State & Local News Vol. 23, No. 3, Spring 2000 ENVIRONMENTAL LAW UPDATE The Challenges of Long-Term Stewardship at Brownfield Sites: Designing and Implementing Land-Use Controls By Joseph Schilling The pace of brownfields redevelopment continues to increase. Fueled by our robust economy and aided by federal grants and state liability protections, the cleanup and reuse of former industrial and commercial properties have almost become routine. Over forty-five states now have some form of voluntary cleanup program (VCP), either laws or regulations that allow for risk-based redevelopment of lightly contaminated sites. To date the U.S. Environmental Protection Agency (USEPA) has awarded over 300 Brownfields Pilot Grants to state and local governments, along with sixty-eight Revolving Loan Fund Grants, and twenty-one Job Training Pilot Grants. Just this past December at the annual Brownfields '99 Conference in Dallas, 2,500 public and private sector participants came together to share their ideas and best practices for continuing this so called "brownfields movement." Within the broader policy context of Smart Growth, the reuse of brownfields in urban areas can help alleviate growth pressures to build on the greenfields of the suburban fringe. Brownfields redevelopment still presents numerous challenges for state and municipal attorneys. Successful brownfields efforts generally involve a wide array of legal issues, such as liability protections, environmental insurance, municipal financing, redevelopment authority, cleanup standards, and possible cost-recovery actions. While most local governments merely facilitate private brownfields projects, an increasing number of municipalities are becoming brownfields developers in their own right, thereby generating more legal issues. The Challenge of Land-Use Controls One of the challenges receiving greater attention is the use of land-use controls (LUCs are sometimes referred to as institutional controls) at brownfield sites. LUCs are legal mechanisms (such as deed restrictions, easements, zoning and planning regulations) designed to protect human health and the environment as long as contamination remains on site. Virtually all state VCPs allow for partial, risk-based cleanups that are tied to the site's future land use. Instead of removing all contaminants and cleaning industrial or commercial sites to residential standards, a brownfields developer can employ various engineering controls (such as paved parking lots to protect a liner or cap that engulfs the residual contamination) in concert with LUCs, to decrease overall costs and make brownfields reuse economically viable. The challenge is how to ensure that future land uses remain consistent with these partial cleanups years down the road. Changes of use and ownership are inevitable. This is where LUCs come into play. Not only do they help ensure compatibility with future land uses, LUCs should also trigger some form of notice and review when the owner, prospective purchaser, or tenant proposes a change that might create an unacceptable risk of exposure to the public. The long-term effectiveness of LUCs, however, remains relatively untested. No formal federal guidance exists on the design and implementation of brownfields LUCs. With roughly forty-five state voluntary clean up programs, the environmental and real property rules governing LUCs vary from state-to-state. Moreover, the cumulative experience of both federal and state environmental regulators with LUC implementation and enforcement is scant. After all, brownfields redevelopment itself is only five years old. At the local level, most municipalities are unaware about the challenges surrounding LUCs. Environmental groups and communities worry that local governments might unwittingly approve zoning changes that could permit residential uses (i.e., a day care center), thereby creating an unknown risk of exposure to the residual contamination. At this stage it is still too early to know whether the existing public and private institutions that administer LUCs have the capacity to meet these challenges. Given these uncertainties and the importance that LUCs can play in encouraging brownfields redevelopments, ICMA, through a cooperative agreement with the USEPA, has conducted several research projects that focus on the possible impacts and roles of state and local governments in LUC design and implementation. This article summarizes a few of ICMA's key observations and recommendations. Hopefully, it will help state and municipal attorneys gain a better understanding about the potential legal issues surrounding LUC design and implementation. Of course, since LUC implementation is a relatively new area, this article is likely to create more questions than provide complete answers. Designing Private and Public LUCs The first step in designing LUCs is to assess the legal authority to impose restrictions on private property. A state's real property laws and court decisions govern private LUCs, such as easements and restrictive covenants. Although many of the fundamental legal principles are similar, specific requirements to execute private LUCs can vary widely between states. Covenants and deed restrictions, for example, are essentially private obligations that can "run with land" and are enforced by private parties. In theory, a covenant or deed restriction could inform future property owners about residual contamination and prohibit residential uses and activities that might increase exposure. Under the common law, however, the owner must actually transfer an interest in the real property to a third party along with the covenant or deed restriction to make it legally enforceable. Within the context of brownfields, it is hard to imagine that buyers and sellers would otherwise agree to such restrictions as part of a typical land sales transaction or later have the incentive to enforce it. Recently several states (i.e., New Hampshire, Ohio, Florida, and Massachusetts) have enacted statutes that give state environmental agencies the authority to create their own brand of deed restrictions on private property as part of their brownfield voluntary cleanup programs. In Connecticut, the state's Department of Environmental Protection (DEP) can allow a responsible party (RP) to complete risk-based cleanups as long as the RP records a deed restriction that limits the future uses of the property. In exchange, the RP is absolved of future liability for the residual contamination. If inappropriate activities take place on the site (i.e., the use is changed or new contamination occurs), or if the DEP learns that the RP did not record the restriction, the DEP commissioner can reinstate the RP's liability and assess civil penalties. Several states (i.e., Connecticut, Massachusetts, Minnesota, and Oregon) have also created a Hazardous Waste Easement that runs with the land and can be enforced by state environmental regulators or local governments. In the realm of public LUCs, zoning continues to receive the most attention. Here local governments have the primary responsibility to design and implement such land-use restrictions on private property. The strength of zoning as an LUC lies with its scope to cover multiple properties. For example, several cities (i.e., Deerlodge County, Montana, and Marina, California) have enacted special overlay zones that restrict access to contaminated soils or groundwater. Critics worry that zoning decisions are too often influenced by local politics and pressures for economic development such that zoning changes could increase the risk of exposure to the residual contamination. Conversely, many private property owners and developers complain that zoning decisions are already too transparent with rigorous public hearings and high citizen participation. Few local planning departments and their municipal attorneys have likely considered the context of LUCs when reviewing their zoning codes. In cities with numerous brownfield properties, however, the time is ideal to revamp such codes to accommodate LUCs. For example, the conditional-use permit process could be adapted to require permits and special conditions for brownfields redevelopment projects. Possible conditions might include regular monitoring and reporting as well as restricting activities and uses that could pose threats to public health. Since conditional use permits and restrictions generally run with the land, they could prove to be more effective over the long-term when compared with traditional zoning. As this discussion illustrates, a critical issue in LUC design is the interplay between private and public controls. Overlapping LUCs is the optimum way to ensure protection of human health and minimize exposure to the residual contamination. The ideal system would include a combination of zoning controls, deed restrictions, covenants, and easements where several LUCs would likely apply to the same parcel. State environmental regulators would continue to take the lead in administering restrictions imposed under their brownfields voluntary cleanup programs. How the states integrate such a complex network of LUCs will inevitably demand increased coordination and communication with local governments. A survey by ICMA found that states and local governments had little understanding of each other's LUC powers and responsibilities. Both levels of government, however, could take advantage of the other's respective spheres of responsibilities to provide a double layer of protection. At a subsequent ICMA State-Local Forum, state cleanup administrators and local government officials spent two days discussing ways they could enhance collaboration on LUCs. Managing and Implementing LUCs Once restrictions are put in place, the practical questions of how to manage and implement LUCs at brownfields loom large for state and local governments. Do they have the requisite expertise and resources to ensure that future land uses remain consistent with the levels of residual contamination? What approaches can local governments employ to complement state LUCs? Although the institutional memory of a neighborhood group or city zoning investigator may temporarily check land-use changes (especially in smaller communities), effective LUCs demand a longer-term, systematic approach to protect public health forty or fifty years from now (perhaps even longer depending on the nature of the contamination). At the root of such a comprehensive LUC strategy lies efficient data collection and management. Whether the LUCs are zoning regulations or deed restrictions, LUCs must be recorded in a way that is consistent, accessible, and easily linked with the proper enforcement authorities. Since counties are primarily responsible for recording deeds and other land-use restrictions, state and local government must work closely with county officials to ensure the right information is recorded on the right parcel; likewise, they must develop a system to notify the appropriate state and/or local government officials when brownfields are bought or transferred. A few communities have started to address these issues by establishing computer-tracking systems. For example, Commerce City, Colorado, designed its new GIS system to also include the tracking of all LUCs on affected properties. Other local agencies, state environmental regulators, and the public can access these systems to research specific properties. Sites with residual contamination are "red-flagged" to remind municipal officials of their sensitive nature. Centralized computer systems, such as the one in Commerce City, can improve coordination among various agencies and municipal departments by facilitating the sharing of LUC information. Sharing information greatly enhances internal coordination among municipal planners, zoning investigators, building officials, county health officers, and municipal attorneys. LUC enforcement also presents unique challenges. For example, private mortgage and title insurance companies will undoubtedly serve as the first line of enforcement to ensure that prospective purchasers or developers comply with applicable deed restrictions through various due diligence procedures. It is often difficult to obtain conventional commercial financing without title companies completing a thorough search of possible restrictive covenants and easements. Depending on the scope of the search, developers may actually receive legal notice of such restrictions. A special registry or GIS overlay of contaminated properties would greatly facilitate compliance of both private and public LUCs. With respect to public LUCs, most local government planning departments maintain their own zoning and land-use databases. Of course, data and information are relatively useless, without sufficient resources and staff to monitor recent transfers and periodically inspect the sites. One of the key insights that came from ICMA's State-Local Forum was the need for additional resources and training on LUC implementation and enforcement at the local level. Since many municipalities vest land-use enforcement responsibilities with their planning or building departments, it makes sense that LUC enforcement could reside in these code enforcement divisions. Effective code enforcement programs already have established procedures to handle citizen complaints and inspect properties for possible violations. Cities, however, would need to develop new procedures to integrate LUCs within the traditional sphere of code enforcement. Training and additional resources would also be important for identifying LUCs and understanding why LUCs require special treatment. Once a breach occurs, the next step is determining what enforcement actions are available to gain compliance. Under many of the VCPs, the state environmental agency could revoke previous releases of liability or take administrative or judicial enforcement actions. Of course, little is really known about the LUC enforcement resources and capabilities of state environmental agencies. At the ICMA State-Local Forum, none of the state environmental departments had yet to file a formal enforcement action for breaches of a LUC. They also discussed the issue of coordinating such enforcement actions among agency attorneys and the state attorney general's office. Under general municipal law principles, cities can also take administrative actions or file a criminal or civil complaint for local land-use violations. Within the realm of public LUC enforcement, state and municipal attorneys would also need to work closely together. Recommendations for Local Governments At this early juncture, it remains difficult to accurately assess the long-term effectiveness of state and local LUC efforts. It does seem inevitable, however, that local governments will play an important role in LUC design and implementation. While a few local governments have started to respond to these LUC challenges, most will need further guidance in tailoring existing programs to administering LUCs. Based on ICMA's preliminary research projects, we offer the following recommendations for local government managers and municipal attorneys to consider: Identify the appropriate state or local legal basis for the LUC; Improve external (state-local) and internal (intra-local) coordination by developing memoranda of agreement (MOA) among state and local agencies and municipal staff; Design a comprehensive LUC system, with overlapping controls and enforcement options, to ensure that failure of one control does not mean failure of the entire system; Include the local governments and affected community groups early in the LUC selection and design processes; Provide training and education to local governments regarding their role and use of LUCs; and Enhance local government efforts with adequate code enforcement resources; for example, the EPA could provide a new round of Brownfield Pilots that focus exclusively on helping local governments design and implement integrated LUC programs. Further Reading Christine Gaspar & Denise Van Burik, Local Government Use of Institutional Controls at Contaminated Sites (ICMA 1998; contact Nadejda Mishkovsky at ICMA, e-mail nmichkovsky@icma.org). Beyond Fences: Land Use Controls Today (ICMA, available March 2000; contact Nadejda Mishkovsky at ICMA, e-mail nmichkovsky@icma.org). Jay Pendergrass, Sustainable Redevelopment of Brownfields: Using Institutional Controls to Protect Public Health, 29 Envtl. L. Rep. 10243 (May 1999). AMY EDWARDS, INSTITUTIONAL CONTROLS, IN ENVIRONMENTAL ASPECTS OF REAL ESTATE TRANSACTIONS (ABA 1999). Larry Schnapf, 13 Practical Considerations for Using Institutional and Engineering Controls in Brownfields Redevelopment Projects, Toxics L. Rep. (BNA) No. 27 856 (Dec. 2, 1998). Joseph Schilling is the director of Economic Development, International City/County Management Association in Washington, D.C. State & Local Law News home page | Table of Contents