Is Florida Running Out Of Mitigation Sites?

Florida developers have long depended on the state's mitigation banking system — through which they can build on wetlands so long as they offset their impact by paying for wetlands to be improved on another site using mitigation credits.

But lately, builders have been told by some mitigation banks that no credits are available, potentially delaying projects for months or years.

"It's a very easy system" when it's working properly, attorney Howard Nelson said.

Eighty mitigation banks in the state help match developers with qualifying projects and ensure they are carried out.

Until now, developers have been essentially told, "Your impact will cost X number of credits. Here's the bill. Write me a check. Done," said Nelson, who chairs the Environmental Practice Group at Miami law firm Bilzin Sumberg.

Nelson represented the Builders Association of South Florida and crafted a new law that will make more credits available by letting developers work on local governments' wetlands projects to meet their mitigation obligations. CS/HB521 passed the legislature Friday. 

Florida developers have never let a little ecology get in their way. Much of South Florida is habitable only because the Army Corps of Engineers in the early 1900s built canals and rerouted rivers to transform what settlers considered a worthless swamp.

Only decades later did people like Marjory Stoneman Douglas realize that the Everglades was really a "River of Grass" and come to appreciate its ecological significance. The push-pull between humans and nature would continue evermore, with a decades-long, $10B-plus Everglades restoration program now underway while more roads and buildings go up each day.

In the 1970s, regulators started to suggest the idea of “no net loss” as environmental policy, allowing building on ecologically sensitive sites so long as developers paid for other sensitive sites to be restored for perpetuity. In 1994, Florida set up rules for mitigation banking, and a private industry sprang up to match developers with property owners offering available credits.

In 2012, that industry helped pass a law that largely prohibited local governments from providing mitigation credits for projects. But the new law is set to undo that restriction.

Nelson has represented Metropica, a $1.5B development in Sunrise, when it sought mitigation credits to build on 9 acres of wetlands, and developer Edgar DeFortuna when he proposed a controversial project that would have affected wetlands in Cutler Bay. DeFortuna was ultimately bought out by the South Florida Water Management District. 

["Some developers] went through years of entitlements on a project only to find there’s no place to mitigate," Nelson said. "They’re holding property with the interest clock ticking, with no place to go, because they can’t begin filling the wetlands.”

In South Florida, the Everglades Mitigation Bank — land owned by Florida Power & Light on Card Sound Road at the northern edge of the Florida Keys — and the Hole-in-the-Donut bank (operated by Everglades National Park) have had nine- to 12-month periods without any credit, and the Loxahatchee bank (a public-private effort adjacent to Arthur R. Marshall Loxahatchee National Wildlife Refuge in Palm Beach County) will run out in five to six months, according to the Tallahassee Democrat.

Nelson said rules require builders to work with their local mitigation banks because the wetlands to be restored should be nearby the ones being destroyed. Each credit represents an acre of land. At Hole-in-the-Donut, the current cost is $27K to $69K per credit. Nelson said credits can cost $145K — they had cost about $7,500 apiece when the program started.

The Florida Association of Mitigation Bankers, which represents numerous mitigation banks around the state, did not return a request for comment. Nelson said the group supported his bill because it requires that builders first buy out any available credits from their local banks, and only then turn to municipalities and ask if there are mitigation projects to be done that will satisfy requirements.

Using a mitigation bank, the responsibility for actually improving wetlands lies with the property owner who sells the credit. But now, in cases where builders can go to local governments, the developer will have to hire contractors to perform the mitigation work, Nelson said.

A spokesperson for the state Department of Environmental Protection told Bisnow that mitigation banks receive permits from either DEP or a Water Management District to assess how many credits it can offer for sale. The number of credits are determined using a standardized procedure defined in Florida's administrative code.

A mitigation bank must meet certain criteria such as: "improve ecological conditions of the regional watershed; provide viable and sustainable ecological and hydrological functions for the proposed mitigation service area; [and] be effectively managed in perpetuity."

The spokesperson said that permit conditions outline monitoring activities and reporting requirements. The 23 mitigation banks permitted by DEP post ledgers of their used and available credits online. 

While the new law will make more credits available to developers seeking to move projects along, environmentalists have questioned whether the mitigation process works at all. In the 2009 book "Paving Paradise: Florida's Vanishing Wetlands and the Failure of No Net Loss," Tampa Bay Times reporters Craig Pittman and Matthew Waite wrote that mitigation is a myth and described instances where man-made projects collapsed because they failed to mimic nature’s complexity:

“On paper, filled-in wetlands are being replaced and everything balances out," Pittman and Waite wrote. "In reality, they are swept aside by the works of man and nothing makes up for them. Development races across the land with all the speed and power of a hurricane hitting a beach, and the attempts to replace what it destroys usually result in expensive failures.”

“We are clearly losing wetlands throughout the state," Jonathan Webber, deputy director of Florida Conservation Voters, told Bisnow. "Before we expand the [wetlands mitigation] program, we need a full and furious scientific evaluation of whether it is working or not.”

However, he acknowledged, that doesn’t seem to be a priority for anyone in power. Legislators “talk a lot about conservation,” he said, but when it comes to taking action, their involvement is “minimal at best.”

Nelson said the mitigation program has improved from its early days, when so-called "postage stamp wetlands," like small ponds in office parks, counted as mitigation sites. Now, he said, there is a better effort on ensuring that wetlands are functional and serve as wildlife habitat and corridors. He mentioned the Fenway in Boston as a example of wetlands co-existing with a city.