase environmental assessment (EPA).
The process of obtaining a phase 1 environmental report begins with a Notice of Intent (NOI). A company requesting a phase 1 environmental report must first file a written declaration with the appropriate regional agency. Once the company has filed its declaration, the agency will determine if it has a case. If it does, the agency will request a copy of the firm's environmental reports for the last three years. If it finds the information to be in error, the agency will notify the firm that it must amend its reports or face a penalty.
A company is not required to amend its documents after a phase 1 environmental report is issued. However, it is usually recommended that companies do so. An amendment ensures that a business maintains compliance with federal and state environmental statutes and regulations. An amendment also ensures that the business demonstrates a continuing effort to preserve the air and water quality in the property it is located in. It also allows the business to dispel any misconceptions it may have regarding the nature of its business and the responsibilities it has to ensure the safety of its employees and the general public.
To obtain a phase 1 environmental prior to leasing a piece of real estate, the lender must follow a detailed checklist. One such checklist is posted on the web site of the National Association of Home Builders. Other such checklists can be found online. Each checklist is designed to address the specific areas where a lender may find its borrower to be deficient. In addition to a list of potential problems, each checklist includes recommended measures that the lender should take to make amends where it is necessary.
One check list that many experts include when discussing the necessity of a groundwater contaminant mitigation specialist is "water table vulnerability." According to this checklist, a lender should not enter into a loan agreement unless it is absolutely sure that the property's groundwater meets the requirements set forth by the groundwater quality plan (SPP). The SPP establishes a baseline of water quality for the region in which the property is located. Each year, the lender is evaluated based on the SPP to determine if that region's groundwater meets or exceeds the required levels.
Another step in determining whether to retain an environmental specialist for a phase 1 environmental assessments project is to contact a local firm that performs groundwater mitigation. One such company is Gehl Energy LLC. Gehl is not a lender; rather, it acts as an adviser to developers and builders in managing their exposure to groundwater contamination. According to its Web site, the company "focuses on the complete cost of a project from both the design/development stage and the permitting stage/settlement." In addition to performing groundwater mitigation, Gehl offers land use and zoning consultation and works with developers to address issues with their facilities that might relate to contamination.
Yet another checklist item is "limited environmental due diligence could be performed." A limited environmental due diligence is described as "a more intensive search for information than would be done for a typical property." A property type may be searched for as part of the general information found on a property's data page. However, a more thorough search must be conducted "by contacting several professional engineering firms," according to the Gehl Web site. Once contacted, the engineer should review the data and perform an "in depth, in-person analysis" of the site.
According to the Gehl site, a further step in evaluating the presence of contaminants in a site relates to "the importance of analyzing the transaction between the developer and the property located at the same time." This step is often referred to as "site-independent analysis." In essence, this means that the transaction between the developer and the land located below the surface does not influence the EPA's evaluation of the EPA's decision to approve the application. These are just a few steps that should be taken when considering the potential to retain an environmental specialist for phase 1 environmental assessments.