The Story of the Atlanta Pipelines & The Developer

THE STORY OF THE ATLANTA PIPELINES & THE DEVELOPER

By Mary Anne Walser, Realtor & Attorney, 404-277-3527, maryannesellshomes@gmail.com

What if you bought the perfect home for your family in an idyllic neighborhood – playgrounds, pools, tennis courts, paid top dollar, settled in… and then found out that the land had suffered an immense petroleum spill several decades ago that contaminated the groundwater?  Most of us would agree that knowledge of the previous spill would have affected your view of the property and the price you were willing to pay. You might have purchased the home anyway – after all, Atlantic Station is the site of an old steel mill and many people live, work, and play there every day.  But previous environmental contamination is something a homeowner would definitely like to know about. So have a seat for the tale of the developer, the pipeline, and the title company.

A developer purchased 151 acres of property in Gwinnett County with an eye towards building a huge community of homes. Luckily no construction had started when the developer found out about a previous petroleum spill on the property. To understand the spill, you need to know about Colonial Pipeline and its large pipelines that run through Atlanta.

Perhaps you have seen the vacant land swaths with warning posts. Colonial Pipeline, the company who owns the pipeline, is based in Alpharetta. The pipeline itself consists of more than 5,500 miles of two pipelines (one 40 inches, the other 36 inches in diameter), originating in Houston, Texas, and going through many states, including Georgia, before it ends at the Port of New York and New Jersey. One of the pipelines is primarily devoted to gasoline and the other carries other petroleum products such as jet fuel, diesel fuel, and home heating oil.

And so these massive pipelines run through Atlanta – they run through this 151 acre property in Gwinnett, they run through a lot of Buckhead, and in fact run just past the house to one side of my own.  So what is it like to live near the pipelines?

In our neighborhood, no one thinks much about the pipelines – they are just “there” and have been there for as long as most of us remember.  Homeowners on either side of the pipeline property are allowed to use the property for certain uses – for walking trails, for play, for shallow gardens – but you can’t dig too deep, and no permanent structures are allowed. Periodically we get a notice from Colonial Pipeline notifying us that we live near the pipeline and outlining what we should do in case of an emergency, such as a leak. But unless and until something happens, it’s just a swath of property, much like property underneath the high voltage powerlines. Some consider it a plus to live by the pipeline – basically you get some extra land for recreational use and Colonial Pipeline maintains it for you.

But the pipeline under this property in Gwinnett developed a leak years prior (in the early 1990s). Colonial reported the leak to the Georgia Environmental Protection Division (EPD), which conducted an assessment and developed a corrective action plan.  By 2005, it was determined that the property was clear and was suitable for sale and development, and Colonial Pipeline, which also owned the land, sold it. An exhibit to the deed of sale notified the purchaser and successors that the petroleum contamination had occurred, and placed limitations on the property: (1) the groundwater could not be used for any purpose whatsoever (the land was serviced by public water from the county, so no groundwater would be used); (2) creating an easement so Colonial could maintain a monitoring well on the property to prevent future spills; (3) giving Colonial a right of first refusal to reacquire the property should it be sold; and (4) reservation of a 25 foot buffer for a creek and a river on the property.

In a subsequent sale of the property, the exhibit with this notification was left off of the deed. So that’s how the problem began. When the land was sold, the subsequent purchaser (a developer), therefore, did not know that there had ever been a spill and paid top dollar for the land. When the developer discovered the omission, they decided not to build and to try to recover some of that “top dollar” that they paid.  A Georgia court determined that the reduction in value of the property due to the fact that there had been a previous spill was worth millions of dollars. The case is still on appeal.  The land still sits empty; no houses, no one but the developer, the lender, the closing attorney and the title company paying much attention to it.

But what if houses HAD been built and you had purchased one unknowingly? How do you protect yourself from such unknowns? There are several things you can and should do when buying property. First, get a survey showing all easements of record. Then get a thorough title search (this is what your closing attorney does to be sure you are getting clear title). And then, GET TITLE INSURANCE. Title insurance helps to protect from adverse claims and notices affecting your deed that may or may not be in the chain of title – like the disappearing exhibit in the Gwinnett County case.

Mary Anne Walser is a licensed attorney and full-time REALTOR, serving buyers and sellers in all areas of Metro Atlanta. Her knowledge of residential real estate and her legal expertise allow her to offer great value to her clients. Mary Anne is a member of the Atlanta Board of Realtors, the Georgia Association of Realtors, the State Bar of Georgia and the Georgia Association of Women Lawyers. Contact Mary Anne at 404-277-3527, or via email:  maryannesellshomes@gmail.com.