We plant trees, thousands of them!

Photos of recent tree planting in the buffer zone at Bass Mountain Stream and Nutrient Bank, North Carolina

Creek Week: New Galveston District Stream Mitigation Operating Procedure Published

Texas-Sized news for RS’ soon-to-open Katy Prairie Stream Mitigation Bank (KPSMB).  The Galveston District of the U.S. Army Corps has put on Special Public Notice a well-composed and carefully considered Standard Operating Procedure for complying with federal requirements for the compensation of streams (as distinct from wetlands).

Below is the new Galveston District Standard Operating Procedure for stream regulation and compensation:

Galveston Corps Stream Mitigation SOP and Tool

The KPSMB was planned by RS in 2007 to coincide within a year or two with the publication of the regulatory document above.  The stream SOP spells out how linear waters will be regulated and mitigated in the Galveston District.  It looks as though RS has succeeded in not being too early or too late on the mitigation side of the equation. The KPSMB will open in the next few weeks, shortly after the mitigation requirements are in place.

The Corps Galveston District did yeoman’s work building a comprehensive stream regulatory program from scratch since the publication of the Federal Mitigation Rule in 2008.  The final product is admirable (and subject to comment over the next year).  The SOP appears to have met the requirement of the Rule for in-kind regulation of streams, and also provided the regulated and banking community with a transparent and workable document from which to begin meeting the requirements.

Houston is America’s 4th largest market and the KPSMB will service the majority of the growing metropolis and its environs.  The bank is scaled to fit the town.  As far as we know, the KPSMB will be the largest permitted stream mitigation bank in the United States, with more than 20 miles of permitted restoration and protection potential.

Perhaps just as exciting for our firm is our land partners in the venture, the Katy Prairie Conservancy (KPC) and the Warrens.  The entire restoration project is situated along streams on the 6000 acre Warren Ranch owned by the KPC and the Warren Family.  The Warren Ranch, among other things, is the largest working cattle ranch in Harris County and Houston.

The Warren Ranch is an ideal location for the establishment of a stream mitigation bank. Here’s why: As credits are sold the Katy Prairie Conservancy and the Warren family will receive a royalty from sales which will allow the Conservancy, if they choose, to retire debt and permanently protect more uplands on the Warren Ranch with conservation easements, or acquire and protect additional threatened property in the watershed. As waters are restored and protected uplands will be protected as well.  A rare but fruitful dynamic in mitigation banking.

We love our landowners at RS but have never seen the proceeds from our real estate transactions go to more wonderful ends than is likely at this ranch and with the Katy Prairie Conservancy.

Bad Headline: Good News

Wetlands Bill May Penalize Raleigh

A News & Observer series, Washed Away, recently identified $140 million spent on restoration projects that are failing, long delayed or too far away to counter the effects of development.The roughly 80 projects identified by The N&O were largely built by the state. It has operated programs that allow developers and the N.C. Department of Transportation to pay fees based on how much damage their roads, shopping centers and subdivisions cause to streams and wetlands, and then the state becomes obligated to build restoration projects that counter those effects.

There is no such program in many other states. The restoration is provided by businesses known as mitigation bankers, who find degraded streams and wetlands, restore them and then sell part or all of those sites to developers and road builders so their projects can move forward.

Market’s good in North Carolina
North Carolina is a lucrative market for mitigation banks because it is a fast-growing state with more stream miles than any other, according to one study. Roughly a dozen mitigation bankers in the state not only compete with the state program, they sometimes serve as a supplier.


RALEIGH There has been a growing mantra among state lawmakers, environmentalists and others to privatize the production of restored streams and wetlands to offset the impacts of development.

They believe that private businesses in a market environment would produce better projects at less cost.

But for Raleigh residents new legislation aimed at furthering that goal could lead to the city eating more than $1 million spent on sites it has purchased for environmental projects. The legislation also would force the city to deal with what is now a monopoly – one business providing the pollution-reducing projects in the Raleigh area.

“I don’t think the bill’s sponsors realize some of the unintended consequences,” said Kenneth Waldroup, Raleigh’s assistant public utilities director.

The bill’s chief sponsor, state Sen. Neal Hunt, a Raleigh Republican and former city council member, said he was unaware of the city’s concerns. The council recently voted to oppose the legislation.

The legislation is the latest development in a continuing battle between the public and private sectors over what is the best way to produce restoration that protects the environment while keeping development and road building from slowing to a standstill. The federal Clean Water Act requires the damages from development be offset by restoration projects that improve water quality.

Waldroup said he generally agrees with a market-based approach to restoration, but says the market isn’t in a position to work for Raleigh. There is only one mitigation bank providing stream and wetland restoration in the Neuse River sub-basin that includes the city.

It could be several years before a second enters the market, he said.

He also said it’s unfair to exclude municipalities from buying restoration from the state, while allowing the state and federal governments to have access to it. The state Ecosystem Enhancement Program provides the restoration for a fee based on the amount of damage a road or development would create.

The city began developing its own restoration three years ago when state lawmakers first made a run at excluding municipalities from buying restoration from the state. The city has purchased conservation easements on two properties at a cost of $1.1 million that it plans to use to offset water quality losses caused by the construction of a new reservoir. The conservation can be used to offset development damages.

But that reservoir on the Little River may not get built. If that happens, under Hunt’s bill Waldroup thinks the city would not have the option of selling the conservation to someone else.

One of the biggest mitigation bankers in the state is Restoration Systems, which is based in Raleigh. John Preyer, co-founder and chief operating officer, said he understood Waldroup’s concerns, but private businesses such as his will struggle to survive if they have to compete against government programs not as focused on the bottom line.

He also predicted mitigation banks will quickly move into underserved areas in a competitive field. His company is looking to produce stream and wetland restoration that would serve Raleigh and the surrounding area.

Three years ago, he said his company began producing nitrogen-reduction projects locally to offset development-related pollution. Within a year another competitor jumped into the market and a third soon followed.

Hunt said he wants to nurture mitigation banks by taking away some of the government competition. His bill does not stop the state from producing restoration for its needs.

He said the businesses would be more accountable and efficient. If a project went bad, they would have to fix it on their own dime.

“They would be responsible and they’d have to go back and do it themselves,” he said.

That hasn’t been the case with many stream restorations done by the state that needed repairs. In a three-part series, “Washed Away,” The News & Observer found more than 30, and in many cases issues were raised about the design or construction. But the state had only docked two contractors for construction problems.

State records suggest those who produce mitigation and then sell it to the state have a better track record. They have fewer erosion problems with stream restorations and performed slightly better than the state in a recent environmental audit of stream and wetland projects.

But that picture is dimmed by the fact that the state did not require private providers to report such repairs until two years ago.

Another question is the scientific research that questions whether stream restoration improves water quality. State legislative leaders say they are concerned about spending money on restoration without proof goals are being met.

Legislative leaders say Hunt’s legislation is likely to become the vehicle to respond to concerns about the quality of stream and wetland projects. Hunt said he will listen to the city’s concerns, and expects his bill will likely be reworked before it is heard in a legislative committee.

[email protected] or 919-829-4861

Commentary: Washed Away

The Swamp Merchant was on vacation deep in the fecund marshes of South Florida during the “Washed Way” series on mitigation this week. I was hardly surprised though, since the worst kept secret in Raleigh among environmental professionals was that reporter Dan Kane and the News and Observer have been working for years to document the failures of the state In-Lieu-Fee mitigation program.

While not surprised on Sunday, I was a bit spooked. What if the series never made the distinction between the people who do what I do, restore wetlands and streams and work like hell to see them succeed or I go broke, and the bureaucracy at NCEEP which has made a hash of their “in-house” projects for years?

What if private commercial mitigation “banks,” with all their scrutiny and regulatory oversight, are not distinguished from state projects regulated by the same state agency that takes payments for them?

Oh, the worry.

Turns out the worry was justified. I don’t think any reader without significant prior knowledge of the intricacies of compensatory mitigation would be able to distinguish the good guys from the bad guys in this sorry state of affairs.

As good guys, all of us at Restoration Systems were being brushed by the ink of the state’s paper of record. Stream mitigation and restoration was being made to seem a terrible failure across the board.

Would anyone ever know of Three Mile, Travis Hamrick’s knock-out stream and wetland site in Avery County? Or the Causey Farm stream and wetland site Worth Creech restored for the FedEx hub in Guilford County? (Causey could make John Muir weep.) Nope. Just careful documentation of the myriad failings of the state program’s “in-house” projects, with nary a mention of the other methods.

But sunshine is still healthy and we got a fabulous week of weather from the News and Observer. As long-time promoters of an entirely different way of performing mitigation in North Carolina — at-risk commercial mitigation banks — our company, Restoration Systems, is willing to see eggs broken while we wait for the omelet.

I am willing to endure day-after-day of bad press for mitigation in general, as long as the policy makers, future articles and the public eventually catch-on to the good news.

The good news is that it doesn’t have to be this way. Other states and Corps Districts do not have state-wide programs to sell developers mitigation and then do the projects later. Outside of North Carolina mitigation is increasingly accomplished by green entrepreneurs banking mitigation ahead of time and receiving salable credit for it — after the ecosystem is cared for.

This system is recommended because it distributes the responsibility for mitigation to regulated private firms who have their own capital at risk. We contend that restoration performed at-risk, with the financial reward of the sponsor rising or falling depending on the ecological results, will someday be recognized in North Carolina as the superior public policy tool to the “fee” program.

The (no) command and (out-of) control state mitigation leviathan documented by the Old Reliable will be retired (again) at some point. The North Carolina Ecosystem Enhancement Program is a failed experiment of government that has worked at cross purposes to its mandate.

I’d like to go on but at the close of this post I am now in New Orleans preparing for bed. I have a meeting in the morning with potential customers to discuss providing bonded wetland mitigation. Later this week I’ll be in Baltimore at the National Mitigation Banking Conference and hope to post once more. God bless this fine spring day in the meantime.

Links: News and Observer "Washed Away" series on mitigation


Washed Away: First of three parts:  State programs intended to offset environmental damage from development have spent roughly $140 million on work that is failing, needs significant repair or is too far away from distressed sources of drinking water.
Washed Away: Second of three parts:  Money that the state spends on projects to reduce pollution from nitrogen has gone toward improvements far downstream and outside the watersheds of the Triangle’s two biggest sources of drinking water: Falls and Jordan lakes.

Washed Away: Third of three parts:  Studies of what seemed a logical solution to the destruction of streams by road builders and developers have found that 20 years of applying common restoration methods – often at public expense – is doing little good.


A plan developed by the state in 2001 for environmental restoration was a boon to conservation groups that had thousands of acres to sell for mitigation.


StarNews Good News: Study says mitigation areas working as planned

Mitigation banking as a profession can often be a tough and thankless slog through a morass of regulatory politics.  What’s more, there is a feeling among some in certain quarters that what we do — restore ecosystems — is frequently not successful and RS is “building” “fake” wetlands that meet regulatory criteria but do not truly add anything much back to the environment.  It is gratifying when our successes are revealed as in the article below.

The article and the study it highlights demonstrates that wetland and stream restoration can be done well according to at least someone’s criteria. I would contend (and often do contend) that mitigation is most successful, however, when it is performed by someone who actually owns the project.

Banked, Full-Delivery, Turn-Key contracted, it doesn’t much matter — but the person doing the work and responsible for the work should have their own personal fortunes rise or fall with the success or failure of the given restoration.  This distinction is somewhat borne out by the data in the recent study, and can be deduced from the graphs I put up here.

But lets not get bogged down in who’s swamps are most thriving on this fine spring day — but rather sit back and enjoy the good news about good mitigation when and where we can find it.

Wetland study shows improvement

By Amy Hotz
[email protected]

Published: Sunday, April 10, 2011 at 10:41 p.m.

Just behind the movie theater at Mayfaire is a little piece of wilderness separated from the business by a retaining wall. Its hardwoods, water-loving plants and the occasional critter give a glimpse into what that property looked like before the mixed-use development paved streets, laid foundations and brought in strings of cars.

When these regulations were made, the idea was to create a kind of environmental balance, allowing development while at the same time making sure natural habitats endure.

A new study funded by a Wetland Program Development Grant from the U.S. Environmental Protection Agency has taken a look at 82 wetland sites and 79 stream sites affected by these regulations to determine if they’ve worked. The study, “Compensatory Stream and Wetland Mitigation in North Carolina – An Evaluation of Regulatory Success,” was released this month.

Several of these test sites were in Southeastern North Carolina, including Mayfaire, Taylor Farm (Landfall), Beach Walk at Kure Beach and Brunswick County Airport.

“Things have improved since the late 1990s. . . . The science has come a long way since then,” said Tammy Hill, environmental senior specialist with the N.C. Division of Water Quality. “That said, we still saw room for improvement. . . . This project helped to highlight some of the problem areas and also some things that we can continue to look into in the future.”

The results of the study indicate 75 percent of the wetland and stream mitigation projects were successful in meeting their regulatory requirements. And, according to the Division of Water Quality, this is a great improvement over two studies done in 1995. One showed a 20 percent success rate for wetlands and another showed a 42 percent success rate. The new study is the first time stream restoration success had been evaluated.

Read more

Buckeye State: Cheers and Jeers for New Ohio Stream Mitigation Rule

Credit to Ohio for issuing a new rule (and to attorney Joe Koncelik for blogging it) that will begin to conform that state’s water quality program to the standards of the 2008 federal mitigation rule. This was not the explicit goal of the rule but it is surely a secondary benefit, from a legal stand point.

Ohio is putting in place the same type rules North Carolina issued in 1996, and subsequently, to require the replacement of damaged streams with like-kind stream restoration or other stream mitigation. This is admirable. But from what I hear on the grapevine Ohio has another thing in common with the Tar Heel state:  A latent hostitility to mitigation banks as the source of the mitigation. Again, this is personally unconfirmed, but I hear that establishing a professional, bonded, mitigation bank in Ohio is just as adversarial and risk-prone as it has been historically in North Carolina.

If true, they have got trouble on their hands. Raising mitigation standards and requiring more professional mitigation, in the absence of the full-utilization of  professional third-party providers, is generally fruitless — and often counter-productive.  For instance, Wal-Mart and their hourly consultants are not going to provide mitigation — on-site or off-site — nearly as effective as that which is located and peformed by bonded mitigation professionals.  Developers develop.  They don’t care for young swamps well.  But Ohio EPA is published saying just the opposite — that there is no benefit to banks.  So, I suppose the new mitigation required by the Ohio rule will be expected to be provided spot-by-spot, project by project, developer by developer?  What a shame.

(Incidentally, I carefully reviewed the Ohio study when it came out and found it flawed.  The study was looking largely at “non-profit” banks which have nearly no incentive for getting it right.  With mitigation, it is not the method — but the motivation — that makes things work.  Bureaucrats and do-gooders, bless their hearts, generally do not carry mitigation through to success because their incentive is low for funding and maintaning the intense long-term intense commitment required of ecological restoration as mitigation.  I recommend a far more comprehensive study done by NCDENR concluding banks and  “Full-Delivery” projects are more successful than other forms of mitigation )

Ohio needs to continue on the sound regulatory course they have set for themselves — but recognize and encourage the responsible professionalism provided by mitigation bankers and providers.   For instance, nowhere in the new rule is the term “bank” even used.  How horrible to ignore the federally mandated preferred source of mitigation in a state rule concerning mitigation.  That’s like requiring everyone to eat fruits and vegetable and providing no accompanying farm policy other than “grow-it-yourself”!

It seems the timing of the new rule is somewhat politicized in advance of the new conservative Governor taking office.  If that’s true the EPA has left their flank open if they expect to pass new regulations without adequate attention to the availability of the compensatory mitigation to the regulated community.  If I were a new governor or state legislator, I’d ask why my state is racing ahead with new regs without encouraging a means of economical compliance.  But good luck to Ohio EPA nonetheless. We will be following you.

New Ohio Stream Mitigation Rule, December 10, 2010

The Flying Turkey takes more air photos

When Pam and the kids and I visit our family in Beaufort, North Carolina, I often take the opportunity to hire a small plane at the friendly Michael J. Smith Airport to take photos of nearby RS sites. I did so yesterday and enjoyed nearly perfect conditions.  Here are some pictures of the Bear Creek, Jarman’s Oak and Lloyd wetland and stream mitigation sites. (As regular readers will recall, I flew Bear Creek earlier this month. But I returned this time WITH my stabilized lens).

I also flew the North Carolina Coastal Federation’s North River Restoration Site, about which I have provided some background below.

Note: If you “click through” the photo box you can more easily read captions and navigate the photos.


Below are some photos of North River Farms, which is being restored by the North Carolina Coastal Federation. This project is near and dear to RS’ heart. RS owned the option to purchase this 6000 acre farm in the 90’s. Determining that the farm had significantly more restoration potential than could be used as mitigation in the watershed (unless Cape Canaveral were relocated to the NC coast), we contacted the NCCF and suggested they take our option and make an application for its restoration to the then newly formed NC Clean Water Management Trust Fund.

The rest is history. The project is now one of the largest coastal restoration projects in the nation. We retained 390 acres within the farm, for which RS was recently awarded a grant from the Natural Resources Conservation Service to restore and protect. Brassgrill and I will blog in the future and tell you more about this project.

Flat Out Wonderful: RS teams with Houston's Katy Prairie Conservancy to sponsor the nation's largest stream mitigation bank

Restoration Systems is excited to share the news of our latest (and greatest) proposal for a mitigation bank outside of North Carolina.  RS, the Katy Prairie Conservancy of Houston, and the Warren family have entered a long-term Joint Venture to develop the nation’s largest stream mitigation bank on the 6000 acre Warren Ranch in northwestern Harris County.

The historic Warren Ranch is the largest working cattle ranch in Harris County and one of the last remaining spreads of its character and size on the perimeter of Houston.  As proposed, the bank will service the compensatory mitigation needs of nearly six million people as the city sprawls westward.   All told, the project will restore, enhance and preserve streams and wetlands over 20 miles of the ranch.

The Katy Prairie Conservancy, one of Texas’ oldest and most respected Land Trusts, plans to dedicate their share of  project proceeds to help retire the debt on the Warren Ranch and restore and permanently protect it to native prairie grassland.  The prairie ecosystem west of Houston has suffered severe degradation in the past. Today it faces obliteration by the relentless march of the city to the west.

RS is very fortunate to have found our farsighted partners, the KPC, its Executive Director Mary Anne Piacentini, and the Warren family.   We look forward to filing you in on the details of the project and updating you as it progresses.   For now, please enjoy the videos below of the Flat Out Wonderful Warren Ranch.