Key Conclusions: Information generated from past Phase 2 investigations is critical in evaluating a Property for environmental liability. Information that indicates ANY detection of ANY contaminant on a property is a potential liability. Information regarding previous Phase 2 investigations should be disclosed PRIOR to commencing a Phase 1.

Evaluation of previous Phase 2 information that was performed on a Property at any time should be evaluated for environmental risk. Based on past experience ERAS assumes that the results of many older as well as some newer subsurface investigations may have been done incorrectly.

This can be attributed to any or all of the following:

  1. incomplete Phase 1 investigation that did not evaluate critical past records;
  2. incomplete, un-focused or poorly documented Phase 2 investigations;
  3. changes in regulatory contaminant limits (such as ESLs) or changes in laboratory analytical methods.

The detection of ANY concentrations of contaminants on a Property is an environmental liability because it is considered evidence of a chemical spill or release by environmental regulatory agencies.

This is the primary reason that ERAS does not recommend random Phase 2 investigations unless there is a clear why, what and where for the proposed investigation.

Furthermore, applicable regulatory contaminant concentrations (most common is the Environmental Screening Levels or ESLs), are used to determine when a regulatory agency must be involved to evaluate the risk to human health and the environment.

An environmental consultant has no authority to ignore contaminant concentrations above the ESLs. In addition, the owner has the responsibility to disclose contamination exceeding ESL’s to the appropriate environmental agency.

It is critical that previous Phase 2 information be disclosed to ERAS PRIOR to engaging a Phase 1 project. The information can be evaluated for scientific validity and risk implications to the Property early in the process so that proper recommendations can be made.

ERAS recommends that previous Phase 1 or Phase 2 reports be reviewed for their recommendations and possible pitfalls PRIOR to their being disclosed to the lender or the SBA. Phase 2 projects should NOT BE ALLOWED unless the implications of possible findings are understood.