New wetlands regulations can affect your developments. Find out what you need to know to protect yourself.
"All wetlands are equal, but some are more equal than others," states Neil Silver, a Michigan-based attorney who specializes in helping developers with projects that have what he calls "strings." It could be a brownfield project on a former industrial site, a wetland, or any other problem site, but his mission is clear: Find a way around these obstacles that cause his clients' projects to be delayed.
Thanks to the Army Corps of Engineers, Silver's job just got tougher and he isn't happy about it. The Army Corps has recently released a new rule, known as Nationwide Permit 39, that calls for stricter regulation of projects that destroy or damage wetlands. (See sidebar)
Silver feels the new rules are often unfair and arbitrary. He points to an invasive weed-like marsh grass, Phragmites australis, as an example. Phragmites-dominated wetlands are of lower quality than pristine wetlands, says Silver. "I shouldn't have to create the Taj Mahal of wetlands somewhere else" to replace a Phragmites-based area, he says.
According to Sam Collinson of the Army Corps of Engineers, you don't. Collinson says that the mitigation process uses a grading system that rates high-quality wetlands much higher than other varieties such as Phragmites systems. He also points out that 80% to 90% of projects can still proceed as they would have under the old regulations.
Even so, he admits that the new system is a work in progress. "At this point we are waiting to see what happens," says Collinson. "The numbers are not in yet, so we don't know if it's working. We won't know for another 6 months to a year."
One company that has first-hand knowledge of this process is Clearwater, Fla.-based Boos Construction Group. They worked with the Army Corps on the Publix Indian River project in Indian River County, Fla. Vice president of construction David Morris recalls that Boos knew some wetlands were on site, but the company wasn't aware of their extent until they started doing diligence checks on the property. At that point, they discovered more than three acres, enough to need a permit from the Corps.
"We were lucky that we were able to work with the St. Johns River Buffer Preserve," says Morris. "We put together a deal (through a mitigation bank) that helped them out a great deal, and didn't break our bank." By the time the process was over, Boos' mitigation efforts added $110,000 to the cost of the project. Morris says such a project would be impossible under the new, stricter regulations.
Environmental consultant Bob Weight worked with Morris on the Indian River project, and has done numerous similar projects. "I've been doing this for 22 years, and I have never had a permit denied," he says proudly. Weight makes no secret of his disdain for the recent changes. "The whole idea of Nationwide Permits was to streamline the (development) process," says Weight, not make it longer and more difficult.
Besides the extra time mitigation can add to a project, money matters as well. "Mitigation becomes more of an economic issue than an environmental one to a developer. Do you want to spend $50,000 on a piece of land that is only worth $10,000? The answer is no," says Weight. "A lot of people are looking at these figures and saying, `I'll take my chances with the fines (for noncompliance).'"
When asked what developers need to know most about wetlands regulations, Weight doesn't hesitate. "The best thing you can do in your article is tell people to do their due diligence," he says emphatically. "It's so key to do your diligence," agrees Morris, "It's so crucial to get that work done up front, get it done early."
- Why should I be concerned about wetlands on my property?
Because they can add to your acquisition costs, possibly even preventing the project from happening in extreme cases.
- Which Army Corps rules impact shopping center development?
The two main rules that effect real estate development are Nationwide Permit (NWP) 27, which concerns wetlands in general, and NWP 39, a more recent rule that specifically regulates "residential, commercial and institutional developments."
- What is "avoidance and minimization?"
Section 19 of NWP 27 states all projects "must be designed and constructed to avoid and minimize adverse effects to waters of the United States to the maximum extent practicable at the project site." As a result, developers are required to prepare a statement that shows how they avoided and/or minimized damage to wetlands. If the avoidance and minimization statement is deemed insufficient or faulty, additional conservation or mitigation efforts may be required.
- What are mitigation banks and how do they work?
The mitigation bank system allows companies to donate money towards rehabilitating off-site wetlands as mitigation for disturbing or destroying wetlands on their project site. According to Sam Collinson of the Army Corps, the goal is to achieve 1 to 1 "function of value." In the most extreme scenario (mitigating the destruction of a high-grade wetland by merely preserving a low-grade one), the ratio of acres mitigated to acres destroyed can be as high as 25 to 1.
- Who is the final authority on these matters?
In most cases, the District Engineer for your local Army Corps District.