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South Bend Commercial Properties – Do You Need A Phase I ESA?

Phase 1 Site Assessment

Are you purchasing property? Then the simple is yes. It is always good to get a Phase I Environmental Site Assessment (ESA) done before you purchase. It is the first step in your environmental due diligence process.

Two of the most common comments we hear when recommending a Phase I ESA are: “is it worth it?” and “the property looks fine, there are no environmental problems.” Well, consider this.

You are looking at purchasing a commercial site in South Bend. It’s a vacant lot on S. Michigan Street in downtown, and it looks great. Visually there is nothing concerning, and the deal seems like a slam dunk – it’s the perfect location for a new mixed-use building.

What you can’t see is that the property was a gas station in the 1940s and 1950s and had several gasoline underground storage tanks (USTs) that were left on the property. When the gas station was removed in the 1950s, the USTs were emptied and filled with sand, then left in the ground (which was common practice back then). Unfortunately, this doesn’t meet the current code, and before the property is redeveloped, those tanks will need to be excavated, cleaned, and removed. Then the soil surrounding the area needs to be sampled.

Your property transaction just went from a slam dunk deal to questionable. Not only do you need to deal with re-abandoning the USTs, but there is the potential for gasoline contamination deep in the soil—an expensive and time-consuming proposition.

This is exactly what a Phase I ESA is for – to identify these issues. Most of the potential environmental liabilities on a property will be very hard to see visually and often come from previous activities when there was less regulation and government oversight. Environmental professionals are trained to look for these issues and know where to get the most valuable resources for historical research.

Don’t end up in a situation where you wish you had a Phase I ESA completed. Do your environmental due diligence before you purchase! We can’t state this enough. Taking the time to assess a property’s environmental liability plays an important role in determining a good investment from a bad one.

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