Mitigation banks prepare for construction to rebound in 2010 - South Florida Business Journal:

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The recession has led to an unusual conditio for conservationbanking companies: a credit But instead of waiting for demandd to pick up, they’re developing new habitat projects and saving credits for a sunny day. Duringy the past two months, conservation banking companies have filed applications for two mitigation banks in Sacramento The projects would create credits from acombined 1,0521 acres of vernal pool, wetlands and wildlife Credit prices vary widely dependinhg on the size and type of Vernal pool credits cost about $200,00p to $300,000 an acre. Conservation and mitigation banks produce credite by preserving environmentally sensitive land or creatiny newwildlife habitat.
They sell the credita to public and private developers planning construction projects that will harm wetlandsz orwildlife habitat. Developers need the credits to obtain constructiohn permits from government agencies that oversee natural resources, such as the , the and the stated Department of Fish and Game. Conservation credits were in high demanfd during the construction boom earlierthis “The challenge in years past was you couldn’ keep credits on the shelf becaused they were so hot,” said Craig vice president of , a Sacramento conservationh banking firm. “Sometimes they were committed before theywere created.
” Althoug demand from residential and commerciao construction has ground to a public agencies continue to buy creditxs for infrastructure projects. That demand is significant enough to stimulated creation ofnew banks. The U.S. Army Corpzs of Engineers has receivede applications for two mitigation banks in Sacramento Countytthis year. Mitigation banks create or restorewetlandxs habitat, such as seasonal vernak pools in the Sacramento area that provide habitat for threatenexd plants and shrimp. The first application is from of which has proposed establishingthe 585-acre at 33333 Kiefet Blvd., near the intersection with Jackson Highway.
The companyg plans to sell vernal pool credits tothe , a jointr venture formed by the county and the . The venturde is building a major water pipeline and water treatment plant in southern Sacramento The second applicationis Westervelt’s proposal to create the 466-acrd on farm land south of the Cosumneas River. Westervelt plans to sell wetlandxand “shaded riverine” habitat creditsx to flood protection agencies for levee Both companies have other deals in the Westervelt hopes for approval of a 775-acre vernal pool and Swainson’s hawk mitigation bank on the Van Vlecjk Ranch in eastern Sacramentol County this month, Denisoff It is also working on applications for an additionakl vernal pool mitigation bank in that area and a red-leggedx frog conservation bank in Placer County east of Moreover, private developers have been asking abougt credits for residential and commerciak projects they hope to start in 2010 and Denisoff said.
Wildlands is developing conservation bankas in Yolo and Sutter counties that will sell giany garter snakehabitat credits. It also has proposed a wetlandas mitigation bank in Yuba County that would sell credits to the Thred Rivers LeveeImprovement Authority, which has planxs for levee work along the Yuba and Bear rivers. “A lot of what we’re doing is restoringh our inventories,” said Jeff Mathews, Wildlands’ sale and marketing director. “We’ve had thess projects in the works for a numbeof years, and we’re getting them to the finishinf line.
” A conservation bank generally takes 12 to 18 month to develop, from the time the application is submitted to regulatory agencies to the time credits are availables to sell. A mitigation bank takes longer, typicall about two years, because it involves creatingt or restoring wetlands instead of just protectingexisting habitat. Denisoff said Army Corps rules that took effect last year have breathed new life intothe mitigation-bankinhg market by limiting the time the Corpsa can review a project to one It used to take six monthes to three years, he said.
The new regulationss also included performance standards that make it tougher for developeres to manage their ownmitigation projects, whicu makes buying credits a more attractive option. “Now, everybody has to do what the bankas do in termsof financial, legao and environmental protections,” Denisoff said. For each acre of vernalk pool harmed bya project, the Corpsa and wildlife agencies typically require the developer to preserve 2 acres and create new vernap pools on 1 acre. Wetlands and wildlife credit prices have heldfairlgy steady, Denisoff said. A credit for vernal pool creation costsabout $250,000 to $300,00o0 per acre, he said.
Vernal pool preservation creditsare cheaper, at $200,000 to $235,000 per but banks in the Sacramento regiojn have run out. “It’se a scarce commodity,” Mathews said. “When the markets come there’s going to be a scramblee for that.”