After ESA: to build or not to build?

By SUSAN KEMP
Landau Associates

Completing a development project has never been a simple process. Whether it involves a residential development, a retail facility, a manufacturing plant, a warehousing facility, or a new highway, the developer must address regulations and requirements from numerous agencies during all phases of a construction project.

However, the process is more of a challenge now than ever before, due to the recent listing of certain salmon species under the Endangered Species Act.

Developers are questioning whether to take on new challenges now, or wait until the rules are better defined. Should they wait until the regulatory environment is more conducive to their needs? How can they deal with current and future obstacles?

A turning point in this process will take place this fall, when the National Marine Fisheries Service plans to publish the first draft of its 4(d) rule for the public under the ESA. The rule is expected to be very conservative, meaning that could throw tough roadblocks in the way of development projects.

This expectation is already causing some local officials to significantly slow the permitting process and to require biological assessments and other studies while they wait for the new rule and adopt new regulations. As with previous new rules, a number of issues regarding salmon will be resolved in court.

However, waiting for the scenario to play itself out isn't necessarily the answer. Some issues may not be decided for months or years, and in this exceptional economy, missed opportunity can be more financially distressing than the frustration of dealing with new regulatory challenges.

Some feel that the best approach is to get a project on the ground immediately, before additional hurdles spring up, such as the development of further regulations, additional species listings or increased difficulty in obtaining funding.

The new regulatory environment may seem daunting. But developers must keep in mind that before the advent of the current ESA tangle, equally thorny regulations arose that caused similar alarm, such as the Clean Water Act, Growth Management Act and Clean Air Act. It's true that because of ESA issues, agencies are adding additional conditions to permits that have already been granted, or pulling permits for further review after construction has begun, but this has also been the case with projects impacted by other regulations, and many of those projects eventually were built.

Another aspect to keep in mind is that minimizing environmental impacts and mitigating resource losses are not new requirements, and for the most part the technology is available to accomplish these goals. In fact, some of the methods are quite simple, such as stabilizing stream banks and providing riparian vegetation and structure for fish. Other issues, such as water quality, temperature, or turbidity may require more complex approaches, but there are some suitable conservation measures that will minimize the project impacts. Agencies are more likely to grant permits to projects with well-evaluated, scientific approaches to minimizing environmental impact.

If developers decide to go forward with projects, they must be prepared for the new permitting process environment. They must consider budgeting additional time and funding into projects for permit acquisition. They should either have professionals on their staff with experience in environmental issues as well as the time to track permits, or contact an environmental consultant that can provide sound scientific strategies, and an attorney who is well versed in negotiating with agencies and familiar with environmental regulations.

A good start to achieving success with new projects is to have the right attitude. Animosity towards the regulations and the agencies only makes agency personnel less willing to work with developers to achieve their goals. Building trust will make the process much smoother.

Project proponents will also need to become creative and flexible. For example, the Washington State Department of Transportation, which acts as a developer and permittee for new transportation facilities, has been successful in negotiating with NMFS and the United States Fish & Wildlife Service to speed up their permitting process for projects that will have minimal effects on the environment. WSDOT achieved this by mandating that biological assessments be conducted for all of its projects, and by having NMFS train two of WSDOT's staff members to review the assessments under its guidelines prior to agency review.

Under the ESA, creative solutions and compromise are not only possible but encouraged, and these approaches can actively increase the value of the completed development. For instance, a project proponent seeking to develop a property with marginal wetland, streamside or other biological habitat can actually add value to the project by enhancing such habitat and incorporating them into onsite amenities, such as corporate park or public access areas.

The difficulties in putting a project through from start to finish are not likely to ease up in the near or distant future. After the ESA dust settles, other regulatory issues will arise out of necessity, as they always have. This is not an environment for the faint of heart. However, with good project design, sound financial backing, support from experienced professionals, and above all flexibility in dealing with the regulatory agencies, it will be possible to complete development projects, even in the face of ESA provisions, in whatever form they may be applied.

Good projects are still good projects, and ensuring that the designs are sufficiently protective of fish, other sensitive species, and their habitats will only make them better.

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