Phase I Environmental Site Assessments (ESAs) are performed to identify potential or existing environmental contamination liabilities associated with a property. The process typically involves reviewing historical records, conducting site inspections, and collecting and analyzing environmental samples as necessary.
In Chicago, Phase I ESAs are typically conducted in accordance with the guidelines set forth by the Environmental Protection Agency (EPA) in its All-Appropriate Inquiry (AAI) Rule, which outlines the standards for performing due diligence to assess potential environmental contamination liabilities associated with a property. The AAI Rule applies to all properties in the United States, including Chicago.
However, the specific requirements for Phase I ESAs may vary depending on the specific regulations and guidelines that apply in the area where the property is located. For example, there may be additional state or local regulations that need to be followed, or there may be specific factors that need to be considered due to the unique characteristics of the property or the surrounding area. It is important to consult with a qualified environmental professional with experience in the Chicago area to ensure that all relevant regulations and guidelines are followed during the Phase I ESA process.
Phase I Environmental Site Assessments (ESAs) are a process used to identify potential or existing environmental contamination at a property. In Chicago, Phase I ESAs are conducted in accordance with the guidelines set forth by the Illinois Environmental Protection Agency (IEPA) and the U.S. Environmental Protection Agency (EPA).
Phase I ESAs typically involve the following steps:
Review of historical and regulatory records: This includes reviewing records such as site plans, aerial photographs, and hazardous waste manifests to determine the property’s past uses and potential sources of contamination.
Site inspection: A visual inspection of the property is conducted to identify potential sources of contamination, including waste storage areas, underground storage tanks (USTs), and other features.
Interviews with current and past property owners and occupants: These interviews are conducted to gather information about the property’s past and current uses, and to identify any potential sources of contamination.
Preparation of the Phase I ESA report: The information gathered during the review of records, site inspection, and interviews is compiled into a report that summarizes the findings and identifies any potential environmental concerns.
Phase I ESAs are an important tool for identifying potential environmental liabilities associated with a property and are often required as part of the due diligence process for real estate transactions. If a Phase I ESA identifies potential environmental concerns, a Phase II ESA may be needed to confirm the presence of contamination and to assess the extent and nature of the contamination.
- The City of Chicago used to have a Department of Environment. Some nearby suburbs have Environmental Health Departments, and many don’t. More often than not, you can’t just fire off Freedom of Information Act requests (FOIAs) in an hour or two. Many experts set aside a half day. Simply put, one needs to have both spatial and temporal knowledge of which agency holds records, what records they’re likely to have, and how long it will take to get them.
- Most properties comprise several parcels, each with historical and current addresses. Adjoining properties research, therefore, requires a keener eye to discern how many adjacent parcels are actually involved with the adjacent operations. There is an enormous volume of information available for even the simplest site, much of which can be crucial to findings. The work on a 0.14-acre parcel often involves a few generations of construction, address schemes, tenants, and operations.
- As Chicago is an old city, located near both a river and one of the Great Lakes, there’s a long industrial history associated with those kinds of features that sprawl out a couple of dozen miles into the neighboring counties. A vacant lot here is almost never “just” a vacant lot.
- The Chicago Fire of 1871 destroyed a large portion of the city and thus “buried” an entire phase of original city development. Many of the records prior to the Fire were also destroyed, thus making it difficult to track down records pertaining to the original development in the city, especially the downtown “Loop” area.
- Many of Chicago’s residential areas developed along busy thoroughfares have been comprised of mixed-use buildings; thus, even a seemingly “residential” section of the city may have a lengthy history of various ground-floor commercial operations, including dry cleaning and/or automotive service facilities. Thorough historical research, in conjunction with local expertise, is required to properly screen potential historical operations of concerns in these areas.
- The City of Chicago is constantly undergoing redevelopment. Specifically, areas across the south and west sides of the city with extensive commercial/industrial/warehousing history are frequently being redeveloped into large, multi-family high rises. Again, localized expertise is key in quickly identifying if a property in one of these areas is located within an area of known widespread contamination.
- In the City of Chicago, typically, half of the adjacent sidewalk(s) is part of the property. It is not uncommon for heating oil underground storage tanks (USTs) to be installed around these areas; however, thorough research into records from the numerous regulatory agencies (past and present) overseeing tank installations in the city is crucial in identifying the likelihood of an orphan/undocumented UST on a property.
Hiring an experienced professional for your commercial real estate due diligence is important.