Annapolis committee pauses sale of Spa Road parcels pending remediation, grants and deed terms

The Economic Matters Committee of the Annapolis Board of Aldermen on July 16 voted not to take action on legislation that would transfer three parcels at 932 and 935 Spa Road to the Resilience Authority of Annapolis and Anne Arundel County for environmental remediation and redevelopment.

Committee members, staff and representatives of the Resilience Authority and the city discussed why the city is proposing the transfer, the timeline for a potential U.S. Environmental Protection Agency brownfields grant, what protections the city would keep and the scope of cleanup work needed before redevelopment.

Why it matters: City attorneys and staff said the transfer is being considered because, as the city itself identified contamination on the properties, many federal and foundation grants will not award funding to the party that caused contamination. Transferring the parcels to a third-party nonprofit instrumentality — the Resilience Authority — would allow that entity to apply for EPA brownfields funding to pay for remediation that the city could not secure directly.

What committee heard: Ashley Leonard, assistant city attorney for the City of Annapolis, told the committee the sale would include a reverter provision so parcels would return to city ownership after remediation. "We will put a reverter clause ... the property comes back. I believe that the current amendment language is no later than 7 years," Leonard said.

Representatives from the city and the Resilience Authority said the EPA brownfields grant application is due in November. Allison DiManno of the Department of Public Works told the committee, "The grant application is due in November," and that community outreach milestones are planned in September and November to support the application.

Christina Alexander, director of operations for the Resilience Authority, told aldermen the authority can be the named applicant for an EPA brownfields grant and accept grant funds. Alexander also warned the cost of remediation can exceed typical grant awards: "Even if the $4,000,000 grant from the brownfield fund is given to you, that can definitely take care of a lot of costs, but this can potentially cost up to $10,000,000." She said the Resilience Authority can pursue additional state, local or private funding to cover gaps.

Discussion and concerns: Committee members pressed for legal protections to ensure the property returns to the city. Leonard said the deed will include a reverter clause obligating the property to revert to the city no later than seven years or upon completion of remediation, and staff agreed to add language requiring immediate reversion if the project fails to secure the grant. Aldermen also asked whether remediation would require full cleanup before the city could own the property again; staff said EPA typically requires remedial measures to the EPA's satisfaction before grant closeout.

On liability and future uses, the Resilience Authority described limits on profit-making under EPA grant rules and said operating for private profit could jeopardize the authority's tax-exempt status. Staff also said they will retain Lot 2 for city use and that subdivision of the site would create four parcels to give flexibility in which parcels transfer and which the city retains.

Heritage and historic resources: Robert Worden, vice chair of the Annapolis Heritage Commission, testified that the Spa Road parcels include historically important farm and Civil War-era sites and asked the city to require archaeological assessments "prior to and during remediation and construction," with attention to areas bordering Spa Creek headwaters. Committee members asked staff to check whether the EPA brownfields process triggers Section 106 reviews under the National Historic Preservation Act. Staff noted they will consult environmental and preservation specialists about how archaeological work can safely proceed on a contaminated site.

Next steps and committee action: Committee members said they want more detailed technical reports before moving forward. The committee voted to take no action on the transfer ordinance so staff, the Resilience Authority and environmental consultants can provide additional briefings (including the Phase 2 contamination details, response action plan and groundwater testing results) and to return with clearer reverter language and funding scenarios.