PETITION for review of order of Pollution Control Board.
MR. JUSTICE GREEN DELIVERED THE OPINION OF THE COURT:
Rehearing denied May 19, 1975.
Petitioner, Springfield Marine Bank, is the trustee of an Illinois land trust, known as the Westchester Trust or Westchester, the beneficial interest of which is in a joint venture. The venture involves the purchase of real estate, its platting and development for residential purposes, and the sale of the improved lots. It does not build on the lots. In 1962, Westchester purchased a tract of land, and by 1972, 15 subdivisions had been developed on it. That year plans were made for a 16th subdivision. Westchester was unable to obtain from the Environmental Protection Agency (E.P.A.) a permit to connect its sanitary drainage outlet to a sewer. That agency had placed a ban on further connections in this area, which was in the southwest part of the city of Springfield. A variance from that ban was denied by the Pollution Control Board (P.C.B.) and petitioner appeals.
The evidence indicated that for several years, in time of heavy rain, a substantial amount of storm drainage water had entered the sanitary sewers causing overflows of raw sewage in manholes and basements in the southwest Springfield area. Most of the area where this occurred was serviced by a sanitary sewer which joins downstream, the one to which petitioners sought to connect. On May 12, 1972, E.P.A. first denied petitioner's application to connect on the grounds that insufficient information had been furnished by petitioner. On July 12, 1972, E.P.A. placed the ban on the issuance of further connection permits to developers in the general area.
Both the Springfield Sanitary District and the E.P.A. had hoped that the flooding condition would be eliminated when the new Sugar Creek treatment plant of the district went into operation. None of the area in question would send sewage to this plant, but it would service part of the area then serviced by the main plant, thus relieving pressure on the main plant. The sewage from the area in question would continue to go to the main plant.
Much of the controversy centers on a letter dated August 29, 1972, from William V. Pye, of the E.P.A., to A. Paul Troemper, Executive Director of the Springfield Sanitary District. After making various observations about overflow problems in the district the letter concluded:
"Based on our evaluation of the past and proposed accomplishments and our own inspections, this Agency has determined that it will be able to issue a limited number of "conditional installation" sewer permits in the drainage area of the Outer Park sanitary sewer. These permits will allow connection of new sewers to the system when the new treatment plant is completed and in operation. Continued issuance of conditional installation permits will be contingent on the results of the above program and, most importantly, the absence of further overflows from the sanitary sewers in this area. In the event further overflows are observed, this Agency will discontinue issuance of conditional installation permits."
This letter soon came to the attention of Charles J. Johnson, manager of the Westchester venture. Thereafter, on September 14, 1972, a conditional installation permit was issued to Westchester authorizing it to install sanitary sewers but not to connect them to existing sewers. As a special condition of the permit Westchester was required to stop its sewers at least 10 feet from any proposed connection point. Stated on the permit was the following:
"Special Condition # 2: No connections may be made to this sanitary sewer extension without a Permit for the connection from this Agency.
Special Condition # 4: Issuance of this Permit must not be construed as termination of the sanitary sewer extension critical review status, imposed by our letter of July 12, 1972, which remains in effect."
Petitioner introduced evidence that upon the basis of the letter and the conditional permit, the principals of the venture assumed that they would be permitted to connect the sanitary drains when the new treatment plant was in operation. They then procured a loan from the Springfield Marine Bank for slightly over a million dollars. They spent about 2/3 of the proceeds procuring other land to develop and committed approximately 1/3 of the proceeds to the development of the 16th addition to Westchester. An officer of the bank testified that he would not have authorized the loan had he not also believed, relying on the letter and conditional permit, that Westchester would get a connection permit when the new plant went into operation.
The new plant went into operation during August, 1973. On the 8th of that month, Westchester petitioned the E.P.A. for a permit to connect and use its sewage drains. The request was denied on October 26, 1973. On April 1, 1974, the instant petition for variance was filed.
Petitioner contends that the P.C.B. is estopped to deny a permit, that the P.C.B. acted arbitrarily and unreasonably in denying the permit, that the ruling was contrary to the manifest weight of the evidence, and that the denial discriminated against petitioner in violation of the due process and equal protection clauses of the State and Federal constitutions.
• 1 P.C.B. did not find the hardship on Westchester incurred because of a denial of the variance to be great. Its opinion noted that the entire Westchester venture had received taxable income of $213,721 in 1972 and $94,183 in 1973 and that a $10,000 loss was projected for 1974. The opinion considered that the income was not lost but merely postponed. We believe that the P.C.B. gave insufficient consideration to the hardship of petitioner. To have a third of a million dollars tied up in a ...