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How Champaign’s Groundwater Restriction Ordinance Adversely Affects Property Rights

5th & Hill Neighborhood Rights Campaign

How Champaign’s Groundwater Restriction Ordinance Adversely Affects Property Rights

Overview: The 5th & Hill Neighborhood Rights Campaign supports the repeal of the Groundwater Restriction Ordinance on the basis that it is bad environmental policy, it is bad for human health as it allows potential exposure to toxic chemicals, and it compromises the rights of (non-polluting) property owners.

To learn more about the ordinance and why the Campaign wants it repealed, click here [1].

Groundwater Ordinance Compromises Property Rights: Champaign City Council Bill No. 2007-138, a Groundwater Restriction Ordinance allows parties, within the City of Champaign, responsible for contamination that has spread beyond the boundaries of their property, to get out of having to address the contamination they have caused.  This is bad environmental policy that can negatively affect neighboring property owners in the following ways:

1.     Contamination that has migrated to private property (commercial or residential) negatively affects its property value.
The requirements under the Groundwater Restriction Ordinance itself state the following:
“The cleanup site representative sends a letter to the offsite property owner notifying them of the presence or potential presence (from modeled results of groundwater spread) of groundwater contamination beneath their property and the planned use of the groundwater restriction ordinance as an institutional control.”
Once a property owner is informed that their property is, through no fault of their own, contaminated by the responsible party, they now are required by law to inform any potential purchaser of their property that contamination has been found on the property.  This limits a property owner’s ability to obtain the desired value for their property. In other words, the Groundwater Restriction Ordinance behaves like a de facto deed restriction by forcing the property owner to behave as if the property was contaminated at the time of purchase.

2.     The use of the Groundwater Restriction Ordinance can affect the potential use of affected properties.  
The presence of contamination will limit the potential for re-sale by limiting the potential buyer pool for an affected property.  Certain types of business or homes will not be able to be built on properties where contamination has been allowed to remain in place.  An affected property owner is now penalized by being forced to appeal to a limited real estate market due to circumstances beyond the affected property owner’s control.

3.      An affected property owner could accrue additional financial burdens.
Property owners who are affected by contamination that has spread onto their property by a responsible party may accrue additional financial hardships in the way of protecting themselves from third party liability, indemnification and the cost of environmental insurance.  Whoever purchases the contaminated property in the future will have to factor in these costs as well when arriving at a purchase price, thereby lowering the negotiating power of the seller.

4.     The use of the Groundwater Restriction Ordinance puts affected property owners at a disadvantage during environmental negotiations to remediate their property.
Parties responsible for the migration of contamination onto residential or commercial property must enter into negotiations with the affected property owners in order to satisfy Illinois Environmental Protection Agency (IL EPA) regulations under the Voluntary Site Remediation Program.
During these negotiations, the party responsible for the contamination proposes a clean-up plan to the affected property owner. This clean-up plan includes tactics to remediate the contamination on the affected property owner’s property. One of these tactics is the use of the City’s Groundwater Restriction Ordinance. The ordinance, as stated above, allows a party responsible for contamination the option of doing nothing to remediate groundwater. In a sense, the responsible party can come to the table and propose to do absolutely nothing while still abiding by IL EPA regulations.  This puts the affected property owner at an inherent disadvantage when negotiating to restore their property to its original state, before it became contaminated.  If the property owner wants remediation of the contamination, and the polluter is unwilling to do actual remediation, the property owner will have to seek legal help in order to force some form of remediation to take place.