Jesuit Bend profiled in ‘good news’ Christmas Day Wall Street Journal Op-Ed

Gulf Coast writer Quin Hillyer did an incredible job making Jesuit Bend’s complex story interesting and readable in an op-ed last week. Ecological facts, policy insight, local perspective and technical specs all wrapped up with a bow. We are thrilled and grateful at RS to be a good news item in America’s largest newspaper on Christmas Day.

Here is the link at

How Markets Can Restore Louisiana¹s Marshes – WSJ[11] by Restoration Systems, LLC

Texas flood and the Katy Prairie Stream Mitigation Bank

The Katy Prairie west of Houston is in a certain sense ground zero for the recent Texas floods. The section of Harris County where RS’ Katy Prairie Stream Bank is located is an absolutely critical landscape for protecting Houston from flooding — and indeed mitigating the threat that already exists.

2009 Katy Prairie flood

Here is the deal: The 7000 acre Warren Ranch (owned by our partner in the mitigation bank, the Katy Prairie Conservancy) is centered in the last undeveloped expanse of the Katy Prairie west of Houston. It is well known that the relative worsening of Houston floods over time is attributable to the loss of storage capacity upstream as formerly pervious agricultural landscapes are devoured by the ‘concrete beast’ lumbering westward from the city center.

As the city and its environs devours land that once soaked up peak rain events, flooding downstream in Houston increases. The situation is the subject of increasing anxiety for Houston residents and the Corps of Engineers, who operate two flood control reservoirs protecting the city. 

The Katy Prairie Stream Mitigation Bank was deliberately located to address these problems. The project is a very positive development for Houston flood control for several reasons:

  • Water courses on the Warren Ranch are permanently protected in the future from culverting and concrete armoring which worsens flooding.
  • The former canals and ditches that once conveyed flood water too quickly downstream are restored to natural design channels which (ironically) flood more easily, thereby easing the flow downstream to the city.
  • Proceeds from the mitigation project collected by the Katy Prairie Conservancy are plowed into protecting more uplands in the region — leading to a virtuous cycle whereby mitigation dollars for aquatic mitigation are indirectly leading to the protection of flood protection uplands.

The 2008 Mitigation Rule is very clear that banks should be located using a watershed approach whereby the purpose and needs of the project are addressed regionally instead of locally. It would be hard to identify any mitigation bank in the country that more appropriately incorporates the watershed approach than the KPSMB.

Finally, perhaps you were interested to know how the restored streams fared in the recent deluge? Keep in mind 90% of the time our restored creeks are bone dry (or a “low-energy” system in hydro-parlance) but were designed — hopefully — to withstand every now and then a monstrous event of the scale recently witnessed.

Travis Hamrick popped up the drone and took the photos above and video below. Using a drone is my new hobby, so I watched him very carefully. As they used to say in the Timex commercial, the KPSMB: ‘Takes a lickin’ — and keeps on tickin'”…

Dept of Interior to shift away from ‘project-by-project’ management

Interior Secretary Sally Jewell has unveiled the outlines of a new landscape-level mitigation strategy across millions of acres of federal land that she said is designed to take the department’s agencies away from narrowly focused project-by-project assessments. The mitigation strategy includes four key objectives the department will work to implement in the coming months in an effort to take a broader approach to managing public lands – landscape-level planning, banking, in-lieu fee arrangements and other mitigation tools.

We plant trees, thousands of them!

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

Stream Mitigation Benefits to Private Landowners

Section 404 of the Clean Water Act authorizes the Secretary of the Army to issue permits for the discharge of dredged or fill material into streams, wetlands, and other waters. Applicants for Section 404 permits generally must mitigate for unavoidable impacts to streams and wetlands associated with their development. Stream mitigation may include such on-the-ground activities as preservation or restoration of vegetated riparian buffers; fencing of livestock from riparian buffers; stream bank stabilization activities; installation of in-stream habitat structures; and reshaping of streams to make them more stable and less likely to erode.

NC House Committee on Wetland and Stream Mitigation to meet Feb. 27


The House Committee on Wetland and Stream Mitigation (LRC)(2013) will meet at the following time:


February 27, 2014

9:00 AM

544 Legislative Office Bldg


Rep. David R. Lewis (Co-Chair) House Appointment
Rep. Chris Millis (Co-Chair) House Appointment
Legislative Members
Rep. Kelly M. Alexander, Jr. House Appointment
Rep. Becky Carney House Appointment
Rep. Rick Catlin House Appointment
Rep. Kelly E. Hastings House Appointment
Rep. Charles Jeter House Appointment
Rep. Chuck McGrady House Appointment
Rep. Garland E. Pierce House Appointment
Rep. Phil Shepard House Appointment
Rep. Paul Stam House Appointment
LRC Member
Rep. Tim Moore Ex Officio

Overbank Flooding Event, Pancho Mitigation Bank

Overbank sedimentation during flood events represents an important component of stream restoration success. In addition to its importance for floodplain development, overbank deposition of fine sediment frequently results in a significant reduction of the suspended sediment load transported through a river system to the catchment outlet.

For details on Restoration Systems’ Pancho Wetland, Stream and Nutrient Mitigation Bank in the Neuse River Basin (now in Monitoring Year 2), go to

Bass Mountain Stream and Nutrient Bank under construction

Five recent photos of construction on Bass Mountain Stream and Nutrient Bank.

Click on the link below for a map of the service area and a drone-taken video:

Construction Industry Compliance Assistance Center (CICA)

Thumbs up to one construction industry compliance advocacy group for what it is saying about mitigation banking!
+ + + It is a regulatory preference that the wetlands are kept undisturbed. Where avoidance is not practical, wetland substitution, or replacement, at another site often provides a sound solution for the need to preserve wetland habitats. Until the mid-1990s the developer had just two options:
1. Mitigate the impacted wetlands on-site. The developer could replace the lost wetlands on the same site but at a potential loss of expensive real estate value.
2. Mitigate the impacted wetlands off-site by purchasing another piece of property and construct compensatory wetlands. This option is usually prohibitive considering cost and the time requirements because developer must locate and purchase the land, secure the necessary permits and convert the property it into an acceptable wetland.

A relatively new concept called mitigation banking offers a new alternative that simplifies the process for the development community. Preserves, called mitigation banks, are large areas of constructed, restored, or preserved wetlands set aside for the express purpose of providing compensatory mitigation for impacts to habitat. A bank is authorized to sell the habitat values created on the preserve. These values, known as credits, are sold to landowners who need to substitute wetlands for those lost to development where avoidance or on-site mitigation is not feasible. Get a quote from Central Penn Contracting on the construction.
+ + +
For more on CICA, go to


Well Deserved: Ecosystem Investment Partners raises $180 million for banking mitigation

Very well reported story here from Paul Quinlan of the Energy and Environment family of publications. Quinlan has written what many in the industry were already aware of, but needed wider publicity: Ecosystem Investment Partners has completed the largest capital raise in the history of the commercial mitigation industry, $180 million.

Fred Danforth, Nik Dilks and Dave Urban deserve a round of applause from the national mitigation tribe. I heard on the grapevine they gave more than 200 “roadshow” presentations across the country in order the raise the money. Whew. Each one of their audience is one less monied interest the rest of us will have to explain mitigation banking to (which in itself is worth millions to the industry).

It is unclear (as expected) exactly where EIP plans to deploy their pile. But their experienced and ecologically minded leadership suggests it will result in better funded mitigation, in top-flight watersheds, based on the highest standards of conservation and restoration. Bully for them.


Fat private-equity investment buoys restoration industry

Paul Quinlan, E&E reporter

Greenwire: Tuesday, July 17, 2012

A private-equity firm has raised $181 million for wetland restoration, in what industry insiders are touting as a sign that for-profit ecosystem revival is finally coming of age.

At issue is the business of mitigation banking — reviving degraded swamps, bogs, marshes and other habitat to generate “credits” that can be sold to developers. Such transactions are aimed at satisfying regulators who require developers who damage or destroy wetlands to restore or protect habitat elsewhere.

Wetland mitigation banking has been around for some 30 years, but it has been slow to live up to its hype that it is a market-based solution to ecological ills caused by development in environmentally sensitive areas. Green groups question the ecological value of restored wetlands, and business analysts fret about mitigation banking’s regulatory uncertainty and uneven demand.

So the $181 million raised for Baltimore-based Ecosystem Investment Partners (EIP) is being celebrated by promoters of mitigation banking. EIP beat its $150 million target with large investments from typically risk-averse sources: a large university endowment, foundations and pensions — including $30 million from the New Mexico Educational Retirement Board, the state’s teacher pension.

– Related: Mis-Sold Pensions | UK Mis Selling Scandal | Goodwin Barrett.

“I think we’re probably at a breakaway point, if you will, in terms of institutional capital understanding of this space,” said Fred Danforth, a managing partner of EIP who founded the company in 2006.

Danforth discovered mitigation banking after retiring in 2002 from a Boston-based investment firm he helped found in 1987, Capital Resource Partners. An fly-fisherman and trustee of the Nature Conservancy in Montana, Danforth waded into his first restoration project when he bought a 1,900-acre former ranch in the Blackfoot Valley of western Montana.

The property’s streams and wetlands were “unbelievably degraded” from decades of ranching and poor management, he recalled recently. So he and others went to work, he said, rebuilding 10,000 linear feet of streams to the correct depths and widths and restoring 260 acres of wetlands.

“I became fascinated by the opportunity to do this important work and overlay a business model that could generate more conservation and more restoration at a real significant scale,” he said.

Danforth assembling experts from the environmental and conservation worlds to form EIP and began fundraising. The first fund closed in 2008 after Danforth raised $26 million — about one-seventh the size of his second fund.

The $181 million haul raised eyebrows across the industry.

“It’s good to see big-time institutional capital come into it, because we want to see the industry professionalized — not a lot of mom-and-pops,” said George Howard, co-founder and president of Raleigh, N.C.-based Restoration Systems, which banks 25,000 acres of wetlands and 60 miles of waterways in half a dozen states.

Randy Wilgis, president of both the National Mitigation Banking Association board and Environmental Banc & Exchange, a mitigation bank headquartered in Owings Mills, Md., said, “It’s just exciting, and it validates the entire market.”

Danforth’s strategy involves acquiring large tracts of degraded but ecologically valuable lands in areas where development — and thus demand for offsetting credits — is expected to be high and regulations requiring wetland mitigation are strictly enforced. Danforth won’t discuss specific figures, such as the costs of restoration, permitting and maintenance or the price of credits.

Generally, EIP expects to acquire 10 to 15 properties priced between $5 million and $20 million and ranging from 1,000 to 10,000 acres, he said.

The heart of wetland mitigation has traditionally been major highway projects, and that is expected to continue, but Danforth expects other projects are on the horizon.

“If you think about pipelines and power lines and the siting of renewable energy … mining, oil and shale gas — all have significant impacts,” he said.

Regs, shale drilling spur business

Much of the recent growth for mitigation banking was spurred by the release in 2008 of new federal regulations governing mitigation banking that industry officials say brought clarity and predictability by laying out performance standards.

But that same year brought the collapse of the real estate market and a corresponding plunge in demand for mitigation credits. This put many small mitigation banks out of business and forced even the largest industry players into a holding pattern.

“It took a lot of the nonprofessionals out, which we welcome,” Howard said. “You had developers jumping into it to make a quick pop.”

The 2008 rules handed another gift to the industry: They indicated that mitigation banking was the preferred method for offsetting wetlands destruction, trumping both the do-it-yourself and in-lieu-fee options also available to developers.

Experts, meanwhile, predicted that demand for credits would rise because of shale drilling and pipeline building and construction projects funded by the 2009 federal stimulus. Applications for new mitigation banks began rolling into the Army Corps of Engineers, which handles Clean Water Act permitting for wetland projects.

Companies such as Resource Environmental Solutions of Baton Rouge, La., and Houston’s Mitigation Solutions are among companies actively pursuing the shale mitigation market. Restoration Systems sponsored the first bank in Pennsylvania targeting mostly gas-line construction associated with shale drilling, Howard said.

“There’s still plenty of growth in mitigation banking, even in a stagnant or declining economy,” Howard said.

The Army Corps doesn’t compile complete mitigation bank statistics from all 38 of its districts. But Dave Urban, EIP’s director of operations and past president of the National Mitigation Banking Association, keeps an informal and incomplete tally of the number of federal bank applications approved: 10 in 2008, 68 in 2009, 78 in 2010, 86 in 2011 and 38 so far this year.

“In 2009 and 2010, you just started seeing a flood of mitigation bank applications,” Urban said. “Now I think you’re seeing a lessening of application because, I think, people realize that in spite of a rule, the process is still balled up in local issues.”

‘No net loss’

The bottom line in the wetland-mitigation business is that swamps are valuable.

Once seen as mosquito-breeding nuisances, wetlands are now protected as sponges for recharging aquifers, filters for polluted stormwater and collection basins for floods. They are also nurseries for multibillion-dollar fisheries and breeding grounds for migratory waterfowl.

For too long, wetland values went unrecognized. Most landowners sought to drain or fill them. By the 1980s, the wetland area in the United States had shrunk to 53 percent of its size when the nation was founded.

Soon enough, plugging drainage ditches and returning these lands to their previous, swampy condition would become brisk business.

In 1989, President George H.W. Bush declared a “no net loss” policy toward wetlands. Enforcement by federal agencies opened the door to mitigation banking by requiring that marshes and other wetlands destroyed had to be replaced with new ones either created or restored.

A 1990 memorandum of agreement between the Army Corps and U.S. EPA followed that laid out guidelines for determining the type and level of mitigation necessary.

Developers began to set aside portions of their projects, where they would attempt to create or restore wetlands. Studies found these tiny, scattershot restoration efforts typically performed poorly. They were also difficult to inspect.

Oversight problems were highlighted in a 2005 report by the former General Accounting Office (now the Government Accountability Office), which found that the Army Corps had failed to check up on mitigation projects done by real estate developers to offset resource destruction.

The 2008 regulations are aimed at solving those problems. They require developers confronting wetlands to strive to avoid destruction and then to minimize impacts. If destruction is “unavoidable,” rules say, builders can look to mitigation.

Industry promotes legislative fix

But mitigation bankers say there are still regulatory uncertainties.

One of the biggest headaches, they say, involves uncertainty over where a bank must be located to service a particular project. Regulations call for a “watershed approach,” meaning banks must be within the same watershed. The methods used to define a watershed can be inconsistent and vary among 38 Army Corps districts, according to the National Mitigation Banking Association, the industry’s trade group.

The industry is also pushing legislation sponsored by Sen. Mary Landrieu (D-La.) in the Senate (S. 664) and Rep. Charles Boustany (R-La.) in the House (H.R. 2058) to allow the sale of mitigation credits to be treated as capital gains for tax purposes. Neither bill has gained traction.

Distrust still lingers among some environmentalists who note the poor early track record of the mitigation banking industry and argue that banking can, without proper oversight, encourage wetland destruction.

“I think banking has a lot of potential promise, but the combination of the profit motive and the science just all have a tendency to work against genuine replacement of the wetland functions,” said Jan Goldman-Carter, wetlands and water resources counsel at the National Wildlife Federation. “The bank is essentially paying for wetlands destruction somewhere else.”

Urban, an environmental engineer and former Army Corps permit officer, says the cure to poor oversight is greater transparency. Boundaries of watersheds and siting of mitigation banks are dependent on factors ranging from flora and fauna to soil types and are not always conducive to simple rules.

“There’s some people who advocate simple solutions, but simple solutions are not always the right solutions,” he said.

“It keeps all boiling down to transparency,” Urban added. “We want the administrative process to be transparent and to include people like us who have expertise in this world who could be helpful.”