Department of Corrections Junction City Prison Project - The 900-pound Gorilla
Project could use up most, if not all of the available wetland mitigation credits in the mid-Willamette Valley
March 26, 2009--Salem
At the annual All-Bankers meeting hosted by the Oregon Department of State Lands and the US Army Corps of Engineers, Kirk Jarvie, DSL liason for Economic Revitalization projects, briefed wetland mitigation bankers on the status of the Department of Corrections Junction City prison project. He said it is likely that the prison project, along with an associated sewage treatment plan upgrade, could require the balance of all the available wetland mitigation bank credits from Eugene to Albany.
Request for bids for the mitigation credit sales should be received by the bankers by late-April or early-May.
In one fell swoop, the prison project could transform the market for mitigation credits from one of abundance and relatively low prices to none available at any price. Recent credit prices have been all over the map as bankers balance current cash flow needs with what kind of position they want to be in when the prison bid opens up. Additional releases of credits is case-by-case specific to each bank according to meeting on-the-ground performance standards; consequently, there is no assurance that additional credits will become available anytime soon in order to take up the slack in supply.
Developers with current or anticipated wetland credit needs would be well advised to consider buying now or at least purchasing an option on credits in order to lock in current prices and supply.
New DSL Permitting Rules Will Make Do-It-Yourself Mitigation More Difficult
Applicants' chances of agency approving mitigation plans diminishing; chances of projects meeting standards more remote than ever
March 1, 2009--Salem
New DSL rules governing compensatory wetland mitigation became effective today, ushering in a new level of difficulty for permit applicants who elect to do their own mitigation projects. The new rules are intended to level the playing field regarding what constitutes acceptable mitigation between all approaches to wetland mitigation - banks, permitee-responsible projects, and the state's payment in-lieu program. Banks have long complained that they are held to a higher standard of performance than the other forms of mitigation, and the new rules attempt to bring all mitigation projects up to bank standards.
1) stepping up the technical requirements for functional assessments;
2) providing local replacement for locally important wetland functions and values;
3) expanded mitigation site selection criteria that needs to be addressed;
4) demonstrating measures taken to minimize the time lag between the proposed impact and fully-functioning mitigation;
5) introduces a new functional assessment tool - ORWAP - including a new emphasis on wetland values and new mechanics for determining functional equivalency;
6) requirements for perpetual protection of the mitigation site including possible cash endowments;
7) requirements for financial security (such as bonding) at the higher of bank or PIL rates;
8) first-time standards for post-project mitigation site wetland delineation.
While none of these areas of concern are new, the guidance shows a ratcheting-up of the technical difficulty that will be encountered when applying for permits and when trying to prove that your mitigation project is successful. Policy shifts have occurred that have not been flight tested for unintended consequences or practicability.
There are a thousand and one details that make up a wetland mitigation project. The new DSL rules and guidance have only added to the complexity and uncertainty. Despite this, many permit applicants will continue to think they can provide adequate wetland mitigation on the cheap by doing it themselves, and they will get to be the Department's guinea pigs. On the other hand, others will join the growing number of savvy developers who appreciate the here-and-now certainty of buying bank credits and moving on with their projects unencumbered.