August 24, 2022
Will mitigation banking offset loss of valued wetlands?
Kai Uyehara

Wetland areas perform a variety of functions that help control climate change. The City of Bellingham and Whatcom County are moving forward with four new mitigation sites, to regain function lost or diminished by some development. (City of Bellingham image)

August 24, 2022
Will mitigation banking offset loss of valued wetlands?
Kai Uyehara

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The protection, replacement and enhancement of wetlands in Whatcom County may see a new approach now that the Whatcom County Council gave the City of Bellingham’s proposed umbrella mitigation bank notice to proceed at its Aug. 9 meeting. The mitigation bank concept provides an additional way for developers to more efficiently protect wetland habitats. 

Sensitive wetland, stream, lake and bay habitats are protected by law, said Renée LaCroix, Assistant Director – Natural Resouces in Bellingham’s public works department. These vital features are vulnerable to destruction or damage, sometimes unavoidable, from many forms of development. A mitigation bank provides a way to restore, enhance or preserve the overall wetland acerage in a watershed.

“Wetlands are extraordinarily important because they provide flood control, pollution control and important habitat for salmon and other aquatic wildlife. They help control erosion and filter pollutants in vital areas,” said Curt Hart, Washington Department of Ecology Communications Manager. Hart said that no part of the state can afford a net loss of wetlands, and that mitigation banks “are a good tool for protecting and enhancing our wetland resources.” (See also “Restraining the tide exacerbates climate change,” Hakai Magazine, Aug. 24, 2022.)

Development is restricted near wetlands. On a site, a development may reduce the buffer surrounding a wetland, LaCroix said, and developers must dedicate a portion of their project area to replacing that lost function. To mitigate an impacted wetland, developers create a wetland on another parcel of land by excavating down toward incoming water, planting approved native species for the wetland and removing non-native species. They must also maintain the wetland area for a certain number of years.

These requirements assume that developers have the expertise to do restoration work and the longevity in the area to maintain it.

Developers typically handle this obligation themselves as part of the project, but sometimes onsite mitigation isn’t feasible, said Graeme Riggins, a wetland scientist who lives in Sedro-Woolley and works for Hamer Environmental. A mitigation bank can work on a larger scale in a watershed and serve as an important second option. 

A mitigation bank uses an already functioning wetland in the same region that is being professionally managed and improved. Wetland functions such as improved water filtration are measured and quantified as credit that can be bought and sold through the bank, LaCroix explained. When developers have to replace a wetland function on their own site, they buy that function from the bank in the form of credits sold at market price. 

The Bellingham project is proposed to be put out to bid for construction and, at present, planned to be owned and operated by the city, LaCroix said.

Next steps for the proposed 600-plus-acre land bank sites involve seeking major project permits. (City of Bellingham image)

Investments in a mitigation bank could benefit a larger portion of the banks’ service area instead of just one site, Hart said. 

The Whatcom County Council found the Umbrella Mitigation Bank Prospectus from the City of Bellingham to be “complete, technically accurate, and consistent with the purpose and intent of WCC Chapter 16.16 (Critical Areas),” and that the bank “involves no conversion of agricultural land to nonagricultural uses.”

The proposed bank, split into four separate sites comprising nearly 608 acres, will now proceed toward major project permit applications. 

The City of Bellingham has spoken with developers, local governments, tribes including the Lummi Nation, the Washington Department of Transportation and anyone doing ground projects to gain a “really good understanding of what development is going to occur in the next 10 to 15 years,” LaCroix said. 

If Bellingham’s proposed bank is established, it will follow wetland mitigation banks that have been operating in the Lummi Nation and Skagit County for years. Phase 1 of Lummi’s mitigation bank, the first such tribally owned project in the nation, has improved more than 200 acres in the Nooksack Delta and collected $1.7 million in mitigation credit purchases since its establishment in 2009. In Skagit County, the 310-acre Nookachamps Bank began operating in 2009 and the 398-acre Skagit Bank began operating in 2011.

Benefits of the bank

“All wetlands are important and valuable,” said Hart. Though wetland protection rules still apply, and site-by-site mitigation would still be an option, with an established bank, “developers can invest in a bank where mitigation would be hard [to] do on their own. A mitigation bank can … provide a benefit for the entire watershed or sub watershed.” 

Mitigation banks can also make the restoration of wetland functions more efficient. 

“A centralized bank allows the owner of the bank to offer a higher ecological function in a shorter period of time,” LaCroix said. “When traditional development happens and the developer has to go out and create whatever function they impacted, there’s a time lag that could take 10 to 20 years. A bank that’s all set up and ready to go can eliminate that lag.”

A mitigation bank can also give developers and government agencies a chance to focus on their particular expertise on both sides of mitigation, La Croix said. For a fee, developers can give up their permitting obligations and let experts mitigate instead.

When developers mitigate site-by-site, there is a higher risk of losing wetland function at a site than with a bank, LaCroix said. “A lot of those sites fail because [developers] don’t have the right hydrology or they didn’t do the maintenance, or they aren’t good at removing the non-native species, so they have a really high risk, whereas with bank it’s done in a holistic way by people that know how to do it.”

A bank has a higher rate of success and can achieve a higher ecological function while using the same amount of energy, time and money as developer-responsible mitigation, she said.

Concern about replacement

The use of wetland mitigation banks in Whatcom County comes with concerns though, as some worry holistic mitigation through a centralized bank may mean sacrificing habitat and biodiversity in other parts of the watershed.

Wetlands vary in composition and function. They can be dominated by emergent vegetation such as grass and herbaceous plants, or scrub-shrub vegetation such as shrubs, trees or forests. Different organisms and animals inhabit scrub-shrub and emergent wetlands differently. When replacing impacted wetlands, the bank may not have the same functions available to replace the original bio community. People may worry “that the wetland that’s being mitigated for might not really be a good match for what the mitigation bank has available,” Riggins said. Bank skeptics are “generally concerned on behalf of diversity of habitat types and function.”

“There’s a common misperception out there that having a mitigation bank means more wetlands will be impacted and that’s not true,” LaCroix said. “The regulatory requirements don’t change — you still have to follow mitigation sequencing. It doesn’t become any easier. The developers still have to go through and quantify their impacts and then buy credits at a couple hundred thousand dollars a pop to make sure those ecological assets are maintained.”

Developers working on smaller projects may also find mitigation banking prohibitively expensive, Riggins said, but going through the bank is not required. 

Community members may be upset to see a wetland near them impacted by development, but LaCroix assures all wetland ecological assets are being preserved with mitigation regardless of the location the assets are replaced in. 

Still in the making

Another downside to mitigation banking for some, is that it takes a while to establish.

“Mitigation banking is a highly regulated industry at the local, state and federal levels,” LaCroix said. “It takes a long time to get a bank up and running and it requires upfront cash to purchase the properties and to do the work so that you can then start selling credits.”

Hart said Ecology is still assessing the Bear Creek Bank, one of the four sections of the proposed umbrella mitigation bank. Technical information is being gathered to evaluate the service area, possible issues and its ability to generate bank credits. 

“We’re going to have to take the wetland mitigation banks one … at a time because of the resources that we have available,” Hart said. 

Development of the Umbrella Mitigation Bank began in 2018 and prospectus was developed in 2020, Hart said, noting it takes time to establish a mitigation bank and to generate the proposed credits. 

“We’re preparing an MBI now,” LaCroix said. The Mitigation Banking Instrument (MBI) specifies how the bank will operate, which all cooperating agencies have to approve at local state and federal levels.

“If everything goes well, we anticipate the bank will be open in about two to three years,” LaCroix said.

— Reported by Kai Uyehara

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