“How much does it cost for a Phase I Environmental Site Assessment (Phase I ESA)?”
I am asked that question weekly. I certainly don’t want to be unhelpful, but it depends. At Brilliant Environmental Services, LLC (Brilliant) a “typical” Phase I ESA, undertaken using ASTM 1527-13 – the latest guidance available – usually runs around $2,500 to $3,500. That said, at complex facilities, I have had to charge as much as $25,000 or more for Phase I’s. Similar pricing is expected for Preliminary Assessments in New Jersey, in accordance with New Jersey specific rules as well as a hybrid report satisfying both federal and New Jersey innocent party defense requirements.
Why do some of Brilliant’s competitors charge less? I don’t know. Expenses alone (database searches, agency visits, site visits) now run close to $1,200, and the actual time for a site visit (usually at least 4 hours if done properly) can be costly. If a consultant says a Phase I will cost anything less than $2,000, be very careful. The product (report) you receive may not be compliant with regulations or provide you the protection you need. The Phase I is the initial step in providing a buyer of a property protection for the unknown – buyer beware!
Questions to ask a consultant when inquiring about a Phase I:
Phase I costs vary with the nature of the property (size, use, and regulatory history) as well as the client’s needs (refinance, purchase, risk tolerance). Those and other factors need to be taken into account to properly complete a Phase I and provide our clients real value. A properly completed Phase I ESA can avoid thousands, if not hundreds of thousands of dollars in mistakes, unnecessary risk exposures, and regulatory fines.
Many property investors view a Phase I Environmental Site Assessment no differently than they view a title report – just a document to have such that a box can be checked during a commercial real estate closing. I encourage those of you who think that way to reevaluate your perspective.