If you’ve ever tried to buy or develop commercial property, chances are someone’s thrown around the term “Phase 1 ESA.” Maybe it came from a lender. Maybe your realtor mentioned it in passing. Or maybe you Googled it after hearing it in a meeting and thought, “Wait… what does a Phase 1 ESA involve?”
That’s a smart question, because knowing what a Phase 1 ESA involves can save you thousands of dollars and months of headaches.
We’re environmental consultants, and we’ve been doing Phase 1 Environmental Site Assessments (ESAs) across Texas and beyond for over 30 years. This no-fluff breakdown is everything you need to know if you’re buying, developing, or financing a piece of property that might have some environmental baggage.
What Is a Phase 1 ESA, Really?
In simple terms, a Phase 1 ESA is a type of environmental due diligence. It’s designed to identify potential or existing environmental contamination liabilities on a property before it changes hands.
Think of it as a deep background check, but for land. You’re not just looking at what the property looks like now. You’re digging into what it’s been through over the last several decades: the spills, the underground tanks, the old gas stations that used to be there in the 1950s, and so on.
It follows a specific industry standard known as ASTM E1527-21 and is often required by lenders, buyers, or developers as part of the due diligence process.
So, What Does a Phase 1 ESA Involve Exactly?
Let’s walk through it step by step, no jargon, no guesswork.
Step 1: Records Review
This is where we put on our detective hats and start digging through the history of the property.
We review:
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Aerial photographs going back decades
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Sanborn fire insurance maps
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City directories
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Topographic maps
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Environmental databases (federal, state, and local)
All of this tells us a story about what the property used to be and what kinds of activities might have left a toxic footprint.
We once reviewed a property that looked like a vacant lot today. But old Sanborn maps revealed it used to be a dry cleaner in the ‘70s. That was a red flag for possible chlorinated solvent contamination.
Step 2: Site Visit
Next, we physically inspect the property. We’re looking for visual evidence of potential contamination or red flags, like:
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Oil stains
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Chemical drums
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Discolored soil
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Unusual odors
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Floor drains or sumps
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Old vent pipes or UST (underground storage tank) fill ports
We also take note of neighboring properties. After all, contamination doesn’t respect property lines.
This visit typically takes a few hours, depending on the size and complexity of the site.
Step 3: Interviews
Talking to people is just as important as digging through documents. We interview:
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Current or past owners
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Property managers
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Tenants
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Local government officials
On one project, a long-time neighbor mentioned that there used to be a small engine repair shop next door—something not listed in any database. That tip helped us catch a potential contamination issue early.
People who’ve been around the property tend to know a lot more than paperwork might reveal.
Step 4: Environmental Liens & Activity/Use Limitations (AULs)
This is the legal piece of the puzzle. We review:
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Title reports
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Environmental liens
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Deed restrictions
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Institutional controls
If there are any legal limitations or cleanup responsibilities tied to the land, you’ll want to know before buying, or you could inherit someone else’s problem.
Step 5: Final Report
Finally, all the findings are compiled into a formal Phase 1 ESA report. This includes:
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Property description
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Historical use summary
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Findings from the site visit
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Interviews and records review
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A list of any RECs (Recognized Environmental Conditions)
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Recommendations for further investigation, if needed
This report becomes a key part of your due diligence file. If there are no RECs, you move forward with peace of mind. If there are RECs, you’ll likely need a Phase 2 ESA to collect soil, water, or vapor samples.
Why Understanding What a Phase 1 ESA Involves Matters
Here’s the deal: contamination can be expensive. We’re talking tens or even hundreds of thousands of dollars in cleanup, legal battles, or lost value if you buy a site without doing your homework.
Understanding what a Phase 1 ESA involves is your first line of defense in limiting liability under CERCLA (the Superfund law). It’s also a critical step in proving you did your due diligence.
A client once purchased a commercial lot without getting a Phase 1 ESA. Turns out, it used to be an auto salvage yard. Within a year, they were hit with an environmental enforcement notice and forced to remediate petroleum-impacted soil at their own cost.
When Should You Order a Phase 1 ESA?
You should consider ordering a Phase 1 ESA:
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Before closing on any commercial or industrial property
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Before development of land with prior uses
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When applying for financing (many lenders require it)
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If you suspect contamination on or near the site
The sooner, the better. A Phase 1 ESA typically takes 7–15 business days from start to finish, but it’s worth building that into your timeline.
What Happens If the ESA Identifies an Issue?
If a Recognized Environmental Condition is identified, meaning, there’s evidence or likelihood of contamination, then it’s time for a Phase 2 ESA. That means sampling soil, groundwater, or vapor to see what’s really going on beneath the surface.
Your options may include:
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Walking away from the deal
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Negotiating a price reduction
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Requiring the seller to address the issue
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Developing a cleanup plan
Choosing the Right Environmental Consultant
Not all consultants are the same. Look for one with:
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Experience with your property type
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Familiarity with state and local regulations
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Ability to turn around reports quickly and clearly
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A history of working with lenders and real estate professionals
A good consultant won’t just drop a 100-page report in your inbox. They’ll explain what it means and help you figure out your next steps.
Final Thoughts on What a Phase 1 ESA Involves
If you’re even thinking about buying or developing property, knowing what a Phase 1 ESA involves is key to protecting your investment. It’s not about red tape, it’s about risk management and long-term peace of mind.
You don’t want to discover an old underground tank after you break ground. You don’t want to find out your land is restricted after you’ve bought it.
Do the homework upfront. Ask the hard questions. And don’t settle for vague answers.
Need Help with a Phase 1 ESA?
At CRG Texas Environmental Services Inc., we’ve helped clients across Texas navigate environmental due diligence with clarity, speed, and integrity. Whether it’s your first ESA or your fiftieth, we’ll walk you through it, no fluff, just answers.
Request a Free Quote Today or give us a call to learn how we can support your project.