In layman's terms, it's an investigation of your property by a trained professional who must meet certain professional qualifications, known as an "environmental professional". It covers an investigation of the current and past history and uses of the property in question. What was previously on the site? What could past usage have done? Did any usage contaminate the soil or groundwater underlying the site? How about the current operation? Are any petroleum, hazardous materials or chemicals in use at the site, or have they been released to the air, soil or groundwater at or near the site?
It's an investigation to determine if there are any conditions that are indicative of releases of petroleum or hazardous materials or chemicals at the site, now or in the past. These conditions are collectively known as "REC" or recognized environmental conditions. So really, a Phase I is meant to identify REC at the subject property, either at present or which may have been present in the past.
What's included in a Phase 1 ESA?
Some of the areas of investigation include:
A thorough review of historical records of the property, including historical aerial photographs, fire insurance mapping (maps, usually older, of most of the US showing what properties contained in the past, such as buildings, fuel tanks, etc.), and historical topographic mapping.
A thorough review of readily available government environmental records of the property, such as for spills, releases to the environment, fuel tank registrations, hazardous material manifests, environmental records, etc.
Interviews with current and past property occupants as might be obtainable, as well as others who might be able to shed light onto past or present uses of the property.
A thorough site inspection, including all building interiors as well as all exterior property and grounds. This site inspection would include a visual inspection of the presence of features such as fuel or chemical storage tanks, the presence of stained soils, site activities, etc.