The Nature Conservancy to Determine Mitigation Credit Costs in Virginia

May 18, 2010

Developers in some watersheds Virginia may shortly have to conduct their own mitigation for wetland and stream impacts. In lieu fee contribution, long a main stay in mitigation in the Commonwealth, has recently undergone changes that may affect its usefulness for some permittees.

On May 10, 2010, the Norfolk District Office of the U.S. Army Corps of Engineers issued a public notice relating to mitigation credit costs. In compliance with the Corps’ 2008 Mitigation Rule (33 CFR Parts 325 and 332), the Corps has designated The Nature Conservancy (TNC) as the entity to determine wetland and stream mitigation credit costs in Virginia for work performed through the Virginia Aquatic Resources Trust Fund (the “Trust Fund”). The Trust Fund conducts stream and wetland mitigation throughout Virginia and is administered under a joint agreement between the TNC and the Norfolk District of the Corps. Where the Corps or the Virginia Department of Environmental Quality (VDEQ) allow applicants to use in lieu fee payments as mitigation for wetland or stream impacts, these payments are made into the Trust Fund.

Up until now, both the Corps and VDEQ provided the estimated amounts due as in lieu fee contributions to compensate for particular impacts permitted under federal and state law. Under the new program, these previous estimates will be honored only as long as they are paid by June 8, 2010. After June 8, 2010, the Corps/VDEQ estimates will not be guaranteed and the TNC determination for the costs will control.

We anticipate that in lieu mitigation credit costs will increase under the new scheme. More importantly, however, unless the TNC has credits available in the applicable watershed, permit applicants will not be permitted to use in lieu fee mitigation in the future and will have to find and construct their own mitigation. This is a substantial change from past practices. Therefore, we strongly recommend that permit applicants who have Corps and/or VDEQ determinations of mitigation credit costs should pay for such estimates by June 8 to preserve their ability to use this mitigation strategy.

If you have questions about these new procedures or any other development or permitting issues, you should call your development counsel. For more information, please contact the authors.