When customers buy real estate sight-unseen from Wildlands, Inc., the land invariably turns out to be a swampy, inhabitable plot in the middle of nowhere - which is just fine for both parties.
Welcome to the world of mitigation banking, an innovative means for both private and public-sector developers to have their land and build on it, too. This is how it works: A developer wants to expand a housing tract into a wetlands area. But there is a problem. Under Section 404 of the 1977 Clean Water Act - a law that calls for "no net loss" of wetlands in the United States - the wetlands are protected against development. Until mitigation banking, the developer had only two options. One was to mitigate or substitute the impacted wetlands with other land on the same site, resulting in a potential loss in real estate value. The other option was to mitigate the affected wetlands off-site, an effort requiring considerable time and expense to obtain, construct, maintain and monitor the wetlands site that will satisfy regulatory agencies.
With the advent of mitigation banking, a developer now can purchase compensatory wetland habitat acreage, or "credits," in an existing wetlands preserve known as a mitigation bank. One such mitigation bank is Roseville-based Wildlands, Inc., founded three years ago by Steve Morgan and Riley Smith.
Morgan, president of Wildlands, describes the virtues of mitigation banking "First, it expedites the permitting process for the developer," he explains. "It also brings up the value of land that other-wise would be set aside for on-site preservation." He maintains that trying to preserve an area of wetlands amidst a development isn't always the most ecological route. "Biologically, it's not always sound to try to work around existing habitat, because the encroachment of man and development." He adds that mitigation banking consolidates wetlands from isolated sites, making them easier to protect.
Wildlands received formal permission to be a wetlands mitigation bank just one year ago. Its bank site consists of 315 acres centered near Sheridan, 22 miles north of Sacramento. The bank acreage offers compensatory mitigation for at least 10 varieties of wetlands habitat, from vernal pools to elderberry savanna. Over 70 plants and dozens of animals species are protected in this site, which serves development in a 40-mile radius. The fixed perimeter ensures that the habitat is biologically similar the wetland sites being developed. Among Wildlands' clients are placer County Public Works, CalTrans and Diamond K Properties in Roseville, for which Wildlands recently mitigated eight acres of wetlands.
Another advantage of mitigation banking is simplicity for the developer. Currently, landowners who opt to mitigate on their own land take on the financial responsibility to maintain the wetlands for a minimum of five years. "Through the purchase of compensatory credits in the mitigation bank, the applicant is relieved of liability, and we assume the responsibility," he says. "That another important factor."
One might reasonably wonder if Wildlands' protected habitat itself might be developed someday, turning the whole the mitigation concept into an ecological shell game. Morgan say that will not happen. The U.S. Army Corps of Engineers and the California Department of Fish and Game "have stated that our creation efforts be maintained as wetlands in perpetuity," he says. "So there's no way that we can develop in this bank."
The two public-sector agencies Morgan mentions - the Corps and Fish and Game - are key allies of Wildlands. Tom Coe, chief of the Army Corps' Central California/Nevada Permit Office, explain how the Corps is involved in the mitigation process. "When a permit applicant wants to use a mitigation bank in this area, right now Wildlands is the only mitigation bank. So we determine how much mitigation [needs] to be purchased at Wildlands. When we issue the permit, we direct the applicant to go to Wildlands and purchase so many acres of certain types of wetlands. When they've satisfied the mitigation requirements for that permit, then the applicant can proceed to build their project."
Jeff Finn of the California State Department of Fish and Game says that because of the state's "no net loss or value" policy regarding wetlands, his agency acts as an advisory body to cities, counties and developers. "And of course, we police the establishment of mitigation banks." He says.
Finn says that Fish and Game approves of Wildlands consolidating small wetland areas into one large locality. "The advantage for us in terms of resources is that it's one block," he says. "And it actually functions as habitat for a lot more critters than some of these really isolated pieces adjacent to developed areas."
COMSTOCK'S, APRIL 1996