Wetland Banking Links

Since 1996, I have been in the "environmental mitigation" business. Mitigation and mitigation banking is a new industry with the objective of restoring environmental function in one area, to compensate for others destroying the preferred environment elsewhere.

Some interesting links:

George Howard House testimony September 20, 2001

Newspaper articles concerning Restoration Systems

Restoration Systems' Bear Creek Wetland Mitigation Bank

Fair warning to those who want to start a wetland bank....

The National Mitigation Banking Association

National Mitigation and Conservation Banking Conference

N.C. DOT's Achievements in Wetland Mitigation

Wetland Restoration for Highways

Congressional Research Service Report describing wetland banking

Mitigation Banking -- All You Need To Know

Another good paper from the Army Corps

The North Carolina Wetland Restoration Program

Factors in The Success of An Entrepreneurial Wetlands Mitigation Bank
___________________

Presented by
Donald A. Carr
Winthrop, Stimson, Putnam & Roberts
Washington, D.C.

At the First National Mitigation Banking Conference

Terrene Institute
April 6-7, 1998 n Washington, DC

The successful establishment of a wetlands mitigation bank, especially a large entrepreneurial one, is a formidable task. It is not for the fainthearted, or for those who need quick gratification. Legal risk, political risk and market risk must each be addressed and overcome. Navigating the regulatory Scyllas and Charybdises requires both experienced judgment at the helm and large quantities of good fortune.

There is certainly no one chart that can lead the venture safely home. The following considerations may apply in many mitigation banking enterprises:

Make sure your business plan is solid enough (and sufficiently well financed) to weather a review process that might be more protracted than your worst forecast. This demands intelligent selection of real estate and ultra-careful restoration planning so that credits can be offered for some small fraction of what a project developer would otherwise have to spend for mitigation. Then, even with the inevitable overruns, there will be sufficient motivation to keep pressing ahead through inevitable mitigation bank review team (MBRT) delays.
Anticipate and show respect for deeply rooted institutional suspicion of mitigation banking concepts and methods. Some regulators have literally been brought up to believe that the only good mitigation bank is a dead one; that they are all fly-by-night schemes and ecologically fraudulent, etc. This attitude, which has its origins in EPA and environmental community distrust of Reagan Administration deregulation efforts, still persists in many quarters. It was not wholly illegitimate in view of some early, ill-conceived bank enterprises.
Therefore, do not proselytize mitigation banking as a philosophy. Instead, focus on the net benefits of your specific proposal compared to the poor results of site-by-site mitigation in the area. Emphasize the technical details and superiority of your restoration plan or the exceptional ecological function of your preservation land in order to depoliticize the discussion.
Be prepared to be in the middle of historic interagency conflicts, and endeavor to make peace with all factions. This warfare has multiple combatants (Corps, EPA and state environmental/natural resource agencies) and has been flaming since at least the Pyramid-Attleboro Mall litigation in the middle 1980s.
Work with local and regional environmental organizations to design and explain the merits of your plan so that they can at least reconcile themselves to non-opposition, because it is almost always impossible to succeed if they actively object. If, on the other hand, the Nature Conservancy or other respected groups can be brought to endorse your plan, this may be a significant advantage.
Formulate your rate of return calculus with the perspective that it will only be achievable if there are demonstrable environmental advantages. You have to show clients and customers that your product is cheaper, but you also have to persuade the agencies that your product is clearly better than the usual command-and-control result.
Remember that most of the people you will be trying to convince do not have private sector backgrounds or orientation. They have a different sense of the time value of money, and you cannot pass GO unless they concur. The mitigation banking guidelines, and the discretion, belong to them. They must be enticed by the merits of your idea and its presentation, not lectured, browbeaten or compelled.
Choose the consultants who are most respected locally, and use experts in every necessary discipline. It is much easier for the agencies to accept your proposition if it is championed by the specialists with legitimacy in each area. This does not necessarily mean the good old boys who used to work for the Corps, some of whom in fact may be resented for having "sold out" or having succeeded in the private sector.
Make a case for a conservative amount of advance credit, rather than appearing to have a nefarious agenda to take the money and run. The agencies hate taking the risk of buying the Brooklyn Bridge.
Factor generous mitigation ratios into bank economics, along with flexibility for agency discretion dependent upon mitigation success and quality or extent of impacts. Allow the agencies to show they got a good deal in the end.

Again, these ten ideas are hardly universal rules. For at least the foreseeable future, mitigation banking practice will be more disparate than uniform. Some Regions and Districts will be hard sells, some easier ones. Each new prospectus will have to invent itself. Still, if you attempt sincerely to put yourself in the shoes of your regulatory audience, you may have a good chance of coming out ahead.

___________________

Donald A. Carr
Partner
Winthrop, Stimson, Putnam & Roberts
1133 Connecticut Avenue, Suite 1200
Washington, DC 20036
___________________

Previous Paper Next Paper
First Mitigation Banking Conference