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Watch v. Harris

June 25, 1979


Cross-appeals from a ruling of the United States District Court for the District of Connecticut, T. Emmet Clarie, Chief Judge, granting motion for a preliminary injunction against the United States Department of Housing and Urban Development and the Waterbury Urban Renewal Agency proceeding with an urban renewal project. Pursuant to the parties' stipulation that this appeal determine the merits, cf. Fed. R. Civ. P. 65(a)(2), held: defendants' conduct violated both the National Historic Preservation Act and the National Environmental Policy Act. Judgment affirmed; preliminary injunction directed to be made permanent.

Author: Oakes

Before: LUMBARD and OAKES, Circuit Judges, and BRIEANT, District Judge.*fn*

OAKES, Circuit Judge:

An ongoing urban renewal project in the heart of a small New England city has evidently awakened in the minds and hearts of local citizens concern about the historical heritage that the project impinges upon. The citizens formed the plaintiff organization by the acronym WATCH, Waterbury Action to Conserve Our Heritage, Inc., and the organization brought suit against three individual federal officials, the Secretary, Regional Administrator, and Area Director of the United States Department of Housing and Urban Development, hereinafter collectively called HUD, and against the Waterbury Urban Renewal Agency (WURA), defendant below and appellant here. The Central Business District Renewal Project No. Conn. R-107 (the Project) contemplated the demolition of a number of buildings in a twenty-acre area. In seeking to stop that demolition WATCH below urged that defendants had not complied with the requirements of the National Environmental Policy Act (NEPA), 42 U.S.C. § 4321 et seq., the National Historic Preservation Act (NHPA), 16 U.S.C. § 470 et seq., and certain regulations of HUD and of the Advisory Council on Historic Preservation.*fn1 In a careful and comprehensive opinion, the United States District Court for the District of Connecticut, T. Emmet Clarie, Chief Judge, held that NEPA was applicable but that, because the loan and capital grant contract was executed before any affected properties were listed in the National Register, NHPA was not. He also held that subsequent regulations of the Advisory Council on Historic Preservation, supra note 1, could not apply because they would be "inconsistent" with NHPA, the underlying statute. Accordingly, the court granted WATCH's motion for a preliminary injunction to restrain the defendants from proceeding with the Project.

WURA appeals from the grant of the preliminary injunction. In a cross-appel and pursuant to our certification of the issue under 28 U.S.C. § 1292(b), WATCH urges that NHPA is applicable to the Project. HUD does not appeal the grant of the injunction but has filed a memorandum disputing WURA's arguments that NEPA does not apply or that if it does apply it conflicts with NHPA. The parties have now stipulated that the hearing befor ethe district court on the preliminary injunction can be considered as a hearing on the merits.Cf. Fed. R. Civ. P. 65(a)(2). We commend counsel for this expediting and cost-saving agreement, which we assume that the district court will accept. Thus we need not discuss "probability of success," "irreparable injury," or other elements of the preliminary injunction test*fn2 but will proceed to the merits of the legal issues.


The City of Waterbury, after workshop sessions, meetings, public hearings, and the like, adopted an urban renewal plan to rehabilitate an area of 20.6 acres in downtown Waterbury north of Interstate 84. On May 11, 1973, WURA and HUD executed a Loan and Capital Grant Contract (the Contract), pursuant to which HUD was to give WURA project loans aggregating in excess of $12,800,000 and a capital grant in excess of $11,500,000. The plan calls for demolition of 83 of some 113 buildings in the project area and for the construction of high rise, high density commercial and office space. The project is still far from completion. As of January 28, 1977, 55% of the land had been acquired; 35% of the buildings had been demolished; although no land had been disposed of, project improvements were 25% complete; and relocation was 45% complete.*fn3 As of November 28, 1978, 27 of the buildings scheduled for demolition remained standing. WURA's executive director testified that as of November 1978, WURA had spent only $12 million of the total cost of the project; that WURA has not disposed of or agreed to convey some of the real estate on which the remaining buildings scheduled for demolition sit; that WURA has not even acquired certain property from private owners; and that a number of the remaining buildings scheduled for demolition are occupied by tenants of WURA.

It is of some importance to the resolution of this case that under the Contract the work is done in phases, each of which requires HUD's permission.Under Section 108(A) of the Contract, WURA is required promptly to submit to HUD documentary data with respect to any action that WURA proposes to take in carrying out the Project. Section 108(B) further provides:

[HUD] may elect not to make a requested payment... if, after [WURA] shall have furnished any item covered by and in accordance with Section 108(A) hereof, [WURA] shall have proceeded further with respect thereto without having been advised in writing by the Secretary to the effect that [HUD] has no objection to [WURA's] so proceeding.

Thus the acquisition of properties, the demolition of buildings, and changes in the urban renewal plan all require HUD's on-going permission. Section 108(B) explains that this permission is necessary to insure that the "Agency [WURA] shall not take any step which might, in the opinion of the Secretary [of HUD], violate applicable Federal laws or regulations... "*fn4

In the eyes of WATCH, the buildings in the project area possess historical interest because they are "of a classic turn-of-the-century main street type," representing an eclectic collection of architectural styles including Renaissance revival, Richardsonian romanesque, Greek revival, and Italianate. The cultural, social, architectural, and historic significance of the neighborhood escaped the attention of the local citizenry -- at least they were not moved by the writings of Ada Louise Huxtable -- until December 1, 1976,*fn5 when the Waterbury Commission on Aging suggested to the State Histoic Preservation office that the H. H. Peck carriage house, located within the Project area, be considered for listing on the National Register of historic places.*fn6 When on May 6, 1976, WURA forwarded to HUD's area office HUD Form ECO-1 setting forth the applicant's environmental information with respect to the project area, WURA stated that "[there] are no known significant historic, archaelogical, or architectural sites or properties listed on, or being considered for nomination to, the National Register of Historic Places." Similarly there were no responses to HUD's legal advertisements on January 5, 1977, in two Waterbury newspapers that HUD was performing an environmental assessment of the Project and was inviting comment by January 20.

On January 28, 1977, HUD completed its Special Environmental Clearance for the Project, observing that "[there] are no properties listed or nominated to the National Register of historical places." Based on this Clearance, HUD concluded that there was no significant environmental impact and that the processing of the Project could proceed. But HUD did not consult with the State Historic Preservation office (SHPO) about eligible properties before preparing the Clearance, and there was disputed testimony that it also did not consult about listed or nominated properties. Neither the ECO-1 nor the Clearance expressly considered alternatives to demolition of buildings designated for demolition in the Project area. HUD did not prepare an environmental impact statement for the Project area and did not consult with the national Advisory Council on Historic Preservation.

However, on April 21, 1977, WURA did transmit information to HUD about the potential eligibility of the carriage house. On December 29, 1977, HUD wrote to the Department of Interior and expressed its finding that the house was not eligible but requested a determination from the Department. The Keeper of the National Register determined that the house was eligible on February 7, 1978. In late December, 1977, attorneys for members of WATCH who owned property in the Project area wrote to HUD demanding National Register eligibility determinations with respect to all the commercial buildings in the Project area. On January 18, 1978, HUD ordered a "freeze," i.e., that no federally assisted acquisition, disposition, renovation, or demolition be conducted on any struture within the Project area until the area office had made a Register eligibility determination. The Advisory Council on Historic Preservation subsequently informed the HUD area office that it had become aware of the Project and requested an evaluation of the significance of the central business district. The State Historic Preservation officer on March 22, 1978, also wrote to the HUD area office stating that he had made a field inspection in February and concluding that several portions of the area were eligible for inclusion, because the area was "a substantially intact 19th century commercial district," one of the more complete 19th century downtown areas in Connecticut, and some of the buildings were "outstanding examples of their types."

The "freeze" lasted from January 18, 1978, to August 31, 1978, while HUD inspected the project and gathered data. In September, 1978, HUD terminated its attempts to obtain Register eligibility determinations and recommenced demolition. At this point SHPO informed the Deputy Assistant Secretary of HUD that it had not been consulted and suggested an immediate review of HUD's decision not to seek an eligibility determination.WURA has evidently entered into a contract for the demolition of the remaining buildings scheduled for demolition. WATCH brought suit in October, 1978, and the district court granted a preliminary injunction on December 22, 1978.


The district court held that the plaintiff WATCH had standing to sue, a decision which is not challenged on the appeal, and that the plaintiffs were not guilty of laches because the buildings about which they were concerned had not yet been demolished and because the plaintiffs could properly rely upon the federal agencies' performing their statutory duties. This decision was surely correct in view of the public interest in preserving the historic sites that remain and the continuing nature of HUD's supervision over acquisition, demolition, and other project activities, see note 4 supra. Compare Steubing v. Brinegar, 511 F.2d 489, 495 (2d Cir. 1975), with City of Rochester v. United States Postal Service, 541 F.2d 967, 977 (2d Cir. 1976). On the merits, Judge Clarie held that NHPA was inapplicable, that Advisory Council and HUD regulations, see note 1 supra, were either inapplicable or invalid, but that NEPA did apply.

Judge Clarie concluded that NHPA was inapplicable because in 1973, when the contract here was executed, Section 106, 16 U.S.C. § 480f, provided that "[the] head of any Federal agency... shall, prior to the approval of the expenditure of any Federal funds on the undertaking... take into account the effect of the undertaking on any district, site, building, structure or object that is included in the National Register."*fn7 Although the statute was amended in 1976 to refer to property "including in or eligible for inclusion in the National Register" (emphasis added), the language "prior to the approval of the expenditure of any Federal funds" remained. As Judge Clarie duly noted, a number of federal courts, in reviewing NHPA challenges to federally assisted urban renewal projects, have interpreted the "approval" language to mean the time when a grant and loan contract is executed.*fn8 Because no properties in the Project area were listed when the Contract was signed, Judge Clarie reasoned, NHPA imposes no present duty upon HUD to consider the effect of the Project on eligible properties or properties listed after 1973.

The court next addressed the applicability of HUD regulations. Pursuant to Executive Order 11593, 36 Fed. Reg. 8921 (1971), directing federal agencies to adopt procedures to assure that federal programs contribute to historic preservation, HUD incorporated by reference the guidelines which the Advisory Council on Historic Preservation had promulgated. See note 1 supra. Under the authority of NHPA, these guidelines originally established procedures for determining whether a federally assisted undertaking had an effect on a listed property. 38 Fed. Reg. 5388 (1973). Under the authority of Executive Order 11593 and NEPA as well as NHPA, the Advisory ...

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