Land Developers Leery of Wetland Protection Pact

WASHINGTON —  A new federal agreement on wetlands protection is vexing the nation’s largest land developers, including the Irvine and Arvida companies, which fear that it may disrupt some of their most ambitious projects and hamper related wetlands restoration work.

The “memorandum of agreement” between the U.S. Army Corps of Engineers and the Environmental Protection Agency, signed in February, seeks to clarify the rules under which the corps grants permits to builders to fill wetlands.

Some developers argue that the new agreement has changed the rules by making it more difficult to compensate for wetlands destruction by restoring or creating other wetland areas--an assertion that the corps and the EPA deny.

Environmentalists, on the other hand, assert that the agreement does not go far enough and leaves broad loopholes that could lead to further destruction of fast-disappearing marshes, estuaries and stream beds.

While the effects of the new agreement will not be known for months, there are some indications that change may be in the offing. In an informal, in-house survey taken before the agreement went into effect, officials at 75% of the corps’ district offices that were polled said they expected that the document would moderately or significantly change their permit-granting process.

The agreement will have “a major impact on development,” said Washington lobbyist Thane A. Young, a wetlands expert who represents the Irvine Co.

“We are very concerned about it,” said Ted Brown, vice president and general counsel of the Florida-based Arvida Co., which is developing the gated Coto de Caza community in South Orange County, at the edge of the Cleveland National Forest.

“I can’t think of any (Irvine Co.) project where there are no wetlands,” said Sat Tamaribuchi, the company’s senior director for environmental planning.

However, Sierra Club spokeswoman Paula Carrell said environmentalists are equally worried because the agreement leaves open to development certain types of wetlands, including mud flats and seasonal ground-water pools, that they believe ought to be protected.

Some Irvine Co. officials are concerned that the agreement, in addition to affecting development, may scuttle at least part of their $2.5-million plan to restore 285 acres of wetlands in the San Joaquin Marsh, next to Upper Newport Bay.

The Irvine Co. wants to use the restored marshland as a “mitigation bank” that would allow the company to fill wetlands on other property slated for development.

Carrell, the Sierra Club’s Sacramento lobbyist, challenged the effectiveness of creating new, “off-site” wetlands to compensate for those destroyed by development.

“To simply wipe out a wetland that has been created through a long, evolutionary period and create another one over here is not as simple as it sounds,” Carrell said. “It’s hard to duplicate evolution, and so it fails at least 50% of the time.”

The debate over the February agreement comes as a federal task force is examining ways to implement President Bush’s policy objective of preventing a net loss of national wetlands. The task force is expected to release its report later this year.

In Congress, meanwhile, the House Committee on Public Works and Transportation has been conducting hearings on the wetlands-protection provisions of the Clean Water Act, which is up for renewal in 1992.

Under the Clean Water Act, first passed in 1972, the corps has the responsibility for granting permits to fill wetlands for non-agricultural projects. The corps considers about 7,000 applications for such permits each year. Under the law, both the EPA and the U.S. Fish and Wildlife Service have a role in reviewing and commenting on the applications, with veto power vested in the EPA.

Federal law and accompanying regulations generally define a wetland according to its soil content, vegetation and water content. For permit purposes, a wetland can be as large and pristine as the salt marsh at Bolsa Chica or as small and degraded as a drainage ditch that has sprouted reeds.

Since 1980, the corps has relied on guidelines developed by the EPA to direct its permit-granting process. The new agreement, according to the corps and EPA officials, is intended to codify and clarify those guidelines.

The most controversial aspect of the agreement is its outline of a strict “sequencing” policy that some developers believe will severely restrict the practice of “mitigation banking.”

Under the sequencing policy, the corps must first determine whether a developer has any practical alternative to the destruction of wetlands. Only after deciding that there is no alternative can the corps move on to consider action that would minimize the impact of development or compensate elsewhere for its effects.

In the past, many of the corps’ 37 district offices have granted permits to fill wetlands on construction sites after developers agreed to create or restore wetlands at other locations, away from the proposed development.

The Irvine Co. is seeking to take advantage of mitigation banking through its reconstruction work at the San Joaquin Marsh.

Developers, who say they endorse the Administration’s goal of no net loss of wetlands, nevertheless argue that the new agreement puts too much emphasis on avoiding any negative impact on wetlands, rather than allowing developers to make up for the effects by creating new wetlands elsewhere.

“The main concern as we see it is not debating the issue of no net loss as an overall goal,” said Pike Oliver, of Irvine-based Southwest Diversified Inc. The company, which is developing residential properties in environmentally sensitive areas of California and Arizona, supports the no-net-loss concept, Oliver said.

The real concern, he said, is that “there are provisions in that agreement, if they were interpreted in the extreme--particularly the provision that avoidance is the primary and overriding goal--that would really preclude the opportunity to create some great habitats.”

The Irvine Co.’s Tamaribuchi said, “Their standards for avoidance may be so great that we’d never be able to demonstrate that it’s impractical to avoid (filling) a wetland anywhere.”

Arvida’s Brown said: “We have applications pending, for example, where the EPA has acknowledged that the . . . result (of the development) would create an enhanced ecological system.

“But given what they see as the mandate of the (memorandum of agreement), which is to focus on avoidance, they are unable to look at the entire plan.”

Although Brown did not specifically cite the Coto de Caza project, others noted that Arvida has wetland-filling applications pending in connection with the project’s second phase. The community is located at the end of Trabuco Canyon Road near Rancho Santa Margarita.

Officials at the corps and the EPA say that the new agreement only clarifies the 1980 guidelines.

“We don’t think this is a change in the regulations,” said Cliff Rader, of the EPA’s office of wetlands protection. “We think, in fact, it’s going to help developers because it’s going to provide some consistency and predictability.”

Rader said the agreement specifically permits the corps to consider mitigation banking as a means of compensating for damage to wetlands, once the avoidance issue has been decided.

“The emphasis on avoidance has always been there,” said David B. Barrows, assistant for regulatory affairs in the Army’s office of civil works. The new agreement, he said, “certainly doesn’t change the requirements or the regulations.”

It may, however, change the corps officials’ interpretation of the regulations. In an informal telephone survey, officials in 50% of the corps’ responding district offices said the agreement will cause a moderate change in the way they do business. About 25% said it would cause no change, while another 25% predicted a major change.

The survey was conducted by Michael L. Davis, a biologist in the regulatory branch at corps headquarters. Davis cautioned, however, that the survey was taken before the agreement went into effect.

“Some of (the corps officials) maybe had some concerns that it will have a bigger impact than it really will,” Davis said.

While much uncertainty remains, one thing is clear, Tamaribuchi said: If the EPA does not sign off on Irvine Co. plans to use the San Joaquin Marsh project as a mitigation bank for other development, the company is not likely to go through with the work.

“The thing is, we won’t do that project unless we’re allowed to mitigate there,” he said.