What is a Mitigation Bank?
Mitigation Banks are wetlands, streams, or other water resources that have been preserved, enhanced, restored or created (PERC) that meet the requirements of Section 404 of the Clean Water Act. Appropriate lands can be restored to a natural state and a conservation easement permanently put in place. This land then earns mitigation credits which large development can buy to compensate for unavoidable damage in their nearby projects.
Landowners can benefit from a mitigation bank in a number of ways including preserving the land in perpetuity through a conservation easement, reducing the estate tax of the land, profiting from mitigation credits or even selling the land.
MITIGATION. Step By Step
Landowner Negotiation - EcoMAA works with a landowner to develop a mitigation project on a portion of their property. This step involves clarifying the financial aspects of the deal, clarifying the footprint (acreage) of the project, any improvements to be made in addition to the stream/wetland restoration work, and clearly defining roles and responsibilities moving forward.
Project Development - The mitigation provider will develop a technical proposal to put before the regulatory agencies for initial feedback. If the feedback is positive, the mitigation provider will move forward with developing a Mitigation Plan which fully articulates how the project will be developed and managed. The usual timeline for this phase is 1 ½ years or more to complete the mitigation plan and receive regulatory approval.
Close on Property - once the project has been approved, the mitigation provider will move to close on the property required for the project. If the landowner has chosen to be compensated at a set price per acre, this is when they will be compensated. A landowner may opt to become a partner in the project and share in the profits over time. If so, the landowner will still place a conservation easement on the property but will not be compensated financially at that time. EcoMAA will help the landowner understand these choices.
First Credits Released - Once the plan is approved and the land has been secured (conservation easement), the mitigation provider will receive the initial tranche of credits that can be then sold on the open market. Credits are released as milestones are reached during the life cycle of the mitigation project. After this initial credit release, credits are generally released after construction, and then at the end of each monitoring year (5-7 years) where performance standards have been met.
Construction - construction generally begins 1 year after the project has been approved. Construction timeline will be drive by the size and complexity of the project but averages somewhere between 5-7 months. This is when any agreed to property improvements (fencing, stream crossings, cattle infrastructure, etc.) will be developed.
Monitoring - following construction the site will be monitored for an agreed to period (usually 5-7 years) to insure the project is meeting agreed to performance standards. During this period the mitigation provider is responsible to making any and all repairs to the project.
Project Closeout - following the monitoring period, the project will be “closeout” with the regulatory agency. If closeout is achieved it means that the project has met all success criteria and the mitigation provider is no longer responsible for the project.
Long-term Management - following project closeout, the project enters into the long-term management phase. This phase will be overseen by the holder of the conservation easement and these efforts will be funded by an endowment made by the mitigation provider.
If you have questions about whether a portion of your land might be a good candidate for a mitigation project, please contact us.