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Where economics and ecology align

Building and re-developing commercial real estate can be investments that yield excellent dividends. There are, however, often extensive legal considerations that come along with specific properties. Here are some legal factors about wetland permitting and mitigation banking that may influence how you approach investment in particular real estate.

What determines that the land in my project needs wetland mitigation?

The provisions of wetland mitigation banking are in Section 404 of the federal government's Clean Water Act. The U.S. Army Corps of Engineers defines wetlands as satisfying three criteria. They must have:

  • Wetland hydrology: Ground that is commonly saturated by water in the ground or on the surface.
  • Wetland vegetation: Plants that optimally grow in wet conditions. Some may have aerenchyma, an attribute that allows plants like sedges to distribute oxygen from the atmosphere down to the root zone.
  • Hydric soils: Soil that is anaerobic due to continued water saturation. The anaerobic soil is low in oxygen.

What is the role of wetland mitigation banking in wetland permitting?

Wetland mitigation banking is done to earn credits for wetland preservation, enhancement and restoration. These credits are recognized by regulatory agencies as offsetting the development impact on another piece of wetland in the same area. Committing to a wetland mitigation banking effort can expedite the permitting process on your development project.

How does a mitigation bank operate, and who can create one?

Developers and other investment parties involved in the purchase and development of property can create a mitigation bank. A mitigation bank can take some years to create and will need the legal establishment of a conservation easement. Once established, bank investors can use credits for their offsets, or sell them to other developers who need mitigation.

For many real estate investors and developers, participating in wetland mitigation banking is a win-win situation. Both the environment and economy benefit from well-placed improvement efforts.

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