The sale and/or development of some of Wisconsin’s most valuable waterfront property may be extremely difficult, if not impossible, due to a legal theory challenging the legal title to this property. While disputes regarding legal title involving specific pieces of property are not uncommon, this dispute is different because it involves one legal theory impacting thousands of acres of waterfront, or formerly waterfront, property throughout Wisconsin. Moreover, in most cases, the legal theory is being applied to property that has been developed for decades and has been improved with existing homes, buildings and/or infrastructure.

Several high-profile cases in downtown Milwaukee involving the development of a high-rise apartment building and in Sturgeon Bay involving a hotel are some of the most recent examples of how this legal theory can stop economic development from moving forward. If the legal title issues are not resolved, many more projects will likely be impacted in the future, preventing job growth, tax base expansion, and the transfer of legal title of affected property in many areas around the state.

To resolve these title disputes on a statewide basis, the WRA and the League of Wisconsin Municipalities will be working with Wisconsin lawmakers to develop a solution as part of the upcoming 2019-20 legislative session. The following is an overview of the issue and five general principles that would likely be included in legislation to help resolve the title issues in a manner that balances the public trust interests with the private property and economic development interests.

Overview

Numerous Wisconsin municipalities located along the Great Lakes or Mississippi River — for example Ashland, Bayfield, La Crosse, Milwaukee, Oshkosh, Sheboygan, Sturgeon Bay and Superior — are having difficulty redeveloping their shorelines because of legal title issues associated with the land adjacent to or near the waterway.

In most cases, this land was once part of the waterway but was filled several decades ago, generally prior to 1977, either through natural processes or as part of a legislative or common law authorization.

One of the most common ways for a shoreline area to be filled is through a natural process. Because water is continuously flowing, the shoreline is constantly changing, either being washed away through erosion or being added to through accretion. Thus, land that was once submerged underwater will often become “high ground” due to deposits added to the land over time.

In addition to natural processes, a shoreline area can be filled and legal title can be granted through a legal process, authorized by state statute. Two of the most common are:

• Legislative lakebed grants, which grant title in lakebeds to local governments for specified public purposes. For example, in 2015, the legislature granted legal title to Brown County in certain lakebeds located in Green Bay, and in 2013, the legislature resolved a legal title dispute related to the shoreline of Lake Michigan for purposes of the Couture project in Milwaukee.
• Bulkhead line approvals, outlined in Wis. Stat. § 30.11, which allow structures and fills to be placed to a designated line into the water. Bulkhead lines are established by local ordinance and are very common in Wisconsin. Although bulkhead lines are common, many have never been “improved” through the addition of fill and structures and thus are currently lines on a map.

Despite these statutory authorizations, some legal authorities maintain that this land is owned by the public and/or protected by the Public Trust Doctrine under the Wisconsin Constitution and thus title cannot be conveyed to private individuals. In other words, if the land was once a lakebed owned by the public, the land must remain public into perpetuity, and legal title cannot be conveyed to private entities.

Without a resolution to these title issues, obtaining title insurance and financing necessary for the redevelopment of this property is problematic. This is especially true given that most of the land involved in such disputes is located in urban areas and has already been developed for residential, commercial or industrial purposes.

Five principles that should be included in any legislation

To resolve the legal title issues affecting this property in a manner that balances the public trust interests with the private property and economic development interests, a legislative solution seems possible if it addressed the following five principles outlined below. Note that these principles are related only to the resolution of the legal title issues. The use, including any future development, of these properties would still need to comply with all federal, state and local regulations.

1. Ownership issues are different for riverbeds and lakebeds: The ownership of riverbeds and lakebeds has an important legal distinction. In the case of lakes, the title to the beds is held by the state. For riverbeds, the title is held by the riparian owner to the center of the stream, but this title is qualified by the rights of the public to use the water for navigation. Accordingly, any legislation would likely need to be drafted to recognize that the public’s ownership interests in the beds of rivers and lakes are different.
2. Scope must be limited to urbanized areas of Great Lakes and industrial rivers: Most of the legal title issues have issues or will likely arise in areas located in larger cities on the Great Lakes or in harbors or industrialized rivers that feed into the Great Lakes. These water bodies are different than smaller inland lakes or rivers that are less developed. Limiting the scope of any legislation to a narrow list of specific urban areas in select cities would help avoid any unintended consequences and reduce concerns from around the state.
3. Applies only to areas filled for 40+ years: To be consistent with current legal principles and as a matter of public policy, any legislation that conveys title to property should apply only to property that has been filled for a long time. Under current statutory law, previous fills of lakebeds are presumed to be valid if the property has been filled since December 9, 1977. Moreover, if a property has been filled for an extended period of time and has been used for a private purpose during that time, conveying title to the owner of that property would be considered an equitable remedy and less of an enrichment for that property owner, which will likely result in less public opposition.
4. Some public access must be maintained: One of the issues often raised in matters involving legal title to properties adjacent to existing waterways is whether some public access to the waterway will be maintained. Because the land was once publicly owned if it was formerly a lakebed, maintaining public access to the water has been an important legal principle and public policy issue. Public access can include a sidewalk, easement, pier or some other way for the public to access the water.
5. Rights of other riparians must be protected: Lastly, while addressing public rights is important, so too are the rights of other riparian owners. Allowing one riparian owner to acquire a legal interest or use his or her property in a manner that would harm the rights of other riparians would be unfair to those riparians and should be avoided.

Because this is a legal title issue and not an environmental issue that is important to municipalities across the state, lawmakers from both sides of the aisle have been interested in finding a solution. Hopefully, legislation will be enacted in the upcoming legislative session to resolve these disputes.

Tom Larson is Senior Vice President of Legal and Public Affairs for the WRA.