The Federal Clean Water Act (and many other statutes) makes it clear that any development has to comply with a no net-loss standard when it comes to impacting wetlands and other natural resources. Project proponents who could impact a wetland must first attempt to avoid the impact, then if an impact is inevitable minimize the impact.  Finally, the party must mitigate for any impacts that do occur.  Boiling that down, if you impact an acre of wetland, you have to replace it with at least another acre of wetland.

Many developers assume that if they are required by federal, state, or local agencies to mitigate they then have to find areas on their project site to install a replacement wetland or other mitigation system. This is what is known as “on-site” mitigation. While this is certainly an option, often that type of replacement method is expensive, inefficient and not ecologically effective.

In many cases, a better alternative is to purchase mitigation credits to offset the impact of your site development. The purchase of these credits takes a piece of land that’s in the same service area - a location that has an ecological nexus with your project area - and preserves that area for restoration and protection forever. These sites are known as mitigation banks and generally consist of an ecologically restored area that creates environmental “lift”.  As an example, if a site started as a paved parking lot and then was restored to a functioning wetland this would create an increase in ecological function.  In this scenario, a mitigation developer/banker would be granted ecological credits for increasing the function of their site.  Once these credits are granted by a governmental agency, the developer/banker can sell these credits to other developers who need to provide mitigation to offset their impacts on wetlands or other natural resources.

 Blue Heron Slough Case

The Blue Heron Slough Conservation Bank (Bank) is located in the lower Snohomish River Estuary, near the mouth of the Snohomish River. The 353-acre site is located on land that historically was part of an extensive estuary complex that was supported by daily flooding from Possession Sound and intermittent flooding from the Snohomish River. In the 1800s, the area was cleared, diked, and drained for agriculture. 

The ecological goal for this site is to restore and estuary complex to this 353-acre by creating a mosaic of channels, marsh, mud flat, and riparian habitats which will be reconnected to riverine and tidal influence by breaching the existing dike in three locations once the site has stabilized. The proposed restoration activities on the Bank will increase the tidally-influenced acreage in the Snohomish River Estuary by approximately 13 percent which is key for salmon and by extension Orca recovery.

Recently a group of liable parties decided to utilize the Blue Heron Slough Bank to offset their liability under CERCLA’s Natural Resources Damage provisions.  The Port of Everett (Washington), the U.S. Navy, Weyerhaeuser, and Jeld Winn all were liable parties for their historic operations in Port Gardner Bay.   The parties had the option of providing on-site mitigation but decided instead to purchase ecological credits from the Blue Heron Slough Conservation Bank.

They ended up purchasing 1,000 credits – valued at around $10 million – in Blue Heron Slough. 

The Blue Heron Slough case is not necessarily about inhibiting or enabling development one way or the other. Removing the act of development from the equation, the issue is fundamentally about developers taking the necessary steps to ensure proper and efficient natural resource damages mitigation methods are pursued and that they can move forward with their project without ongoing mitigation liability. The key question for landowners and developers is: do you want to mitigate natural resources thoroughly and efficiently or do you want to take on the burden of mitigation yourself on your own land?  In many instances, the use of a bank is far more efficient and cost-effective and in most cases creates far more environmental lift.

Fortunately, there are some best practices you can follow as a landowner or developer to approach natural resources damage mitigation with intention and efficiency.

At Holmquist + Gardiner, one of my focuses is helping developers and organizations create and implement an ecological credits strategy that will support both your development goals and the necessary mitigation to permit your project and protect our environment. I also have vast experience working to create mitigation banks and working with the regulatory agencies who require mitigation measures.

We help ensure developers go through the proper sequencing process to comply with federal, state, and local requirements. From there, we look at local and state permitting and mitigation rules to help develop a mitigation strategy. Finally, we help facilitate the purchase of mitigation credits and ensure that all mitigation requirements are met to allow the project to move forward and to secure a full release for mitigation liabilities.

If you’re considering a development project and looking at your mitigation options, or you would like to discuss a development already in process, please contact me and I’d be glad to discuss your options.