Local Government and Hazardous Substances:
Part I., Responsibilities and Identification
By CRAIG E. COLTEN and DIANE MULVILLE-FRIEL, Illinois State Museum, Geography Program
Introduction
In 1979 a major manufacturing firm donated a seemingly bucolic piece of property to a unit of local government for use as a park. The undeveloped parcel of
land was located on Neville Island in the Monongahela
River and appeared to be an ideal tract for recreation.
Unknown to the community at the time, owners of the
property had allowed chemical and other manufacturing firms to discard process wastes there during the
1950s. Waste disposal ceased by the mid 1970s and
vegetation quickly obscured the evidence of former
land uses.
Under the provisions of the Superfund law (Comprehensive Environmental Response, Compensation,
and Liability Act or CERCLA), the current land owner
is responsible for the costs of cleaning up contaminated
property. In the case of Neville Island, the local community government faced a very high price tag for
restoring the property to a safe environmental condition; however, they were extremely fortunate in negotiations with the former owner and were able to return
the land to its donor. While the local government escaped onerous financial liabilities, they became keenly
aware of their responsibilities under current environmental laws. Local governments in Illinois also need to
recognize their potential for involvement in environmental litigation and prepare themselves to take action
to prevent the acquisition of liabilities.
Relict Hazards
Like the situation in Pennsylvania, there are many
sites in Illinois that have undergone significant land-use
changes over the past half century. These may be
former factories that have been dismantled, old gasoline stations converted to small offices, or quarries filled
in with a mixture of urban refuse and transformed into a
park. Although there are federal and state programs
that seek to inventory and clean up contaminated sites,
only a small number of sites are known. In 1987, the
U.S. General Accounting Office estimated that the U.S.
Environmental Protection Agency's (USEPA) computerized inventory of potential Superfund sites contained only 20 percent of their estimated number of
actual hazardous material sites. More recently, the U.S.
Office of Technology Assessment reported that the
number of Superfund sites may climb from slightly
more than 1, 000 to over 9, 000 by the end of the century.
Furthermore, the USEPA has never had a program that
actively sought out and identified waste sites. This suggests contaminated sites will continue to be discovered
for years to come.
Illinois' industrial economy has had a long association with hazardous substances. Well before there were
specific regulations to deal with such risks, manufacturers of coal gas, electroplated metal hardware, mirrors, watches, agricultural tools and chemicals, refined
petroleum, and primary metals, casually discarded
unwanted by-products. Subsequent urban growth and
economic shifts have contributed to changes in how
property is used. The Department of Commerce and
Community Affairs reported that there were over 4, 500
idle factory sites across the state in 1987. Many undoubtedly contain accumulations of virtually invisible
on-site wastes and are targeted for adaptive reuse in the
next decade. Redevelopment or conversion of such
properties can take place, but the relict hazards need to
be dealt with first and with care.
Responsibilities
The alarming reality of this situation is that current
property owners can be held culpable for contamination. The Superfund law applies strict, joint and several
SELECTED PRE-1930 HAZARDOUS WASTE GENERATORS
Industry
|
Hazardous Material
|
Years
|
|
Pre-1870
|
|
Pottery
|
lead
|
1800-
|
Felt hats
|
mercury
|
1800s
|
Fabric dyeing
|
aniline dyes (coal tar products)
|
1849-
|
Printing, publishing
|
|
1850s-
|
Paints
|
lead, metals (cadmium)
|
1850s-
|
Plumbing supplies, batteries
|
lead
|
1850s-
|
1870-1930
|
Steel manufacture
|
acids, cyanide, oils
|
1870s--
|
Mirrors
|
mercury, ammonia, lead
|
1880-
|
|
|
1890
|
|
lead
|
1890s-
|
Carpets and wallpaper
|
arsenic
|
1880-
|
|
|
1900
|
Illuminating gas
|
tars, phenols
|
1880-
|
|
|
1950
|
Electroplating
|
acid, cyanide, arsenic
|
1880--
|
Pesticides
|
arsenic
|
1890s--
|
Petroleum products
|
phenols, lead, oils
|
1900-
|
Creosote products
|
tars, oils
|
1900-
|
Munitions
|
benzene, toluene
|
1917-
|
Plastics
|
phenols, cyanide
|
1907-
|
Metal working--
|
solvents (toluene, xylene,
|
1910-
|
machinery, tools
|
benzene), arsenic
|
Watch making
|
radium, plating wastes
|
1910-40s
|
Fireproof insulation
|
asbestos
|
1910-
|
Organic dyes and pigments
|
acridine
|
1912-
|
Lineoleum
|
acrolein
|
1915-
|
Airplanes
|
tetrachlorethane (dope)
|
1915-30
|
Dry cleaning
|
trichlorethylene naptha
|
1915-
|
Rubber products
|
trichlorethylene, benzene
|
1915-
|
Glass making
|
arsenic, cadmium
|
1915-
|
Leather tanning
|
arsenic, chromium
|
1920s-
|
(soft leather)
|
|
|
Paints
|
acetone, acrolein
|
1920s-
|
Wood finishing
|
synthetic varnishes
|
1923"
|
Sources: Oliver 1902; Price 1914; Hamilton 1925; McCord 1931; Rogers 1921: Coates. et al. 1982.
Figure 1: Many of the pre-1930 sources of hazardous substances were
common industries in Illinois. Not only were there many businesses
that used hazardous substances, small-scale factories operated in
many towns and villages that do not have a significant industrial
economy today.
February 1991 / Illinois Municipal Review / Page 19
liability, and is retroactive. This means that the financial
burden for cleaning up a site can be attributed to a wide
range of past and present owners, operators, or contributors to the problem, and for actions that were legal
at the time they took place. More specifically, strict
liability is attached to owners regardless of whether
they acted in a knowing or reasonable manner. Joint
and several liability makes each owner, past and present, potentially liable for the entire cost of remediation.
Amendments to Superfund passed in 1986 provide a
legal tool for "innocent property owners-- to escape the
liabilities imposed by CERCLA. If property owners
can show "due diligence," that is if they can demonstrate that they took "all appropriate inquiry" into discovering the contamination before taking title, they
may be considered an innocent property owner. The
courts have yet to clearly define "due diligence" or "all
appropriate inquiry," but taking prudent steps before
acquiring property is essential.
It is important to keep in mind that local governments are not exempted from the Superfund legislation. Cities and counties can become parties in lawsuits
seeking to recover clean-up costs. Municipalities or
counties can acquire liability by direct purchase, condemnation, donation, claiming land for back taxes, or
even temporary management of a site. The means of
acquisition is immaterial. Therefore, units of local government must exercise caution when proffered a gift or
when evaluating property for purchase.
The most commonly accepted method to establish a due diligence defense is to prepare a "site assessment."
Contractors for either the seller or buyer may prepare
reports that document past land uses and potential
abuses, although it is generally the responsibility of the
seller. The intent of these investigations is twofold: (1)
to detect potential contamination of the site and encourage the seller to attend to any remediation; and (2)
prepare a means for the buyer to demonstrate he/she
exercised all appropriate inquiry. These site investigations have become requisites for most commercial
property transactions. Lending institutions are demanding a clean bill of health on real estate deals that
they are involved in. Although units of local government do not always use bank funds, they should exercise the same level of prudence.
Site Assessment
A site assessment is generally divided into two
phases. The Phase I component includes a site history, a
review of environmental compliance, site geology and
hydrology, a site inspection, and interviews with those
familiar with activity on site. If the first phase indicates
a strong potential for contamination, environmental
tests, including soil and water analyses, compose the
Phase II work. The basic purpose of the site history is to
document past land uses that may have involved hazardous substances from about 1900 to the present.
Hazards-related activity commonly found in Illinois
since the turn of the century include the handling of
lead-based paints, smelting of lead in type setting operations, use of solvents in dry-cleaning or printing opera-
Page 20 / Illinois Municipal Review / February 1991
tions, the existence of underground storage tanks, mixing arsenic-based pesticides, or the disposal of mixed
urban and industrial wastes. The final report should
indicate not just the sequence of activity at the site
being transferred, but land uses on surrounding property that may impact the parcel in question. The preparation of a site geological and hydrological report
should indicate the possibility of contaminant migration to the site from neighboring property. Natural or
man-made conduits can permit the movement of hazardous substances and need to be identified. A review
of environmental compliance, often referred to as an
environmental audit, attempts to trace the record of
land uses as documented in the files of regulatory agencies since about 1970. This component identifies permits for handling hazardous substances or violations of
environmental laws, thereby alerting the buyer to recent risks. The site inspection seeks to confirm that the
documentary record is not at variance with the actual
conditions of the site. There have been cases where
government files indicated a site was clean, but stacks
of leaking drums were on the property. Without a site
inspection, responsibility for such obviously illegal situations can be passed on to the new owner.
Phase I site assessments may range in price from
$1, 500 to $5, 000 depending on the size of the parcel and
the complexity of its land use history. Phase II environmental testing can drive the costs up considerably.
Despite the seemingly high price, the net benefit can
offset any initial outlay. The relatively simple task of
cleaning up soil contaminated by a leaking underground storage tank may run in the hundreds of thousands of dollars. Cleaning up large-scale contamination
and the attendant damages may cost millions. By comparison, the up-front cost of a site assessment is a reasonable price to pay for piece of mind and legal security.
Illinois recently enacted legislation known as the
Illinois Responsible Property Transfer Act (RPTA). It
calls for certain types of transactions to file "disclosure
documents-- with the county recorder and the state
EPA. Although viewed by some as a due diligence
form, the state legislature specifically stated that the
disclosure document cannot fulfill this function. Consequently, properties that must report under RPTA,
along with most other commercial properties, must
have a separate site assessment.
Currently, there is no universally accepted standard
for what constitutes an acceptable site assessment, and
there is a wide range of services being offered as due
diligence investigations. Until there is greater agreement on a standard procedure, property buyers will be
smart to expect exhaustive investigations and reports. It
is better to err on the side of thoroughness and accuracy, than to face potentially costly consequences.
Other Actions Appropriate for Local Governments
In addition to site assessments, there are other steps
local units of government can take to deal with relict
deposits of hazardous substances within their jurisdiction. We will discuss some of these in Part II of this
series. •
Suggested Reading
C.E. Colten and D. Mulville-Friel, Guidelines and Methods for Conducting Property Transfer Site Histories. Illinois Hazardous Waste
Research and Information Center, Research Report 049. Champaign,
IL, 1990.
J.S. Moskowitz, Environmental Inability and Real Estate Transactions: Low and Practice. New York: Practising Law Institute, 1989.
A.R. Wilson, Environmental Risk: Identification and Management.
Chelsea, MI: Lewis, 1990.
February 1991 / Illinois Municipal Review / Page 21