Pilot program aims to create series of wetland "banks"

Wildlife now are calling approximately 230 acres of former farmland adjacent to the Snoqualmie River their home, thanks to an ambitious wetlands project under review by the state Department of Ecology.

An additional 260 acres eventually will be ready for wildlife and salmon living in the Skykomish River corridor.

Since 2001, Victor Woodward and David Remlinger, as well as some other landowners, have been creating new wetlands as part of a pilot program that Ecology hopes will open up to other prospective landowners next year.

The idea is to create a series of wetland "banks," where developers who destroy wetlands for new construction can purchase credits to offset their environmental damage. The money helps pay for the creation of the wetlands. When wetland credits are completely sold out at a bank of wetland property, a permanent conservation easement, preventing any development of the property, goes into effect.

Such banks are a last resort for developers, as they must consider on-site preservation first. But because of their size, the banks could prove more beneficial as habitat for land and aquatic species. Wetland reconstruction on development sites often covers only a couple of acres and is surrounded by too much urban growth to be successful, Ecology officials say.

With six pilot banks under way throughout Washington — including two in Snohomish County near Monroe — Ecology sees a chance to prioritize wetland protection and construction with this new program where previous methods have failed.

Yet, with any environmental program run by a bureaucracy crammed full of regulations, some in the pilot study say Ecology has much work yet to do to make the system smoother for future wetland bankers.

It's a business, after all, and if the process takes five years, as this first go-round has, the idea won't be financially viable, some say. Wetland creation can cost hundreds of thousands, if not millions, of dollars. Credits, which can sell for tens of thousands once approved, must be sold as quickly as possible to cover initial costs.

Said Remlinger, "It's seemed easier to develop a shopping center than build a beneficial wetland in this state so far. There's lots of work yet to be done."

Still, it's a program that those already involved say they're interested in making work — if Ecology can streamline the process.

Wetland bankers

At Woodward's bank along the Snoqualmie River outside Monroe, tall cottonwoods and willows sway in the wind. For years, he has planted the trees, along with salmonberry plants and Nootka rosebushes, throughout the 230 acres he'll restore during the next 10 years.

On once floodable farmland, Woodward is taking advantage of the river cycle to bring water back onto the property, first as storage, second to filter out pollutants, and third to create habitat for not just fish and waterfowl, but foxes, voles and other animals.

Woodward stoops to inspect a tree that has become part dinner for a wandering deer.

About five miles away, Remlinger and his partner, Eric Gleason, operate heavy machinery, digging out gravel to be replaced with fresh dirt.

Once soccer fields and a motorbike track, their former farmland was supposed to be turned into a nursery, Remlinger said, until Snohomish County officials told him a nearby dike protecting the land from Skykomish River flooding would soon be removed.

Not wanting to lose an investment, the partners found themselves involved in the state pilot project.

Part of their approved plan is not only to create wetlands that can later sell for credit, but also to create an off-channel of the Skykomish River for salmon habitat. Side channels are important to a salmon fry's survival during seasonal flooding.

Woodward has invested nearly $1.7 million in his project. While Remlinger and Gleason haven't offered a specific number, it's clear a price tag in that range has been their cost as well.

In Clark County, about 900 acres at a number of different locations are being restored adjacent to and surrounding creeks leading to the Columbia River — another of Woodward's projects. In Stevens County, a smaller, 20-acre site eventually will be sold for credits. Two separate projects, each more than 300 acres, are under way outside Mount Vernon in Skagit County.

Each gives developers in those parts of the state an opportunity to buy credits for future construction.

"We looked at geographic location as part of a bunch of criteria in selecting members for the pilot program," said Lauren Driscoll, manager of Ecology's wetlands program. "We had 12 parties initially interested."

Of the six sites, three are certified to eventually sell credits, including the two Snohomish County projects.

"Postage-stamp" habitat

Woodward was the first to sell credits under the pilot project. The Lake Stevens School District, constructing a new school on 40 acres at 2433 79th Ave. S.E., wanted to drain a half-acre wetland on the site. But that's forbidden under state and federal laws unless a developer plans to replace what is lost in another area.

Any replacement must be of equal or greater value, but a study of the Lake Stevens site showed nothing there would come close, officials said.

"One of the problems we find in getting good replacement values at mitigation sites is that they may not compensate what is being lost," said Gretchen Lux, head of Ecology's wetland-banking program. "There are times when we don't want to [mitigate on-site]. We have to look at the function of a wetland on-site and see if it is important to keep it there or not."

Too often in the past, wetland replacement of lost acreage has amounted to "postage-stamp" parcels of little value, Driscoll said. Wildlife aren't as likely to use an acre of wetlands surrounded by subdivisions or commercial development as they are a 100-acre wetland connected to a river.

"We were beginning to find that what we were doing [by replacing wetlands on-site] just wasn't working, yet developers were spending a lot of money constructing them," Driscoll said.

Instead of paying for a wetland project of little value at the Lake Stevens site, the school district was allowed to buy into Woodward's wetland project. The school spent $96,000 for a half-credit. The cost of the school is $66.5 million.

"What we're building is more suitable to habitat than anything you're going to see a large-scale project do on-site," Remlinger said. "How much value does something like that have when you could reconnect 250 acres to the river? It's more valuable to habitat and the environment."

Woodward hopes to sell 150 credits or more at his site outside Monroe at a price of $100,000 to $170,000 each. Typically, one acre of destruction equals one credit, and prices depend on the wetland's quality, as determined by the Department of Ecology and the market value.

Remlinger and Gleason will connect their channel to the river next summer. They say they then hope to garner a 30 to 40 percent return per acre once they begin to sell credits.

Wetland banking, as a private business, works only if those involved can hope to make a profit. It can be done, and has been in other states. Other property owners are taking notice of the pilot program, and Ecology expects to get applications for more wetland-bank developments once the program is opened up to others.

Start-up frustrations

But the pilot program hasn't been a smooth ride for any of the property owners, most say.

Said Sky Miller, one of those working on the Nookachamps Wetland Mitigation Bank near Mount Vernon, "We're disappointed in the amount of time it takes to process a [wetland] bank. But we're optimistic Ecology is going to work this out."

Miller is part of Wildlands Inc., based in California but with an office in Marysville. Wildlands, started in 1991, finished the first wetland-mitigation bank west of the Mississippi in 1994. Since then, the company has created and restored more than 40 square miles of wetlands in California, Miller said.

With that much experience to draw on, Miller has been dismayed that the Washington pilot program has taken as long as it has.

After its creation by the Legislature in 1998, an advisory committee met for 18 months to hash out rules and regulations governing the program. Ready to start in 2001, the project then was stalled by a lack of funding, Driscoll said.

"In 2003, the [wetland-]banking industry came to Ecology requesting that we re-initiate work on the program," she said. "To help fund it, the bankers agreed to pay for review of their projects."

Miller said that cost his project near the Skagit River as much as $32,000, a price he considers too high.

"We're optimistic we'll have our bank certified in the next week or two," he said.

Remlinger called the process "tumultuous."

"I was thinking this would be more of a team process, but it's often seemed like we [property owners and Ecology] aren't on the same page," he said. "It's taken a long time, and if it isn't streamlined, then other landowners aren't going to be interested."

Because of the lag time on the pilot program, other prospective wetland bankers have been asked to wait. Miller's Wildlands is helping the Port of Everett move to create a wetland bank at the Biringer Farm — a $4 million project that would restore 358 acres of tidal marshland in the Snohomish River estuary. The project is considered high priority by environmentalists looking to restore endangered Chinook salmon runs in the river.

The Port hopes eventually to sell wetlands credits to developers and plans to use some of the credits for its own terminal-expansion projects.

Ecology officials agree the process has taken too long and needs to be simplified. New rules set for review next summer could make it easier.

One need is to clarify the process, which includes reviews at local, state and federal levels.

Closely watched effort

But once the pilot program is opened to other landowners, projects are likely to get increased scrutiny, especially from agricultural associations worried about the hit farmland is taking in Washington, and from environmentalists wanting to be sure the projects actually work.

"Wetland banking is an important tool in helping address ecosystem functions in our watersheds, so it's a program that we want to see go forward," said Mike Rundlett, environmental-affairs manager for the Western Washington Agriculture Association. "But having said that, we want to see what we can do to mitigate for the loss of those agricultural lands, also a part of the natural resources here."

Rundlett points to the Skagit Environmental Bank, also outside Mount Vernon.

While 355 acres are part of the wetland bank, the landowners purchased about 800 acres, and Rundlett said some of this property is likely to be developed.

Rundlett wonders whether the fact that part of the land will be converted to wetlands will make it easier for other development to occur — and will that set a precedent for future projects?

"These banks are often on properties that until a few years ago were actively farmed," said Rundlett, a former Ecology regional director.

Woodward speculates that wetland-banking projects could move political forces to alter laws making some forms of development easier.

"That doesn't mean it's going to open up development to go hog wild, but in Puget Sound, if wetland banks are successful, politicians could say here's an option to make more development available," he said.

Regardless, Ecology officials say they expect the program to be more beneficial than harmful to the environment they're sanctioned to protect.

And the laws requiring mitigation are unlikely to change, Driscoll said: An acre destroyed will still need to be replaced by an acre or more of new wetlands.

"I do believe it's going to be a program that will continue," she said. "But we need to stress to folks that these banks are not the answer to mitigation themselves. Banking doesn't allow folks to bypass the regulatory system."

Christopher Schwarzen: 425-783-0577 or cschwarzen@seattletimes.com