Getting developers in step on wetlands efforts

Sunday, January 3, 2010 at 11:45pm

Like every other state in the union, Tennessee is readying for an eco-friendly future. But besides the usual steps like courting “green collar” jobs and talking shop about curbing carbon emissions, state officials have focused specifically on cultivating a sense of environmental responsibility in one group that’s been historically lacking one — land developers.

Tennessee’s wetlands have become the focal point of the effort, largely because the state has a checkered past when it comes to compliance. According to a 1999 Tennessee Tech study, the state’s efforts to make up for wetlands destroyed by development “overall has been less successful and has not quite produced enough wetland acreage to compensate for that lost.”

State agencies say they’re turning over a new leaf.

The Tennessee Department of Transportation, for one, is making a concentrated effort to design projects that limit wetland impact from the onset, the department’s Chief of Environment and Planning Ed Cole told The City Paper.

“Sometimes an acre of wetland impact might only require for a few yards [change] in a right-of-way to avoid it completely,” Cole explained.

The hope among state agencies is that private developers will take a cue from the careful planning ostensibly practiced by the state. But despite the state’s nudging, there’s no indication private development will fall in line.

Further complicating matters, a recent reworking of a federal guideline could open the door for developers looking to skirt their due diligence.

Under a complex permit process that interweaves both federal and state approval, any building project that disturbs an existing wetland must compensate for the impact through wetland mitigation, a process that restores, creates or enhances a body of water to make up for the loss.

Historically, this has been done in two ways: on-site mitigation, where developers are responsible for restoring or creating a wetland near the affected area; or through wetland banking, where a developer can buy permits from an existing wetland bank to meet the compliance.

Environmental groups and the staff at the Tennessee Department of Environment and Conservation (TDEC) have been longtime proponents of the first method because it puts the environmental responsibility for cleaning up affected wetlands firmly on the shoulders of developers; but many builders see banking as the favored method.

“Most applicants would rather pay the money, go to the bank, and be done with it,” said Dan Eager, the manager of the division of water pollution controls at TDEC. “They’re not responsible for the ongoing monitoring or for guaranteeing the success of [the mitigation]. The banker assumes that responsibility.”

Feds throw state a curveball

TDEC and other regulatory agencies have the final say on how an applicant must mitigate impact. Those regulators are able to refer to state guidance from the Water Quality Control Board that lists on-site mitigation or local banking as preferable to outsourcing the responsibility to banks outside the affected area.

But according to Eager, the federal government recently threw a curve ball to regulators responsible for determining how to handle mitigation.

In March the federal guidelines were revised, and the new wording placed a preference on banking over on-site mitigation. Besides causing some confusion over what guidance regulators should follow, the federal change may open the door for more applicants to ask directly for the banking option.

“It tips the scale a little bit more, I would say, in the direction of going to a bank if an applicant can say, ‘Look, the federal government prefers this,’ ” Eager said.

One reason the federal government may have switched its preference is that on-site mitigation has had mixed success. Because developers are not wetland experts, they often lack the technical know-how to successfully design and maintain the wetland projects, Eager explained. As a result, many stabs at on-site mitigation fail.

But the wetland banking option increases the chances of success by putting the responsibility for mitigation in the hands of professionals, proponents argue.

Banks can either be nonprofit or for-profit entities set up by a group of experts. The bankers usually buy a large tract of former wetlands and invest heavily in the restoration of the property. After an approval process with government regulatory agencies, the restored bank can then sell credits to developers who have affected wetlands with other projects.

Finding the good side

Despite the apparent success of wetland banks, some say it’s wrong to lean too exclusively on the banking model because it separates the affected area from the restoration. If wetlands are destroyed at a site and a developer just buys credits at a distant bank, it does little good for the originally affected ecosystem.

“Wetlands are where they are in the landscape and they function there, so if you can place [mitigation] there or close to there, then that particular stream those wetlands help support is going to enjoy those benefits,” Eager said. “Whereas, if your mitigation is 20 or 50 miles away, you’re not going to see those benefits in that immediate drainage basin or watershed.”

But the separation of a site from its mitigation could have a further consequence, environmentalists fear. If developers get used to the idea that any impact can be simply corrected with a check to the mitigation bank, they might pay little attention to environmental consequences of projects in the planning stage. Therefore easy access to readily available banks might undermine the environmental consciousness officials have been working to instill in developers.

“There’s a good side to mitigation banking, but it shouldn’t be done in a way that encourages destruction on the front end,” said Barry Sulkin, an environmental consultant. “We don’t want to facilitate people destroying wetlands where they naturally occur.”

According to Eager, his office already must contend with permit applicants who would rather go straight to a bank than find an on-site mitigation option.

“People will propose to go to a wetland bank, but their project is in Chattanooga and they want to go up to upper east Tennessee to the bank,” he said. “There have been numerous times when we’ve said, ‘No, you need to look more locally.’ ”

As one of the largest public permit applicants in the state, TDOT does use mitigation banks but puts a preference on finding a local mitigation option the department can administer itself. If nothing is available, the department uses a bank.

“We really feel strongly that unless there’s a solution right at the project itself that everybody agrees to . . . we at TDOT don’t need to be in the business of making those kinds of decisions,” Cole said. “[We] let the regulators and banks make that decision.”

There isn’t a real worry the state will turn more toward banking and neglect on-site opportunities, regardless of the federal recommendation, Cole said. Credit prices at private banks are market-driven, Cole explained, and banking can be costly. For a budget-strapped state government, expensive banking is an unattractive option.

According to Eager, the department’s final decision about how a permit is mitigated is determined on a case-by-case basis. Often it comes down to who the department feels is mostly likely to mitigate correctly: those responsible for the impact or those who are paid to see the mitigation done right.

“Whereas [mitigation] is a bothersome detail to a developer, it’s the main business the banker is in,” he said.