2016 at Jesuit Bend Mitigation Bank

Hello, folks, I’m back for a rare blog post but it’s never too late to share the unique rewards of mitigation banking. Below I have posted video and here are some photos of the Jesuit Bend Mitigation Bank in Louisiana as it completes Year One monitoring. As the ecology matures, Jesuit Bend has a lot to teach anyone who is interested in coastal restoration. Simply viewing the project is informative.

This time last year Dredge Florida was roughly halfway finished with the 100 day dredging phase. Then in January we planted 211,000 pots of marsh grass. Today the site is meeting all interim success criteria, with thriving vegetation and proper elevations.

If you are only here for sport, check out the gator hunt at Jesuit Bend in late September and here for the kill shots.

RIP: Fred C. Danforth Conservation Finance Pioneer

I was sorry to hear that Fred Danforth, the guiding light behind mitigation industry leader Ecosystems Investment Partners, died from a long standing illness last week. I did not know Fred well but remember a particularly enjoyable Orioles game I spent with him. I have also long recognized the contribution his leadership and financial insight and experience have made to our industry. In many ways, he was responsible for the increasing capitalization — and professionalization — of mitigation banking. We at RS are sad to see him go, and offer our condolences to his family and his fine team at EIP. His obituary below is wonderfully well written and conveys the devotion that many of us in the industry feel for our work.

Fred C. Danforth 3/17/2016 Mattapoisett, MA

Posted on Tuesday, 22nd March 2016 | MATTAPOISETT

 Fred C. Danforth, 65, Pioneer in the Field of Conservation Finance Fred C. Danforth, who co-founded the largest private equity firm in the United States devoted to land and stream restoration, died at his home in Mattapoisett, MA, on Thursday, March 17. The cause was gall bladder cancer. Born in Brewer, ME, Fred graduated from Yale University in 1973. He began his career in finance with Citibank in New York City. He left there to become president of a regional bank in Tulsa, OK. In 1986, he co-founded Capital Resource Partners, a private equity investment firm located in Boston. It was after retiring from CRP in 2002 and purchasing a Montana ranch with a degraded trout stream that Fred found what he often said he was “meant to do,” combining his passion for the environment with his talent in finance. After two years of stream restoration efforts, the trout, which had been absent for decades, began to return. The robust response of nature to restoration gave Danforth the vision to create the first wetland and stream mitigation bank in Montana. He then co-founded a firm based on his vision that private capital could be marshaled to do large-scale restoration and conservation, work that had been previously reserved primarily for government and philanthropy. The firm, Ecosystem Investment Partners, based in Baltimore, pioneered a new “ecological asset class” by providing companies and government agencies a more efficient way to comply with Clean Water Act and ADA website compliance 2019 regulations. For Danforth, being a pioneer in this space demanded an unwavering belief in his vision and a fierce tenacity. Today, EIP has over $ 500 million under management, making it one of the largest sources of private capital for ecological restoration projects in the world. The same passion and determination that underpinned the foundation of EIP was present in other areas of Fred’s life. The time he spent on several Native American reservations illuminated the struggle young Native Americans face in seeking educational opportunities. A scholarship student at Yale, Fred endowed a scholarship fund to bring Native American students, particularly those from reservations, to the University. He also supported the creation of the Native American Cultural Center, which is now the hub of Native student activity at Yale. A talented multi-sport athlete, Fred sustained a severe injury to his right eye in a high school basketball game that left him temporarily blind in one eye. Although he had to give up basketball and baseball, he went on to play four years of varsity football at Yale. After three surgeries over seven years by famed Boston eye surgeon Trygve Gunderson, his sight was restored while at Yale. Fred’s son, Trygg, is named after his surgeon. An enthusiastic fly-fisherman and a determined golfer, Danforth was also passionate about having fun. He maintained that one of his strongest skills was his ability to “shoot a beer” in less than 2.5 seconds. The number of basketball and baseball games he missed played by his sons could be counted on one hand. In a speech he gave in November to Yale and Harvard athletic alumni, Mr. Danforth talked about legacy, saying, “By this I mean not just the legacy of accomplishment, but the legacy of influence and impact—of how I live my life, how I engage my passions, and the signals I send to my two sons.” As one of the investors in EIP said recently, “Fred’s legacy will live on. Because of his vision, tenacity and enormous heart, we will all benefit from his work. The many thousands of acres he helped to restore, the many miles of streams that are beautiful once again, will be a wonderful testimony to him. We were indeed lucky to have him with us, and to be able to share his passion.” Fred Danforth is survived by his wife, Carlene Larsson, and two sons, Trygg Larsson Danforth and Pierce Danforth Larsson. A memorial service will take place April 9, at 5 p.m. at the Boston Harbor Hotel. The family requests that in lieu of flowers, donations be made to the Fred C. Danforth ’73 Scholarship Fund at Yale University or The Blackfoot Challenge, a non-profit focused on conserving and enhancing the natural resources in Montana’s Blackfoot Valley.

Restoration Systems featured in Triangle Business Journal

Surprisingly perhaps, over seventeen years in business RS has never had a “business” article written about our firm. We have had specific projects covered as ecological interest stories, and even some controversy, but never a word in the business pages or the local biz journal.

But last year we decided finally to show some leg and entered the Triangle Business Journal’s ‘Fast Fifty’ growing companies competition. We were surprised (to say the least if you saw us jumping up and down) to place….drum roll please….#2!!

One thing led to another and RS was the featured company in TBJ this week. As per a business associate who is filing for a new DBA in Texas “It is not easy to come among such a list, let alone be among the top 10”. Considering how dynamic and prosperous our region is, it is a genuine thrill to be covered so well in these pages. Amanda Hoyle did a great job and we look forward to providing her — and you — more frequent updates regarding our progress as a business.

A business that banks on regulations by Restoration Systems, LLC

A business that banks on regulations

Friends since high school and college, George Howard and John Preyer are used to the confused looks they often get when they explain the business model of Restoration Systems LLC, the company they started together in 1998.

The company specializes in environmental mitigation banking, a field of business that didn’t exist before 1995. That was the year that the federal guidelines for mitigation banks were established as a compromise option under the Clean Water Act of 1973, the federal government’s primary law governing water pollution.

Former U.S. Sen. Lauch Faircloth, R-NC, then a member of the Committee on Environment and Public Works, helped craft the federal guidance for mitigation banking. And John Preyer, at the time, was serving as his legislative director.

And to that, a niche industry – and a business plan for Restoration Systems – was born.

Mitigation banks offer a third alternative that didn’t exist before for developers of roads, utilities and buildings that might be doing damage to a nearby water resource, such as a stream or wetland.

If trying to qualify for an environmental permit, a property owner or developer must:

1) Avoid the protected property altogether if possible;
2) Minimize the potential damage or impact to the property; and
3) When all else fails, mitigate.

“And in that order,” Preyer says.

“We come in at the end of the day, after they have already worked to avoid and minimize,” he says. “If you are looking for a positive environmental outcome, we are doing it.”

Restoration Systems proactively finds and buys conservation easements from property owners for the purpose of restoring streams and wetlands or protecting threatened species from the future encroachment of development and growth. Once a project has been signed off on by both federal and state agencies, the company sets up a mitigation bank, or a system in which to sell “credits” or pieces of a restored stream or wetland to help make up for any damage that might be done to a nearby water resource from another construction project. Credits can cost $14,000 each, or it might be cheaper if it’s a large transaction. The company also manages restoration projects on behalf of government partners or companies that don’t have to be sold through a mitigation bank.

Preferably, Howard says, the impacted projects “share the raindrop” with the stream or wetland property so that the damaged and the improved property impact the same body of water.

Mitigation banking is usually a last-ditch option for builders, but it’s a a growing industry that Restoration Systems is helping take nationwide.

It’s also one of the most-regulated industries in the environmental market, Howard says.

“Developers don’t want to have to pay for credits. Conservation interests don’t want development there in the first place. We have to answer to everybody,” he says. “It’s the good guys and the bad guys these days, and we like being the good guys.”

Restoration Systems is currently overseeing 50 mitigation banks and restoration sites in nine states, with a majority of them in North Carolina. It has restoration sites within the Falls Lake watershed in Raleigh and along the Cape Fear River watershed in southeastern counties.

In Texas, the company has partnered with Morehead Capital Management, a Raleigh-based hedge fund, and a Texas land trust to restore more than 20 miles of streams on the Katy Prairie near Houston. The project is the largest permitted stream mitigation bank in the U.S.

Restoration Systems is also a lead partner in the sale of off-set credits to companies in the wind, oil and energy industries across the Southern Great Plains.

Howard shows from a aerial map the desolate lands in northern Texas, Oklahoma and Kansas that Restoration Systems has invested in to preserve sufficient grassland habitats for the lesser prairie chicken, a threatened species whose population has dwindled to around 17,000 birds in recent years.

This breed of bird is particularly sensitive to things that are taller than its grassy habitat – like the oil rigs that dot the landscape of the Southern Great Plains.

“They don’t like anything over three feet tall, or they’ll stop mating,” Howard explains,

Since the company was founded, the partners estimate the company has sold about $110 million in credit inventory in fits and starts over the years. It brought in about $20 million in revenue in 2014, mostly from the sale of mitigation bank credits, which was up from $6 million in revenue in 2012, according to Chief Financial Officer Buzz Floyd.

“With these bigger projects, we’ve caught the eye of national investment firms, and the deals are getting more sophisticated,” Floyd says.

Their goal moving forward is to smooth out that revenue stream and keep a more stable inventory of credits to sell in the parts of the country where demand is expected to grow.

“We are all about regulation in our business,” Howard says. “It creates our business.”

Amanda Hoyle covers commercial and residential real estate. Follow her on Twitter @TBJrealestate

Validation: Brent Fults and CBNLT recognized by Virginia Governor and EPA Administrator as water quality trading pioneers in the bay

Governor McAuliffe introduces Brent Fults at 5:20 

Baltimore Sun-Times

Ecosystem Marketplace

RS is positively thrilled by our Virginia partner Brent Fults’ and the Chesapeake Bay Nutrient Land Trust’s (CBNLT) participation this morning in an unprecedented high-profile event touting water quality markets. Introducing Brent today was the Governor of Virginia Terry McAuliffe [!]. If that were not enough, also speaking were USEPA Administrator Gina McCarthy — and U.S. Secretary of Agriculture Tom Vilsack. In attendance were watershed policy chiefs from the Chesapeake Bay and nationwide.

gov and brentUSDA Sec. Vilsak, Governor McAuliffe and CBNLT’s Brent Fults at the press conference 

gina mccarthy epa water quality trading conf

USEPA Administrator Gina McCarthy gives shout-out to WQ trading 

The road to widely accepted “retail” water quality trading is a long and tortured one. Here is a 2011 RS blog post describing the challenge of realizing and utilizing these long discussed markets and water quality products in Virginia. At the time of the post we were three years into a process which culminated today — four years later — in the full throated public endorsement of water quality credits by the federal government and a regulated state.

Brent Fults, Scott Reed, Casey Jensen, and all the gang at CBNLT, should enjoy today’s validation of their long-standing and very personal struggle to make regulated market-based retail credit sales for water quality off-sets in Virginia a reality.

I have said many times that the cost of the coffee and doughnuts at seminars discussing water quality trading exceeds the dollar volume of the trades. I may need to put that cute line away. These markets are taking off in a big way, because Fult’s and friends walked the walk — when others just talked that talk.

In (the very few) watersheds nationwide where “non-point to non-point” WQ trading is embraced, as today in parts of Virginia and North Carolina, nearly every development over a single lot is regulated by an MS4 stormwater permit and uses some degree of WQ off-sets to achieve no-net-contribution to water quality pollution. This captures most all development (what an industry) and leads to better compliance and more affordable regulatory outcomes for permittees than old, failed approaches.

Only another 2258 river basins to go!

New Department of Agriculture video featuring CBNLT’s work

CLICK BELOW to hear Brent Fult’s statement at the event:

Federal Agencies Support Virginia’s Innovative Market-based Approach to Improving Water Quality in Chesapeake Bay

Virginia program to serve as model for similar programs across the country

WASHINGTON, Dec. 16, 2014 – U.S. Environmental Protection Agency (EPA) Administrator Gina McCarthy today joined U.S. Department of Agriculture Secretary (USDA) Tom Vilsack, Mike Boots of the White House Council on Environmental Quality (CEQ), Commonwealth of Virginia Governor Terry McAuliffe, a private investor and an Appomattox, VA farmer to recognize an innovative, market-based nutrient trading program run by Virginia to improve the water quality of Chesapeake Bay.

At the McConnell Safety Transportation Operation Center, in Fairfax, Va., EPA, USDA, and CEQ highlighted the cost-effective program that has saved the Commonwealth more than $1 million, demonstrating an innovative means of meeting Clean Water Act stormwater requirements and Virginia state water quality goals for the Bay. The program encourages economic investment while reducing phosphorus pollution to local waterways in order to meet water quality goals for the Chesapeake Bay. It is expected similar programs will be established around the nation to provide new revenue sources for agricultural producers while reducing soil erosion and runoff.

“Virginia’s nutrient trading program is a strong example of how to create economic opportunity and new income for rural America while protecting and improving local waterways and the Chesapeake Bay,” said EPA Administrator Gina McCarthy. “The program is a win for the environment and our economy and we encourage states to look at Virginia as a model and a resource as they adopt similar programs.”

“USDA applauds the Commonwealth of Virginia for showing tremendous leadership on this issue,” said Agriculture Secretary Tom Vilsack. “Efforts like these provide new and additional income streams for farmers and ranchers, while improving water quality and saving Virginia money. I am hopeful this initiative can be replicated across the nation.”‎

“The Chesapeake Bay faces numerous challenges, and the Commonwealth of Virginia is responding with innovative thinking and collaboration across sectors,” said Mike Boots, who leads the White House Council on Environmental Quality. “Not only do creative approaches like these provide new markets for private investors and generate new revenue for farmers, they also bolster the strength of our natural resources, improving their resilience to threats posed by a changing climate and other stressors.”

“I am glad the federal government has chosen to recognize this innovative, pro-business program,” said Virginia Governor Terry McAuliffe. “Our nutrient credit trading system is building the New Virginia Economy by protecting our environment and controlling costs for the private sector and the Virginia taxpayer.”‎

Virginia’s Department of Environmental Quality has created a demand and supply market for land conservation projects that are protective of water quality for future generations. The agency’s stormwater program requires reductions of phosphorus runoff from certain types of road construction projects that can be achieved by purchasing phosphorus credits from state-certified credit banks. Credits purchased are generated by Virginia farmers in the Potomac and James River watersheds, whose farming practices have permanently reduced the amount of phosphorus flowing into those rivers and, ultimately, the Chesapeake Bay. The farm practices are certified by the state as “nutrient credit banks” and come solely from private investors, reducing reliance on public funds and generating a new revenue stream for participating farmers. These credits cost VDOT approximately 50 percent less than other, more traditional engineered pollution reduction practices,

such as detention ponds, and underground filters. In addition, these banks advance other goals such as wildlife habitat, stream buffers and land preservation.‎

USDA video of the Virginia program was highlighted in today’s event: http://youtu.be/ucBFVeq-vdsThis is an external link or third-party site outside of the United States Department of Agriculture (USDA) website.

By advancing the goals of improving the health and regional economy of the Chesapeake Bay as laid out in President Obama’s 2009 Executive Order, nutrient trading is giving farmers additional income opportunities that help keep agricultural lands in production and stretch limited budgets by tapping private sector investments.

EPA and USDA are working together to implement and coordinate policies and programs that encourage water quality trading and will release a web-based water quality trading roadmap tool in early 2015. As part of a joint memorandum of understanding to support trading and environmental markets, the two agencies are centralizing information for buyers and sellers to utilize water quality trading. This resource library will be searchable and help users find information specific to their needs. Both agencies will sponsor a national conference in 2015 for stakeholders to share experiences and move forward with trading as a valuable tool for driving environmental improvement.


USDA is an equal opportunity provider and employer.

WHEN:             Tuesday, December 16, 2014

9:30 a.m. EST

WHO:               Gina McCarthy, U.S. Environmental Protection Agency Administrator

Tom Vilsack, U.S. Department of Agriculture Secretary

Mike Boots, White House Council on Environmental Quality

Terry McAuliffe, Commonwealth of Virginia Governor

John Harrison, Appomattox farmer raising cattle, managing hay and timber lands

Brent Fults, founder of Chesapeake Bay Nutrient Land Trust, LLC

WHERE:           McConnell Public Safety Transportation Operation Center

4890 Alliance Drive, Fairfax, VA 22030

RSVP:            Media who would like to attend the event should contact [email protected] 

***NOTE: Media will need to check-in upon arrival at the secure facility. Please plan to arrive at least 20 minutes before the start of the event.  

Nutrient Credit Trading Event – Handout by Restoration Systems, LLC

Conservation Groups Challenge Limited Protections for Lesser Prairie Chicken

Three conservation groups – Center for Biological Diversity, Defenders of Wildlife and WildEarth Guardians – have filed a legal challenge to force full protection of the lesser prairie chicken under the Endangered Species Act. The move comes in response to the U.S. Fish and Wildlife Service’s recent decision to protect the highly imperiled bird only as “threatened” while providing special exemptions that would allow ongoing destruction of their dwindling grassland habitat.
READ MORE AT  http://www.biologicaldiversity.org/news/press_releases/2014/lesser-prairie-chicken-04-10-2014.html

Drone’s View of Stream Restoration

Watch as a drone follows a short section of a long stream restoration project on the Warren Ranch on the Katy Prairie west of Houston, Texas.  The Restoration Systems’ drone “pilot” is a passenger in a vehicle driving along the dirt road on the right, out of the frame.
Video Clip (30 secs)


Court strikes down Bush-era stream rule governing strip-mining

A federal court yesterday scrapped the so-called Stream Buffer Zone Rule promulgated under President George W. Bush to govern strip-mining activities. Environmentalists restarted litigation against the rule last year amid federal Office of Surface Mining delays in developing a substitute, called the Stream Protection Rule. Yesterday, U.S. District Court for the District of Columbia Senior Judge Barbara Rothstein, a Democratic appointee, struck down the SBZ rule because OSM had failed to consult with the Fish and Wildlife Service before issuing the new standards.

READ MORE: http://www.eenews.net/greenwire/2014/02/21/stories/1059994937



Endangered Species Act Under Threat?

Is America’s bedrock conservation law being threatened or is it time to reform the Endangered Species Act? Last week a group of 13 Republican lawmakers in Congress called for an overhaul of the influential federal law that safeguards imperiled fish, wildlife and plants. The effort, spearheaded by U.S. Reps. Doc Hastings of Washington and Cynthia Lummis of Wyoming, is centered on “targeted reforms” that would “not only improve the eroding credibility of the Act, but would ensure it is implemented more effectively for species and people.” Though experts don’t expect the recent attempt to go anywhere, supporters of the ESA warn that the new proposals are an attack that would strip the law of any substance. READ MORE at http://www.flatheadbeacon.com/articles/article/endangered_species_act_under_scrutiny/37829/





Read about Doc Hastings at  http://naturalresources.house.gov/about/chairman.htm

17,000 feet of stream restoration in Texas

Reach 5 of Warren Creek: 17,000 feet of stream restoration completed ahead of schedule by Restoration Systems for TxDOT  – 52,000 feet still to be done – compensation for impacts of under-construction segments of the Grand Parkway, Houston, Texas.